RENT CONTROLS FOR LONDON

January 25, 2019 by in category Mortgage News with 0 and 0

It has been officially announced by the mayor of London, Sadiq Khan, that his office is developing a blueprint for rent controls in the capital, citing Berlin and New York City as major cities where rent controls are successful.

Khan says: “The arguments for rent control are overwhelming, and Londoners overwhelmingly want it to happen. I am delighted Karen Buck MP has agreed to work with my deputy mayor for housing on proposals for new laws that would help make private rents more affordable. It’s vital that the government acts to improve the quality of millions of lives, now and in the future.”

Karen Buck MP says: “London’s private renters are amongst the worst affected by the housing crisis in the capital, and the laws to protect them are woefully out of date. “We need an approach to rent stabilisation and control that works in London, and I am very pleased to be working with Sadiq’s team to develop a blueprint for what government should do. Once we have set out these proposals, we will argue the case that ministers must support London’s private renters by putting our plans into action.”

“The cost of housing is high for everyone, whether you rent or have a mortgage, so the frustration felt by so many people in London, and indeed the UK, right now is understandable. We have a general housing shortage, social housing has been in long term decline for some time, and more and more people have no option but to turn to the private rented sector for a home, says the National Housing Association.”

Carrying on they say “However, it is frankly bizarre that the mayor of London should choose this moment in time to develop a blueprint for stabilising rents. It is equally odd that the announcement justifying the decision should be based on rent data for the period 2005 and 2016, when according to the Mayor of London’s own housing data private rents in the capital have dropped consistently from 2016. “It’s often assumed that high rents are the product of landlords’ greed rather than market forces. However, housing costs are seen as relatively high because wages have not kept pace with the cost of supply. Capping the rent which can be charged will alter neither of these factors.

“Artificially suppressing rents sounds like an easy solution, but it would be counter-productive and fails to address the root causes of a lack of affordable housing. In fact, history shows that rent controls stifle the supply of housing and reduce the money available to a landlord to maintain their properties. That benefits no-one.

“The only real solution to the UK’s housing problem is to build more homes whilst bolstering economic growth. The emphasis should be on encouraging more housing in all tenures from a more diverse range of investors and providers.”

London Mortgage Advice Ltd is authorized and regulated by the Financial Conduct Authority for residential mortgages and non investment insurance business.

Although London Mortgage Advice Ltd is regulated by FCA, commercial mortgages and most buy-to-let and offshore mortgages are not regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

London Mortgage Advice ©2015