Khan makes fresh call for rent controls as one-in-four renters struggle to make payments

New City Hall analysis suggest 160,000 Londoners are falling behind on their rent payments, reports Noah Vickers, Local Democracy Reporter

Some 160,000 Londoners are falling behind on their rent payments, new analysis by City Hall has found.

The figures reveal 24% of private renters in the capital (about 650,000 people) are struggling to meet rent payments and 6% (about 160,000) say they have fallen behind in the last six months.

London mayor Sadiq Khan said the new data strengthened his argument to the government that they should give him the power to introduce rent controls across the city.

The government said rent controls “do not work”, but added that new legislation it is passing will improve renters’ lives.

The new statistics, drawn from a YouGov poll commissioned by City Hall, also show that some 3,630 households were assessed as being threatened with homelessness in London after receiving a Section 21 ‘no-fault’ eviction notice last year.

A Section 21 allows landlords to evict tenants without giving a reason. After receiving the notice, tenants have two months before their landlord can apply for a court order to evict them.

Average advertised rents in London had meanwhile reached £2,501 a month by the end of March 2023, according to Rightmove data.

“With astronomical rents, bills, and the cost of household essentials rising, many London renters are only just about managing – and the situation is getting worse,” said Khan.

“More and more people are now at risk of being evicted. That’s why it has never been more urgent for the government to implement an immediate two-year rent freeze in the capital and give me the power to introduce a system of rent controls that works for London.

“While the publication of the government’s long-overdue Renters Reform Bill is a positive step forward, my message to ministers is that they must also take action now to make rents more affordable as a matter of urgency.”

Responding, a spokesperson from the Department for Levelling Up, Housing and Communities said: “We recognise people are facing pressures in the private rented sector, which is why we introduced the Renters Reform Bill in May, delivering a fairer deal for renters and empowering them to challenge unjustified rent increases and banning Section 21 ‘no fault’ evictions.

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“Evidence shows that rent controls in the private sector do not work, as they lead to declining standards, a lack of investment and may encourage illegal subletting.”

The topic of rent controls was discussed at a meeting of the London Assembly earlier this month, where Labour member Sakina Sheikh told the chamber’s Conservative group: “The escalating cost of rent is causing a mental health crisis, it’s increasing homelessness, and actually we need to intervene in a housing crisis that your party created through consecutive failed housing policies from this government.”

Emma Best, the Conservative group’s deputy leader, countered by listing several international examples where she said rent controls had been tried and failed, adding: “The research by our very own GLA [Greater London Authority] showed that if we were to bring in rent controls in London, then the number of homes available to rent in London in some cases fell by 62% by 2025.”

Emma was referring to a 2015 report authored by the University of Cambridge’s Centre for Housing and Planning Research, which was commissioned by the GLA’s housing committee. The research modelled six different scenarios, each with a different type and level of rent control applied. In only one of the six scenarios did the size of the private rental sector shrink in absolute terms. The uppermost projection of that scenario showed the supply of homes being 61.8% smaller by 2025 than it would otherwise have been if rent controls had not been applied.

The other five scenarios showed the size of the rental sector continuing to grow, but with supply being somewhere between zero and 8.8% smaller in 2025, compared with a situation in which no rent controls were applied. The report concluded that in that in those other five scenarios, there was an average fall in affected rents of between zero and 15%.

“This leads to an aggregate loss of rental income to the sector of between 0% and 10% (as not all tenancies are affected at all times),” the report said.

“This is a relatively small loss of income and not, in itself likely to cause a substantial change to the size of the sector.”

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