The Mayor of London is seeking more powers from the Government that would allow him to issue rent controls in the capital.
A City Hall report – in which London Mayor Sadiq Khan takes some of the credit for the tenant fees ban being introduced and for encouraging the Government to consider scrapping Section 21 – argues for more powers over the rental market.
The report asks for powers to be devolved so London could establish a universal register of landlords and create a Private Rent Commission to manage the register and set rent controls.
It also suggests incentives to ensure there are enough properties available for tenants, such as exempting build-to-rent homes from controls for a defined period or creating tax incentives for investing in new or improving existing homes.
The report concedes that individual landlords may require a form of appeal available to them if rent reduction measures were causing them genuine financial difficulty.
Khan said: “It is high time for private renting in London to be transformed. Londoners need fundamental change that is long overdue.
“Unlike other mayors around the world, I have no powers over the private rented sector. That’s why this landmark report sets out a detailed blueprint of what the Government must do to overhaul tenancy laws, and what powers City Hall needs from them to bring rents down.
“We have made important progress over the last three years by working closely with councils and renters – from ‘naming and shaming’ rogue landlords and banning letting agents fees for tenants, to being part of the successful campaign to scrap Section 21.
“But now we need the Government to play their part by making tenancy laws fit for purpose, and by enabling us to bring in the rent control Londoners so urgently need.”
Agents and landlords have criticised the proposals.
Marc von Grundherr, director of Benham and Reeves, said: “There is no doubt that we need to address the issues surrounding the London rental market, but to attempt to remedy said problems through a freeze on rents isn’t far short of idiotic and demonstrates a real lack of understanding when it comes to the rental sector and wider property market.
“To further deter landlords from the rental space by restricting the income available, having already hit them where it hurts via a ban on tenant fees, Stamp Duty hikes and tax changes, will only see a reduction in stock and further inflame the issues that we are currently seeing.
“Landlords are the lifeblood of the rental market– they need to be encouraged to remain in the sector, not to exit it.
“Had the number of homes promised actually been delivered we would have seen a natural adjustment to rental prices in the capital through a reduction in demand.”
David Smith, policy director at the Residential Landlords Association, said: “Rent controls are meaningless if Londoners can’t find a home to live in. Rent controls will lead to a drop in investment, and increasing supply should be the Mayor’s priority.
“Localised rent controls would also have a huge impact in the surrounding areas. With demand continuing to outstrip supply, residents would have to move out of the city and rents would be pushed up further as demand increases in the commuter belt.
“Research from the Centre for Cities has found that rent controls divide renters into the privileged and outsides, with those already renting when the controls are introduced doing well but those hoping to move into the city or for more space losing out, damaging social mobility.
“London rent rises are already well below inflation increasing at just 0.9% in the year to June compared to CPI at 2%.”
David Cox, chief executive of ARLA Propertymark, warned that the last time rent controls existed in this country, the private rented sector (PRS) shrunk to the lowest levels ever recorded.
He said: “At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink.
“In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help will be forced into the hands of rogue and criminal operators, who may exploit them.”
Comments (7)
So no comments on the actual proposal, but attacks on the proposer? Shall I dare to guess what’s driving that…?
Oh dear, you really went there? Very sad.
I think David Smith summerises quite well in the article, also just a very basic misunderstanding of supply and demand dynamics.
HE SHOULD GET ON WITH THE JOB OF REDUCING CRIME!!
That’s been outsourced to a Police and Crime Commissioner, another waste of money.
Khan is a charlatan! He is all about ego and appeasing the reactive left-wing extremists who vote in mayoral elections. This city would be better off without a Mayor at all!
It’s like amputating a hand to fix a broken leg.
Abolition of a London mayor and city hall would make a significant saving and remove yet another layer of political expansionism. London for many years did not have a mayor. The mayoral system was formed to deal with strategic matters like transport and regional planning yet Kahn seems to have greater political ambitions. Perhaps the next it will be like the movies – “Passport to Plimlico”