Private rents in England could be frozen for up to a year under proposals being considered by chancellor Rachel Reeves, as the government weighs further intervention to address cost of living pressures.
According to The Guardian, the plans are being discussed as part of a wider support package amid concerns about the potential economic impact of the conflict in Iran on household finances, including rents and mortgage costs.
The reported proposal would temporarily prevent landlords from increasing rents, adding to a series of planned changes to the private rented sector.
Ministers are understood to be exploring short-term measures to ease financial pressure on households, as broader economic uncertainty and political considerations intensify.
The Treasury has so far declined to comment on what it deemed “speculation”. But that did not stop others sharing their views.
George Bangham, the head of social policy at the New Economics Foundation thinktank, told the press: “We have an affordability crisis in the private rented sector, which dates back to before the pandemic. Other countries in western Europe already do this, and England used to from 1915 until 1989.
“We know rent controls can fix an affordability crisis if done carefully, we just need to be willing to impose them.”
However, Robert Colvile, head of the Centre for Policy Studies, was not so supportive of the potential measures being considered.
He said: “This feels like a mind-boggling scale of intervention in the private market. If the government wants to bring rents down it should build an awful lot more houses.”
Discussions are at an early stage, with Rachel Reeves understood to be considering a range of measures to limit rental costs, including a preferred option of a one-year rent freeze.
New-build properties could be exempt to avoid discouraging development. Labour Party has committed to delivering 1.5 million homes during this parliament, although current output remains well below that level.
A report commissioned by Labour in opposition, led by Stephen Cowan, proposed rent caps linked to inflation or wages, but the policy was not adopted and is not part of the renters’ rights reforms being introduced this week.
The proposed freeze would go further, albeit temporarily, reflecting what ministers describe as exceptional economic conditions linked to rising inflation and disruption to global energy supplies.
The measure is one of several options under consideration as the government looks to ease cost of living pressures and respond to political challenges ahead of upcoming local elections, where Labour faces potential losses and increased competition from the Green Party of England and Wales, which supports rent controls.
Rent controls would backfire and prove a disaster for renters – NRLA
