Buy to Let
London Mayor proposes rent controls for the capital
Could limiting rents actually force landlords out of the capital and lead to a shortage of private lets?
The Mayor of London, Sadiq Khan, has published a report proposing rent controls for the capital.
He has set out how the private rented sector in London should be transformed to give renters open-ended tenancies and to create powers to bring rents down.
The report sets out a detailed blueprint of what new powers the Mayor wants from Government to enable City Hall to introduce rent control.
How would it work?
Under his rent control proposals, the Mayor would establish a new London Private Rent Commission to implement and enforce measures to reduce rents and keep them at lower levels.
With the average private rent for a one-bed home in London now more than the average for a three-bed in every other region of England, the Mayor believes the case for City Hall being given powers to bring rents down has become overwhelming. Far more Londoners are also now renting, with 26 per cent renting privately in 2018, compared to only 11 per cent in 1990.
Sadiq Khan, said: “Unlike other Mayors around the world, 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.
Miatta Fahnbulleh, chief executive of the New Economics Foundation, added: “With a majority of Londoners now in favour of rent control we urge the Government to grant the powers needed to the Mayor to bring rents down to affordable levels for London’s 2.4m private renters.”
Unintended consequences
However, the proposals came in for strong criticism from some quarters, because it could force some landlords to exit the market, effectively limiting supply.
Director of Benham and Reeves, Marc von Grundherr, said: “To further deter landlords from the rental space by restricting the income available, having already hit them where it hurts via a ban on tenant fees, stamp duty hikes, and tax changes, will only see a reduction in stock and further inflame the issues that we are currently seeing.
“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.”
