A right-wing think tank has claimed that rent controls “produce significantly more negative consequences than benefits”.

In a new briefing paper, the Institute of Economic Affairs (IEA) highlights what it calls a “strong and enduring consensus in the academic literature about the impact of rent control”.

The briefing follows calls from some, including London mayor Sadiq Khan and the Green Party, to introduce rent controls to mitigate the UK’s housing crisis.

Authored by Dr Konstantin A. Kholodilin, Senior Researcher at the German Institute for Economic Research (DIW Berlin), the paper reviews 196 studies undertaken over 60 years, spanning almost 100 countries in all inhabited continents.

In the paper, the IEA – which pushes a free market, neoliberal world view and was an enthusiastic supporter of Thatcherite polices in the 1980s – claims that rent controls lead to less maintenance spending, conversion to owner-occupation, and the construction of fewer new properties, which ultimately exacerbates a housing shortage.

According to Kholodilin, rent controls can also create “excess demand” for housing, which can result in new residents finding it difficult to locate places to live, decreasing labour mobility, increasing discrimination against marginalised groups, and boosting black market activity.

Dr Konstantin said: “Rent control effectively reduces rents in the controlled sector, but does it a high price. Tenants occupying the rent-controlled dwellings benefit the most, at least in the short run, while newcomers lose from rent control. In the long run, rent control can undermine the rental sector forcing landlords to convert their dwellings and tenants to become homeowners.”

Dr Kristian Niemietz, IEA Editorial Director, said: “Economists are a notoriously divided profession: ask three economists, and you get four opinions. But there are exceptions to this, and the study of rent controls is one of them. This is an area where the empirical evidence really overwhelmingly points in the same direction. The finding that rent controls reduce the supply and quality of rental housing, reduce housing construction, reduce mobility among private tenants, and lead to a misallocation of the existing rental housing stock, is as close to a consensus as economic research can realistically get.”