Prosper UK Housing Commission Urges Ban on Rent Controls
A new report from the Prosper UK Housing Commission calls for a legal ban on rent controls and reforms to boost build-to-rent supply, citing Scotland's policy as a deterrent to investment.
The Prosper UK Housing Commission has urged the UK government to legally rule out rent controls to restore investor confidence and boost rental supply. Its newly published report argues that increasing the supply of rental homes is the only sustainable way to bring rents down.
The commission, chaired by former housing minister Gavin Barwell, calls for a statutory exclusion on rent controls backed by a ten-year agreement on rent indexation. It also demands amendments to the Renters’ Rights Act. The report describes rent control as a classic populist policy, stating there is now clear evidence it fails to improve affordability.
Gavin Barwell said: "Increasing the supply of rental homes is the only sustainable way to bring rents down."
Scotland’s rent restrictions cited as evidence of policy failure
The commission points to Scotland’s recent experience as proof that rent controls undermine investment. Emergency legislation in September 2022 froze rents within tenancies. A 3% rent cap followed from April 2023. These were temporary cost-of-living measures.
The effect on new supply was immediate, the commission claims. Around £2.5 billion of the Scottish Build to Rent pipeline was assessed as at risk. Of a pipeline of nearly 17,000 homes, only about 11% had been completed and let. A survey of fourteen institutional investors holding £15bn in assets found none rated Scotland as attractive for residential investment. Four rated it as un-investable.
Because controls applied within tenancies but not between them, landlords repriced at new lets. The ten-year compound annual growth rate for rents in Glasgow and Edinburgh is 5 to 6%.
The emergency measures have been replaced by a permanent framework under the Housing (Scotland) Act 2025, effective from April 2026. It allows designation of rent control areas where increases are limited to CPI plus one percentage point, up to a maximum of 6%. Build to Rent and mid-market rent homes are exempted by regulation.
The commission rejects the argument that such carve-outs make controls workable. An exemption granted by regulation can be withdrawn by regulation, it states, leaving long-term investors unable to price that risk. The Scottish Government’s own impact assessment acknowledges the policy has affected Scotland’s attractiveness for investment.
Recommendations to boost build-to-rent and reform rental sector
The report proposes a suite of measures to stimulate the private rented sector, with a focus on build-to-rent (BTR). It argues BTR could provide a scalable source of additional rental housing and should be established as a core housing tenure.
Key recommendations for the government include:
| Recommendation | Detail |
|---|---|
| Stamp duty cuts | Reinstate Multiple Dwellings Relief for BTR developments. Reduce the additional homes surcharge to 3% for BTR schemes. |
| Regulatory reform | Allow one property licence per building rather than per home. Implement a three-year freeze on new regulatory burdens. |
| Rent review changes | Amend the Renters’ Rights Act to extend the interval between rent reviews from one year to two. Ensure unsuccessfully challenged increases are backdated. Define the tribunal’s jurisdiction more precisely to determine open-market rents. |
| Planning and land use | Introduce standardised Section 106 agreements. Establish a National Planning Service for major applications. Conduct a national Green Belt review. |
| Public BTR programme | Set up a programme where local authorities and public landowners partner with BTR developers to deliver social rent homes on public land, funded via an expanded recyclable fund administered by Homes England. Completed homes would be sold to institutional investors to recycle capital. |
The report also recommends a temporary shared equity scheme for first-time buyers of new, energy-efficient homes. It finds that half of the £76,000 rise in the cost of building a new home since 2020 comes from regulation, policy, and tax.
The commission recommends setting up a public BTR programme in which local authorities and public landowners develop land in partnership with BTR developers for social rent.
