MPs demand Angela Rayner U-turns on rent controls

MPs have written to the housing secretary Angela Rayner, urging her to reconsider the government’s refusal to introduce rent controls in England.

It comes as research commissioned by the Joseph Rowntree Foundation and undertaken by the Autonomy Institute models three rent control ideas from next year.

They are: a CPI-linked cap, a nominal freeze and a moderate system limiting rises during tenancies to CPI and increases between tenancies to CPI plus 2%.

The estimates annual savings for each tenancy by 2031 of £1,418 under a freeze, £701 with moderate controls and £130 through a CPI-linked limit.

However, news of the MPs’ letter comes a day after the Institute for Fiscal Studies found that rent controls will reduce the number of homes to rent.

MPs press Ms Rayner

The letter from 26 MPs says: “On average rent now takes 36% of a renter’s salary, rising to almost half of their pay in some areas just to keep a roof over their heads.

“With so much of people’s income going on housing, it is little wonder that a third of renters are living in poverty.”

The letter added: “The impacts don’t stop at the front door either, when rent take up such a large chunk of a pay packet you aren’t able to spend in local cafés, restaurants or shops.

“These extortionate rents are the elephant in the room when we talk about the cost of living.”

Landlord tax trade-off

Each proposed route for rent controls is paired with two tax reforms: restoring full mortgage-interest deductions by reversing Section 24 and applying National Insurance contributions to landlord property income.

Without a policy change, the model projects that the proportion of tenancies involving loss-making landlords would rise from about 10% in 2024 to 17.05% by 2031, mainly because of higher mortgage costs.

With the proposed measures, that figure would be 12.48% under a CPI cap, 14.16% with moderate controls and 15.33% following a nominal freeze.

Mean post-tax rent return on equity, excluding capital gains, is projected at 2% without reform, compared with 1.81%, 1.68% and 1.52% respectively under the three alternatives.

Government rejects controls

Ms Rayner said last month that the government was not planning to impose rent controls and pointed to protections introduced through the Renters’ Rights Act.

She also said controls had not ‘necessarily brought rents down’ elsewhere in the UK, including Scotland.

Dr Will Stronge, chief executive at the Autonomy Institute, told The Mirror: “Rent controls have often been dismissed as unworkable, but our modelling shows that a modern, well-calibrated cap paired with fair treatment of landlord costs can improve affordability for tenants without triggering the kind of landlord exodus that would leave renters worse off.”

An MHCLG spokesman said: “We have no plans to introduce rent controls.”