Is the UK Rental Market Being Crashed on Purpose? Lessons from History and Around the World

Is the UK Rental Market Being Crashed on Purpose? Lessons from History and Around the World

In 2026, landlords across the UK are asking the same question: is this really just bad policy — or is it by design?

With Section 21 set to be abolished in May, interest rates still elevated from 2022’s rapid hikes, and local authorities wielding aggressive enforcement powers through selective licensing, it’s no wonder private landlords are walking away from the sector in record numbers. Rents have nearly doubled in some areas, yet landlords are being portrayed as the problem.

This isn’t the first time Britain has seen its private rental market collapse under the weight of regulation. In fact, we’ve been here before — and history shows us exactly what happens next.

The Pre-1988 Collapse of the Private Rented Sector

Prior to the Housing Act 1988, the UK’s rental market was strangled by layers of restrictive regulation:

• Rent Acts (1915–1977) imposed indefinite security of tenure and heavy rent controls.
• Landlords couldn’t evict tenants, couldn’t raise rents, and couldn’t recover costs — even in cases of antisocial behaviour or rent arrears.
• Properties deteriorated. Investment dried up. By the 1980s, the private rented sector (PRS) had shrunk to just 9% of housing stock.

The system became so unsustainable that entire streets fell into disrepair. Councils couldn’t cope. Tenants suffered as much as landlords.

It took the Housing Act 1988 — which introduced Assured Shorthold Tenancies and Section 21 — to revive the sector and make private letting viable again. For the next 30 years, the PRS grew to over 4.6 million households.

Now, that hard-won progress is being undone.Global Case Studies: When Regulation Backfires

The UK isn’t the only country to make these mistakes:

• New Zealand banned no-fault evictions in 2020. Supply collapsed. By 2023, they had to reverse the policy.
• Portugal heavily taxed landlords and imposed tight rent controls. Landlords left the market. In 2024, they slashed rental income tax to just 10%, with 0% tax on rents 20% below market rates.
• Sweden’s indefinite tenancies and rent controls led to extreme shortages. Waitlists in Stockholm now stretch over 10 years, and illegal subletting is rampant.

The pattern is clear: over-regulation leads to undersupply.

When you make letting properties high-risk and low-reward, small landlords disappear — and rents surge.

2022–2026: A Timeline of Controlled Demolition?

Let’s connect the dots:

• 2022: Interest rates spike to curb inflation — mortgage costs surge for landlords.
• 2022–2024: Councils expand licensing schemes, raise fines, and launch aggressive enforcement campaigns.
• 2023–2025: EPC deadlines loom, Making Tax Digital adds cost, and Renters Reform Bill is passed.
• May 2026: Section 21 abolished. Eviction becomes a court-only process.

All of this while Build-to-Rent corporations expand rapidly — backed by institutional finance and exempt from many local schemes.

Coincidence? Or coordinated?

The New Landscape: Compliance Without Control

Today, a landlord must:

• Register with councils
• Disclose private data on public databases
• Get licensed per property or per block
• Face £30,000 fines for trivial breaches
• Be responsible for pets, tenant behaviour, property condition, and tax filings — but without control over possession

Letting agents are leaving. Landlords are selling. Courts are jammed. Meanwhile, councils and housing campaigners pretend to be surprised.

We’ve seen this before. The 1970s-style collapse is being re-run — but now, it’s happening with legal aid costs, digital tax, and EPC requirements thrown in.

‍