Chancellor Rachel Reeves is reportedly considering the introduction of a one-year rent freeze on private homes in England, as the ongoing conflict with Iran continues to strain household budgets. The proposal, which would ban landlords from increasing rents for a 12-month period, represents a significant policy shift ahead of the upcoming local elections.
Cost-of-Living Package
The rent freeze would form part of a broader cost-of-living package expected to be unveiled in the coming weeks. The measures aim to mitigate the economic fallout from the war in the Middle East and the closure of the Strait of Hormuz, which have driven up energy and fuel costs.
Ms Reeves had previously resisted introducing rent controls in Labour’s Renters’ Rights Act, which comes into force on Friday, and had stated she was not in favour of a ‘blanket approach’ to rent regulation. However, growing concerns over the impact of the war on household budgets have prompted the Treasury to consider exceptional interventions.
Discussions are reportedly at an early stage, with the Chancellor weighing several options to reduce housing costs. The move comes as Labour braces for heavy losses in May’s local elections, and the government seeks swift measures to ease the cost-of-living crisis.
Criticism and Support
Rent controls have faced criticism for potentially worsening the housing shortage by forcing landlords out of the private rented market and discouraging new development. Robert Colvile, head of the Centre for Policy Studies, described the plans as ‘a mind-boggling scale of intervention in the private market’, arguing that the government should instead focus on building more homes.
Conversely, George Bangham, head of social policy at the New Economics Foundation, expressed support, noting that other Western European countries already implement such measures, and England had rent controls from 1915 until 1989. He stated, ‘We know rent controls can fix an affordability crisis if done carefully, we just need to be willing to impose them.’
Exemptions and Additional Measures
New build properties are reportedly excluded from the proposed freeze to avoid hindering construction. Labour has pledged to build 1.5 million homes by 2029, though it currently lags behind that target by a third.
The Chancellor is also considering a package to support household energy bills, potentially introduced this summer, and faces pressure to cancel a planned rise in fuel duty as petrol costs surge. Ms Reeves has indicated that any support would be targeted rather than universal, learning from the previous government’s £40 billion package which she described as a ‘mistake’ for benefiting the wealthy.
Political Context
The proposals come as Prime Minister Sir Keir Starmer faces mounting pressure, with Labour expected to suffer significant losses in next month’s local elections. The embattled PM is also contending with a potential parliamentary probe over the appointment of Lord Mandelson as ambassador to the US, with a Commons vote scheduled on the matter.
Labour whips are urging MPs to block an investigation, and Sir Keir has drafted in former PM Gordon Brown to rally support. The Treasury has been contacted for comment on the rent freeze proposals.
