For just under 24 hours, the residential landlord sector was seized by panic following reports that first appeared on Monday night that the Chancellor was preparing to impose a ‘temporary’ ban on rent increases. The policy of rent controls was hitherto the preserve of the Green Party and Labour’s loony left, but then came reports that the Treasury was preparing to intervene to help renters during a cost of living crisis that will get worse before it gets better. It seemed rent controls – famously described by Swedish economist Assar Lindbeck as “the most efficient technique for destroying a city apart from bombing” – were going mainstream.
Reaction Was Swift and Emphatic
The British Property Federation said there is “no surer way for the Government to kill off its ambitions to deliver the homes we desperately need” than to implement rent controls. The National Residential Landlords Association said the policy “would be a disaster for landlord and investor confidence and consequently the supply of homes in England.” Even normally mild-mannered City analysts offered colourful criticism of the idea.
Free-Market Think Tanks Frothing at the Mouth
By Tuesday lunchtime, Rachel Reeves was up in the Commons when Labour MP Yuan Yang urged the Chancellor to confirm the reports and commit to a rent cap. The Chancellor replied: “I will do everything in my power and use every lever we have to bear down on the cost of living, including for people in the private rented sector.” It wasn’t a statement that calmed landlords’ nerves.
About an hour after the Chancellor’s Commons outing, the PM’s spokesperson, asked about the policy, said “we have no plans to implement this.” But hang on a moment; the Chancellor had just very publicly flirted with the idea in response to what felt very much like a planted question. Could it be the case that the left hand doesn’t know what the far-left hand is doing?
We asked the Treasury for a comment and they said they were “working on a line.” The landlords’ trade body, meanwhile, summed up the mood yesterday evening: “It is reckless for this kind of uncertainty to be created in the same week that major reforms already causing concern among landlords come into force…for many, it may be enough to conclude that this is the moment to exit the private rented sector for good.” Slow clap, everyone.
