Labour could introduce rent controls via the back door by devolving power to regional and city mayors, a property expert has warned.

Writing in BTR News, Richard Berridge, founder of Blackbird RE Advisory, says the Labour party’s manifesto hints at devolving more powers to local and regional authorities, which could include the ability to implement rent controls. This move aligns with Labour’s broader goal of addressing the housing crisis by empowering local governments to take direct action tailored to their communities’ specific needs.

Mayor of London Sadiq Khan’s call for rent controls has been echoed by other UK cities including Bristol, while Richard Parker, the newly elected Labour Mayor of the West Midlands, sees their potential but stresses the need for a balanced approach.

Significant

“If Labour were to come to power and…if rent controls were introduced, the impact on the single-family rental (SFR) and build-to-rent sectors could be significant,” says Berridge (pictured).  

“Historically, rent controls have led to mixed outcomes. In Scotland, for example, the introduction of rent controls in major cities such as Edinburgh and Glasgow have had unintended consequences.”

He believes institutional investors could be deterred from making further investment due to the uncertainty and potential reduction in rental income. To mitigate this risk, the SFR/build-to-rent sector should proactively engage with local politicians and educate them about the potential negative impacts of rent controls.

“Emphasising the importance of building more homes, enhancing tenant rights, and fostering a collaborative relationship between landlords, tenants and the government is crucial,” adds Berridge. “Only through such a balanced and comprehensive approach can the UK effectively address its housing challenges and ensure that rental housing remains accessible, affordable and of high quality for all.”