Khan’s rental freeze stokes industry backlash

Key figures in the property industry have spoken out against Sadiq Khan’s proposals to freeze rents in the capital. The London mayor has called for an overhaul of the private rented sector, with a new blueprint demanding rents are reduced and locked at lower levels. Khan is also seeking to build a new London Private Rent Commission and a universal register of landlords and rents. But industry figures argue rent controls could damage the institutional build to rent sector, and restrict new housing supply and quality. Adam Challis, head of residential research at JLL, said: “The mayor’s proposal will send shivers down the spine of the housing industry and buy to let investors.” Challis pointed to previous rent controls “driving down the quality of rental homes as landlords can no longer afford to invest in their upkeep”, and warned that controls risked reducing supply. Co-founder of room share platform Ideal Flatmate, Tom Gatzen, said the mayor had failed to deliver the promised number of homes, already pushing prices up. In response to the new proposals, Gatzen said: “A quite frankly laughable proposal from Sadiq Khan, and one that reeks of desperation. “We’ve already seen the detrimental impact an ill-thought out ‘tenant first’ policy can have on the market in the wake of the tenant fee ban, with many letting agents and landlords increasing rents to recoup lost income.” John Dickie, London First’s director of strategy and policy, said: “The answer to London’s housing crisis lies in redoubling efforts to build more homes – not making it harder, through rent controls, to secure new investment into house building. He added: “Build to rent must not be held back from delivering high quality, professionally managed, new homes for Londoners.” The BPF said it “fundamentally opposes rent controls” and warned that a separate tenancy model in London “makes no sense”, and would exacerbate the housing and affordability crisis in the capital. Ian Fletcher, director of real estate policy at the British Property Federation, said: “If investment into new rental housing is deterred, this would take London further away from resolving the underlying housing issue of our time – a lack of supply.” Fletcher stressed that the build-to-rent sector provides high standards and choice “as competition intensifies”. He added that the sector has already committed to three-year tenancies and transparency. He said: “Knowing how rents will be set, however, shouldn’t be confused with old-style rent controls, which will damage investment in the sector.” Khan’s blueprint follows his announcement earlier this year that he would develop plans and seek to bolster his powers to support renters. He said he would lobby government to deliver his proposed reform. It also comes as the London mayor ramps up his campaign for re-election in 2020. Earlier this year, Grainger chief executive Helen Gordon dubbed the plans “draconian” and warned that a mayor “determined to get re-elected on this vote for rent controls” would worsen the housing crisis. In response to the announcement, a spokesman from Grainger said: “The proposals are subject to parliament’s support and new legislation, which the Mayor himself acknowledges he does not have the power to implement. “In his statement, the Mayor recognises the difference between build-to-rent and professionally developed and managed properties compared to the wider buy to let sector, and he calls for incentives and support for the build-to-rent and professional rental market in order to protect investment in new housing supply and existing high-quality rental homes. ” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette