Rent Control Concerns Affecting Buy-to-Let Investment
March 3, 2015 |
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The UK’s housing supply shortage is being worsened by concerns over the possible introduction of rent capping under a Labour government, according to a poll of landlords by an online estate agent.
Four in ten landlords will not add to their property portfolio in the run-up to the general election in May, and 26% were concerned that a Labour win could negatively impact house prices.
Ed Miliband has pledged in to introduce three-year tenancies, with rent rises tied to inflation. This is in spite of the fact that data from the English Housing Survey shows that rent rises in the private rented sector since 2008 were well below inflation, whereas social sector rents increased well above inflation.
Furthermore, RLA research found that 75% of landlords froze or reduced rents in 2014, putting another dent in the argument that rent controls would benefit tenants. They also found that three in five landlords would leave, or consider leaving, the private rented market if rent controls were introduced.
These findings back up an earlier warning from the Royal Institute of Chartered Surveyors (RICS), who said that “politicians play with the private rented sector at their peril.”