Labour-commissioned report calls for caps on rent hikes

Labour-commissioned report calls for caps on rent hikes

Rent hikes should be capped for people struggling to afford soaring rates, according to a report commissioned by the Labour Party.

Rises should be limited to either consumer price inflation or local wage growth - whichever is lower - in England and Wales, it found.

Stephen Cowan’s report, commissioned by Lisa Nandy as shadow housing secretary, recommends a swathe of measures to support renters struggling with the spiralling cost of living.

It will pile pressure on Sir Keir Starmer to set out his own plans to support renters. Labour has welcomed the findings, but distanced itself from the report to insist it is not party policy.

Former shadow housing secretary Lisa Nandy commissioned the report (PA Archive)
Former shadow housing secretary Lisa Nandy commissioned the report (PA Archive)

The proposals, leaked to The Guardian, include the so-called “double lock” cap for renters renewing their tenancies.

Mr Cowan also recommends a national landlords register updated yearly to demonstrate their compliance with standards. His report also backs the abolition of no-fault evictions, measures to discourage short-term or holiday lets and policies to boost the country’s affordable housing stock.

A Labour spokesman said: “While we do believe action needs to be taken to protect renters and rebalance power, rent controls are not Labour Party policy as 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.”

The Independent has highlighted the “cost of renting crisis” facing households across the UK.

Rental costs have increased at the fastest rate on record as the housing market continues to be impacted by constricted supply and higher interest rates.

The average UK rent increased by 9 per cent in the 12 months to February, up from 8.5 per cent in January, the Office for National Statistics (ONS) said.

It is the highest annual percentage change since the UK data series began in January 2015. Private rent inflation was highest in London, at 10.6 per cent, and the lowest in the North East at 5.7 per cent.

The average monthly rent in the UK is now £1,238, which is £102 higher than 12 months ago.

Ms Nandy said in September 2022 that she wanted to give local authorities the power to freeze rents, telling the party conference: “Doing nothing is not an option.”

Sir Keir Starmer will come under pressure to support renters if he becomes PM (Stefan Rousseau/PA Wire)
Sir Keir Starmer will come under pressure to support renters if he becomes PM (Stefan Rousseau/PA Wire)

But she later rowed back on the promise, describing the approach instead as a “sticking plaster” that would increase homelessness.

Scrapping the policy represented a major shift in thinking for Labour, which had promised the regulation of rents in all its manifestos since Ed Miliband was leader.

Sadiq Khan and Andy Burnham are among senior figures in local government to have called for powers to control rents as prices surge in their cities, with Mr Khan urging the government to set up a commission to work out a way forward.

England and Wales are unusual around Europe in having no rules about what a landlord can charge or how sharply they can increase rents over time.

The Scottish government last March voted to cap rent increases on sitting tenants at 3 per cent in most circumstances, and continue a ban on evictions. Local authorities can also apply to control rents more generally in so-called “rent pressure areas”.

The Labour spokesman added: “We look forward to the publication of Stephen Cowan’s independent report and his contribution to the debate on improving the private rented sector.”

“In government, Labour would act where the Conservatives fail 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.”

Mr Cowan, the Labour leader of Hammersmith and Fulham council, will launch the report on Wednesday without a member of Sir Keir’s shadow cabinet present.