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Sadiq Khan confirms plan to propose rent controls in London

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

The idea was first hinted at in early December last year, which a spokesman later confirmed by saying that proposals for such a plan would be a part of the ‘London Model’ report that will be issued in Spring 2019.

The official City Hall announcement states that Khan has invited Labour MP Karen Buck, who was instrumental in carrying the Homes (Fitness for Human Habitation) Bill through parliament recently, to work with deputy mayor for housing James Murray to develop the blueprint, “whilst at the same time protecting new supply and investment.”

The mayor goes on to cite Berlin and New York City as major cities where rent controls are successful.

In addition to rent controls, the London Model will propose reform to Section 21 evictions and the introduction to open-ended tenancies as a right for renters.

It must be noted that the mayor’s office does not have the power to introduce such laws, but can lobby for them at the highest levels.

Khan says: “The arguments for rent control are overwhelming, and Londoners overwhelmingly want it to happen. I am delighted Karen Buck MP has agreed to work with my deputy mayor for housing on proposals for new laws that would help make private rents more affordable. It’s vital that the government acts to improve the quality of millions of lives, now and in the future.”

Buck adds: “London’s private renters are amongst the worst affected by the housing crisis in the capital, and the laws to protect them are woefully out of date.

“We need an approach to rent stabilisation and control that works in London, and I am very pleased to be working with Sadiq’s team to develop a blueprint for what government should do. Once we have set out these proposals, we will argue the case that ministers must support London’s private renters by putting our plans into action.”

In response, the national landlords association comments: “The cost of housing is high for everyone, whether you rent or have a mortgage, so the frustration felt by so many people in London, and indeed the UK, right now is understandable. We have a general housing shortage, social housing has been in long term decline for some time, and more and more people have no option but to turn to the private rented sector for a home.

“However, it is frankly bizarre that the mayor of London should choose this moment in time to develop a blueprint for stabilising rents. It is equally odd that the announcement justifying the decision should be based on rent data for the period 2005 and 2016, when according to the Mayor of London’s own housing data private rents in the capital have dropped consistently from 2016.

“It’s often assumed that high rents are the product of landlords’ greed rather than market forces.  However, housing costs are seen as relatively high because wages have not kept pace with the cost of supply. Capping the rent which can be charged will alter neither of these factors.

“Artificially suppressing rents sounds like an easy solution, but it would be counter-productive and fails to address the root causes of a lack of affordable housing. In fact, history shows that rent controls stifle the supply of housing and reduce the money available to a landlord to maintain their properties.  That benefits no-one.

“The only real solution to the UK’s housing problem is to build more homes whilst bolstering economic growth. The emphasis should be on encouraging more housing in all tenures from a more diverse range of investors and providers.”

Meanwhile, Landbay chief executive John Goodall says: “Rent controls are likely to lead to a reduced investment into the rental sector and thus a further shortage of high quality rental accommodation. That will not lead to a positive outcome for London’s renters as they will find it harder to find decent properties.

“The mayor should be looking to find ways to encourage investment rather than political grandstanding that will end up harming those that he claims that he is trying to help.”

MakeUrMove managing director Alexandra Morris adds: “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.”

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