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.”