Housing is becoming increasingly unaffordable for many tenants, with rents rising more than 10% in the last 12 months and now accounting for almost half a person’s take-home pay. As a result, tenants are calling for a rent freeze in the private rental sector to stop costs spiralling further. LandlordBuyer looks at whether this could happen in England and what impact it could have on landlords.
Scotland leads the way on rent freeze
Let’s start with the precedent. In September 2022, the Scottish Government brought in emergency legislation freezing private and social housing rents until at least the end of March 2023.
This move was brought in to help protect people from the rising cost of living, including soaring energy costs. The consequence is greater financial pressure on Scottish landlords, who are trying to manage rocketing mortgage rates without being able to increase their rents. The rent freeze is set to be reviewed and could be extended until September 2023 or even March 2024, potentially putting more strain on landlords.
Rent cap for social housing
In England, the Government has put a cap on rents in the social housing sector in response to the cost of living crisis but it has stopped short of capping rent rises in the private rental sector. Limited to 7% from April 2023, this aims to protect the most vulnerable of tenants at a time when inflation may have seen rents rise by up to 11%.
Rent freezes: a reality under a Labour government
The idea of introducing a rent freeze in England’s private sector could become a reality if Labour come into power. At the Labour Party Conference in September 2022, Shadow Levelling Up and Housing Secretary, Lisa Nandy, said she was very interested in allowing mayors or local councils to freeze private rents during difficult times. She also indicated that her party was working on proposals for controlling rents. This could have significant repercussions for landlords across the country.
Current polls put Labour well ahead of the Conservatives for the next election, with the Conservatives potentially losing almost 300 seats. If Labour does take control of Government and introduces rent cap measures, they could restrict a landlord’s ability to raise rents in response to rising costs.
Is a rent freeze too much for you?
If the worry of a rent freeze is the final straw, LandlordBuyer can purchase your buy-to-let quickly and simply using our professional property buying service. We will give you a free cash offer to get the sale started and the sale can complete in as little as seven working days. Crucially, LandlordBuyer will purchase buy-to-lets with sitting tenants, short leases and poor EPC ratings. Get in touch to discuss your property investment future.