The government has rejected calls for rent controls, saying they would “do more harm than good”, while acknowledging that rents have risen significantly since housing benefit rates were last reset.

Social Security and Disability Minister Sir Stephen Timms (pictured) made the comments during a Commons debate on local housing allowance (LHA) in which MPs highlighted the growing gap between LHA rates and rents in some parts of England.

Lib Dem Andrew George, MP for St Ives, told MPs there were no private rental properties available within LHA rates in his constituency when the market was checked. He suggested that the government could provide tax concessions to private landlords who offer decent homes with security and an agreed negotiated rent cap. The MP also called for the government to restore and maintain the link between LHA and the 30th percentile of local rents and to uprate the allowance annually.

Labour MP Chris Hinchliff urged it to consider a cap on rental increases, arguing that private renters spend an average of 36% of their income on rent. However, Timms said the priority was increasing the supply of affordable homes and added: “My colleagues in MHCLG have taken the view that rent controls would do more harm than good.”

Defended

Timms defended the methodology used to calculate LHA, saying the system was designed to use up-to-date rental data collected by the Valuation Office Agency but acknowledged that rents had risen sharply since LHA rates were last reset to the 30th percentile in 2024.

He said: “There have been significant rent rises, even in the two and a bit years since the level was last reset. There has been a rapid rise in rents in that period, and that will need to be taken into account in deciding what should happen to the LHA for next year.

Decisions

“Future decisions will be based on the government’s priorities, and those are the priorities that the Chancellor will have in mind as he makes his announcements in the Budget next week.”

The debate follows charities’ repeated calls for the government to unfreeze LHA. Generation Rent points out that only 2.7% of advertised lets in Great Britain are currently affordable for people claiming housing benefit while Citizens Advice reports that more than half (58%) of all households renting privately across England, Wales and Scotland that receive housing benefit don’t get enough support to cover their rent. It says this figure has soared by almost 300,000 households since May 2024, the last time housing benefit was increased.

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