The mayor of London Sadiq Khan is developing rent control proposals as part of his 2020 re-election bid in the hope that he will gain government support to give his department the power to combat increasing rents in the capital.
The mayor wants to create a blueprint for an overhaul of the laws for private renters to allow new restrictions on rent to be imposed, but for that to happen he would require legislation by central government.
“London is in the middle of a desperate housing crisis that has been generations in the making,” Khan told the Guardian. “I am doing everything in my 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.”
Khan’s rent control proposals have been welcomed by Labour’s London Assembly Housing Spokesperson, Tom Copley AM.
He said: “Londoners have faced continuous and exorbitant rent increases for far too long, paying out an increasing amount of their income without seeing any improvements to conditions or their rights within the private rented sector.
“However, with this announcement, it is clear that City Hall is listening to the vast majority of Londoners, fed up of being ignored by the government and keen to see rent controls implemented as a matter of urgency.”
Copely also expressed his delight at the fact that the Mayor is also proposing to scrap Section 21 evictions.
He added: “Roughly, a third of Londoners will rent from a private landlord by the end of this decade. So, I hope that the government will get behind this and other measures that will bring London’s private rented sector into line with European capitals, such as Paris and Berlin”.
However, many people, including buy-to-let landlords, are unsurprisingly opposed to the plans.
Responding to Khan’s rent control proposals, Chris Norris, director of policy and practice at the National Landlords Association (NLA), made it clear that “rent control doesn’t work”.
He commented: “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.”
Norris pointed out that in the year to July 2018 private rents in London fell 0.3%, compared to an average increase in the rest of England of 1.6%. When adjusted for inflation, as published by the Mayor’s team, this equates to a real terms fall of around 2.25%.
He continued: “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.”