Calls by Labour’s London Mayor Sadiq Khan to secure powers to implement private sector rent controls are facing increasing opposition.

Business organisation London First says such a policy, if ever implemented, would hold back investment in house building.

John Dickie, London First’s director of strategy and policy, says: “The Mayor is right to focus on improvements to the private rented sector as more and more Londoners live in rented homes.

“But 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.

“As the Mayor’s proposals acknowledge, Build To Rent must not be held back from delivering high-quality, professionally managed, new homes for Londoners.”

And the Residential Landlords Association’s policy director Dabid Smith says Khan’s calls for powers to implement rent controls are meaningless if Londoners can’t find a home to live in. 

“Rent controls will lead to a drop in investment and increasing supply should be the Mayor’s priority. Localised rent controls would also have a huge impact in the surrounding areas. With demand continuing to outstrip supply, residents would have to move out of the city and rents would be pushed up further as demand increases in the commuter belt” insists Smith.

“Research from the Centre for Cities has found that rent controls divide renters into the privileged and outsiders, with those already renting when the controls are introduced doing well but those hoping to move into the city or for more space losing out, damaging social mobility” he adds.

“London rent rises are already well below inflation increasing at just 0.9 per cent in the year to June compared to the consumer price index rise of 2.0 per cent.”

Lettings guru Marc von Grundherr, director of London agency Benham and Reeves, says the proposal by the capital’s Mayor is little short of idiotic and “demonstrates a real lack of understanding when it comes to the rental sector and wider property market.”

He says: “To further deter landlords from the rental space by restricting the income available, having already hit them where it hurts via a ban on tenant fees, stamp duty hikes, and tax changes, will only see a reduction in stock and further inflame the issues that we are currently seeing. Landlords are the lifeblood of the rental market, they need to be encouraged to remain in the sector, not to exit it.”

And Tom Gatzen, co-founder of PropTech platform ideal flatmate, comments: “A quite frankly laughable proposal from Sadiq Khan and one that reeks of desperation. During his time in power, his severe failure to deliver on the number of new homes promised has contributed massively towards an over-reliance on the London rental sector. This demand has pushed rental prices up further and the capital’s tenants are the ones that have paid the price.”