Shadow chancellor Rachel Reeves has suggested that rent caps could be introduced in local arears under a Labour government.
In an interview with BBC Radio Essex, Reeves said there might be a case for controlling rent rates in certain local areas, though she emphasised there would not be a “blanket approach”.
A similar policy enabling local authorities to prevent landlords from raising rents above a set amount each year was introduced in Scotland by Nicola Sturgeon and that drove many buy-to-let landlords out of the market, reduced the housing supply of much-needed housing stock in the PRS.
When asked on the show if she could see some kind of cap on rents, Reeves did not rule out the suggestion.
“Where that has happened, it has not always delivered the results that people might want,” she said. “I think that should be up to local areas to decide. There may be the case for that in some local areas, but as a blanket approach, I’m not convinced by that.”
However, Labour has insisted that rent controls are not its policy “nationally” but has not ruled out giving councils the power to introduce them.
A Labour spokesperson 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.
“In government, Labour would act where the Conservatives have failed to ensure fairness and security for renters, immediately abolishing section 21, ending tenant bidding wars, and extending Awaab’s Law to the private rented sector.”
A report commissioned by Labour proposed rent controls, arguing that payments should not rise faster than local prices or wages.
The policy was recommended by Stephen Cowan, the Labour leader of Hammersmith and Fulham council, in a report suggesting a “double lock” on rent increases, linking them to the lower of local wage growth or inflation.
The report recommended that rents should only increase once a year, with tenants receiving at least four months’ notice.
Labour rejected the recommendation to introduce a cap, with a spokesman admitting that such controls could reduce the supply of rental properties, making it harder for prospective tenants.
Rent controls remain popular among Labour mayors, Sadiq Khan, Andy Burnham, and Steve Rotheram.
