The government is reported to be considering a major U-turn on rent controls in a bid to ease the cost of living for voters.

The proposed one-year rent freeze on private sector homes is in response to growing alarm about the impact of the Iran war on voters’ budgets, according to The Guardian. It would be a significant reversal for Labour which resisted including rent controls in the Renters’ Rights Act, which comes into force on Friday. Housing minister Matthew Pennycook has also repeatedly rejected calls for rent controls from tenant groups.

However, the paper says ministers are now sufficiently worried about what the conflict in Iran will mean for mortgages and household budgets that they are willing to consider exceptional measures. They hope these could help shore up Keir Starmer’s position in the weeks after the local elections next month, when Labour is expected to suffer heavy losses.

Banned

Landlords in England would be banned from raising rents for a limited period of time under the proposals, which are being debated within government as part of a major cost of living package to be launched in the coming weeks, according to The Guardian.

Discussions are understood to be at an early stage, and chancellor Rachel Reeves is said to be looking at a number of interventions in the rental markets to keep housing costs down. She is expected to exempt new-build properties from a potential freeze in a bid to encourage developers to keep working on new schemes.

Disaster

Introducing a rent freeze would be a disaster for landlord and investor confidence, says NRLA chief executive Ben Beadle, who believes the impact on supply would inevitably drive new rents still higher. “Such a move would run completely counter to good economic sense and the government’s own prior decision to rule out such measures,” he adds.

“Even if these reports prove to be speculation, it is reckless for this kind of uncertainty to be created in the same week that major reforms already causing concern among landlords come into force. For many, it may be enough to conclude that this is the moment to exit the private rented sector for good.”

Propertymark

Timothy Douglas, head of policy and campaigns at Propertymark, says rent controls risk distorting the market and undermining investment at a time when demand already far outstrips supply.

With huge regulatory change through the Renters’ Rights Act, which will ultimately mean less flexibility and higher costs for landlords and tenants, the reports are alarming, he adds. “If the UK government is serious about improving affordability, it must focus on increasing housing supply and supporting long-term investment in the private rented sector, rather than introducing measures that will ultimately make it harder for renters to find a home.”

The Treasury said it would not comment on “speculation”.

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