Rent controls would critically damage any prospects of growth in the private rented sector in Wales according to Douglas Haig, Director for RLA Cymru.
Following Labour leader, Ed Miliband’s calls for the re-introduction of rent controls in England, the Residential Landlords Association is writing to all parties in the Assembly to seek assurances that they will not introduce such a policy in Wales.
The RLA argues that introducing rent controls would leave many tenants in Wales worse off given that rents across Wales are increasing by much less than inflation as measured by both CPI and RPI.
According to data from the Office for National Statistics, rents in the private sector in Wales increased by just 0.6% over the past year and 3% in the five years between March 2009 and 2014.
All the evidence from the UK and overseas demonstrates that rent controls deters investment in the private rented sector and so reduces supply. This includes evidence from the Organisation for Economic Co-Operation and Development (OECD) which shows that rent controls lead to greatly reduced quality and quantity of new homes.
Douglas Haig, Director for Wales for the RLA commented:
“Whilst it is good to see a debate being held on the role that the private rented sector has to play in meeting the country’s housing needs, it is vital that it is based on fact and not populism.
“All the evidence clearly shows that rent controls critically undermine investment in new homes to rent and are not needed given that official statistics show that rents are increasing by less than inflation.
“I am therefore writing to all parties in the Welsh Assembly to seek reassurances that they do not intend to adopt a similar path for Wales which would be against the interests of tenants.”