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Rent Controls don't work - study is warning to UK lettings sector

A study of what has happened to a private rental sector hit by rent controls provides lessons to those in the UK considering such a move.

The study comes from the Republic of Ireland where economist Jim Power conducted research for the Institute of Professional Auctioneers & Valuers and the Irish Property Owners’ Association.

The characteristics of the Irish private rental sector and the consequences of rent controls will ring bells in the UK where similar measures are under consideration.


The study finds, amongst other issues, that:

- the constantly changing and very challenging regulatory and taxation environment that treats private landlords very differently from institutional landlords, is largely responsible for private non-institutional landlords leaving the market;

- the creation of Rent Pressure Zones (areas where controls exist) are creating a two-tier rental market and leading to a situation where maintenance of quality accommodation is not economically justifiable and negatively impacting on capital values where the property is the subject of the RPZ rules;

- it is likely that landlords that historically charged rents under market rate and are confined to minimal increases arising from RPZ regulation are exiting the market in greatest numbers;

- these landlords are replaced in the market in part by new properties at much higher rents owned by institutional landlords with no evidence available to confirm if any net additional new properties have come onto the rental system;

- Rent Pressure Zone regulation has prevented rents from falling as well as rising beyond the limits set.

The study says there has been a collapse in private investor participation in the market, dropping from 19.9 per cent of total mortgage lending in 2006 or €7.9 billion to 1.4 per cent in 2021 or €143 million.

It concludes there has to be a move away from policies that discriminate against private landlords and which give them little incentive to participate in the rental market. 

“If private landlords continue to exit the market, the situation is going to get worse,” it warns.

The two bodies that commissioned the report - the Institute of Professional Auctioneers & Valuers and the Irish Property Owners’ Association - have also released the findings of a joint survey amongst their respective memberships with 892 respondents of which:

- 94 per cent believe that recent Republic of Ireland government policy and changes in regulations have impacted negatively on their attitude to continuing as a landlord;

- over 57 per cent plan to sell their rented properties in RPZs;

- some 91 per cent believe they or their landlord clients will not invest further in residential investment property;

- over 50 per cent said rental properties are the sole pension source, apart from the state pension.

Pat Davitt, IPAV chief executive, says: “The private landlord has traditionally been the mainstay of the Irish rental market. 

While we have grown and embraced the global market, which we needed to do, initially to get the market going in 2012-2013 but more recently to cater for the growing needs of a rapidly expanding economy, the research and economic report we launch today confirms beyond doubt how as a country we often sacrifice and disregard the worthy within for the perplexing allure of the foreign dollar. 

“Nowhere is this more evident than in how differently the State treats private and institutional landlords. 

“We need both but they deserve to be treated equally and fairly and policymakers need to deliver on that. Otherwise rent levels into the future will be dictated less by the kind of market forces we’ve experienced historically and more by trends in complex global property investment vehicles.”

And Stephen Faughnan, chairman of the Irish Property Owners Association, adds: “The study by Jim Power reaffirms the real issues at play in the private rental sector that are resulting in the exodus of private landlords from the market in large numbers. Issues such as penal tax rates and a tax code that discriminates against private landlords in favour of large institutional funds, together with the continually changing and ever more complex regulatory environment all militate against investing in the private rental sector.

“… Data clearly shows that private non institutional landlords are by far and away the single largest landlord set in the market and yet Government policy continues to target these same people with policies and regulations that are making it impossible for them to stay in the market.

“Until policy makers recognise these issues and accept that the private investor is a key player in the rental market, the private investor will continue to leave the market in significant numbers which is not in the interests of the large numbers of people that opt to live in the private rented sector”.

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  • George Dawes

    Yet all the lefties are pushing for it

    Not too bright are they ??

  • John Ahmed

    No surprise.
    Many private landlords are exiting property within the UK because of council licensing and a tax regime stacked unfairly against them.

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    I saw for myself the new slums in North Dublin caused by their rent controls which caused property values in the entire neighbourhood to plummet a few years ago.

    Perhaps that message needs to get across to Tory voting owner occupiers?

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    Unfortunately all our politicians seem to be communists.

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    This is actually a very good factual report. Politicians , and councils need to wake up to reality that Private Landlords house millions of people who are very content with their landlord and the property (home) they live in. Yet all of the Governments whether in Ireland , Scotland, Wales, and England seem hell bent of driving us out. Why ?

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    • 27 May 2022 08:50 AM

    These thick useless moronic turds will never listen.

  • Matthew Payne

    The problem is 2 fold, vote chasing and they simply dont understand the dynamics of property. Take Boris' leaked idea this week of a CGT discount for LLs selling to FTBs to help them onto the property ladder. The most idiotic idea when I have heard for a while but one that ticks the 2 boxes above. Wins votes, and no flippin clue what they are doing.


    Eton boys, all they are good for is throwing red wine up the walls and getting P...D

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    The above survey findings and report are welcome, although I don’t think there is any appetite in government to listen. The above results of rent controls are predictable and obvious, similar results have happened in other countries when rent controls have been introduced.

    The fact that The CCP (Conservative Comminist Party) are steaming ahead anyway, suggests they know exactly what they’re doing, the impact it will have, but don’t care and have an alternative agenda. The report above talks about how corporate interests are being given favourable treatment - this is no accident. Private landlords are being elbowed out to make way for corporate players - what they may not have factored in was that the corporate players have no interest in the bottom 75% of the market, which is the majority of private landlords. So we’re being elbowed out to make way for the big boys who have little interest in the sector of the market we are in.

    Additional to this, is that being tough on landlords, despite making things worse is a net balance vote winner with a significant sector of society. Politicians will always sacrifice improving a situation for extra votes.

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    It depends what your objective is. If your objective is to get rid of every private landlord in the country then they work very well!!

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    As I have said previously, as landlords we will come out of this in a good position whether we stay or sell up, we all have assets worth at least hundreds of thousands of pounds, and a good amount of us have that in the millions, yes there will be CGT to pay if we sell, but in the long run we will move on…… the tenants will suffer a future of spiralling rents with no hope of home ownership, I genuinely feel pity for them, most have no clue what is heading their way. The introduction of more legislation simply speeds up the process.


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