Labour could bring in rent caps at a local level

A Labour government could bring in rent caps that would empower local councils to restrict annual rent increases by landlords.

That’s a similar proposal to Scotland’s Housing Bill which has recently been unveiled.

Rachel Reeves, the shadow chancellor, made the revelation during a BBC Radio Essex interview.

She said that rent controls might be a viable solution in some areas but dismissed the idea of a nationwide implementation.

‘Not always delivered the results’

Ms Reeves said: “Where that has happened, it has not always delivered the results that people might want.

“I think that should be up to local areas to decide.”

She added: “There may be the case for that in some local areas, but as a blanket approach, I’m not convinced by that.”

Landlords exiting the market

However, Scotland’s previous strategy that imposed a rent cap, spearheaded by Nicola Sturgeon, led to landlords exiting the market and a surge in rental prices.

Paul Shamplina, Landlord Action’s managing director, warned on LBC that such a policy could lead to unintended outcomes.

He said: “I think with regard to rent controls, I understand why it’s in conversation – rents are becoming more unaffordable for tenants at the moment.

“The problem you’ve got is Scotland tried it and their rents went up. You’ve got landlords leaving in their droves, for multiple reasons.

“If rent caps came in, that could stifle investment with regard to lending.”

‘War on landlords’

Labour’s proposal for rent caps has been called a ‘war on landlords’ by one Conservative MP.

Jonathan Gullis is the party’s deputy leader and he said: “Given the destructive impact of rent controls it beggars belief Rachel Reeves is contemplating introducing them in parts of the UK.

“This war on landlords is nothing but the same old Labour, all it will do is drive up costs for hardworking people.”

Fairness and security for renters

Labour has pledged to ensure fairness and security for renters, including abolishing section 21, ending tenant bidding wars and extending Awaab’s Law to the private rented sector.

Last week, a Labour-commissioned report proposed rent controls, suggesting that rent should not increase faster than local prices or wages.

A Labour party spokesman said: “As Rachel Reeves said, she does not believe rent controls are the right approach.

“While Labour believes action needs to be taken to address extortionate within-tenancy rent rises, rent controls are not national Labour Party policy as we remain mindful of the risk they could pose to the availability of rental properties and the harmful impacts any reduction in supply would have on renters.”