The Renters Rights’ Act goes some way in offering a new standard for tenant and landlord relationships, and is one of the more memorable pieces of legislation passed by the incumbent Labour government. It is yet to be seen what level of impact these new laws, which come into effect in spring this year, will have on the current housing crisis in the UK.
While regional mayors Andy Burnham and Sadiq Khan have called for rent controls to stem the tide of unaffordable rental homes, the new laws, though strengthening and ringfencing tenants’ rights, do not go far enough, stopping short of introducing centralised and widespread rent controls in the UK. Other than new laws allowing the capping of rent prices in some areas of Scotland, it seems that despite the furore, rent controls remain a thing of the past in the UK’s private housing market.
So why is rent control such a contentious issue in a renters’ market beset by soaring prices, poor-quality housing and a lack of available homes?
Rent control is not a new idea
Rent control is not a new idea either in the UK or across broader Europe.
Rent controls, introduced briefly in Berlin during the coronavirus lockdown of 2020, have been blamed for contributing to a lack of supply in the rental market. In 2021, The Economist described this brief period of capped rent prices as “a failure”, contributing to “Berlin’s housing shortage” and leaving relations between tenants and landlords “poisoned”. A more recent article in the BBC dwelling on the impact of the Renters’ Rights Act again referred to the rent caps in Berlin as contributing to dire problems with competition and scarcity still felt today by renters in that city.
However, rent controls have been a fixture of several European countries’ rental markets for a lot longer than the disaster period of the past few years. Controlled rents in France, Spain, Norway and the Netherlands take various forms, involving different levels of government intervention in the private market. In the Netherlands, unusually extensive levels of rent control apply to 96% of private market properties. Not only are annual rent increases heavily limited by Dutch laws, but these increases are means tested in line with tenants’ salaries, meaning that tenants earning a low wage cannot be charged more than a certain amount for their rent. Other countries, such as France, Spain and Norway, have similar rent controls allowing landlords to set initial prices and then regulating the rate of subsequent price increases.
But it has not always been the case that UK governments have shied away from rent control as a method of ensuring affordability on the private market. Post-war, rent controls were inexorable from the government management of much of the country’s housing stock. Legislation enacted in 1915 and 1939 introduced full rent controls and, though these were both intended as temporary measures, they remained in place until as late as 1968. In 1915 and 1939 equally, the new laws passed were designed to restrict rents to pre-war levels, ensuring that the housing market remained stable and preventing wartime profiteering by overzealous landlords.
The Renters’ Rights Bill and rent controls
As many of its critics have pointed out, the Renters’ Rights Act does not go so far as to implement the kind of broad-strokes rent control that was commonplace in the UK before, during, and after the world wars and that can be found today in many European countries. However, the new laws will place a ban on rental bidding, and some have seen this as a hallmark of the gradual introduction of rent control in the UK housing market.
A recent article in the BBC compares the new legislation to other forms of rent control across Europe, The Telegraph has declared that “nobody wants rent controls, but we’re getting them anyway”, while The Times’ Emma Duncan has described the new legislation as “increas[ing] the incentive to sell rental property and decreas[ing] the incentive to invest in property”.
While largely intended to prevent no-fault evictions, the new laws passed do proscribe some kind of control on the rental market, by preventing the price hikes that often occur in high-demand areas due to bidding wars. One aspect of the Renters Rights’ Act does devolve new power to the Scottish Government, to cap rent prices in some areas. However, these so-called rent controls are a far cry from the widespread regulation of the early to mid 20th century, and pale in comparison to the legislation passed across the rest of mainland Europe.
So why has there been such vociferous resistance to new rental laws which are, essentially, uninvasive measures intended to clamp down on landlord malpractice and which hardly amount to full-scale rent controls?
The debate over rent control
A commonly referenced argument against rent controls points to the fact that, during their introduction in the UK, these measures frustrated building targets by ensuring that constructors were offered too little a return on their investments. High building costs and interest rates ensured that constructors were more likely to build for upmarket clients, producing a boom in owner-occupiers after the war and leaving the number of rental properties in dire decline. The Economist calls upon the same argument when dismissing Berlin’s brief efforts to quell rising rent prices, describing how lowered rents produced a decrease in the “supply of homes”.
However, the fact that rent control resolves problems of affordability but exacerbates issues with housing supply is perhaps not as catastrophic as it may first seem. Government data for 2024 identified 998,000 empty homes in England alone. This figure rose by 10% between 2018 and 2023.
Looking at these numbers, it may seem as though the main cause of a deepening housing crisis in the UK is unaffordable prices rather than an actual shortage of homes. In the social housing sector, it is clear that building rates have slowed drastically over the past few years, contributing to a dearth of available council houses to meet high demand.
However, this is clearly not the case in the private sector, where the high-asset value of private properties has encouraged heavy investment for decades. Not only has the number of privately renting households increased by 52% between 2008 and 2024, but the number of properties built to rent in the private sector increased by 13% between 2024 and 2025.
Housing: investment opportunities or a fundamental right for everyone?
The various arguments for and against rent controls amount to a fundamental difference in perspective. That is: the difference between the description of this crisis as one stemming from the strangulation of investment and building versus one stemming from a fundamental problem of price rises and affordability. Ultimately, this amounts to the difference between a view of housing as a lucrative investment opportunity or a form of asset storage, and the view of housing as for the provision of homes which are, or should be, a fundamental human right.
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