Report warns rent controls could spark switch to more Airbnb-style lettings
A leading property website has warned the introduction of rent controls in Wales could see more landlords move their properties to Airbnb and other short let platforms.
The property platform Home, which monitors the lettings market, says a shortage of rental stock has seen rents increase significantly and suggests rent controls could result in an exodus of landlords, making the situation worse.
“What is immediately apparent is that, while there is so little choice for prospective tenants, it is unlikely that rents will fall. Letting agents are overwhelmed with demand and renters have no real bargaining room in the majority of lets,” Home’s analysis says.
“Setting rent controls would only make the situation worse as landlords would likely exit or switch to Airbnb-style letting.
“In order to improve the choice for tenants and keep rents in check, we clearly need more competition and that means more properties available for rent. To achieve that, the government must stop disincentivising buy to let through taxation and further regulation.”
Welsh Labour and Plaid Cymru agreed to establish rent controls under the cooperation agreement announced in November as one of a series of measures to tackle the housing crisis in Wales and their introduction was debated in the Senedd earlier this month.
Take fright
Speaking during the debate, Plaid Cymru’s housing spokesman Mabon ap Gwynfor said: “I know that some will take fright at reading the motion and will instinctively oppose it, referring to examples where policy under the heading ‘rent control’ has failed. And that’s true: some experiments have failed.
“But when they are designed in the right way, when they’re targeted and when they dovetail with other successful policies, then rent control is a policy that succeeds and is popular.
“And they’re popular today, with over two thirds of people supporting a policy of this kind in the United Kingdom, according to a recent YouGov opinion poll. Note that the motion does not propose a particular kind of rent-control system, but it does note the need to impose controls on rents to a level that meets the ability to pay.
Responding for the Welsh Conservatives, Janet Finch-Saunders, MS for Aberconwy, echoed Homes’ conclusion, warning: “Private landlords, financial brokers, are telling me that they or their clients are fed up now with so many controls being placed upon them, when all they want to do is provide good-quality accommodation for a fair rent in return.
“Many are now selling up their stock or moving over to the holiday let. In fact, between 2018 and 2019 and 2021, Wales has seen over 4,500 private landlords leave the sector. And, Minister, you can shake your head, but I have that figure, firmly, provided to me by Rent Smart Wales themselves, in black and white.
“Now, last week, I chaired an estate agents round-table, and it was made clear that there is an agent in south Wales that manages over 4,000 units, and they know for a fact that owners are voting with their feet, and actually leaving the rented sector.
“Your proposal, Mabon, would make that wave a tsunami of landlords leaving, and the casualties will be the very people that you actually think you’re trying to help.”
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Will the Govt listen though- i do not think so. We live in a free market economy and marxist controls do not work in it. Labour Govts in the 70’s tried it and look at the mess the country became.
No more second homes in wales 🏴 tax all second homes in wales 100 percent taxes
Did you know that Marx kept getting banned from different countries and also was baptised at the age of 6 for political reasons
Rent controls, like UBI, are one of those well-intended policies that result in the opposite of the intention. It’s the same as student loan forgiveness – maybe the model itself is the issue, all these policies do is shift debt onward. Further allowance for government control (as opposed to checks and regulation) of an economy always leads to stagnation or collapse. We’ve played this game, only stupid prizes await.
The reason landlords are leaving the sector is the same reason that Air B’n’B owners are selling up, HMRC has finally caught up with “unearned income”.
Rent controls work well in other countries like France, Germany and other civilised nations but whether the UK can be called civilised is under debate.
It certainly does “Work well” for certain people, but not for those the controls are intended to help. It seems that any policy that holds, at least in part, a retributive aspect that target a group (punishing landlords, in this case) tend to have nasty unforseen circumstances. Berlin, for instance, has seen a massive influx of foreign property investment, thus squashing the ability of middle class Berliners to fully benefit from investment opportunities whilst the controls effectively price younger people out of the market altogether (causing depressed wages, locking them into a rental structure that seems low to older, established… Read more »
Not true. I don’t mind paying taxes but I do mind being assaulted by tenants and having my property deliberately damaged by them. Pre-covid if your tenant gave you a false reference you could ask them to leave within 2 weeks. Post-covid it’s 6 months. It’s regulation gone mad and all on the side of the tenant. I’m out!
Stop listening to YouGov polls. The only thing you find with those things is what you gov pollers like. Even using not true communism argument. It is disgraceful.
A lot of people will say yes to something if they only hear half the story.
I don’t want to be a landlord and I don’t want to run a holiday let. I want what my parents had – a high interest rate on their saving which resulted in a nice straightforward income that did not involve the stress of being assaulted by vile tenants and fearing what review your latest holiday let customer let will give you. Unfortunately as a Plebeian of the UK, this is the only way I can make money currently. I don’t have friends or relatives in high places who can help me buy shares in companies that will receive lucrative… Read more »