Finance chief says rent controls ‘not the answer to…
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), says rent controls are not the magic answer to problems in the lettings sector.
In a statement to the mortgage industry media she says the new Labour government “would be wise to learn the lessons of history and promise not to introduce rent controls in any form”.
She continues: “In Scotland, the Green Party/SNP coalition introduced rent freezes and no-eviction policies in 2022 in an attempt to address the cost-of-living crisis.
“Rents were frozen until March 2023, at which point landlords could increase them by a maximum of 3%, or 6% if they appealed – and many did. In the past, they may have prioritised keeping good tenants happy in the knowledge that both parties had the ability to renegotiate terms if their financial positions changed.
“With the imposition of controls, landlords hiked rents whenever they could, fearful of future draconian regulation. The controls were abolished in March 2024. ONS figures show that during the year to March 2024, average monthly rents in Scotland went up by 10.5% to £947 pcm – higher than the 9.1% rise in England and 9% rise in Wales.”
Davies says Labour at Westminster has been sending mixed messages about such measures.
“Chancellor Rachel Reeves stated in May this year that ‘rent controls are not a Labour Party policy’ but in the same month declared that she could see a case for introducing controls in some areas. Some prominent regional mayors and councillors, including Manchester’s Andy Burnham and London’s Sadiq Khan, are keen supporters of such controls. And Sir Keir Starmer is a keen supporter of devolving more power to regional mayors.
“Buy to let landlords can therefore be forgiven for feeling apprehensive. In fact, the latest quarterly landlord research carried out by Pegasus Insight found that rent controls would be the largest single driver of market exit/property divestment by landlords, with one in three saying they would sell up if such controls were introduced..”
