Rent control was introduced during the first World War. Until the late 1940s, given low inflation and a falling population, this had limited impact on the housing market. However, once house prices began to surge in 1947 and 1948, rent controls began to bite as landlords got out of the business.
Many landlords find it is more attractive to sell up rather than continue to operate in a highly regulated market, where maintenance costs may be rising more rapidly than rents The current situation is that in major areas of the country rents are controlled, with a limited rise permitted each year. For existing tenants, this means that, over time, their rents stay well below the rents for new tenants. However, many landlords find it is more attractive to sell up rather than continue to operate in a highly regulated market, where maintenance costs may be rising more rapidly than rents.
Rent control has never been a solution but it is politically appealing. Both daftmedia and RTB figures showing steady declines in supply over years- this is not just a cashing-out phenomenon.