London rent control proposal branded “laughable”

London mayor Sadiq Khan has followed on a promise made in January this year in proposing the implementation of rent controls within England’s capital.

Specifically, Khan wishes to create a landlord and rent register which would be used to accomplish three tasks: to design a rent control system; to set out how existing rents should be gradually reduced; and to recommended incentives to boost housing supply.

Other recommendations made in his report, in which the previous demand is detailed, include scrapping break clauses and introducing open-ended tenancies.

“Unlike other Mayors around the world,” says Khan, “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.”

However, many in the sector have reacted negatively at best.

Ideal Flatmate co-founder Tom Gatzen says: “A quite frankly laughable proposal from Sadiq Khan and one that reeks of desperation.

“During his time in power, his severe failure to deliver on the number of new homes promised has contributed massively towards an over-reliance on the London rental sector. This demand has pushed rental prices up further and the capital’s tenants are the ones that have paid the price.”

Meanwhile, Benham and Reeves director Marc von Grundherr says: “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.

“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.”

RLA policy director David Smith adds: “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.

“London rent rises are already well below inflation increasing at just 0.9 per cent in the year to June compared to CPI at 2 per cent.

“We do welcome a number of the mayor’s proposals for improving London’s rental sector including establishing a dedicated housing court and reforming the Section 8 process for landlords to regain possession of their property in legitimate circumstances,” he adds.

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