Sadiq Khan wants to freeze rents for two years

Mayor of London Sadiq Khan has asked the government to hand him powers to freeze private rents in the capital for two years.

City Hall estimated that this would cost landlords nearly £3,000 over the two-year period between April 2022 to March 2024.

The Labour Mayor argued that the change would “give people a chance to get back on their feet after the pandemic”.

The proposal has unsurprisingly been met with some hostility from the National Residential Landlords Association.

Ben Beadle, chief executive of the trade body, said: “A rent freeze would be disastrous for the private rented sector.

“At a time when costs are rising sharply, and will continue to do so with extra spending needed for energy efficiency upgrades and higher mortgage rates, all it would do is drive more landlords out of the market.

“This would make the situation worse for tenants at a time when there is already a chronic shortage of homes.”

Franz Doerr, co-founder and co-CEO of payment technology company flatfair, also spoke out against the change.

He said: “Sadiq Khan has diagnosed the right problem but offered the wrong solution. Rent controls may help those living long-term in the same accommodation, but as superheated markets like Berlin have demonstrated, they punish new arrivals and frequent movers.

“Young people in particular are both hardest hit by cost-of-living increases, and more frequent movers than the rest of the population, with average private tenancies of a little over a year. Costly rental deposits hit this young, mobile population the hardest.

“Easing the burden on Generation Rent requires a more nuanced, coordinated approach than capping rents. The government and City Hall should consider opening the door to deposit alternatives, doing away with the need to stump up a costly five-weeks’ rent and unlocking the £4.5 billion currently held in rental deposits.”

Chris Hutchinson, CEO of rental platform Canopy, was more positive about the proposal.

He said: “The proposal from Sadiq Khan to freeze private rents would be a welcome boost for renters at such a testing time. The cost of living crisis is hitting everyone hard and those renting, in potentially energy inefficient homes, are likely to see utility prices skyrocket.

“And the continuous growth of house prices and increased cost of living makes scrapping together a deposit an increasingly difficult challenge for those looking towards homeownership, meaning they’ll be renting for longer.

“27% of UK adults already feel stressed about money every single day, and this anxiety will undoubtedly grow with tenants needing to dip into savings or stretch budgets further to cope the increasing cost of everyday life.

“A freeze on rent costs would give renters an element of certainty and what’s paramount now is that people take control of the things they can. That’s positive financial habits and ensuring rental payments are used as a tool to build credit scores so when the time is right to buy, renters are ready.”

Comments 2

  1. This move if it went ahead would guarantee that London will not get the 85,000 additional rental properties/year they say are needed. Maybe we will see an immediate rush of rent increases and/or section 21 evictions followed by re-rentals at a 20% increase before this kicks in or maybe some landlords will just sell up and potential landlords will just not enter the market. This move will no doubt please Shelter and Generation rent and maybe it will be vote winner until people find they have nowhere to live. What happens at the end of the freeze period (if it ever comes) will landlords just be allowed to hike the rents? I doubt it. Khan argues that the change would “give people a chance to get back on their feet after the pandemic”. However, his lot won’t be paying for it, those demonised rich landlords who made their fortunes out of rent arrears by untouchable tenants during Covid and who deserve a kicking will pay. It serves them right, how dare they provide housing to people who cannot afford to buy their own places, highlighting continued Government failure to provide for them.
    This on top of the currently rejected (for now) rent reductions and rent freeze proposals for Northern Ireland. Something in some form is coming and it won’t be good news for the PRS that’s for sure and a “hostile” reaction from the NRLA won’t make anybody back down.

  2. Well stated northernlandlord I could not have put it better. You seem to have two types of people in life; those who save and invest understanding the market they are in and those who are politicians who want only to buy votes at someone elses expense to put, or keep, them in power often promising what they are not even empowered to deliver. As in the London Mayor’s case. If you are a tenant of course what politicians offer (their bribe) is attractive and the vast majority will not understand to impact of the results until it is too late. The Rent Act 1977 illustrates the impact of rent control only too well but unless you were a property professional operating in the late 70’s and 80’s you are unlikely to understand the history. The only losers will be the poorer in society as homes are less available and in the case of the 1977 RA it STOPPED social mobility by no housing being available to those who wanted to move from less prosperous areas for work and better their lives. Still the Government promise levelling up so that’ll work won’t it!

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