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.
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.”
Support our Nation today
For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.