Another opponent of rent controls speak out

Opposition continues to build to the prospect of rent controls in part of the UK, with the latest voice citing the failure of such measures in the Republic of Ireland.

David Alexander - head of Lomond Group-owned company DJ Alexander Ltd, based in Scotland - has analysed research for Ireland’s Institute of Professional Auctioneers & Valuers and the Irish Property Owners’ Association.

The research, which covers many of the changes which have occurred and are proposed for the private rented sector in Scotland and the rest of the UK, found that constantly changing regulations and more punitive tax regimes led to more individual landlords leaving the market and being replaced by institutional landlords and that rents, rather then reducing, actually rose as a result of the new policies.

The report found that there was evidence that Ireland’s Rent Pressure Zones created a two-tier rental market, cutting both accommodation quality and quantity. 

It found that the legislative and financial changes resulted in individual and small-scale landlords leaving the market and being replaced by institutional landlords charging higher rents. 

David Alexander says: “It is fascinating that this new Irish analysis and [an earlier] review have both come to the same conclusion that rent controls don’t benefit tenants, landlords, or homeowners. Tenants suffer because they limit appropriate supply and so rents, rather than falling as a result of the policy, actually rise in many cases.”

“Landlords and individual investors suffer as they opt out of the private rented sector leaving the space free for institutional investors to come in with higher rents resulting in more expensive homes for tenants. Homeowners in areas with rent controls also experience substantial financial losses as these areas are devalued in the marketplace resulting in lower property values.

“This is another survey telling us what most in the UK sector have been saying for some time: rent controls don’t work. They damage the private rented sector in the long term which impacts on tenants, landlords, and investors, as well as affecting the value of individual homeowners in rent restricted areas.”

You can see a detailed report on the Irish research here.

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