The Labour government faces a strategic conundrum. The Government is unpopular, scrambling for cash and convincing next to no one that it is on their side. In the absence of growth, painful trade-offs between taxes and spending loom if it is to meet its self-imposed fiscal rules, while the persistently high cost of living and lack of improvement in public services are already among the most important reasons why 2024 Labour voters have taken against the Government. Keir Starmer will be looking for popular policies that combat the cost of living but require no additional public spending or major tax rises, while also clarifying who this government is for. Few such policies exist. But there is one that delivers on every count: rent controls.  

Rent controls, where the government sets a cap on rent levels or on rent increases, are hugely popular. Recent polling by YouGov for Common Wealth found 75 per cent of UK adults support the policy, with only 15 per cent opposed. The phrasing of the proposal was radical and unambiguous.  Respondents were asked, “Would you support or oppose implementing a cap on the amount of rent that can be charged, based on the location and quality of the property?”, which was met with high levels of support among 2024 Labour (85 per cent), Lib Dem (80 per cent) and Green voters (88 per cent) as well as considerable support from people who had most recently voted Conservative (65 per cent support) or Reform UK (63 per cent). This is a popular policy with a direct and positive impact on people’s daily lives, allowing Labour to demonstrate that it is, as it likes to say, on the side of working people.  

Unsurprisingly, renters are in favour, but the same is true for most homeowners, and especially those with many renters in their social circle. Support is fairly high even among landlords themselves. Because the UK counts so many landlords — one in every 19 UK adults is a landlord — it is comparatively easy to poll them with a large enough sample of the general population. The 184 landlord respondents in the YouGov survey split almost down the middle on the question of rent controls (44 per cent in favour vs 47 per cent against), despite firm opposition from landlord advocacy groups. Certainly, the latter would come out strongly against any rent control proposals, but they do not speak for all landlords. As the cost of housing has risen and risen, rent controls stand out as a fairer option, even among many of those who have benefited from rising rents.  

Opponents argue that rent controls are a radical and unworkable idea. This is untrue: they are practiced widely, with the UK (minus Scotland) only one of three countries in northwest Europe to spurn rent controls entirely.^[1] And of course, for much of the twentieth century, rent controls did operate in the UK and helped stabilise the cost of housing, until they were abolished in 1989. At this point, the private rented sector was among the smallest of any rich democracy, with only nine per cent of households renting from private landlords.^[2] There is nothing wrong with the return of renting per se, but today’s renters are facing a far worse deal than owners, or indeed than renters in other countries. For owner-occupation and renting to be equally viable in economic and non-economic terms — what is sometimes called “tenure neutrality” — the fate of renters will have to be improved considerably.  

Nevertheless, rent controls differ considerably across countries and it is important to get the design right. The case of Scotland, which is currently debating amendments to the Housing (Scotland) Bill, offers important lessons.^[3] Initially, Scotland’s temporary rent control framework set a hard limit on within-tenancy increases but no limit on rent rises between tenancies, which meant landlords benefited from tenants leaving and were incentivised to maximally raise prices between tenancies. Worse still, this transitional rent control framework will lapse ahead of the new rent control bill coming into force in 2027, which threatens to expose tenants to a “tidal wave” of rent increases.^[4] This has allowed opponents to claim that rent controls are counterproductive.^[5] Yet more than anything, the Scottish case highlights the importance of careful policy design. The Scottish government has now settled on a moderate proposal, whereby rent increases will be capped at inflation plus one per cent both within and between tenancies. The rest of the UK would benefit from the same.  

For the political and economic consequences of rent controls, proponents often point to the minimum wage as an analogy. In 1999, New Labour made the brave decision to introduce a minimum wage, despite the prevailing opinion among economists that this would raise unemployment. The policy has been a staggering success. Real-life labour markets act differently from those in economics textbooks, allowing governments to improve aggregate welfare and especially that of the lowest-paid workers. Studies have found no evidence of an overall adverse employment effect,^[6] while those whose wages were raised by the policy experienced considerably better mental health.^[7] Amazingly, the minimum wage policy was about as effective at reducing depressive symptoms for them as anti-depressant medications tend to be.^[8] Rent controls could be Starmer’s equivalent: a concrete measure to address the chronic insecurity so many renters face.

The policy would fit with Starmer’s belief in a stronger state and complement the Government’s existing agenda well. As it stands, the private renters bill will outlaw no-fault evictions, thus providing private renters with much-needed stability, but they are still vulnerable to whopping rent increases which would amount to much the same. Tenants will be able to challenge excessive rent increases at a tribunal, but which soon-to-be-homeless renter would dare rely on that? As with the minimum wage, the empirical evidence on rent controls suggests there is far more scope here to do good than conventional economic models suggest.^[9] Opponents argue that rent controls per se would not address a lack of housing units. But rent controls would prevent displacement, which is a social good in and of itself, especially as the private rented sector is now home to 1.6 million families with children in England alone.^[10] Rent control is economic security in action.  

At the next elections, Labour hopes to point to a positive track record of home building and economic growth, but there is a gap in its political strategy. All but the most ardent YIMBYs will concede that it will take time to ramp up the housing supply, let alone for prices to come down — if they ever do. Even if the Government’s plans for growth and housebuilding are as successful as Labour hopes they will be, these will not translate into easier living and greater public goodwill unless measures are in place to curb rentierism and to deliver economic security for the country’s millions of private renters. Rent controls can be a supplement to, not a replacement for, building new units, especially of council housing. To ease the cost of living now, Labour needs to intervene directly and decisively on behalf the people it represents.