UK Thinktank Urges 'Double Lock' Rent Cap to Ease Living Costs

The Call for Rent Controls

The Institute for Public Policy Research (IPPR), a thinktank close to the Labour government, is urging ministers to introduce private sector rent controls in England to ease the surge in living costs caused by the Iran war.

The Proposed 'Double Lock' Rent Cap

The IPPR has published a paper calling for a rent 'double lock', which would link rent increases to either wages or inflation, depending on which was lower. This would also apply to new tenants moving into a property.

• The proposed cap would be based on the 12-month average of either consumer price inflation or wage growth, whichever is lower.
• Any new building would be exempted from the cap for the first 10 years to encourage developers to continue building new homes.
• A landlord who has done extensive work on their property would also be allowed to raise rents beyond the cap.

The Financial Impact

The IPPR has calculated that 2.4 million people in the UK now have unaffordable rents, meaning it costs more than 30% of their gross income. This number is expected to rise by another 340,000 by the end of the decade.

The thinktank's plan would also involve increasing housing benefit to cover the cheapest 30% of rents, costing an additional £600m a year.

The Impact Analysis

The proposed rent cap aims to help millions of people struggling with unaffordable housing costs. The IPPR's extensive links inside government will increase pressure on ministers to include the idea in a cost of living package to be announced by Rachel Reeves later in May.

The Prediction

If implemented, the 'double lock' rent cap could help keep housing costs low and reduce the number of people struggling with unaffordable rents. However, academics have noted that rent controls can have mixed success, and rents on properties not covered by the cap may rise more quickly than they otherwise would have done.