The likelihood of rent controls being enforced by a Labour government is gaining momentum, fuelled by a forthcoming report initially commissioned by Lisa Nandy during her tenure as shadow housing secretary. The report, set to be unveiled today, advocates for rent caps as a means to alleviate the housing disparity affecting millions of individuals.
Leaked by the Guardian ahead of its official release, the report proposes a series of measures aimed at providing relief to renters grappling with exorbitant rental costs. It is believed that the report was spearheaded by Stephen Cowan, the Labour leader of the London Borough of Hammersmith and Fulham.
Despite its origins under Nandy’s leadership, the Labour Party appears to be distancing itself from the report, asserting that its contents do not align with the party’s official stance. However, recent statements and initiatives from prominent party figures suggest a growing inclination towards tighter regulations in the rental market.
In February, The Neg disclosed Labour’s plans to impose additional regulations on letting agents, should the party come to power. Deputy leader Angela Rayner vowed to extend “Awaab’s Law” to encompass private landlords, signalling a broader push for tenant protections.
Rayner also pledged to ban Section 21 no-fault evictions immediately upon Labour assuming office, with further reforms anticipated to follow suit. Cowan’s latest proposals advocate for a “double lock” mechanism for tenancy renewals, capping rent increases at either consumer price inflation or local wage growth, whichever is lower.
However, cautionary notes within the report, as revealed by the Guardian, highlight potential downsides of strict rent controls. Measures such as rent freezes or limitations on rent hikes between tenancies could inadvertently exacerbate the housing shortage, driving prices even higher.
Among the recommendations outlined in the report is the stipulation that rent increases occur only once a year, with tenants receiving a minimum of four months’ notice prior to any adjustments. Cowan emphasizes the need for renters to feel secure in their homes, while ensuring that landlords can compete fairly within a regulated market.
Recent research by the Resolution Foundation underscores the urgency of addressing rising rental costs. Average rents are projected to surge by 13% over the next three years, with the cost of new tenancies already witnessing an 18% increase since January 2022. The proportion of low-income families resorting to renting has nearly tripled since the mid-1990s, underscoring the pressing need for comprehensive reform in the housing sector.
As the Labour Party navigates the complexities of housing policy, the debate over rent controls intensifies, with stakeholders weighing the potential benefits against the risks of market distortion. The impending publication of Nandy’s commissioned report promises to reignite discussions on one of the most pressing issues facing renters across England and Wales.