30th
Dec 2018
An industry association is very concerned by the possibility that the mayor of London, Sadiq Khan, is seriously considering introducing rent controls across all of the capital's boroughs and could cause major hardship for tenants finding a place to live, as further investment in the PRS will undoubtedly be damaged.
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The Guardian newspaper has seen Khan's letter that was sent to Karen Buck, the Labour MP for Westminster North, in which he wrote that the capital is in urgent need of adopting a 'strategic approach to rent stabilisation and control', since the arguments in favour of capping rent inflation are becoming “overwhelming”.
The mayor's intention is for all London councils to be given greater powers so that they have the jurisdiction to fight inflated rents.
However the industry association is 'dead set' against the proposal of rent controls being 'imposed' across London as it could seriously damage the private rented sector.
A spokesperson for the industry association, said: “The Labour Party in Wales has previously rejected rent controls arguing that they reduce incentives to invest in new property when we need more and lead to a reduction in the quality of housing. The same would be the case in London.
“All evidence around the world shows that where forms of rent control are in place, decoupling prices from the value of properties hurts both tenants and landlords.”
London has been subject to rent controls in the past under national legislation, as most rented homes were under some form of rent cap.
However this was changed when Margaret Thatcher put a stop to rent controls in the 1980 and 1988 Housing Acts, as the Prime Minister wanted to actively encourage new investors into the BTL Sector.
The spokesperson added: “In the end what is needed is a relentless focus on boosting the supply of housing,”
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