The Mayor of London has demanded new powers to freeze private rents in the capital for two years.
Sadiq Khan has written to the Housing Secretary Robert Jenrick to seek permission for this change which he claims will help tenants as the economic fallout from Covid-19 continues.
Khan, backed by campaigners at Generation Rent, warns of an “impending tsunami of evictions” once the ban finishes at the end of this week.
This is despite the Government legislating for a six-month notice period for most tenancies.
The Mayor suggests there would be a freeze on rent increases both between and within tenancies, effective immediately, meaning landlords must not charge new tenants a higher rent than the previous tenant.
There would also be an option to extend the two-year freeze if Covid-19 results in the economic outlook for renters not improving, he said.
Freezing rents is not without precedent – earlier this year the Berlin state Government froze rents in the city until 2025, both within and between tenancies.
Khan said: “More than ever, Covid-19 means that many of London’s private renters are facing a really uncertain future.
“More likely to be in lower-paid and insecure work, the end of the furlough scheme means even more renters in the capital are now at risk of pay cuts or losing their job.
“Yet at every stage of this pandemic, renters have been treated as an afterthought by the Government, with protection measures only ever rushed out at the last minute.
“This uncertainty is causing unnecessary anxiety and stress.
“I’m calling on ministers to give me the powers to stop rents rising in the capital for as long as this virus is with us, to give London’s 2.2m renters more financial security.
“If Berlin can freeze rents for five years, there’s no reason London shouldn’t be able to freeze rents for two years in these extraordinary times.”
The move was opposed by the National Residential Landlords Association (NRLA), which highlighted previous studies that show rental stock just limits housing supply.
Chris Norris, policy director for the NRLA, said: “Rent controls would be a disaster for anyone looking for somewhere to rent. As history and experience elsewhere tells us, all they would do is drive landlords out of the market exacerbating an already serious shortage of homes available.
“Rather than driving a wedge between landlords and tenants the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.
“Only then will he make any discernible impact on improving the affordability of housing across the capital.
“We do though support the Mayor’s calls for greater financial support for tenants struggling with rent arrears. In the end this would help them, and the majority of landlords who are individuals and not property tycoons, to sustain tenancies.”
Marc von Grundherr, director at Benham and Reeves, added: “A proposed rental freeze is yet another ill-thought-out plan from a London mayor that has no idea what he’s doing when it comes to the capital’s rental market.”
“His reckless attempt to win votes from London tenants by freezing rents will simply cause more landlords to exit the sector, further reducing the available supply of rental homes.
“It’s this reduction in rental market supply that has already caused rents to climb and while a rental freeze may prevent this from happening in the short term, the further reduction in stock available will lead to far graver problems for London tenants than a few hundred pounds extra in rent.
“Many will find themselves unable to secure a property, with little other choice but to return home or worse, end up on the streets.”
ARLA Propertymark also criticised the proposal.
Timothy Douglas, policy and campaigns manager for the trade body, said: “The Government has provided protection to tenants through the stay on evictions and the job retention scheme, while landlords have fallen outside of Government support.
“It is important to be proportionate to all involved in the sector – tenants, agents and landlords – as the economy struggles to recover in this period.
“It is therefore vital that the situation is not worsened through any measures on landlords as a kneejerk reaction to the conditions created by Coronavirus.
“The vast majority of landlords are supporting good tenants to stay in their properties but a mandatory rent freeze would serve to deter investment in the private rented sector at exactly the time when more is being asked of landlords.”
Comments (11)
Is he also going to freeze mortgage payments for 2 years? If not how will he explain the reduction in stock and the impact that has on tenants as B2L landlords walk away from the rental market especially with sales on a high?
Utterly clueless- rents self-regulate by supply and demand. Rents dipped in 2008 and are dipping again now-as always micro-markets with a huge variety of impacts. His click-bait politics of scaremongering with no substance is boring yet predictable. Tories won’t grant him these powers( in case it’s deemed a ‘triumph’)- which in turn he will bemaon as ‘tories wouldbnt give me the powers I needed to save tenants’. yawn. Havwe asked GenRent both last night & today to back up their statements about ‘London rent hikes’ with facts- still awaiting that validation.
GenRent just got back to me- 3% of tenants surveyed advised of rent hikes. Not validated/verified data. But let’s legislate an entire market based on the suppositions of 3% of a survey. Blimey.
Yes, of course Sadiq Khan is useless and he’s playing to the gallery. But this story raises a much bigger question. DO WE REALLY NEED A MAYOR OF LONDON? Well, do we? What is the point of the mayor’s office?
Playing with Trains
So he ‘runs Transport for London’ – in the old days that used to be ‘London Transport’ that ran itself and before Sadiq Khan, Boris Johnson and Ken Livingstone there were buses (no doubt Khan’s dad drove one of them) and there were tubes. And remember TFL have a big hand in the hopeless Crossrail Limited – creating a railway with trains that are going to arrive at least five years late. So he can’t even make the trains run on time.
A Bridge Too Far
Finally, look at the catastrophe and farce of Hammersmith Bridge – closed to trucks, vans, cars and now cyclists and pedestrians. Even boats are now prohibited from passing beneath its crumbling structure. If The Mayor of London can’t even sort out a dispute between two London boroughs, again I say what is the point of him?
As a closing thought, just look at the calibre of politicians who have been attracted to that illustrious office – Ken Livingstone, Boris Johnson and Sadiq Khan – need I say more?
He’s the bookie’s favourite to win the delayed Mayoral election and highly likely to be Mayor for quite a while. Like it or not.
Yes, of course Sadiq Khan is useless and he’s playing to the gallery. But this story raises a much bigger question. DO WE REALLY NEED A MAYOR OF LONDON? Well, do we? What is the point of the mayor’s office?
So he ‘runs Transport for London’ – in the old days that used to be ‘London Transport’ that ran itself and before Sadiq Khan, Boris Johnson and Ken Livingstone there were buses (no doubt Khan’s dad drove one of them), there were tubes. I actually travelled on them. And remember TFL have a big hand in the hopeless Crossrail Limited – creating a railway with trains that are going to arrive at least five years late. So he can’t even make the trains run on time.
Finally, look at the catastrophe and farce of Hammersmith Bridge – closed to trucks, vans, cars and now cyclists and pedestrians. Even boats are now prohibited from passing beneath its crumbling structure. If The Mayor of London can’t even sort out a dispute between two London boroughs, again I say what is the point of him?
As a closing thought, just look at the calibre of politicians who have been attracted to that illustrious office – Ken Livingstone, Boris Johnson and Sadiq Khan – need I say more?
Does he have nothing better to do?
Cheap Political opportunism at its best. He cant lose either way….
So how exactly does capping the rent for an incoming tenant at the same level as the previous tenant help the previous tenant who has now had to leave the property because of changed cicumstances. Loss of job etc. Both tenant and landlord will have substantial costs as a result of the change.
Keeping people in place (somehow) in a manner that is fair to both sides is the only viable alternative.
If the worse case scenarios pan out and many thousands of people are losing their jobs (which is highly likely) are rents really going to rise anyway? Probably not…
Rent controls are only a question of “when” not “if”. They work in many other developed countries, including socialist (errr not) New York. The rentier generation of Baby Boomers who have all the property were in the ascendency for a long time because of their voting numbers. But sadly for them, they are starting to die now and the young workers are starting to become more politically powerful. So we will continue to see the huge distortions given to Buy to Let slowly start to be unwound now. And restrictions on rents will only be one part of this.
A well written article.
Khan can shout and gesticulate all he likes. These powers are pointless and won’t be granted. He can’t have noticed that rents are flat or falling in parts of London.
The fool hasn’t even noticed that London is in complete chaos right under his nose so no chance of him having a clue about rents.