Khan invests in rent to secure second term

Mayor of London makes capital-wide rent controls a cornerstone of his re-election campaign.

Sadiq Khan is investing in rent to see him into a second term as Mayor of London.

As a cornerstone to his 2020 re-election campaign, Khan says he intends to introduce a private rent commission to the capital – with a board that would include current renters – to enforce measures to reduce rents and keep them at lower levels, something the Mayor of London presently lacks the legal power to do.

The concept sets up a clash with government, and London First fears rent control will hold back investment in house building.

Shaun Bailey, Khan’s Tory rival for the mayoralty, has launched his own pledge on housing, proposing establishing a ‘taxpayer-owned housebuilder’ controlled by City Hall that would operate like a private sector firm.

And Andrew Boff, housing spokesman for GLA Tories, said a bid for powers to introduce rent controls didn’t alter the fact that the approach doesn’t work.

“History shows that experimenting with rent controls can lead to deteriorating property standards, fewer homes to rent and even higher rents – Londoners deserve better than this flawed approach,” he said.

Boff called on Khan to instead reverse his decision to restrict building on swathes of brownfield industrial land and bring back a family homes target.

Khan is due to launch a report at City Hall today (19th July) setting out the new powers he would need and a blueprint for the overhaul of the rental sector.

As outlined, the devolved powers would:

  • Establish a universal register of landlords to access valuable data as well as enforce standards
  • Establish a London private rent commission to design and implement an effective system of rent control
  • Implement simple rent stabilisation measures such as caps on rent increases while the commission is being created

The average private rent for a one-bedroom home in London is now more than the average for a three-bed home in every other region of England, and the proportion of Londoners renting privately has risen from 11% in 1990 to 26% last year.

Polling suggests more than two-thirds of Londoners favour caps on the amount landlords can charge, similar to systems in Berlin and New York.

Berlin has recently announced a five-year rent freeze – rents are controlled both within and between tenancies.

In New York City, some apartments have their rents capped by a board.

Khan references Scotland recently introducing laws allowing councils to apply “rent pressure zones”, where rents could rise by no more than inflation, but the rest of England and Wales had very weak protections.

“It is high time for private renting in London to be transformed. Londoners need fundamental change that is long overdue,” Khan says.

“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.”

The report, co-authored by the Labour MP Karen Buck and the deputy mayor, James Murray, draws on proposals from a study by the New Economics Foundation (NEF).

Miatta Fahnbulleh, NEF chief executive, said urgent and radical action was needed, with average rents having risen three times as fast as average incomes since 2010.

Fahnbulleh said: “The scale of this affordability crisis means that action must be taken.

“We support the mayor’s call – drawn from NEF’s proposals – for additional powers to design and roll out rent controls.”

“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 2.4 million private renters.”

Generation Rent director Dan Wilson Craw said the current state of the rental market meant a rented property could rarely be a true home.

“Londoners are being priced out of the neighbourhoods they grew up in, couples are delaying having kids, and many tenants dare not complain about disrepair in case their landlord retaliates with a rent hike,” said Wilson Craw.

“Sadiq Khan recognises the ambition and urgency needed to improve life for private renters. We hope the new prime minister recognises this too and acts quickly.”

Labour’s 2017 manifesto included a pledge to “introduce controls on rent rises” and to consider giving the mayor of London additional powers, given the particular pressures in the capital.

London First warns rent control proposals will hold back investment in house building.

John Dickie, London First’s director of strategy and policy, acknowledged Khan as right to focus on PRS improvements as more and more Londoners lived in rented homes.

“But the answer to London’s housing crisis lies in redoubling efforts to build more homes, not making it harder, through rent controls, to secure new investment into house building,” said Dickie.

“As the mayor’s proposals acknowledge, Build To Rent must not be held back from delivering high-quality, professionally managed new homes for Londoners,” he said.

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