The new Labour government has ruled out giving Sadiq Khan the power to introduce rent controls on private tenancies in London.
The mayor has been calling for the establishment of a London Private Rent Commission for half a decade to enforce caps on the rents landlords can charge, but the previous Conservative government repeatedly rejected this.
Now a spokesman for the new government has made his strongest statement on the issue yet, saying that ministers have “no plans whatsoever to transfer powers to control rents”.
Previously, Labour leader and current Prime Minister Sir Keir Starmer told the Standard in March that rent controls were “not Labour’s policy at the moment”. At the same time, he acknowledged that “Sadiq has strong views on this” and promised to “work together in the future”.
The Ministry of Housing, Communities and Local Government (MHCLG), currently led by Deputy Prime Minister Angela Rayner, has stated that “solving the UK’s housing crisis is one of our top priorities and giving tenants in need more rights and security is a key priority for this Government. However, there have been no discussions with the Mayor of London about introducing rent controls.” Khan’s spokesman also confirmed that there have been no such discussions on the issue to date.
The mayor explicitly called for a two-year freeze on all private rents in the capital from 2022, saying in August last year that this would be a “lifeline” for Londoners at risk of homelessness.
However, Die Standard has learned from sources close to the mayor that the issue of rent control is not currently a priority for Khan in his negotiations with ministers.
While he has not changed his belief in the need for such decentralisation, he appears to be focusing instead on discussing how the government can help him increase London’s housing supply, particularly arguing for more social housing.
The MHCLG spokesperson said: “The lack of housing is exacerbating the housing crisis and we are taking action to stimulate housing construction. We will work closely with the Mayor and boroughs to improve housing supply in London.”
Earlier this week, it was revealed that the number of properties started under Khan’s latest affordable housing programme has fallen to a record low in recent months, with just 150 properties starting construction across the whole of Greater London between April and June.
One of the main arguments used by opponents of rent controls is that they lead to a restriction of the supply of new properties on the rental market.
Neil Garratt, leader of the Conservative Party in City Hall, described rent controls as “populist nonsense” that “has been a disaster everywhere they have been tried”.
When asked about rent controls in April this year, Khan told Byline Times: “If I have the honour of being re-elected, I will continue to lobby both the Tory Party and the Labour Party to at least leave that decision to the cities and regions. (And) to at least allow us to set up that rent control commission.”
He added that he “understands the arguments from both sides – the landlords and developers who say if you do this, we’ll just pull out of the property market. And that’s why we’re going to set up a commission that includes both landlords and developers and your tenants and lessees.”
The move would not require government approval, but is still set to go ahead. In his recent election manifesto, the mayor promised he would oversee the construction of “new rent-controlled housing, where rents are capped and linked to the income of key workers.”
These apartments are being built specifically with the intention of controlling rent prices. In the first phase, 6,000 such apartments are to be built across the city, “in areas where they are most needed.” The mayor has not yet announced details of how the apartments will be financed or who their landlords will be.
When asked about the plans by Green London Assembly member Zoe Garbett in May, Khan said: “To be clear, the reason they are important is because they show that rent-controlled housing can work and not cause problems in the market.”
“If you look at some of the models around the world, sometimes the year the houses were built is used as a benchmark to decide which houses fall under a rent-controlled system and so on.
“I hope not only that these 6,000 apartments will lead to 6,000 families finding permanent housing at affordable rents, but that it will also give the market and the government the certainty that rent controls will not bring the world to collapse.”
