This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The Mayor of London, Sadiq Khan, has set out his blueprint
for rental housing in the capital as part of his 2020 re-election bid,
including a proposal for rent controls.
Khan is hoping to gain Government support to give the
Greater London Authority (GLA) the power to combat increasing rent prices in
The Mayor wants to create a blueprint for an overhaul of the
law for private rental housing, to allow new restrictions on rent prices to be
imposed. For this to happen, he would require approval by central Government.
Khan told the Guardian:
“London is in
the middle of a desperate housing crisis that has been generations in the
making. 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.”
Labour’s London Assembly Housing Spokesperson, Tom Copley AM,
has welcomed the Mayor’s rent control plans.
He says: “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.
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.”
He adds: “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, John Stewart, the Policy
Manager for the Residential Landlords Association (RLA), is unimpressed by the
Mayor’s blueprint for rental housing: “It is curious that the Mayor is considering
introducing rent controls at a time when rents in London are falling in real
terms, according to official data.
“The Labour Party in Wales has previously rejected
rent controls, arguing that they reduce incentives to invest in new property
when we need more and lead to a reduction in the quality of housing. The same
would be the case in London.”
He explains: “All evidence around the world shows that,
where forms of rent control are in place, decoupling prices from the value of
properties hurts both tenants and landlords.
“In the end, what is needed is a relentless focus on
boosting the supply of housing.”
The latest data from the Office for National Statistics shows that, in the year to December 2018, rent prices in London increased by an average of 0.2%, which was well below the rate of inflation.
Alexandra Morris, the Managing Director
of online letting agent MakeUrMove, agrees with Stewart: “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.”
She continues: “Rent controls would represent another
burden for landlords who are already facing interest rate rises, tax relief changes and increasing regulation. This could become a
further barrier to landlords covering their costs or making a small profit.
“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.”
Morris goes on: “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
Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources.
When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.
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