Runaway rents should have an “emergency brake” imposed on them, a left wing think tank demands.

The New Economics Foundation (NEF) claims every region of England has seen private rent increases of between 6% and 9% each year.

Its report says lowest income renters are spending just under half their income (48.5%) on rent, and warns that without further action, affordability will continue to worsen across the country.  

The research argues that the Renters Rights Act won’t, alone, solve the issue of unaffordable rents. 

The proposals call for an “emergency brake” capping rent increases at the lower of inflation or 2%, paired with a return to a system of “fair rents”, used throughout the 20th century until they were abolished in the 1980s. 

The NEF claims the policy worked on the principle that landlords should receive fair rental income, and in return should not exploit renters through charging excessive rents. 

The NEF claims that since the pandemic  rents in all regions have been growing between 6% and 9% – and the three fastest-growing rental markets all in north-west towns.  

The report argues that decades of policy choices, including the removal of rent controls, the sale of social homes through right to buy and the introduction of buy-to-let mortgages, has worsened housing affordability in every region of the UK.   

The foundation wants: 

• An immediate “emergency brake” until a ‘fair rents system’ has been established. This would temporarily introduce a limit on rent rises both within and between tenancies by either inflation rates or 2% – whichever is lower;

• New powers for mayoral combined authorities to declare local rent pressure and run “fair rent” pilots, with rent levels set by reference to local indices rather than uncapped market rents;

• A gradual implementation of fair rents in areas of the country with runaway rents through a long-term phased process to avoid rent crashes or excessive churn in tenancies;

• An exemption for new-build properties from the emergency brake and fair-rent system for a period, and then gradually phase them into the fair-rent system. 

The foundation claims France, Germany, Ireland and Spain all operate rent regulation systems. 

Its adds that public opinion is strongly in favour of action on rent controls. 

Polling by Ipsos MORI in 2024 found that 71% of the public supported capping annual rent rises at no more than the national inflation rate, while just 8% opposed. 

A separate YouGov survey for Common Wealth found 75% support for a quality and location-linked rent controls policy.