The plans were among 10 pledges announced by the Labour leadership contender today, but the RLA believes that introducing controlled rents would inevitably reduce the supply of rental homes, worsening the UK housing crisis.
Alan Ward, RLA chairman said the plans would be spell disaster for private renters.
He said: “Jeremy Corbyn’s call for rent controls would be a disaster for tenants. He is ignoring all history and experience which shows that where such controls are applied they choke off the supply of homes to rent, making it more difficult for tenants to access decent and affordable housing. This has previously been acknowledged by Labour’s former Minister responsible for housing in Wales.
“Rather than playing the populist tune, Mr Corbyn would do well to consider the facts. Figures in the English Housing Survey show that private sector tenants are spending an average of 4 years in their current property, up from 3.7 five years ago. Such tenants are also more satisfied with their accommodation than those in the social rented sector according to the same survey.”
The RLA has long opposed the introduction of rent controls, believing they will affect the quantity and quality of homes on offer and has been campaigning on this issue for a number of years.
The facts speak for themselves. When the UK last had rent controls, the size of the Private Rented Sector fell from more than half of households – 55% – in 1939 to just 8% in the late 1980s.
Putting a price limit on anything that is below the market rate is going to create a shortage. If rents are capped, limiting landlords returns then some will inevitably leave the market – especially in light of the recent tax grab from former chancellor George Osborne. All at a time when demand for PRS homes is higher than ever.
They also discourage movement, with many households in cities in the US and Germany where rent controls are in place living in unsuitable accommodation as it would be too expensive to move elsewhere.
Rent controls would destroy investment in new housing, push up prices and make it far harder for people to find a flat or house to rent, as well as limiting the landlord’s ability to adequately finance maintenance work.
The RLA believes that rather than penalising landlords for providing much needed rental homes the Government needs to address the issue of supply to stabilise rents in the long term.