Could rent freeze solve London’s private rental challenges?

Sadiq Khan calls for rent control as 40% of Londoners say they will struggle to keep up with payments
01 December 2022 , Steve Smethurst

Government won’t consider rent freeze amid concerns that it would reduce investment in the sector and negatively impact the supply of homes available to rent

London Mayor Sadiq Khan has called for a two-year rent freeze similar to that introduced by the Scottish Parliament.

He said: “London’s private renters are facing a triple whammy with rising rents, bills, and the cost of household essentials putting a major strain on their finances.

“Scotland has had a rent freeze. In other parts of the world cities like Vienna, Berlin, Paris and New York have a form of rent control and the sky has not fallen in.

His comments came as average rental prices reached £2,500 a month and 40% of Londoners fear they will struggle to keep up with payments in the next six months, according to a YouGov survey.

Alicia Kennedy, Director of Generation Rent said: “It is too easy for [private] landlords to demand a higher rent when they know they can evict you and re-let to someone else who is willing to pay it. People who don’t want to move are being priced out of their homes and forced to compete in this hellish market. And the cost of living crisis is making it even worse.

Labour’s Lisa Nandy, Shadow Secretary of State for Levelling Up, Housing and Communities, has said she is exploring the possibility of handing new powers to metro mayors and local council leaders that would allow them to freeze rents, saying she is “very interested and attracted by the idea”.

However, Felicity Buchan, Housing Minister has made it clear that the government is not considering rent controls in England. Speaking at the National Residential Landlords Association’s (NRLA) annual conference, she said such a policy would lead to “disinvestment in the sector, which is not good for anyone”.

Ben Beadle, Chief Executive, National Residential Landlords Association (NRLA) said that the Mayor viewed private landlords as simply a problem to be managed.

He said: “If the Mayor wants to address the cost pressures faced by households across London, he needs to focus on boosting the number of homes available. Anything else would merely be tinkering with the symptoms of the challenges in the rental market, without tackling the root cause of them.”

Research in 2015 by Cambridge University found that rent control would reduce the number of homes available to rent in London, in some cases by up to 62% by 2025.”

Andrew Boff, the Conservative Deputy Chair of the London Assembly said that more restrictions on landlords (that do not relate to the quality of the home) would reduce the supply of homes available to rent.

That has been the experience everywhere rent controls have been applied. Research in 2015 by Cambridge University found that any form of rent control would reduce the number of homes available to rent in London, in some cases by up to 62% by 2025.

He added: The Mayor received a record £4.82 billion to start building 116,000 affordable homes by March 2023. Six years later he still has over half a billion pounds to allocate to new affordable homes.

City Hall replied that payments from the 2016-23 fund could only be made when construction of homes began, and staff were working tirelessly to meet targets and ensure all funding was spent on delivering housing. 

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