British Finance Minister Rachel Reeves is considering a one-year freeze on private sector rents to help tenants cope with inflation driven by the Iran war, according to multiple reports. Downing Street has dismissed this idea, stating that freezing private sector rents is “not the approach we will be taking.”
Key Takeaways
British Finance Minister Rachel Reeves is considering a one-year freeze on private sector rents to help tenants cope with inflation driven by the Iran war. Downing Street has dismissed this idea, focusing instead on cutting bills and lowering energy prices.
- Rachel Reeves left open the possibility of a rent freeze to reduce living costs for renters.
- Downing Street dismissed the plan, stating it is not their approach.
- The measure would exclude newly built properties to encourage housebuilding.
- Economists warn that a freeze could push rents for unregulated properties higher and reduce overall supply.
- Labour MPs are divided on the subject, with some welcoming radical ideas and others opposing rent controls.
The chancellor told Parliament she would use all available measures to reduce living costs for renters. The proposal comes as Labour faces potential losses in local elections next week and seeks ways to mitigate the economic impact of the conflict on households.
According to The Guardian, Reeves is weighing a temporary ban on rent increases as part of a broader cost-of-living package expected later this year. The move would mark a shift from her previous stance against blanket rent controls, which are set to be introduced in Labour's Renters' Rights Act.
A No 10 spokesperson said their focus remains on cutting bills and backing renters alongside lower energy prices. Reeves, however, failed to rule out the idea when asked about it in the Commons, telling Labour MP Yuan Yang: “I will do everything in my power and use every lever we have to bear down on the cost of living, including for people in the private rented sector.”
The measure would exclude newly built properties to encourage housebuilding. Economists warn that a freeze is likely to bring down rents on properties to which it applies but push rents for unregulated properties higher. They also caution that it could reduce the overall supply of rental properties, undermining Labour’s promise to build 1.5 million homes during this parliament.
Supporters of rent controls argue they can address affordability crises if implemented carefully. The Guardian highlighted that other countries in Western Europe have successfully used rent controls to manage housing costs. Meanwhile, Labour is under pressure to deliver on its promise to build 1.5 million homes by 2029, though current construction rates are lagging behind this target.
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