Labour Party pledges to control rents if elected on May 7

LONDON (Reuters) - The Labour Party said on Sunday it would introduce rent controls if it wins an election on May 7 and ban private landlords from raising rents above the rate of inflation for the duration of new three-year contracts. Left-wing Labour and Prime Minister David Cameron's centre-right Conservatives are neck-and-neck in most opinion polls ahead of the election and both are searching for a policy idea that might break the deadlock. Labour leader Ed Miliband has previously promised he would intervene in other areas, such as the energy market, to keep prices down. His latest proposal is aimed at younger voters, many of whom cannot afford to buy property because of historically high house prices. "Too many people are struggling to meet the costs of putting a roof over their head," he said. "Some are saving for a deposit year after year, decade after decade. Others are having to move all the time, ripping up the roots they have laid down." Under Labour's plans, which it said it would introduce in its first year of office, it would bring in standard three-year contracts, oblige landlords to disclose previous rent charges, stop them pushing through any above-inflation increases, and cut tax relief for "rogue landlords". The changes would apply to England only, where an estimated 11 million people rent their homes. The Conservatives oppose rent controls, believing it is wrong to interfere in the free market and that building more housing is the way to keep prices down. Labour's pledge drew a mixed reaction. The Confederation of British Industry (CBI), the country's main business lobby group, said the plans could deter investors from putting money into construction. "Institutional investors, which are critical for building new homes, could be discouraged by plans to intervene in the rental market in this way, as it will add uncertainty," the CBI said in a statement. Generation Rent, a lobby group representing renters, was also sceptical, saying some measures didn't go far enough, while others could easily be circumvented. "Stopping landlords from making inflation-busting rent increases would make private renters more secure than they are in today's Wild West lettings market," it said in a statement. "But the proposals are still riddled with loopholes." (Reporting by Andrew Osborn; Editing by Ralph Boulton)