What the evidence shows
The IFS analysis draws on international research, covering housing markets in Ireland, Germany and parts of the United States. The findings consistently show that rent controls produce outcomes that economic theory would predict in a functioning market: reduced supply, declining quality, and inefficient allocation of properties.
Empirical research confirms that tenants in rent-controlled properties generally pay less than they would otherwise. However, the report cautions that this benefit is not universal. Where controls exempt certain property types — such as new builds — or permit rent resets between tenancies, landlords may charge higher rents than they would have absent any regulation. Controls introduced in Germany in 2015, for instance, had no measurable effect on average rents after approximately one year of operation.
The IFS also notes that landlords may seek compensation through non-monetary means. Research found that during a period of rent control in Oslo, a significant number of rental listings required tenants to provide services such as babysitting, or to pay deposits of up to 20 times the monthly rent — practices that largely disappeared once controls were lifted.
Supply and quality effects
Every study considered found that rent controls reduced the supply of rental properties. Landlords tended to exit the market by selling to owner-occupiers or converting properties to commercial use. Some research also identified lower rates of new housing construction, including in Ireland, where Gillespie et al. (2025) documented this effect.
Property quality also deteriorated under rent controls in most studies reviewed. The IFS cites another research finding a 36% increase in immediately hazardous building code violations following the introduction of rent controls in New York. With more prospective tenants than available properties, landlords face less pressure to invest in maintenance or renovation.