BLOGS

The prospect of rent controls in England has reignited a longstanding debate. In April 2026, Propertymark wrote to the Chancellor requesting an urgent meeting to discuss the potential introduction of short-term rent caps—a measure the trade body warns could destabilise an already fragile private rented sector. With rents continuing to rise and tenants struggling with affordability, the appeal of price intervention is understandable. But what does the data tell us about the likely consequences?

The current state of England's rental market

REalyse data tracking the English rental market over the past 24 months reveals a sector under sustained pressure. Average asking rents across England currently sit at approximately £1,700 per month, with year-on-year increases ranging from 2.7% to 4.0% over recent months. Whilst the pace of growth has moderated from the double-digit spikes seen in 2022–2023, rents remain on an upward trajectory that is outpacing wage growth for many households.

Days on market have held relatively steady at 42–52 days, suggesting demand remains robust. Monthly listing volumes have averaged around 62,500 properties, with some improvement in supply during 2025 compared to the previous year—though availability remains well below pre-pandemic norms in many areas.

For tenants already dedicating a significant portion of their income to housing costs, even modest rent increases compound existing affordability challenges. This context makes the political case for intervention more compelling.

Regional yield disparities and what they mean for landlords

Any discussion of rent controls must grapple with the economics of buy-to-let investment. REalyse analysis of gross rental yields across English regions reveals a stark divide that could shape how rent caps affect different markets.

Northern regions offer the highest returns: Northumberland and Tyne and Wear leads with average gross yields of 7.4%, followed by Tees Valley and Durham at 7.2% and East Yorkshire at 7.0%. These areas combine relatively affordable property prices (averaging £147,000–£186,000) with monthly rents of £800–£1,050.

At the other end of the spectrum, Inner London – West shows gross yields of just 4.4%, with average property values exceeding £1.2 million and monthly rents around £4,000. Across the South East and Greater London, yields typically fall between 4.7% and 5.4%.

The national median sits at approximately 5.9%—a figure that, once mortgage costs, maintenance, void periods, and regulatory compliance are factored in, leaves many landlords with slim net returns. For portfolios financed at today's interest rates, yields below 6% often translate to negative cash flow.

Why this matters for rent control policy

If rent increases were capped at, say, inflation or CPI plus a margin, landlords in lower-yield markets would face the sharpest squeeze. A flat cap applied uniformly across England would disproportionately affect London and the South East, where yields are already marginal. Conversely, higher-yield northern markets might absorb modest caps more readily—though these areas also tend to have lower-income tenant populations, creating affordability tensions regardless.

Lessons from Scotland's experience

England need not speculate about rent control outcomes. Scotland introduced a rent cap in September 2022 as an emergency cost-of-living measure, initially limiting in-tenancy increases to 3% (later adjusted to 6% from April 2024). The Housing (Scotland) Act 2025 subsequently established permanent rent control powers.

The evidence from Scotland is instructive. Data from Rightmove and Zoopla indicated that whilst in-tenancy rent rises were constrained, landlords responded by significantly increasing rents between tenancies—resulting in asking rents for new lettings rising faster than in England during parts of 2023. Supply also contracted, with the Scottish Association of Landlords reporting member exits from the sector and new investment falling sharply.

REalyse tracking of Scottish rental listings has shown reduced availability in key cities such as Edinburgh and Glasgow, contributing to intense competition when properties do come to market. This supply-demand imbalance has, paradoxically, intensified affordability pressures for tenants seeking new homes—even as sitting tenants benefit from capped increases.

Impact on tenants: short-term relief, long-term risks

For sitting tenants, rent controls offer genuine and immediate benefits. Predictable housing costs aid household budgeting and reduce the anxiety of unexpected rent increases. For vulnerable tenants on low or fixed incomes, caps provide a buffer against displacement.

However, REalyse market data suggests several countervailing risks:

• Reduced mobility: If landlords raise rents sharply at tenancy changeover (as observed in Scotland), tenants become reluctant to move—even when their circumstances require it. This "lock-in" effect can trap tenants in unsuitable properties.

• Quality deterioration: With rental income constrained, landlords may defer maintenance and improvement works. Properties in lower-yield areas are particularly at risk, as there is less margin to absorb compliance costs.

• Supply contraction: If rent controls push net yields below acceptable thresholds, landlords sell. First-time buyers may acquire some of this stock, but much may shift to second-home or short-let use—removing it from the long-term rental market entirely.

Impact on landlords and market stability

Propertymark's core concern centres on landlord exit. REalyse data already shows landlords operating on tight margins in much of England. With gross yields averaging under 6% in the Midlands and South, and mortgage rates significantly higher than the sub-2% levels of 2021, many portfolios are cash-flow negative before any rent cap is applied.

The English Private Landlord Survey consistently shows that the majority of buy-to-let investors own just one or two properties—"accidental" or small-scale landlords rather than institutional operators. These landlords are most sensitive to regulatory and fiscal changes, and most likely to exit when returns fall.

An accelerated sell-off would have consequences beyond the landlords themselves. Tenants in sold properties face disruption and potential eviction. Local rental supply tightens, pushing up rents for new lettings. And the build-to-rent sector—whilst growing—cannot absorb displaced demand quickly enough, particularly outside major cities.

What might a balanced approach look like?

The policy challenge is genuine: tenants need protection from excessive rent increases, whilst landlords require sufficient returns to maintain supply and property standards. A data-informed approach might consider:

• Targeted rather than blanket controls: Capping increases only where rents exceed local median multiples, or where rent-to-income ratios indicate acute affordability stress.

• Supply-side incentives: Pairing any rent regulation with measures to encourage new rental supply—whether through planning reform, build-to-rent incentives, or reduced taxation on long-term landlords.

• Time-limited measures: If controls are introduced as a cost-of-living response, sunset clauses would limit long-term distortions and allow market adjustment.

• Enhanced data transparency: Requiring landlords to register rents (as proposed in the Renters' Rights Bill) would create the evidence base needed to assess whether controls are working—or causing harm.

Conclusion

The debate over rent controls in England is ultimately a debate about trade-offs. REalyse data makes clear that the rental market is already operating under strain: rents rising faster than incomes, supply constrained, and landlord yields compressed by higher interest rates and regulatory costs.

Rent caps offer tenants short-term relief but risk accelerating the very supply problems that drive rents higher. Propertymark's call for dialogue with the Chancellor reflects a sector seeking to shape policy before unintended consequences materialise.

What is certain is that any intervention must be informed by granular, local market data—understanding where yields are viable, where supply is most constrained, and where tenants face the greatest affordability pressure. Blanket policies applied uniformly across England's diverse housing markets are unlikely to achieve their aims without creating new problems elsewhere.