Calls for rent controls have recently intensified and this month campaigners and a Labour MP argue that restrictions on private rents could reduce costs for tenants and lower government spending on housing support.

Labour MP calls for rent controls

Margaret Mullane, MP for Dagenham and Rainham, has suggested that the government should reconsider rent controls as part of its efforts to curb welfare spending and ease cost-of-living pressures.

She said: “Given the focus that exists on curbing welfare spending as well as seeking ways to ease the cost of living, now is the time to look again at rent controls.”

Mullane argued that high private sector rents are placing significant pressure on both the welfare budget and local authority finances. She said the annual Housing Benefit bill had risen to more than £30 billion, with local authorities paying a further £3 billion on top of Housing Benefit payments.

She also rejected claims that introducing rent controls would necessarily result in landlords leaving the market in large numbers.

“While I understand the arguments against rent controls – one being the theory that it would result in the mass sale of property, flooding the market and leading to a crash in house prices – I think this is short-termism.”

Mullane cited rent control systems in France, Germany and Ireland and proposed trialling a similar approach at local authority level in UK areas experiencing significant social and economic pressures. However, she acknowledged that rent controls alone would not resolve the housing crisis and said a major increase in social rented housing would need to form part of a long-term solution.

New research models rent reductions

A new campaign backed by research using HMRC data has examined the potential effects of reducing private rents by 10% and 20%.

The report claims that a 10% reduction would save the average renting household £1,300 a year, while making 2.3% of individual landlords unprofitable. A 20% reduction could save households around £2,400 a year and reduce government housing benefit spending by at least £2 billion annually.

The researchers argue that most landlords would remain profitable under both scenarios, despite recent tax changes and higher interest rates.

Report author Dr Beth Stratford said: “Rent controls are one of the few policies that can provide immediate relief to struggling households and provide a much needed boost to local economies, whilst saving the government billions.

“Our analysis shows that landlords are making much larger profits than other UK businesses, even after recent interest hikes and tax rises.

“Well-designed rent controls, combined with the right fiscal and legal framework, create a historic opportunity: a managed transfer of homes out of the insecure and unaffordable private rented sector and into home ownership or secure and permanently affordable ownership by councils, housing associations and community-led organisations.”

Potential impact on the private rented sector

The report’s authors said expectations of a landlord exodus following the increase in interest rates in 2022 had not materialised. They cited an estimate from the Ministry of Housing, Community and Local Government that the number of privately rented dwellings in England increased by 96,000 between 2023 and 2025.

However, the researchers accepted that introducing rent controls would be likely to prompt some landlords to sell their properties. They argued that this could create an opportunity for homes to be acquired by councils, housing associations and community-led organisations.

According to their calculations, the housing benefit savings accumulated over ten years following a 20% rent reduction could support the purchase of around half of the properties made unprofitable under that scenario. Half of the purchased homes could then be converted to social rent.

The proposals add to the continuing debate about how rent regulation could affect tenants, landlords, public spending and the supply of homes. Both the MP and the report authors argue that rent controls should form part of a broader housing strategy rather than operate as a standalone measure.