Downing Street has definitively ruled out a temporary rent freeze, quashing speculation that had sent property company stocks lower. The denial came after Chancellor Rachel Reeves had fanned speculation about helping renters with cost of living pressures. Shares in buy-to-let lender Paragon Banking Group fell 1.7% while rental home provider Grainger dropped nearly 3% amid the uncertainty.

The government faces inflation pressures triggered by the Iran war, with the Bank of England likely to raise inflation forecasts while keeping interest rates unchanged at 3.75%. Housing industry leaders including Helen Gordon, CEO of Grainger, criticized potential rent controls, warning they would reduce housing supply and deter investment. The National Residential Landlords Association also condemned the idea.

The government's rejection leaves the existing policy framework intact. Reeves pointed to the Renters' Rights Act as providing necessary tenant protections. Tenant advocacy group Generation Rent had applauded speculation about a freeze, arguing it would provide breathing space from unaffordable increases amid international market pressures.