London rents have been dizzyingly high for years now, with young people quitting the capital in droves and migrating north (and to nearby commuter towns) for cheaper rent and a chance to get on the property ladder. But a solution could be in the pipeline, if London Mayor Sadiq Khan gets his way.
Khan is looking at introducing rent controls in the capital to bolster private renters' rights, according to a leaked letter to an MP seen by the Guardian. In his correspondence with Karen Buck, the Labour MP for Westminster North, Khan said London needed "a strategic approach to rent stabilisation and control".
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He continued: "The housing crisis is now having such an effect on a generation of Londoners that the arguments in favour of rent stabilisation and control are becoming overwhelming." He said he supported introducing reforms to enhance tenants' rights since before he became mayor in 2016. "In 2013, I suggested reforms could give renters the right to longer-term tenancies and predictable rents."
While Khan doesn't himself have the power to introduce city-wide rent controls – rents, tenancies and private renters' rights are governed by national legislation – his letter suggests that renters have a powerful and vocal advocate lobbying MPs and government on their behalf.
Khan has also recently called for the introduction of open-ended tenancies and the end of "no fault" evictions, which allow evictions with no reason, which he believes "are essential to strengthening the rights of renters."
Unsurprisingly, news of potential rent controls in the capital was greeted warmly on Twitter among housing campaigners, left-leaning politicians and many struggling Londoners. (There was similar fanfare when Labour leader Jeremy Corbyn proposed new powers to control rents in his party conference speech in 2017.)
UK rent controls existed in some form thru most of 20th century & work in plenty of other countries. The Mayor is right to explore how #rentcontrol or stabilisation could work in London to tackle impoverishing housing costs & damaging gentrification https://t.co/xVU3AHcbPA
— Hannah Slater (@hannahslateruk) December 10, 2018
London rents have been out of control for years. This broken market has entrenched inequality and it is only getting worse. Some form of rent control - as in Berlin and New York - is long overdue.https://t.co/wuCNxOiWoZ
— David Lammy (@DavidLammy) December 10, 2018
Mayor Sadiq Khan to look at imposing long term tenancies with predictable rents in London << really glad to hear this. Sensible and vital to do something to help renters plan & get security https://t.co/XWWe0X44sr
— Antonia Bance (@antoniabance) December 10, 2018
Honestly this has to be a no-brainer. Rents completely out of control.
— clive woodbridge (@blandishments) December 10, 2018
The only people that don't want this are exploitative unscrupulous landlords. >> Mayor Sadiq Khan to look at imposing rent controls in Londonhttps://t.co/iB5ENZrvBc
— William Oliver (@Bill_ee_O) December 10, 2018
Naysayers argue that rent controls wouldn't solve the huge problem of a lack of housing supply. Others say restricting landlords' income would discourage them from investing in further developments and force them to sell their properties, potentially leaving private renters with even fewer places to live.
How would "rent control" work in practice?
"Rent control" could mean a number of different policies – whether it be temporarily freezing rent, capping rent increases or imposing a cap on rent entirely – and there are many ways to implement each one, as Channel 4 reported last year. If rents were capped entirely, for instance, would they be set at market rates or at a lower limit? So while the specifics of what Khan is proposing aren't clear, we do at least know he's looking to redress the imbalance of power between private sector landlords and renters.
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There's also a difference between "rent control" and "rent stabilisation". According to a report by the LSE: "Rent stabilisation schemes vary in their detail but generally aim to provide greater certainty to both landlords and tenants within the period of the lease while taking account of market pressures at the beginning of the tenancy."
Rent controls around the world
Rent controls exist in different forms in many countries and cities around the world.
• Dublin, Ireland – Price controls were introduced in early 2017 (but landlords are finding ways to flout the rules).
• Germany – Cities like Berlin and Munich have caps on how high rents can go, with the cap varying based on local averages.
• New York – Rent controls are decided at the state level in the US, and while some states have laws preventing rent regulation, New York has had measures in place the longest. More than one million apartments are regulated in some way, with only a small number controlled completely and set way below commercial levels. The rest are stabilised, with rent rises controlled by the Rent Guidelines Board.
• Germany – Cities like Berlin and Munich have caps on how high rents can go, with the cap varying based on local averages.
• New York – Rent controls are decided at the state level in the US, and while some states have laws preventing rent regulation, New York has had measures in place the longest. More than one million apartments are regulated in some way, with only a small number controlled completely and set way below commercial levels. The rest are stabilised, with rent rises controlled by the Rent Guidelines Board.
It's not as outlandish as it sounds
The UK actually had rent controls for most of the 20th century, after they were introduced in 1915 as a response to rising rent costs. Rent and mortgage payments were both fixed, and it was difficult for landlords to evict tenants and reoccupy their properties. It was a system that largely worked for both parties, and full-on rent controls were in place between 1939 and 1968, as Channel 4 explains. It wasn't until 1989, under Margaret Thatcher, that deregulated rents on new private sector lettings were allowed.