"Rent controls, while well-intentioned, risk driving landlords out of the market or into workarounds that undermine the very tenants they aim to protect"
- Rob Stanton - Landbay
More than a third of landlords in England say they will stop investing in their properties if rent caps are introduced, according to new research from buy-to-let lender Landbay.
The Renters’ Rights Bill, which was introduced to parliament in 2024, proposes significant reforms to the private rented sector (PRS), aiming to improve tenant protections and rental standards. It includes tighter rules on rent increases, requiring landlords to give tenants at least two months’ notice, as well as a new right for tenants to challenge rent hikes at tribunal.
Landbay asked landlords how they would respond to the introduction of rent caps. Just over one-third (37%) said they would halt investment in their existing properties. Based on an estimated 4.7 million homes in England’s PRS, this would mean approximately 1.75 million properties could face reduced upkeep or improvements if the Bill passes into law.
Rob Stanton (pictured), sales and distribution director at Landbay, commented, “It’s really important that we go into the Bill with our eyes open. Rent control always has unintended consequences – and let’s be frank, that is exactly what we are signing up for with the Renters’ Rights Bill."
"We can see it in areas that have adopted it, like Berlin, New York, and San Francisco. Trying to manipulate the market will lead to landlords leaving their properties untouched and not investing in them, potentially lowering the quality of the housing stock. In a free market, rents reflect demand and scarcity. That will no longer be the case when the Bill comes in.”
The impact of rent controls in other major cities has been widely documented. In Berlin, where the local government introduced a rent freeze in 2020, the number of listed rental properties dropped by more than 50%. Many landlords either left their properties empty, converted them into owner-occupied units, or sold them altogether.
Others made extensive upgrades to qualify for regulatory exemptions. New rental development slowed significantly, and a lack of supply made it increasingly difficult for younger or first-time renters to secure housing.
In New York City, some rents are governed by a board, and restrictions have led to a rise in under-the-table payments and illegal subletting arrangements. These informal practices have contributed to the emergence of a shadow rental market, creating a mismatch between supply and demand and further complicating access for new tenants.
San Francisco has experienced a similar pattern. Research cited by Landbay indicates that rent control led to a 15% drop in the overall supply of rental housing, while tenant turnover in rent-controlled units fell by 25%. However, the policy also deepened inequality by favouring long-term tenants and reducing options for newcomers, especially those with lower incomes or more mobile lifestyles.
In addition to the headline finding around investment, Landbay’s survey revealed that 16% of landlords would consider exiting the market entirely if the Bill passes. This could result in the loss of up to 750,000 properties from the PRS. A further 12% admitted they would attempt to sidestep new regulations to maintain rental income at market levels.
“Rent controls, while well-intentioned, risk driving landlords out of the market or into workarounds that undermine the very tenants they aim to protect,” Stanton warned. “We’re staring at a future where quality rented housing dwindles. If 350,000 landlords, with roughly 750,000 properties, leave the private rented sector, and landlords stop investing in 1,750,000 properties, at least 44% of England’s remaining private rented sector will face neglect and under investment. The data from Berlin, from New York, and from San Francisco screams caution—capping rents distorts markets, slashes supply, and creates black markets. Landlords aren’t the enemy; they’re responding to a market being squeezed dry. Ignore the evidence, and we’ll all pay the price. This is very bad news for the government.”
The Renters’ Rights Bill is still making its way through the legislative process, with further debate expected on its long-term implications for landlords, tenants, and the wider housing market.
