London mayor proposes rent control

London mayor proposes rent control

London mayor Sadiq Khan has announced that his office is developing a blueprint for rent controls in the capital. 

The statement follows a City Hall and YouGov poll that revealed strong support for rent controls in the capital, with more than two-thirds of those surveyed in favour of a government enforced cap on the amount landlords can charge. 

Khan, who hinted at the plan early in December last year, has long argued that national government should radically overhaul the laws for private renters which he believes are unfit for purpose. 

In a statement yesterday (January 23) he said: "London is in the middle of a desperate housing crisis that has been generations in the making. At City Hall we are doing everything in our power to tackle it – including building record numbers of new social homes - but I have long been frustrated by my lack of powers to help private renters. 

"It’s vital that the government acts to improve the quality of millions of lives, now and in the future."

The Mayor has asked Karen Buck, Labour MP for Westminster North, to work with his deputy mayor for Housing, James Murray, to develop proposals for rent stabilisation or control laws that would help make private sector rents more affordable for Londoners, whilst at the same time protecting new supply and investment.

This work will complement proposals being developed on how tenancy laws could be modernised. 

Alexandra Morris, managing director of online letting agent, MakeUrMove, said rent controls did not address the existing problem in its entirety. 

She said: "The main problem for tenants is a lack of supply in the housing market, meaning it does not meet demand, particularly when it comes to social housing. Rent controls do not deal with this problem, they merely seek to address a symptom of the problem.

"Most good landlords don’t regularly increase rents, because they want to provide a service their tenants can afford. This means most landlords experience a real terms reduction in their rental income year on year.

Ms Morris has warned that the implementation of rent controls "would represent another burden for landlords who are already facing interest rate rises, tax relief changes and increasing regulation".

She added: "As smaller landlords often have one eye on getting out of the market, rent controls could prove to be the final straw. This would further reduce capacity in the private rental sector.

"In addition, there will also be some landlords who wouldn’t have increased rents but who now feel they have permission to put rents up in line with the rent control measures.

"All of these factors will lead to more rapidly increasing average rents because the fundamental issue – that we aren’t building anywhere near enough homes in the UK – has yet to be adequately addressed."