Labour is considering imposing a one-year freeze on private sector rents in England, as ministers scramble to shield household budgets from the economic fallout of the Iran war and the closure of the Strait of Hormuz. The measure, which would temporarily ban landlords from raising rents, is being debated inside government as part of a wider cost-of-living package expected in the coming weeks.
Rachel Reeves, the chancellor, is said to favour an outright freeze lasting 12 months, according to sources briefed on the discussions. New-build properties would be exempted from the ban, a concession aimed at encouraging developers to keep building. The Treasury declined to comment on what it called “speculation”, and officials stress that talks remain at an early stage.
The proposal marks a sharp reversal for Reeves, who has previously resisted including rent controls in Labour’s Renters’ Rights reforms. That package, which comes into force on Friday, will make it illegal for a landlord to evict a tenant without a reason – but stops short of capping rents. Now, with the prime minister Keir Starmer looking vulnerable and Labour braced for heavy losses at next month’s local elections, ministers are hunting for immediate ways to ease the cost of living.
The economic backdrop: war, inflation and squeezed households
The driving force behind the rethink is the Iran conflict and the closure of the Strait of Hormuz, which have sent global oil and gas prices soaring. Annual UK inflation rose to 3.3% in March 2026, up from 3% in February, driven by higher crude oil and petrol costs. Core inflation – which strips out volatile energy and food – stood at 3.1%, while services inflation hit 4.5%.
Economists predict inflation could peak between 3.5% and 4% later this year because of the war. The International Monetary Fund has warned that the UK will suffer the sharpest growth downgrade and the joint highest inflation rate in the G7 this year. The OECD has revised down its UK growth forecast for 2026 from 1.2% to 0.7%. A government minister has said the country faces higher food and fuel prices for at least eight months after the conflict ends.
Speaking to Sky News, Starmer acknowledged the strain on households, saying people might need to change their travel plans or what they buy at the supermarket depending on how long the war lasts. Reeves is also considering a package of support for energy bills later this summer and faces pressure to cancel a planned rise in fuel duty.
The Bank of England’s Monetary Policy Committee is weighing how to respond: higher inflation pushes it towards raising interest rates, but the economic slowdown caused by soaring energy costs could prompt it to cut rates to stimulate borrowing and spending.
The case for and against rent controls
Supporters of the freeze argue it would directly tackle the affordability crisis that has gripped the private rented sector since before the pandemic. George Bangham, head of social policy at the New Economics Foundation thinktank, said: “Other countries in western Europe already do this, and England used to from 1915 until 1989. We know rent controls can fix an affordability crisis if done carefully, we just need to be willing to impose them.”
Labour’s own commissioned report, led by Stephen Cowan, the leader of Hammersmith and Fulham council, had recommended a “rent stabilisation” system for England and Wales that would cap increases at the lower of consumer price inflation or local wage growth. It also proposed banning rent review clauses and limiting increases to once a year with four months’ notice. Crucially, however, the report “came out strongly against hard rent controls”, warning they were damaging to the sector. Shadow ministers dismissed the idea at the time and did not include it in the Renters’ Rights Bill.
The one-year freeze now under consideration goes much further than that earlier proposal – albeit as a temporary, emergency measure. Opponents warn that such heavy-handed state intervention in the private market will backfire. Robert Colvile, head of the Centre for Policy Studies, said: “This feels like a mind-boggling scale of intervention in the private market. If the government wants to bring rents down it should build an awful lot more houses.”
Critics point to the UK’s chronic housing shortage: the country is missing around 4.3 million homes compared with Western Europe, according to the research. Underinvestment in housebuilding, restrictive planning policies and the shift of housing from a necessity to a financial asset – driven by buy-to-let schemes, second-home ownership and overseas investment – have all contributed. The neglect of social housing has also cost hundreds of thousands of council homes.
Labour has pledged to build 1.5 million homes over the parliament, with more than 300,000 homes annually focused on social housing and affordable ownership, and a new State Housing Construction Company. Yet current building rates are about a third below what is needed to hit that target.
Opponents of rent controls also cite international evidence. In Spain, a new Housing Act introduced in February 2024 capped rent increases at 3% for new contracts, with stricter controls in designated “stressed areas”. In March 2026, the Spanish prime minister announced a nationwide contract extension at current prices and a 2% annual cap through to the end of 2027. But reports indicate the policy has led to a decline in the supply of rental housing. Landlords have left the market, making it harder for tenants to find properties.
International comparisons and domestic precedents
Scotland provides a closer example. Under the Cost of Living (Tenant Protection) Act 2022, the Scottish government initially imposed a 0% rent increase cap, later adjusted to 3% with landlords able to apply for up to 6% in specific cases. Those emergency measures expired on 31 March 2024. The Scottish government now plans permanent rent regulation through the Housing (Scotland) Bill, which would cap increases at CPI plus 1%, up to a maximum of 6% annually, in designated Rent Control Areas. Implementation is expected in stages, with full effect not until summer 2027 at the earliest.
Many western European countries, including France, Germany and the Netherlands, have “third-generation” rent control systems that aim to balance tenant protection with a reasonable return for landlords – typically restricting rent increases rather than imposing outright freezes. England itself had rent controls in place continuously from 1915 until 1989.
The Green Party, which is expected to capture several urban councils from Labour in the upcoming local elections, has proposed rent controls in England and Wales. Zack Polanski, the party’s leader, has called for a one-year rent freeze in Wales until permanent controls are introduced, but acknowledged that the path to rent controls in England “might be longer”. Labour MPs are concerned that they are losing voters to the left, particularly in cities where the Greens are gaining ground.
Ministers hope that bold proposals such as the rent freeze will help shore up Starmer’s position in the weeks after the local elections, where Labour expects heavy losses. However, with economists predicting a prolonged period of squeezed incomes and the IMF warning of the UK’s dire economic outlook, the government’s intervention in the rental market will face intense scrutiny – both from those who say it does not go far enough and from those who warn it will do lasting damage to housing supply.
