Labour’s proposals to introduce rent controls in London risks reducing the number of private homes available for rent, as landlords look to exit the private rented sector.
Shadiq Khan is being urged to forget about rent controls and instead focus on boosting the supply of rental accommodation in the capital by enticing more people to invest in the PRS.
The Mayor of London has long called on the government to hand him extra powers so he can cap rents in the capital in order to rebalance London’s private rented sector and make it, in his view, “fit for purpose”.
But the National Residential Landlords Association (NRLA) is warning that plans for rent controls, which are at the heart of Khan’s re-election bid, would be a disaster for aspiring tenants.The NRLA points to a report published by The Treasury in 2010 under the last Labour government, in which the current mayor was a minister, that warned of the devastating impact such a policy would have on inner city housing.Assessing the impact of rent controls before they were abolished in 1988, the report concluded that they had been a major factor in the “decay of much of the inner city housing stock.”Ben Beadle, chief executive of the NRLA, commented: “Rent controls would be a disaster for London as the last Labour government made crystal clear. They would mean tenants actually paying higher rents than leaving them to market forces.“The story of rent controls wherever they have been introduced is that they exacerbate an already serious shortage of available homes.“Rather than calling for things he cannot deliver, the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”
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