The Mayor of London, Sadiq Khan, has announced that a campaign for wide-ranging rent control is to be key to his 2020 re-election bid. He asked the government to give the London mayoralty the power to combat soaring rents in the capital.
To this news, Alexandra Morris, Managing Director of online letting agent, MakeUrMove, said the following:
“The main problem for tenants is a lack of supply in the housing market, meaning it does not meet demand, particularly when it comes to social housing. Rent controls do not deal with this problem, they merely seek to address a symptom of the problem.
“Most good landlords don’t regularly increase rents, because they want to provide a service their tenants can afford. This means most landlords experience a real terms reduction in their rental income year on year.
“Rent controls would represent another burden for landlords who are already facing interest rate rises, tax relief changes and increasing regulation. This could become a further barrier to landlords covering their costs or making a small profit.
“As smaller landlords often have one eye on getting out of the market, rent controls could prove to be the final straw. This would further reduce capacity in the private rental sector.
“In addition, there will also be some landlords who wouldn’t have increased rents but who now feel they have permission to put rents up in line with the rent control measures.
“All of these factors will lead to more rapidly increasing average rents because the fundamental issue – that we aren’t building anywhere near enough homes in the UK – has yet to be adequately addressed.”