Proposal comes as ministers assess cost-of-living pressure from Iran conflict
Chancellor Rachel Reeves is considering a temporary freeze on rents in England’s private rented sector as ministers prepare a wider cost-of-living package in response to pressure on household finances.
Under the proposal, private landlords would be prevented from increasing rents for one year. The option is being discussed within government before measures expected in the coming weeks.
While discussions are still at an early stage, Reeves is understood to be examining several possible interventions in the rental market, with a one-year freeze described by sources as her preferred option.
The move would mark a shift for the chancellor, who has previously avoided rent controls in the government’s renters’ rights reforms. Those reforms come into force on Friday and will end no-fault evictions.
People briefed on the discussions said ministers were concerned that the war in Iran could feed through to mortgages, energy costs and household budgets. Economists have warned of renewed inflationary pressure, while Labour is preparing for difficult local election results.
Opponents of rent controls argue that limits on private rents could reduce investment in new homes and worsen supply shortages over time.
“Introducing a rent freeze would be a disaster for landlord and investor confidence and consequently the supply of homes in England,” said Ben Beadle, chief executive of the National Residential Landlords Association. “Any hope of growing the market – or even retaining the homes that millions of families rely on – would be lost.
“There is no evidence to suggest that it would make rents more affordable. In fact, the impact on supply would inevitably drive new rents still higher. Such a move would run completely counter to good economic sense and the government’s own prior decision to rule out such measures.
“At a time when demand for rental housing continues to significantly outweigh supply, we agree with the Housing Minister’s view that any form of rent controls would make life more difficult for renters.
“Even if these reports prove to be speculation, it is reckless for this kind of uncertainty to be created in the same week that major reforms already causing concern among landlords come into force. For many, it may be enough to conclude that this is the moment to exit the private rented sector for good.”
New-build homes are expected to be exempted from any freeze, in an effort to avoid deterring developers from continuing with housing schemes. Labour has pledged to deliver 1.5 million homes during this parliament, but current delivery levels are understood to be around a third below the rate needed to meet that target.
Ministers hope a package aimed at household costs could help stabilise Starmer’s position after next month’s local elections, where Labour is expected to lose seats. Some urban councils are expected to move to the Green party, increasing concern among Labour MPs about support shifting to the left.
The Greens have proposed rent controls in England and Wales. Other countries have also moved towards rent controls. In Scotland, MSPs have passed legislation allowing ministers to cap rents in certain areas. Spain has introduced a temporary measure that lets renters seek a rent freeze for up to two years.
For David Hollingworth (pictured right), associate director of communications at broker L&C Mortgages, while it’s understandable that the Chancellor is considering how best to mitigate the impact of a hike in the cost of living on households, the plan is bound to be met with criticism and risks putting a further squeeze on a private rented sector, where landlords are already under pressure.
“New measures of the Renters’ Rights Act take effect from Friday and the impact of those will still be being digested by landlords,” Hollingworth said. “It is the latest round of changes in recent years, many of which have made life harder for landlords, whether it’s tougher tax and lending rules or higher interest rates.
“If the government was to intervene with rent freezes in the private market, it could see more landlords considering whether now is the time to exit the market.”
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