What’s the deal with rent controls?

Good afternoon from New Economy Brief.

Renters have been squeezed by high rents for decades, and with 45% of private tenants now facing unaffordable housing costs it’s little surprise that rent controls are moving up the political agenda. The government’s new Renters’ Rights Act marks a major advance for renters’ security – including the long-awaited abolition of no-fault evictions – but it leaves the question of affordability largely untouched.

In the long run, building more new homes can ease pressure on rents. But this takes time, and the UK’s recent building record is hardly encouraging (as we explored recently). With the cost-of-living crisis persisting and housing still many people’s largest expense, interest in ways to make renting more affordable has intensified. Recent reports from IPPR, NEF and JRF are the latest signs of that growing momentum.

This week we examine the case for rent controls: their benefits, their limitations, and how they could look in the UK in practice.
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Why rent controls are back on the agenda

Exorbitant rents have been well documented in recent years, with particularly eye-watering hikes during the cost of living crisis. But the private rental sector (PRS) has been like this for decades. Since rents were deregulated in the late 1980s, they have risen steadily, and by 2024/25 private renters spent an average of 34% of household income on rent – versus just over 10% in the early 1980s. (30% is considered the threshold for unaffordability.)

Widespread unaffordability. The PRS has doubled since the late 1990s and now houses one in five households. IPPR finds 2.4 million of these – almost half – now face unaffordable housing costs – and projects this will keep rising if nothing is done. The pressure is most acute for low-income renters, but it’s felt right up the income scale: over a fifth of those in the top 20% of incomes report difficulty covering their rent. 

Cuts to social security support. Local Housing Allowance (LHA) is no longer doing its job for low-income tenants. It is meant to cover the cheapest 30% of rents in a local area, but periodic freezes even as rents soar have eroded its value. Fewer than 3% of homes would be affordable to move into today for people relying on housing benefit. There is broad consensus that at the very least LHA should be unfrozen and annually uprated to cover the bottom 30% of rents, if not more.      

But unaffordable rent does harm further up the income distribution than the benefit system is designed to reach. And that means looking beyond the social security system for a solution.

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The case for rent controls

Rent controls – capping rents so they can’t increase faster than inflation or wage growth – could bring meaningful, relatively quick relief for tenants. They could save renters hundreds of pounds within a few years, as well as helping control spending on housing benefits. 

Controls can also help rectify the structural power imbalance between landlords and tenants, particularly in tight rental markets. They give the latter greater certainty about how often and how much their rent can change, and enable rents to fall relative to incomes over time. 

And combined with other interventions, they can contribute to reshaping the housing market in more fundamental ways, with homes gradually moving from private landlords into social or community ownership, or to homeowners.

Public support is strong, too. Polling by More in Common from early 2026 finds 67% of the public backs stopping rents from rising faster than wages, with majority support across most voting segments. Even 44% of landlords support the idea.

International comparisons. Rent controls are mainstream policy across Europe, found in Germany, France, Spain, Ireland, Scotland, the Netherlands and many others. NEF thinks Ireland and Spain are among the most successful examples. In Ireland, Rent Pressure Zones, where annual increases are capped in areas of concern, have slowed rent increases meaningfully. Controls also reduced rents in Catalonia, without reducing the supply of rental properties. The most comprehensive overview of international studies on rent controls found they reduced rents in most cases. 

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Criticisms and mitigations 

However, rent controls are hotly contested. The central argument against them is that their benefits are outweighed by the harm they can cause in the wider housing system. These can include reducing rental supply and housebuilding, as well as pushing up rents in non-controlled properties. They can also discourage people from moving (e.g. for work), and lead to housing being poorly allocated or deteriorating through neglect.

A landlord sell-off? By reducing profits, rent controls could also cause landlords to sell en masse or convert properties to short lets – harming lower-income tenants who can’t access homeownership or social housing. 

Proponents of rent controls say careful design can mitigate this. JRF's new analysis argues that landlord profitability can be protected by pairing rent controls with tax reforms that redistribute more of the tax burden towards the most profitable landlords. NEF says conversion of homes to short-lets can be addressed with stronger regulation and tax disincentives, making more homes available for residential use.

A smaller PRS. Some proponents of controls argue that shrinking the PRS is actually a good thing, too – if it’s done right.

Impact on new supply? IPPR argues that evidence is inconclusive that rent controls reduce construction of new homes, but that risks can be managed with wider support for housebuilding, which is crucial to improving affordability in the longer term. These levers include planning reform, creating more social housing, and carefully designed, time-limited exemptions from rent controls for some new builds. 

Safeguarding quality. There is some evidence that rent-controlled homes get less maintenance. Stronger regulation can mitigate this, and the extension of the Decent Homes Standards to the PRS as part of the new Renters’ Rights Act is a big step forward. Tying rent increases to landlords making improvements can also help.  

Mobility and misallocation. Where rent caps apply only to sitting tenants but reset when a property changes hands, tenants are discouraged from moving out. This can lock up larger homes with fewer occupants, making it harder for newcomers to find homes and to relocate for work. Capping rent increases both within and between tenancies, as supporters advocate, would narrow this gap and reduce incentives to stay in an unsuitable home. 

The cost of inaction. It’s important to take concerns about the potential downsides of rent controls seriously, and any system would need careful design to deal with them. But proponents argue that the risks of inaction – entrenched unaffordability, rising poverty, a generation locked out of secure housing and significant structural economic costs – are greater than the risks of a well-designed system, making it a worthwhile trade-off.

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What could rent controls look like in the UK?

So how could rent controls bring down rents in England without creating the problems critics foresee? IPPR, NEF and JRF offer different models but share a common approach: limiting rent increases and applying controls both within and between tenancies. 

IPPR proposes a “double lock”, capping annual rent increases at the lower of inflation or earnings growth. It notes that if this had been in place since 2020, rents would be at least 7% lower by 2030 – saving the average renter £850 a year across England and over £1,700 in London.

NEF advocates immediately capping annual rent increases at 2% or inflation, whichever is lower, before moving to a new “fair rents” system.

JRF has modelled a system linking increases to inflation (alongside the tax reforms mentioned above), which would leave renting households around £1,200 a year better off within six years.

All three organisations argue for rent controls as part of a wider package of reforms. This includes permanently relinking Local Housing Allowance to local rents; JRF argues rent controls would pay for annual uprating and reduce the housing benefit bill. 

The package also includes improved collection of rental data and enforcement (IPPR and NEF), and exemptions from rent controls for substantial quality improvements and some new-build homes (IPPR). Among the other proposals are stronger regulation of short-lets (IPPR and NEF) and transferring homes into owner occupation, social housing or community ownership where landlords choose to sell (NEF). All three support measures to increase housing supply, particularly of social homes. 

The (un)affordability question isn’t going away 

The Renters' Rights Act has made renters more secure, while doing little to address affordability. Ministers argue that building more homes will ease pressure on rents over time. That may be true, but new homes take years to deliver, and the government's housebuilding programme is falling short of its ambitions. For renters struggling today, future supply is not enough. 

Rent controls are not without risks. But a growing body of evidence suggests that, if well designed, they can improve affordability while limiting many of the downsides critics fear. Inaction carries risks of its own, too: for renters, the economy, and society more broadly. As long as rents remain unaffordable, the debate over controls is unlikely to go away – nor should it.