What happens to rents if landlords exit the market? Nothing.
Today we publish new research looking at the relationship between the size of the private rental market and rents, in light of the credit crunch, landlord tax changes, and proposals for tenancy reform.
We demonstrate that:
- A fall in rental supply is matched by a fall in demand as renters become home owners
- There is no impact on inflation-adjusted rents – in fact they’ve been falling
- The experience of the past 14 years suggests rents are most closely linked to wages – i.e. what renters can afford to pay
- This should give the government confidence to press on with substantial reform to tenancies