London mayor Sadiq Khan has renewed his plea for ministers to allow him to freeze rents in the capital, but the British Property Federation has said this “is not the answer”.
The mayor said that without a two-year rent freeze average private rents in London could rise above £2,700 pcm next year. The average is currently £2,567, according to Rightmove.
Khan has called for “serious funding” of £4.9bn from central government to help with the shortage of homes in the capital that is fuelling the cost increases.
He argued that a two-year rent freeze could save renters £3,374 on average, with £887 saved in the first year and £2,487 in the second year. That is £386 more than when this analysis was last conducted by City Hall in March 2022.
Khan said: “These figures reveal the clearest picture yet of why rent controls are so necessary. Private renters make up nearly a third of everyone living in the capital, but they are being consistently let down by a government that refuses to listen and take urgent action to protect them from even greater financial hardship.”
British Property Federation policy director Ian Fletcher agreed that it is “an extremely challenging market at present”.
But he added: “The failed experiments with rent controls in the 1960s and 1970s show that the rent-freeze proposed by the mayor of London is not the answer and would only deter investment into housing in London and further limit supply. The solution to a housing crisis is not to further stall housing delivery.”
He said that, contrary to the mayor’s findings, the BPF’s research showed that rent freezes have immediate negative consequences for renters, “with property standards deteriorating and those people trying to enter the market finding it even harder to secure a home”.
Fletcher added that the real problem was planning policy and an under-resourced planning system, because they were holding back the build-to-rent sector.
“We urge the mayor not to shrink the rental sector, depriving yet more people of a home, and instead look at solutions that grow housing provision.”
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