Downing Street rejects rent controls after market reaction
The government has said it is not considering a one-year rent freeze in England, after reports of possible rent controls raised concern among landlords and property investors.
Speculation grew after chancellor Rachel Reeves told the House of Commons that the government would “use every lever we have to bear down on the cost of living, including for people in the private rented sector.”
The Treasury did not initially reject a report that rent controls could be introduced for 12 months as part of measures to support households facing higher costs linked to the Iran war energy price shock.
Downing Street later said rent controls were not being considered.
“Picking up on the news that the secretary of state for housing, Steve Reed, has dismissed any prospect of introducing rent controls across England will be welcome news for many directly involved in providing much-needed housing stock within the private rented sector,” said Timothy Douglas (pictured right), head of policy and campaigns at Propertymark.
“Insight from across the UK, and especially from Scotland, has consistently shown rent controls deter investment, constrain supply, and decrease choice for many tenants. In addition, wider issues are also continuing to influence the domestic economy, applying additional pressures on landlords and would risk pushing the sector to the brink of collapse.
“The UK government needs to focus all attention on encouraging investment across the private rented sector, to keep pace with current and future demand. It is vitally important that there is a joined-up approach and government departments are working together to deliver this.”
The issue comes as Keir Starmer and Reeves face pressure to limit the effect of rising inflation. The Bank of England is expected to raise its inflation forecasts this week, although markets expect interest rates to remain at 3.75%.
Reeves told MPs that the government had already brought in tenant protections through the Renters’ Rights Act, which is due to take effect on Friday. She said mortgage borrowers had seen some benefit from lower Bank of England rates, and that renters also needed support.
The National Residential Landlords Association criticised the idea of a rent freeze, saying “it would be a disaster for landlord and investor confidence and consequently the supply of homes in England.”
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