‘Build more homes, cap rents: Burnham’s housing test’

Prime Minister Andy Burnham has two years to make a real change in people’s lives, and his first few weeks in office suggest he is taking the task at hand seriously. His commitment to deliver growth in every postcode’,  and to the biggest programme of council house building since the postwar period suggests he understands, perhaps as a result of his time away from Westminster, that homes are the foundation of our lives, and that our housing, high streets, and the wellbeing of our neighbours are the means by which we measure the country’s success.  

That’s why the government’s announcement that it will build more than 70,000 new social and affordable homes over the next decade is encouraging. While this is only a tenth of what housing charities such as Shelter and Crisis have been calling for, it is clear that the Prime Minister and Angela Rayner understand how important it is to be at least seen to be addressing the housing crisis. 

 In practical terms, however, this does little to support those struggling with the cost of renting today. The Renters’ Reform Coalition (RRC) – an alliance of leading national housing charities, think tanks and tenants’ unions – is united in calling for caps on how much landlords can raise the rent by, because we know that the high cost of renting is at the centre of the housing crisis, as well as the cost of living crisis. Rent now takes up, on average,  36% of renter’s salaries, meaning that the average rent is officially unaffordable. RRC research suggests that one in three private renters often go without essentials like groceries due to the cost of rent. 

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And it isn’t just us who want to see the Government introduce rent caps. 70-78% of the public consistently support capping or restricting rent increases in polls. That includes a majority of voters from every party – 63% of Reform voters and 85% of Labour voters – and even four in ten landlords. Polling by the think tank Persuasion suggests that a “cost of living populism” platform which includes rent controls could lead Labour to winning 34% of the national vote and 358 seats at a future election, a majority of 66.

This shouldn’t come as a surprise. Rent caps are good for growth and keep much-needed money in the pockets of tenants – and in the Treasury. Out of control rents are pushing up the cost of Local Housing Allowance, and suck money out of the pockets of renters, a traditionally high-spending demographic, that could be spent in local shops and cafes, supporting our high streets.

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The government is staking the house on easing the cost of living crisis, and the truth is that some of the factors that contribute to rising costs are harder to tackle than others. Rent caps are an immediate means of making sure that whatever measures the government takes to tackle the cost of living crisis, they are felt in our households, rather than siphoned off by rising rents. August’s ONS data shows that private rents have again risen faster than wages, as they have done, on average, for 11 of the past 15 years. In the absence of rent regulation, rising rents will continue to chase and consume government spending on local housing allowance, renters’ wage growth and any money saved through VAT cuts and energy caps.

Of course, there will be opposition. On the right of politics, the Conservatives and Reform are gearing up to defend landlords’ interests, despite the fact that a majority of their supporters, as with supporters of all parties, are in favour of rent controls. It’s also true that the cost of living crisis is complex and outcomes can be hard to predict. But by introducing rent caps, Andy Burnham will be giving his government the best shot at making sure voters are better off at the next election. Perhaps just as importantly, they will give him the chance to show us who he’ll stand by when the chips are down: those who struggle through crisis, or those who profit from it.

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