Rent controls just won't work says Faulkner

One of the industry's most respected analysts, Kate Faulkner, says rent controls of the kind proposed by some politicians ahead of the May general election could ultimately lead to rents rising rather than being stabilised or falling.

Faulkner says the latest revised measures of the inflation within the private rental sector by the Office of National Statistics confirms that annual rental inflation is just two per cent a year, so below the long term consumer inflation average of around three per cent.

In other words, landlords' rental income has been declining in real terms says Faulkner, who has analysed data from the ONS as well as LSL, Belvoir Lettings and Countrywide agencies. She says most existing rents to existing tenants - who typically stay in their properties for two to three years - is not increased by landlords from one year to the next.

Unlike reports we have seen, it is suicide for landlords/agents to 'kick out' good tenants in the hope of a few extra quid each month she says.

Faulkner claims that where rent controls do exist, in the social sector, rents have actually increased by 21 per cent since 2008/9. In comparison, private sector rents have risen only by a maximum of seven per cent, and often very much less. The average rent of £720 in the private sector would actually be £120 more a month if the social rent controls had been applied she says.

She believes that MPs who 'blame' letting agents and landlords for rents and other lettings industry problems are merely deflecting attention from their own critical failings, namely a failure to build enough homes and a failure to regulate private rentals despite support for 25 years from many within the industry itself.