The Guardian is reporting that the Chancellor Rachel Reeves is considering imposing a year-long rent freeze on landlords as a special measure to alleviate the cost of living crisis caused by the closure of the Strait of Hormuz.
This will be debated by the government as a package of measures to reduce inflationary pressures on household budgets. The Treasury responded by saying it would not comment on ‘speculation’.
It would be far easier and cheaper for the government to legislate on landlords than tackle the rising cost of fuel, food and mortgage rates.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Introducing a rent freeze would be a disaster for landlord and investor confidence and consequently the supply of homes in England. 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.”
Cynically, one could see how this coincides with the imminent local elections in a desperate effort to buy votes.
As previously reported on Property118, the government has claimed it has no plans to introduce rent controls and, last month, said it opposed rent controls because they would “push landlords out of the market”.
Timothy Douglas, Head of Policy and Campaigns at Propertymark comments: “With the UK Government introducing huge regulatory change through the Renters’ Rights Act, which will ultimately mean less flexibility and higher costs for landlords and tenants, it is alarming to hear reports that the Chancellor is considering additional rent control measures – particularly when Housing Ministers have recently publicly denounced their role.
“Evidence from across the UK, particularly in Scotland, shows rent controls restrict supply, deter investment, and reduce choice for tenants. Singling out landlords to solve the cost of living is not the answer.
“Rent controls risk distorting the market and undermining investment at a time when demand already far outstrips supply.
“If the UK Government is serious about improving affordability, it must focus on increasing housing supply and supporting long-term investment in the private rented sector, rather than introducing measures that will ultimately make it harder for renters to find a home.”
