Rachel Reeves' proposal for a one-year private rent freeze has been dubbed a 'disaster,' as leading economists rounded on the government's housing policy.
Proposed Rent Freeze Under Fire
The Chancellor is reportedly considering banning landlords from raising rents for private sector homes for one year, in a bid to protect renters from the impacts of the Iran war. The government had previously resisted imposing rent controls as part of its upcoming renters' rights act, which will ban 'no-fault' evictions.
The proposed rent freeze, first reported by The Guardian, comes as ministers are reportedly willing to consider exceptional measures to protect household budgets as inflation begins to tick up. But leading economists were quick to snub the plan, with Robert Colville, head of the Centre for Policy Studies, describing it as a 'mind-boggling scale of intervention in the private market'. 'If the government wants to bring rents down it should build an awful lot more houses,' he said.
Labour Housebuilding Performance Criticised
Simon French, chief economist at Panmure Liberum, said: 'There is a scenario where this policy would have got a more sympathetic hearing at the start of the Parliament when the previous decades of failure to build could have been cited as (loose) justification. But having presided over a slowdown in housing starts and rental reforms that are making the UK supply side less flexible then this is a rather harder sell.'
The government has pledged to build 1.5m homes by the next general election but housebuilders and construction figures say this target has become nearly impossible. A leading construction trade body told City AM the government's inheritance tax regime is preventing firms from scaling up housebuilding, and the head of construction firm Breedon said the target was 'impossible the day it was announced'.
'Disaster for Landlord Confidence'
The National Residential Landlords Association has also rounded on the rent freeze proposal, saying it would harm renters as well as landlords. The industry body's chief executive, Ben Beadle, said: 'Introducing a rent freeze would be a disaster for landlord and investor confidence and consequently the supply of homes in England. There is no evidence to suggest that it would make rents more affordable. In fact, the impact on supply would inevitably drive new rents still higher.'
Kallum Pickering, chief economist at Peel Hunt, also questioned whether a rent freeze would bring down costs, writing on X: 'Price fixing breaks economies… Totally misguided thinking here.' The Treasury has refused to comment on 'speculation'.
