The housing crisis will be made worse by rent caps, two property experts have said.
Various activist groups, much of the Green and Labor parties and even occasional Tories have recently called for rent caps. The devolved governments of Scotland and Wales have policies encompassing rent caps in one form or another.
Now the National Association of Property Buyers has issued a warning with spokesperson Jonathan Rolande saying, “Rent control is not the answer to our housing crisis. In fact, it risks making it worse and creating a whole new crisis.
“In the very short term, the ceilings reassure tenants who know that their rent will not increase. But unless subsidies to make up the difference are provided by the government, many existing owners will simply sell, reducing supply.
He continues: “Overseas buy-to-let investment will decline. More landlords will opt for the more profitable AirBnB rental style while some landlords will see their properties repossessed. We will also witness the deterrence of new entrants into the sector. There will always be a housing crisis, it will just be another set of problems. »
Rolande’s comments echo those of Rick de Blaby, head of Get Living – owner of the former Olympic Village in London – who says capping rents would stifle supply.
The fear is that rent caps will accelerate the trend of landlords leaving the private rental sector.
The number of rental properties has not increased since 2016, according to Zoopla, which estimates that there are 5.5 million rental properties in the UK.
The number of unoccupied units available for rent has fallen by 38% compared to five years ago, while inquiries with rental agents have increased by 46%.
Zoopla calculates that across the country, rents rose 12% last year. Due to the imbalance between supply and demand, some commentators expect them to rise another 5% this year.
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