Win for NRLA as Labour u-turns on rent controls
The Labour Party has abandoned plans to introduce rent controls should it come to power, with Shadow Housing Secretary Lisa Nandy admitting proposals could in fact increase homelessness.
At last year’s Labour Party conference Ms Nandy revealed she was exploring proposals to hand metro mayors and council leaders powers to freeze rents, saying ‘doing nothing was not an option’.
NRLA Chief Executive Ben Beadle spoke to Ms Nandy and her team in the wake of her speech calling for a rethink, explaining the potentially devastating impact such a move could have on both the supply of homes to rent and housing standards.
Ms Nandy subsequently revealed the plans have been dropped at a meeting of industry professionals on Wednesday, admitting they could in fact hurt those they were designed to help.
According to media reports, she told the Housing 23 event that controls would be ‘little more than a sticking plaster’ when it comes to tackling the current housing crisis.
She said: "When housebuilding is falling off a cliff and buy to let landlords are leaving the market, rent controls that cut rents for some, will almost certainly leave others homeless,” adding: “It might be politically easier to put a sticking plaster on our deep-seated problems, but if it is cowardice that got us here, it is never going to get us out."
Plans for rent controls have had huge support in recent years from Labour mayors including Sadiq Khan in London, Andy Burnham in Greater Manchester and Steve Rotheram in Liverpool.
However the NRLA has long warned that they controlling or freezing rents could actually make the problem worse, with landlords, no longer able to make their business models stack up, likely to leave the sector.
NRLA Chief Executive Ben Beadle said: “All the evidence shows that where rent controls have been introduced they have exacerbated rather than solved an already serious shortage of homes to rent.
“I approached Ms Nandy after last year’s conference to explain the far-reaching consequences of the plans – namely a reduction in supply and standards.
“Data from other cities across the globe show rents can often rise more when artificially controlled rather than when they are responding to the market.
“I am pleased the Shadow Housing Secretary took on board what I had to say, and look forward to talking constructively with the Labour Party about developing policies that will benefit tenants while supporting those landlords providing the vital homes to let the country needs.”
In addition to talking to Ms Nandy and her team, Ben has also met with Councillor Stephen Cowan, the Labour leader of Hammersmith & Fulham Council who is heading Labour’s review of the private rented sector, to outline the NRLA’s position and key asks on Renters Reform and standards.
Axing rent control plans is a major step change for Labour, with rent regulations at the heart of Labour housing plans for many years. It is unclear whether other proposed reforms for the private rented sector remain on the table, including the party’s plans to end automatic repossessions for rent arrears.
