Rent control often sounds appealing to some: limit how much landlords can charge, and tenants will have access to affordable homes in the city. Yet for those who own, manage, or invest in property it’s important to look beyond good intentions and understand the real-world impact of rent control policies.

Across the world, wherever rent controls have been introduced, they have consistently produced unintended consequences—many of which have harmed both tenants and landlords alike. Understanding these effects is crucial for anyone with investments in the private rental sector.

The Illusion of Affordability

Rent control sets a legal limit on how much landlords can charge for rent or how quickly rents can increase. In theory, this protects tenants from sudden spikes in housing costs. In reality, however, capping rents below the market level distorts basic supply and demand.

When rents are artificially low, demand for rental properties soars. People who would not normally be in the rental market—such as students moving out earlier, individuals seeking second flats, or wealthier households seeking a bargain—rush to secure these underpriced homes. Yet landlords, facing reduced returns, are discouraged from maintaining, improving, or even continuing to offer properties for rent.

The result? A rising shortage of available, well-maintained homes. Over time, housing quality declines, new developments slow down, and many properties fall into disrepair or are sold off for alternative uses.

In a city like London, where demand already outstrips supply, rent control risks deepening housing shortages rather than solving them.

The Supply Trap

One of the greatest dangers of rent control is its impact on housing supply. Developers are less likely to build new rental properties if returns are uncertain or restricted. Existing landlords may convert properties to non-residential use or exit the market altogether.

Without sufficient new stock entering the market, tenants face an ever-tighter squeeze. Queues lengthen, competition intensifies, and those who truly need affordable housing find themselves locked out by sheer scarcity.
In cities where rent control has been introduced, such as New York and Berlin, the long-term effect has been a dramatic slowdown in rental supply, leading to exactly the type of housing crises that rent control was intended to prevent.

Who Really Benefits?

A major myth is that rent control primarily helps the poorest members of society. In fact, those with the best connections, quickest applications, or strongest references tend to snap up the limited number of rent-controlled properties. Over time, these properties often remain in the hands of middle-class tenants who, despite rising incomes, continue to benefit from below-market rents.

Meanwhile, those most in need—lower-income families, key workers, and young people starting out—struggle to find accommodation at all.

In effect, rent control can create a two-tier system where access depends more on luck, timing, and connections than on need. The market becomes clogged, stagnant, and increasingly unfair.

Disincentivising Good Landlords

For landlords, rent control fundamentally alters the incentives that drive property management decisions. When returns are artificially suppressed, the financial motivation to reinvest in properties weakens. Essential repairs may be delayed, cosmetic improvements deferred, landlords may not be able to afford to do repairs and upgrades to kitchens, bathrooms, and insulation abandoned.

Rather than striving to offer the best homes to attract and retain good tenants, landlords in rent-controlled markets often shift to a defensive strategy—minimising costs and compliance risk, while doing the bare minimum legally required.

This hurts tenants just as much as it hurts landlords. It creates a cycle of declining property standards across entire sectors of the rental market.

Political Popularity, Economic Reality

Rent control is politically attractive because tenants outnumber landlords. Promising “rent freezes” or “affordable housing guarantees” wins votes. But popularity does not make a policy economically sound.

The fundamental problem with rent control is that it attacks the symptom (high rents) rather than the cause (insufficient housing supply). In London’s case, decades of under-building, planning restrictions, and population growth have created a natural upward pressure on rents. Artificial price caps do not solve the root cause—they only make the underlying shortages worse over time.

In places where rent control has been introduced, initial public support often gives way to frustration and disappointment as quality drops, availability shrinks, and the black market for rental properties grows.

Conclusion

Rent control is not a solution to housing affordability. It is a temporary political measure that, in practice, creates deeper, more damaging problems over time—for landlords, tenants, and the broader housing market.

If London is to meet the needs of its growing population, the focus must be on increasing housing supply, removing planning bottlenecks, and encouraging responsible investment in the private rental sector—not artificially distorting prices. Landlords who understand these dynamics will be better positioned to protect their investments and continue offering valuable housing solutions in the years ahead.

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