Rent controls would prompt switch to Airbnb

The imposition of rent controls - urged by a growing number of politicians and pressure groups in different parts of the UK - would drive a proportion of rental stock to short let platforms such as Airbnb.

That’s the warning from property website Home, which gives a monthly snapshot of the rental and sales markets.

The latest report from the website speaks of “an unprecedented decline in available rental stock on the market” from around 120,000 properties available for renting in February 2019 to scarcely 50,000 now, February 2022.

Home says this represents a massive 58 per cent fall in three years.

It suggests that Greater London is now the main driver of rental inflation overall, as tenants return to the capital following the easing in Covid restrictions.

And it believes that rental affordability is looking stretched in all regions, including London, but due to supply constraints here are unlikely to be significant rent falls this year. More likely is a period of consolidation at these higher levels, it suggests.

Home says: “What is immediately apparent is that, while there is so little choice for prospective tenants, it is unlikely that rents will fall. Letting agents are overwhelmed with demand and renters have no real bargaining room in the majority of lets.

“Setting rent controls would only make the situation worse as landlords would likely exit or switch to Airbnb-style letting.

“In order to improve the choice for tenants and keep rents in check, we clearly need more competition and that means more properties available for rent. To achieve that, the government must stop disincentivising buy to let through taxation and further regulation.

“However, the new Levelling Up agenda seems to be offering precisely the opposite.”