Rent Controls Debate: Labour MP Push, Expert Warnings, Dagenham 2026

Key Points

• Margaret Mullane, Labour MP for Dagenham and Rainham, is calling on the government to introduce rent controls to curb welfare spending.
• Writing in LabourList, Ms Mullane argues that high private sector rents are driving councils to the brink of collapse and inflating the Housing Benefit bill to over £30 billion a year.
• She proposes trialling a model similar to “rent pressure zones” used in Ireland, at a local authority level in areas with significant social and economic pressures.
• Industry experts and the Institute of Economic Affairs (IEA) warn rent controls typically reduce housing supply and quality, and can lead to higher rents in uncontrolled sectors.
• In Scotland, where a rent cap is in place, rents have risen by 11.6%, with data suggesting landlords are increasing rents faster than elsewhere in Great Britain.
• Ms Mullane stresses that any long-term strategy must include a major increase in the stock of social rented homes.

Dagenham and Rainham (East London Times) July 2, 2026 – A Labour MP is urging the government to consider introducing rent controls as a measure to rein in soaring welfare costs and ease the cost of living crisis, sparking fresh debate between housing campaigners and industry experts over the effectiveness of such policies.

What is the Labour MP proposing on rent controls?

Margaret Mullane, MP for Dagenham and Rainham, has set out her case in an opinion piece for LabourList, arguing that rent controls are needed to tackle soaring private sector rents that are placing severe strain on both households and local authority budgets.

As reported by Margaret Mullane of LabourList, she stated:

“As well as the financial impact high rent is having on families who are struggling, high private sector rents are also having a massive impact on the nation’s welfare budget and driving so many councils to the brink of collapse.”

Ms Mullane highlighted that the Housing Benefit bill has “ballooned to well over £30 billion a year, with the majority of this going to private landlords”, adding that local authorities pay a further £3 billion on top of Housing Benefit payments.

She continued:

“Given the focus that exists on curbing welfare spending as well as seeking ways to ease the cost of living, now is the time to look again at rent controls.”

Why does the MP say rent controls are ‘not a radical idea’?

In her article, Ms Mullane acknowledged common objections to rent controls, including concerns they could prompt mass property sales and depress house prices, but described such arguments as “short-termism”.

As reported by Margaret Mullane of LabourList, she stated:

“Whilst I understand the arguments against rent controls, one being the theory that it would result in the mass sale of property, flooding the market and leading to a crash in house prices, I think this is short-termism.”

She pointed to examples across Europe, noting:

“Many of our European neighbours have rent control systems. It isn’t a radical idea. France, Germany and Ireland have limitations on rent increases in areas experiencing a tight housing market.”

Ms Mullane specifically referenced Ireland’s “rent pressure zones”, suggesting:

“I believe a similar model could be trialled in the UK at a local authority level in areas with significant social and economic pressures.”

However, she emphasised that rent controls alone would not resolve the underlying structural issues in the housing market.

As reported by Margaret Mullane of LabourList, she stated:

“However, as important as I think rent controls would be, to really get to grips with the chronic dysfunctional nature of housing demand and supply, a major increase in the stock of social rented homes must form the foundation of any strategy to tackle the housing and cost of living crises.”

What do industry experts say about rent controls?

Property industry bodies and think tanks have long warned that rent controls can produce unintended consequences, including reduced investment in rental housing and distortions in market pricing.

As previously reported by Property118, rent controls “do more harm than good”, citing analysis from the Institute of Economic Affairs (IEA).

According to the IEA, while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.

The debate has been sharpened by recent data from Scotland, where a rent cap has been in place.

Data by Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain, with rents up by 11.6%.

Lead analyst at Hamptons, David Fell, said:

“The evidence from Scotland suggests that rent controls rarely work as intended.”

He added:

“At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed.”

Mr Fell continued:

“Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.”

How are councils and tenants affected by high rents?

Local authorities in high-rent areas face mounting pressure as Housing Benefit and discretionary housing payment costs rise, squeezing already tight budgets.

Ms Mullane’s warnings about councils being driven “to the brink of collapse” reflect concerns shared by some local government leaders about the sustainability of current welfare housing costs.

For tenants, high rents mean a larger share of income goes on housing, leaving less for other essentials and increasing reliance on benefits or support from local councils.

The MP’s intervention comes amid ongoing national debate over housing affordability, with rising rents outpacing wage growth in many parts of the country.

Background to the rent controls debate

Calls for rent controls in the UK have resurfaced periodically during housing crises, particularly in London and other high-demand areas.

Previous UK experiments with rent regulation, notably in the mid-20th century, were eventually scaled back amid concerns they discouraged investment and reduced the quality and quantity of rented housing.

In recent years, some European countries have adopted more targeted forms of rent regulation, such as caps on annual increases or controls in designated “pressure zones”, rather than blanket rent freezes.

Scotland’s introduction of a rent cap as part of emergency cost of living measures reignited the debate, with landlords and industry groups arguing it created uncertainty and contributed to rent rises as landlords sought to “catch up” with market levels.

The UK government has so far resisted comprehensive rent controls, focusing instead on measures such as strengthening tenants’ rights, supporting new housing supply, and reforming welfare housing payments.

Prediction: How could this development affect tenants, landlords and councils?

If the government were to take up Ms Mullane’s proposal and trial local rent controls, the immediate effect could be a short-term slowdown in rent increases for some tenants in designated areas.

However, drawing on evidence cited by the IEA and Hamptons, there is a risk that such controls could lead to faster rent growth in uncontrolled areas, reduced maintenance and investment in rental properties, and a reluctance among landlords to let homes in controlled zones.

For councils, initial savings on Housing Benefit could be offset if the policy reduces the available supply of private rented homes, pushing more households towards temporary accommodation or social housing waiting lists.

Tenants already in controlled properties might benefit from greater rent stability, but prospective tenants could face stiffer competition and fewer options if landlords exit the market or convert properties to other uses.

Over the longer term, the impact of any rent control scheme would likely depend on whether it is paired with a substantial increase in social and affordable housing, as Ms Mullane herself emphasises.

Without a significant expansion of housing supply, analysts warn that rent controls alone are unlikely to resolve the underlying imbalance between housing demand and availability, and could entrench shortages rather than ease them.