Just days after suggesting rent controls were off the table, it now appears Labour may be reconsidering their stance. Shadow Chancellor Rachel Reeves mentioned on BBC local radio that there might be a case for implementing rent controls in specific local areas. This statement marks a shift from the previous position, indicating a potential openness to targeted rent control measures.
However, Reeves emphasised that any rent control measures would not be applied universally. She clarified that there would not be a “blanket approach” to rent controls, suggesting that Labour is considering more nuanced and localised solutions to address housing issues. This development signals a potential change in Labour’s housing policy, reflecting growing concerns about rising rents and housing affordability in certain areas.
Rachel Reeves suggested that local authorities could have the power to limit how much landlords can raise rents each year. This idea echoes a similar policy introduced in Scotland by Nicola Sturgeon, which led to several unintended consequences. In Scotland, the policy caused many landlords to leave the market, reduced investment in Build To Rent projects, decreased the overall rental housing supply, and ironically resulted in increased rents.
In her interview with BBC Radio Essex, Reeves emphasised that the decision on implementing rent controls should be left to local areas. She acknowledged that while there might be a case for such measures in specific regions, she does not support a blanket approach across the country. Reeves 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.” This nuanced stance suggests Labour might be open to targeted rent controls, depending on the needs and circumstances of individual communities.
Labour’s recent stance on rent controls seems to contradict its previous rejection of the policy, which was itself a reversal of statements made about two years ago when the party appeared more sympathetic to controls. This shift in position adds to the confusion surrounding Labour’s official stance on the issue and raises questions about the party’s consistency and policy direction.
Several Labour mayors, including Sadiq Khan in London, Steve Rotheram in Liverpool, and Andy Burnham in Greater Manchester, have openly expressed their support for rent controls. Their advocacy reflects growing concerns among local leaders about the affordability and stability of rental housing in their respective regions. These mayors believe that rent controls could help mitigate the housing crisis by providing more predictable and affordable rents for tenants.
Rachel Reeves’ recent comments come just days after the party distanced itself from a call for rent controls in a report commissioned in January 2023 by then-shadow housing secretary Lisa Nandy. The report was intended to address the rising cost of living and housing affordability issues faced by many renters across the country. However, Nandy was shortly removed from her position by party leader Sir Keir Starmer, indicating a shift in the party’s approach to housing policy.
Despite Nandy’s removal, the writing of the report went ahead under the leadership of Stephen Cowan, the Labour leader of Hammersmith and Fulham council. Cowan’s involvement ensured that the report’s recommendations were still considered, even though the party’s official stance seemed to be moving away from rent controls. This internal disagreement highlights the complexities and differing opinions within the party regarding the best approach to tackle the housing crisis.
Labour’s fluctuating position on rent controls underscores the broader debate within the party about how to address the housing affordability issue effectively. While some members and local leaders advocate for more direct intervention through rent controls, others caution against potential negative consequences, such as reduced investment in rental properties and decreased housing supply. As the party continues to navigate this contentious issue, it remains to be seen how Labour will reconcile these differing perspectives and formulate a coherent housing policy moving forward.
He took 15 months to complete the report, but when it was launched last week, no front bencher spoke in its favour. This was because the report supported selective rent controls, which at that time seemed to contradict national party policy.
Adding to the confusion, after Reeves told the BBC that Labour might allow some rent controls, a national party spokesperson issued a statement correcting her. The statement clarified that Rachel Reeves does not believe rent controls are the right approach.
The spokesperson added: “While Labour believes action needs to be taken to address extortionate within-tenancy rent rises, rent controls are not national Labour Party policy. 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.”
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