Private tenants in England could see annual savings of £2,400 if rent controls were introduced, according to a recent report by the UCL Institute for Innovation and Public Purpose. The findings, which have been enthusiastically welcomed by Green Party leader Zack Polanski, suggest such measures could significantly improve affordability for lower-income households and reduce government spending on housing benefits.
The report, co-authored by Dr Beth Stratford and Dr Joe Beswick, modelled a scenario where rents had been frozen in November 2022. Under this hypothetical, the government could have restored housing support to cover the cheapest 30% of local rents and still saved an estimated £2 billion annually on housing benefit. Combining this rent freeze with increased housing support would now result in an average annual saving of £2,400 for renting households, with disposable income for the poorest fifth of households increasing by 22%.
Mr Polanski lauded the report's conclusions, stating on social media that it represented a "Win/win all around!" He highlighted that the proposed controls would not only save renters money but also generate savings for the government. He further suggested that a portion of these savings should be reinvested into building new social housing stock, aligning with the Green Party's long-standing call for rent controls as a key component of their response to the ongoing cost-of-living crisis. During their 2026 local election campaign, the party advocated for councils to be granted powers to limit rent increases, with the Wales Green Party specifically proposing a one-year freeze while a more comprehensive system is developed.
Crucially, the new analysis also pushes back against concerns that substantial rent reductions would render a significant number of landlords financially unviable. Using HM Revenue & Customs data, the researchers estimated that even a 20% reduction in rent would only see the mean pre-tax profit margin for mortgaged landlords decrease from 70% to 64%. This adjusted margin, the report notes, would still be 4.5 times higher than the average pre-tax margin recorded by businesses across the broader economy. It is important to note, however, that this calculation does not account for capital gains derived from house price growth. For unmortgaged landlords, who constitute 58% of unincorporated landlords in the study, profit margins would remain even higher. The report estimates that a 10% rent reduction would only make approximately 2.3% of landlords unprofitable.
While acknowledging that rent controls could prompt some landlords to sell their properties, the authors suggest this could present an opportunity for councils and housing associations to expand their social housing portfolios. They estimate that the savings generated by a 20% rent reduction could, within a decade, facilitate the purchase of at least 48% of the properties made unprofitable by the policy. This proportion could rise to at least 56% with changes to council financing, with half of these acquired homes potentially being converted to social rent.