Real Estate

Sadiq Khan sets out rent-cap proposals for London


London’s mayor has set out proposals to cap rents on both new and existing tenancies as he seeks additional powers to enable rent controls in the UK capital.

Sadiq Khan said on Friday he would seek to establish a London Private Rent Commission, with tenants on its board. This would use a new register of landlords and rents to “set out how existing rents should be gradually reduced and their subsequent levels limited within and between tenancies”.

Rent increases could be limited as an interim measure while the long-term scheme was designed, he added.

The London mayor at present lacks the powers to impose rent controls and is unlikely to gain them under the current Conservative government. But Labour leader Jeremy Corbyn supports them, raising the possibility Mr Khan’s proposals could be implemented if the party wins a general election.

Mr Khan, also a Labour politician, said: “It is high time for private renting in London to be transformed — Londoners need fundamental change that is long overdue.

“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.”

More than 2m people live in privately rented accommodation in London, where median rents are almost twice those elsewhere in England, according to the English Housing Survey. Rents account for 39 per cent of average earnings in the city, down from 43 per cent two years ago, according to Zoopla.

Mr Khan’s proposals were developed by his deputy mayor for housing, James Murray, and the MP Karen Buck, based on proposals set out by the New Economics Foundation, a leftwing think-tank.

The group said rents should be linked to properties rather than to specific tenancies, with the level initially set using a formula linked either to current market levels — and setting rents below them — or to average incomes.

It said landlords should be compelled to report rent levels to an open-access database, with a system of monitoring, enforcement and tribunals to check they comply.

The think-tank noted that rent controls “could decrease the attractiveness of the sector as an investment” and recommended additional measures to mitigate that risk, including “a large increase in social housebuilding”.

Socially rented homes already offer lower rents for those on low incomes but face huge waiting lists as their numbers have lagged far behind demand.

Landlords reacted angrily to Mr Khan’s proposals. The National Landlords Association said: “Capping and reducing rents in the way suggested in this manifesto would destroy any prospect landlords have of covering their costs or making a profit.”

Shaun Bailey, the Conservative candidate for London mayor in elections next year, said: “Rent controls don’t work. Implementing them would take a bad London housing and rental market situation and make it worse. It would drive landlords out of the market and lower the standards of the flats left on offer.”



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