Industry slams Khans rent control calls

PRS industry specialists have come together to brand Sadiq Khan's re-election focus on rent controls a 'disaster'. The Mayor is running for another term and using the topic of rent control in the capital as the title of his manifesto.;

The private rental sectors industry giants have banded together to brand Mayor of London Sadiq Khan’s proposed rent controls in London a “disaster”.

Rent control, where the Government controls the amount that can be charged for rent, exist in cities such as Berlin and New York.

Khan’s controls

Earlier this month, Sadiq Khan, mayor of London, launched his re-election campaign. His main focus is around allowing rent controls to be introduced.

Kickstarting his campaign at a housing estate in Hackney, the mayor was due to say:

“The case for rent controls is now absolutely undeniable. But Tory ministers have blocked us from introducing our plans for rent controls in London and have simply said no.”

He plans to use the upcoming mayoral election on May 7th as a referendum on rental controls.

Khan said his rent control plan would establish a new London private rent commission, with renters on its board, to implement and enforce measures to control rents.

Khan is also considering ending “no fault” evictions and increasing minimum landlord-to-tenant notice periods to four months.

NRLA speaks out

Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA) responded to Khan’s proposal:

“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.”

The NRLA has warned that linking rental prices to inflation would put tenants in a worse position than allowing landlords to determine their own prices.

“Figures show that private rents have fallen every year in real terms throughout his time at City Hall and are now nearly 10 per cent lower than five years ago when compared to the Retail Price Index.”

ARLA Propertymark echoes calls

Lettings agent body ARLA Propertymark, has also criticised the London Mayor’s plans.

ARLA’s Policy and Campaigns Manager, Tim Douglas commented;

“Rent controls are not the answer when seeking ways to stand up for renters in London”

“Increasing the supply of properties, rather than capping rents will ensure rents fall and landlords stay in the market. A greater focus on speeding up planning within councils and building on land under the Mayor’s responsibility will ultimately allow more properties to be built and help make renting in London more affordable.”

Landlords agree

Sentiments in the landlord community echo those of the industry, concerned that tenants are being misled by the appeal of rent controls.

One key factor that outlets are keen to point out is what they see as the hypocrisy of Khan running on this policy, despite a report published by HM Treasury in 2010 under the last Labour government - in which Khan was a minister - that warned of the devastating impact such a policy would have on inner-city housing.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.