Family-run businesses have long dominated British rentals, but now other companies aim to develop flats specially designed for renters. Photo: AP
Source:
https://scmp.com/property/international/article/3019655/london-mayor-seeks-rent-control-powers-will-clamp-down-sky International
London mayor seeks rent control powers, will clamp down on sky-high leases
- Average rent for a London one-bedroom home is higher than the average for a three-bedroom home in the rest of England
- Proposal comes as capital pours into rental housing from some of the world’s biggest investors
A property agency in London. The city’s residents need fundamental change that is long overdue, Mayor Sadiq Khan says. Photo: Bloomberg
Rent controls could be coming to London, if the city’s mayor gets his way.
Sadiq Khan wants to follow in the footsteps of Berlin and New York, in seeking to clamp down on inflation-busting rent increases, but lacks the power to impose the rules.
Instead he has published a blueprint for how the government could hand down powers that would include giving renters open-ended tenancies and the ability to bring rents down.
Cities around the world are grappling with an affordable housing crisis after a decade of loose monetary policy sent asset values soaring even as incomes stagnated.
That is leading to a raft of new policy propositions, from taxing overseas buyers to capping rents in cities from Vancouver to Sydney.
In London, the average rent for a one-bedroom home is higher than the average for a three-bedroom home in the rest of England, according to the Greater London Authority, meaning such proposals are increasingly popular.
“It is high time for private renting in London to be transformed – Londoners need fundamental change that is long overdue,” Khan said in a statement on Friday. “Unlike other mayors around the world, I have no powers over the private rented sector.”
The proposals come as capital is pouring into rental housing in Britain from some of the world’s biggest investors.
While British rentals have traditionally been dominated by family-run businesses, companies including Legal & General Group, M&G Real Estate, Greystar Real Estate Partners and Invesco are seeking to develop thousands of apartments specifically designed for rentals as they seek to cash in on growing demand.
These rental homes are included in the mayor’s blueprint even though they typically offer longer leases.
“Some representatives of the build-to-rent sector have previously expressed concern about the potential for both rent control and enhanced security of tenure to deter investment in new rental homes,” the mayor’s report said.
“However, others have indicated they would welcome the move to a more regulated market similar to those in other countries, which provides more certainty and stability for investors.”