Rent controls are one of the most persistent housing policy ideas in modern politics. Whenever rents rise faster than wages, calls for government-imposed caps quickly follow. In the UK, proposals are often framed as a fairness issue – the idea that landlords are “better off than renters” and that the state should intervene to rebalance the system.
At face value, rent controls sound compassionate and straightforward. If rents are rising too fast, simply stop them from rising. However, decades of international evidence show that while rent controls may offer short-term relief for a small group of tenants, they consistently fail to fix housing affordability in the long run – and often make the problem worse.
Why Rent Controls Appeal to Politicians
1. They Offer a Simple Answer to a Complex Problem
Housing affordability is deeply complex, involving planning policy, construction costs, population growth, finance, and supply constraints. Rent controls cut through that complexity with a clear political message: “We’ll cap rents.”
For voters under pressure, this sounds decisive and reassuring. For politicians, it is an easily communicated policy with immediate visibility.
2. They Fit a Popular Inequality Narrative
Rent control is often justified using a moral argument: housing is essential, landlords profit from scarcity, and renters lack power. Framing the issue as “landlords versus tenants” creates a clear political dividing line and helps mobilise support, even if the economic realities are more nuanced.
3. They Deliver Short-Term Wins
Rent controls can temporarily protect sitting tenants from rent increases. These benefits are immediate, visible, and politically valuable – even if the long-term costs only emerge years later, often after the policymakers who introduced them have moved on.
Why Rent Controls Fail in Practice
Economists across the political spectrum largely agree on one point: rent controls distort housing markets.
1. Reduced Housing Supply
When governments cap rents below market levels, landlords respond rationally:
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Some sell their properties.
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Some convert rentals into owner-occupied homes or short-term lets.
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Some stop investing in rental housing altogether.
The result is fewer homes available to rent, which intensifies competition and pushes up rents elsewhere in the market.
2. Higher Rents for New Renters
While existing tenants in controlled properties may benefit, new renters often face higher rents, fewer choices, and tougher competition. Rent controls effectively create a two-tier market: protected insiders and excluded outsiders.
3. Declining Property Standards
When rental income is artificially capped, there is less incentive – and often less financial capacity – to invest in maintenance and upgrades. Over time, this leads to deteriorating housing quality, something seen repeatedly in rent-controlled cities around the world.
4. Reduced Mobility and Inefficiency
Rent controls discourage tenants from moving, even when their circumstances change. People stay in homes that no longer suit their needs simply because the rent is artificially low. This leads to inefficient use of housing stock and worsens shortages.
Global Examples Where Rent Controls Fell Short
United States (New York & San Francisco)
Long-standing rent regulation protected some tenants but significantly reduced rental supply. In cities like San Francisco, landlords increasingly converted rental homes into owner-occupied properties, contributing to higher city-wide rents and accelerating gentrification.
Germany (Berlin)
Berlin introduced strict rent caps with the intention of improving affordability. The policy resulted in a sharp fall in rental listings, freezing supply almost overnight. The caps were eventually overturned, but not before market confidence was damaged.
Scotland
Temporary rent freezes and caps led many landlords to raise rents to the maximum permitted level or exit the market altogether. Instead of stabilising rents, the policy contributed to faster rent increases once controls loosened.
Sweden and Stockholm
Strict rent regulation created waiting lists for rental homes stretching years or even decades, pushing people into informal arrangements or the unregulated market.
India (Mumbai)
Rent-controlled properties became dilapidated and unsafe, with landlords unable or unwilling to invest, leading to widespread housing quality issues.
Across different political systems and housing markets, the pattern is consistent: rent controls reduce supply, distort incentives, and fail to solve affordability.
Why Rent Controls Keep Returning Despite the Evidence
Rent controls persist not because they work, but because they are politically attractive:
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They promise immediate relief.
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They align with popular fairness narratives.
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They shift blame rather than addressing structural causes.
The deeper problem – insufficient housing supply – is harder, slower, and more politically challenging to fix.
What Works Better Than Rent Controls
Long-term housing affordability is far more likely to improve through:
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Increasing housing supply via planning reform
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Encouraging investment in rental housing
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Supporting targeted financial help for those who need it most
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Strengthening tenant protections without distorting prices
These approaches address root causes rather than symptoms.
Conclusion
Rent controls may feel like the right response to rising rents, but history shows they consistently fail to deliver sustainable affordability. They protect a minority, penalise newcomers, reduce supply, and ultimately push rents higher elsewhere.
If the goal is genuinely affordable housing for future generations, policy must focus on building more homes, not capping the price of too few.
Disclaimer
NetRent does not provide legal advice. This article represents our understanding of rental property law and housing policy at the time of writing.
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