Property lawyers have warned that landlords in England could face weaker returns and may be prompted to sell properties if ministers introduce rent controls. Kristine Ng, a partner at Morr & Co, and Paul Rooke, a partner at Mayo Wynne Baxter, stated that such restrictions could deter investment and decrease the number of homes available for tenants.
This warning follows findings from the Institute for Fiscal Studies, which reported that private renters allocated an average of 28% of their household incomes to housing costs in 2024–25. This compares to just over 11% across all households. Additionally, 26 Labour MPs have urged Housing Secretary Angela Rayner to reconsider the government's current stance against introducing rent controls in England.
Ms Ng suggested that if returns become restricted, investment is likely to shift elsewhere. She noted that while rent controls might offer short-term protection for tenants, they risk discouraging investment in the private rented sector at a time when housing supply is already under pressure. The IFS analysis also indicates that if landlords sell properties in response, there could be downward pressure on house prices and a reduction in rental homes.
Research for the Joseph Rowntree Foundation, conducted by the Autonomy Institute, modelled three potential forms of rent control from next year: a CPI-linked cap, a nominal freeze, and a moderate system. This moderate system would limit rises during tenancies to CPI, with increases between tenancies capped at CPI plus 2%. The model estimated annual savings for each tenancy by 2031 could range from £130 under a CPI-linked limit to £1,418 under a freeze.
Mr Rooke highlighted the risk of unintended consequences, stating that rent controls could create a two-tier market. This could benefit existing tenants but make it more difficult for new tenants to find accommodation. He added that such controls might also discourage investment in maintenance and improvements, potentially limiting the supply of rental housing over time.