If rents had been frozen in 2024, the average renting household would be saving £1,300 a year, while only 2% of landlords would be made unprofitable. 

Meanwhile the tax and interest rate changes of recent years have landlords harder than a two-year rent freeze would have.

Those are the claims in a report published today by the UCL Institute for Innovation and Public Purpose (IIPP) and the New Economics Foundation (NEF).  

 Using data obtained from HMRC, the researchers modelled two illustrative scenarios – one based on a 10% reduction in rent, and the other a 20% reduction in rent. 

A 10% reduction in rents – equivalent to freezing rents in May 2024 – would save the average renting household £1,300 year. 

This would have made 2.3% of individual landlords unprofitable, compared with the 4.8% who have been made unprofitable because of tax changes and interest rate rises since 2021. 

In a scenario where rent controls made private rents 20% cheaper – saving the average renting household around £2,400 a year – the report authors claim that mortgaged landlords would be making profits more than four times higher than the average UK business. 

Landlords without a mortgage, who the authors say are in the majority, could expect to see even larger profits.  

Meanwhile, this reduction would save the government at least £2 billion a year in housing benefit spending. 

Report author Dr Beth Stratford comments: “Rent controls are one of the few policies that can provide immediate relief to struggling households and provide a much needed boost to local economies, whilst saving the government billions. 

“Our analysis shows that landlords are making much larger profits than other UK businesses, even after recent interest hikes and tax rises.

 “Well-designed rent controls, combined with the right fiscal and legal framework, create a historic opportunity: a managed transfer of homes out of the insecure and unaffordable private rented sector and into home ownership or secure and permanently affordable ownership by councils, housing associations and community-led organisations.” 

Molly Harris, senior researcher at the New Economics Foundation, adds: “This is an important contribution to the growing base of evidence which shows action can and must be taken to protect renters from a housing affordability crisis.  

 “Everybody deserves a home they can afford and feel secure in yet far too many private renters are being pushed into overpriced and substandard homes. 

“This report shows that landlords’ overall profitability remains very high, despite recent rises in interest rates and taxes. 

“Action to improve affordability for private renters could make significant savings for households and government, while most landlords could continue to be profitable.”     

The report authors insist that following the increase in interest rates in 2022, expectations of a landlord exodus from the market did not materialise. 

And it says the Ministry of Housing, Community and Local Government estimates the number of privately rented dwellings in England grew by 96,000 between 2023 and 2025.  

A statement from the authors says: “While the introduction of rent controls would likely lead to some landlords selling their properties, the report argues that this is an opportunity for homes to be transferred from the private rented sector back to ownership by councils, housing associations and community led organisations.  

“The researchers calculate that over ten years, the savings in housing benefit spend that the government could accumulate from a 20% reduction in rent would be sufficient to support the purchase of around half of all homes that are rendered unprofitable by that rent reduction, and convert half of these to social rent.”