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Coronavirus: London mayor Sadiq Khan resurrects plan to freeze rents

Yahoo! Finance UK logo Yahoo! Finance UK 2 days ago Tom Belger
a man standing in front of a crowd: Mayor of London Sadiq Khan takes the tube to Oxford Street, London, where he visited shops and restaurants to find out how they are coping after he sent a letter to the Prime Minister on the huge challenges currently being faced by West End businesses. (Photo by Stefan Rousseau/PA Images via Getty Images) Mayor of London Sadiq Khan takes the tube to Oxford Street, London, where he visited shops and restaurants to find out how they are coping after he sent a letter to the Prime Minister on the huge challenges currently being faced by West End businesses. (Photo by Stefan Rousseau/PA Images via Getty Images)

London mayor Sadiq Khan has called for new powers to cap private rents in the capital, sparking a backlash from landlords and the UK government.

The Labour mayor is demanding a two-year freeze on rent increases, as an “emergency measure” amid fears of rising evictions when a ban ends later this week.

Khan set out his proposals in a letter to housing minister Robert Jenrick. The mayor has called before for central government to hand City Hall powers to control rents for an estimated 2.2 million private renters.

“If Berlin can freeze rents for five years, there’s no reason London shouldn’t be able to freeze rents for two years in these extraordinary times,” he said.

A freeze is needed now to ensure “no one is forced out onto the streets as a result of this pandemic,” he added.

READ MORE: UK government eviction ban extension only a ‘temporary reprieve’

But the proposals are unlikely to be supported by the Conservative government, and landlords said they would be a “disaster.”

A spokesperson for the ministry of housing, communities and local government (MHCLG) hit back at the plans.

Rent controls “could drive responsible landlords out, reduce investment in high quality housing and ultimately push rents up,” she said.

 “We’ve taken unprecedented action to support renters by banning evictions for six months, preventing people getting into financial hardship and helping businesses to pay salaries.”

The spokesperson also highlighted the government’s decision to increase the notice period landlords must give tenants for six months in England as a temporary crisis measure.

READ MORE: Virus could ‘wipe £5.7bn off landlord incomes by 2024’

The government’s plans “strike a balance between protecting vulnerable renters and ensuring landlords whose tenants have behaved in illegal or anti-social ways have access to justice,” she added.

Chris Norris, policy director for the National Residential Landlords Association, also dismissed the proposals.

“Rent controls would be a disaster for anyone looking for somewhere to rent. As history and experience elsewhere tells us, all they would do is drive landlords out of the market exacerbating an already serious shortage of homes available,” he said.

“Rather than driving a wedge between landlords and tenants the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”

Norris said landlords backed the mayor’s calls for more financial help for tenants in arrears, however.

But the proposals were welcomed by tenant campaigners. Alicia Kennedy, director of Generation Rent, said some Londoners had been hit by rent rises even after telling landlords the pandemic had seen their incomes slashed.

“Unwanted moves can leave struggling tenants with nowhere else to go, and contribute to the spread of coronavirus,” she warned.

“With the economy in recession and coronavirus cases on the rise, landlords should not be permitted to raise rents and force a tenant into an unwanted move.”

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