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A U-turn under pressure

In late April 2026, reports emerged that Chancellor Rachel Reeves was considering a temporary rent freeze on private sector landlords in England—a measure designed to ease cost-of-living pressures ahead of local elections. Within days, Downing Street publicly dismissed the proposal, and Housing Minister Matthew Pennycook reiterated that the government "does not support the introduction of rent controls."

The swift rejection came after an outcry from landlord groups and property industry bodies. The National Residential Landlords Association warned that a freeze would be a "disaster for landlord and investor confidence," while Propertymark cautioned that additional controls would "push up costs, reduce supply and make it harder for tenants to find homes."

This was not the first time ministers had ruled out such intervention. Since January 2026, Pennycook has repeatedly stated that rent controls could "incentivise landlords to increase rents routinely up to a cap" and risk "pushing many landlords out of the market."

Scotland's cautionary tale

Central to the government's reasoning is the experience north of the border. Scotland introduced emergency rent controls in October 2022 under the Cost of Living (Tenant Protection) Act, initially freezing rents at 0% before allowing a 3% cap from April 2023. The measures expired in March 2024, with transitional protections running until March 2025.

The outcomes have been closely scrutinised. Despite the cap, Scottish rents averaged a 12.9% increase during 2023—largely driven by steep rises on new tenancies, which were exempt from in-tenancy restrictions. A survey from the Scottish Association of Landlords suggested around 22,000 properties may have been removed from the rental market in a single year. Hamptons data shows that 67% of Scottish landlords increased rents in 2025, the highest share of any region in Great Britain.

REalyse data shows Scotland's current rental market remains tight. Average asking rents stand at approximately £1,163 per month with a gross yield of 7.15%—among the highest in the UK. Days on market average just 31.6, notably faster than the UK average of 39.5 days, reflecting persistent demand against constrained supply.

Regionally within Scotland, the Highlands and Islands recorded a striking 13.6% year-on-year rent increase, though listing volumes remain thin at around 540 properties over the past 12 months. Eastern Scotland (including Edinburgh) shows more moderate growth of 1.6%, while West Central Scotland (Glasgow and surrounds) sits at 2.0%.

The UK rental market in context

Across the UK, average asking rents now stand at approximately £1,660 per month, with national rental growth moderating to under 1% year-on-year. The overall gross yield averages 5.75%, though this masks significant regional variation.

REalyse analysis reveals a clear north-south yield divide:

• North East England: 7.32% average yield, strongest year-on-year rent growth at 4.0%

• Yorkshire and The Humber: 6.54% yield, 2.9% rent growth

• North West England: 6.41% yield, 1.1% rent growth

• London: 4.74% yield, minimal growth at 0.15%

• South West England: 5.64% yield, rents actually falling by 3.7%

• South East England: 5.67% yield, rents down 2.8%

Rental supply has shown signs of stabilisation. Quarterly listing volumes increased from around 112,600 in Q2 2024 to approximately 242,400 in Q2 2025—more than doubling at the national level. London alone saw over 72,000 new listings in Q2 2025, suggesting landlord exit fears may have been overstated in certain markets.

However, supply remains uneven. Wales recorded fewer than 4,900 new listings in recent quarters, while Scotland's quarterly volumes have fluctuated between 10,600 and 14,800 over the past year.

Balancing protection with supply

The government's position reflects a broader tension in housing policy. The Renters' Rights Act, which came into force on 1 May 2026, abolishes Section 21 "no-fault" evictions and introduces stronger tenant protections. Ministers appear determined to draw a line at rent controls, arguing that adding price caps to regulatory reform would tip the balance against investment.

Pennycook's March 2026 statement to Parliament summarised the official view: rent controls "could make life more difficult for private renters, both in terms of incentivising landlords to increase rents routinely up to a cap where they might otherwise not have done, and in pushing many landlords out of the market, thereby making it even harder for renters to find a home they can afford."

International evidence supports caution. Studies from Sweden, Germany, and cities including San Francisco have documented unintended consequences of rent controls, including reduced housing quality, slower construction, and the emergence of informal subletting markets.

Outlook: data-driven decisions

For investors and landlords, the government's stance offers some reassurance on policy stability—at least in England. Scotland's ongoing experience with sector regulation, and the potential for devolved approaches in Wales, means the UK rental market will continue to operate under varying frameworks.

What the data makes clear is that rental supply responds to confidence. Markets with strong yields and stable policy environments—particularly in northern England—continue to attract investment. Where regulatory uncertainty has been highest, supply constraints have been most acute.

For tenants, the trade-off is real: stronger protections within tenancies may come at the cost of fewer homes to rent. The government's wager is that avoiding rent controls will preserve supply and, ultimately, keep rents more affordable than the alternative.