How rent control could save tenants £1,200 a year

Coming up this week:

• NOC – no overall control – and why it’s a disaster
• Rent control: could it really save the state millions?
• Why you should read Gordon Brown’s book about the 2008 global financial crisis

Politically, the key story is the fracturing of the accepted two-party binary in Britain, with more than 30 additional local councils now classified as having no overall control (NOC), which will make it harder for councillors to find consensus and get things done at a local level.

For this reason, we are going to zoom in on the problem of housing affordability and a contentious policy area which has received much attention in recent weeks: rent control.

(Here’s a primer looking at the different types of rent control – from hard rent caps to inflation-linked increase limits – as well as international comparisons from Scotland to America.)

Before the local elections, it was widely reported that Rachel Reeves was open to the idea of rent freezes.

Rent control is a controversial policy because there is some evidence (albeit complicated in its own way, as I wrote here) that it can limit the supply of available homes to rent.

Perhaps unsurprisingly, both Housing Secretary Steve Reed and housing planning minister Matthew Pennycook have poured freezing cold water on the idea that the Labour Government would introduce rent controls.

Now, the Joseph Rowntree Foundation (JRF) has shared an exclusive report with me for this newsletter, which runs the numbers and concludes that imposing rent controls on England’s private rental market could bring the Government more than £600m a year in net savings on its housing benefit bill by 2030.

The JRF’s research was carried out by the Autonomy Institute, an independent research organisation.

The rent control they modelled is a cap on rent increases at the Consumer Prices Index (CPI) inflation rate plus 2 per cent, similar to the formula used in Scotland.

To mitigate against landlords losing money, the JRF and Autonomy’s research considered bringing back full mortgage interest relief for the 60 per cent of landlords who have a buy-to-let mortgage (which was restricted in 2020), scrapping the two percentage point increase to income tax payable on rental income and instead applying national insurance contributions to rental income.

One of the arguments often used against rent control in England is that it would hit private landlords’ finances so hard that they would be forced to sell up and leave the housing market.

However, until now, relatively little data-driven research has looked at just how true this is.

Rosie Worsdale, a senior policy adviser at the JRF, told me over the phone: “We commissioned this independent research to interrogate and examine exactly what level of profit or returns on their investment landlords have been making, because we felt that that was a key empirical question underpinning the debates about whether rent control is a good idea or not.”

So, what did they find?

According to the JRF and Autonomy’s research, the majority of landlords record above-normal returns even after tax in most parts of the country.

“A well-designed tax system should do more to rebalance these incentives,” the JRF argue.

While the Renters’ Rights Act will limit the number of times a landlord can increase rent to once a year and allow renters to challenge rises at a new tribunal if negotiations fail, it has become law at a time when rents are at near-historic highs.

In recent years, average private rents have often risen faster than consumer inflation. While that has now slowed, rents have been left high in relation to incomes in many places and, certainly, higher than the support available for lower-income households via housing benefit.

Between March 2025 and March 2026, average rents in the UK increased by 3.4 per cent to £1,434 in England, according to the Office for National Statistics (ONS).

The JRF says that rent controls linked to CPI “would have an immediate and significant impact on renters, saving renting households almost £1,200 per year on average by 2030”.

This, in turn, would lead to savings on the housing benefit bill, which currently stands at around £39bn a year, and make it easier for the government to increase the support available via housing benefit in line with rents, they say.

As things stand, housing benefit was frozen in 2024 and will remain so until at least 2027. This is a decision which, homelessness experts like the charity Crisis have warned, will “lead to rising homelessness”.

The JRF hopes that their findings will add data to a national conversation about rent control, which is not often evidence-based.

This also comes as people, particularly private renters, are extremely worried about their living costs.

That said, Rosie at the JRF said they were mindful that “concerns about the potential negative impact of rent control should be taken seriously.”

“For instance”, she said, “we have suggested shielding landlords at the acute end of the recent interest rate spike. There is also a question about whether you should exempt new-build homes to make sure there is a supply of new homes and new rental homes in a rent control scenario?”

Given the Labour Government’s soft spot for build-to-rent developers, this idea is likely to go down well.

What do you think? Let me know vicky.spratt@theipaper.com

Housing crisis watch

In case you missed it, exclusive polling for me by Ipsos has revealed that 49 per cent of people think the Government is doing a bad job on housing.

What I found particularly interesting about this research was that it seemed to suggest that awareness of Labour’s policies, including the Renters’ Rights Act, was part of the reason why voters are inclined to think the Government is doing a “bad” job…

Read the full report here.

What I’m reading and listening to….

• Gordon Brown is back in government as a special envoy on global finance. What better time, then, to read his book Beyond the Crash, which was published in 2010. It reflects on the catastrophe that occurred in banking in the years leading up to 2007-08 and, rather chillingly, predicts many of the economic problems that Britain faces today, which, arguably, are why Sir Keir Starmer is struggling so much…
• And, finally, another shameless plug from me! Episodes two and three of my new podcast series for The Rest is Politics are now available to listen. In two, I speak with Professor Bobby Duffy, who questions the idea of generational division and suggests that old and young people may have more in common than they realise. In three, I speak to none other than former deputy prime minister Angela Rayner about what she thinks the Government should be doing to help young people…