The government is mulling the imposition of a one-year freeze on private sector residential rents, in a move that will send shivers through the build-to-rent sector.

The Treasury is debating the move as part of a raft of measures being considered to help ease the impact on the public of cost increases caused by the war in Iran, The Guardian reported.

The talks are at an early stage, and the freeze may not come to pass. Several measures to ease rental burdens on consumers are being considered, but Chancellor Rachel Reeves favours a one-year freeze on private sector rents.

The freeze would reportedly exempt new-build properties to avoid disincentivising developers from building. Academic research from around the world has found that while rent caps or freezes are positive for existing tenants, they slow down new development and thus push up rents in the medium to long term.

The Guardian’s report did not say whether any freeze would cover student accommodation, senior living or coliving.

Property industry executives were highly negative about the potential for the freeze.

“The fundamental issue remains that there is a severe shortage of rental homes across the UK which is limiting consumer choice and keeping rents high,” Dolphin Living CEO Olivia Harris said in a statement.

“The solution is to build more homes, especially those of an intermediate affordable tenure, which can help address many of the affordability issues we are currently experiencing, rather than introducing a measure that will discourage future investment and accelerate the number of smaller landlords looking to exit the market, thus exacerbating the demand/supply imbalance.”

Several commentators pointed to the example of Scotland, where rent caps imposed by the Scottish government caused investment in new development to slow to a trickle.

“If a temporary rent freeze is being considered by the Chancellor, she must learn the lessons of the disastrous impact of the failed attempt to introduce rent controls in Scotland with rents for new lets rising significantly after controls were introduced, alongside a standstill in new home-building,” British Property Federation CEO Melanie Leech said in a statement.