Mayor of London Sadiq Khan is seeking a two-year emergency freeze on rents in the capital as the ban on evictions nears its end on September 20.
The National Residential Landlords Association argues the move would be a “disaster for tenants”, driving property investors out of the market and reducing the supply of rental properties.
Khan has written to housing secretary Robert Jenrick seeking powers to introduce rent controls in London to help tenants recover from the impact of the pandemic.
During this time the mayor argues that private rents in London should be allowed to fall, but not increase.
He cites research by the Greater London Authority and YouGov which suggests that half a million Londoners are potentially facing eviction.
It found that of the 2.2m adults in private rented accommodation in the capital, a quarter have fallen behind on their rent, or say they are likely to do so as a direct result of the pandemic.
More than a third of private renters polled said they thought the pandemic was having a “large impact” on their personal finances.
Khan warns of an impending “tsunami of evictions: when the government’s extension of the evictions ban finishes at the end of this week.
The mayor is seeking an emergency freeze on rent increases both between and within tenancies.
Khan also wants the option to extend the two-year freeze if there is no improvement in the economic outlook for tenants as the pandemic continues.
The mayor’s office points to similar action in Berlin, where the state government has frozen rents in the city until 2025, both within and between tenancies.
Separate GLA research suggests that following the end of government support such as the furlough scheme, unemployment is likely to be even higher next year and it is unlikely to subside to pre-crisis levels until 2022.
As well as rent controls the mayor has called for further measures to support tenants.
He is urging the government to introduce grants to allow renters to stay in their homes and clear arrears as an interim measure until the government “can make changes to welfare that will support everyone to sustain their tenancies in the longer term”.
In the longer term, Khan wants to see improved access to welfare, including scrapping the benefit cap; uprating Local Housing Allowance to median market rents; making additional discretionary housing payments to cover shortfalls; and extending eligibility to all renters, including those not currently entitled.
Along with tenant groups and housing charities, Khan is calling for so-called “no-fault” evictions under section 21 to be scrapped as soon as possible.
He wants landlords’ powers to evict tenants under section 8 to be limited until welfare reforms are introduced.
Khan says: “More than ever, Covid-19 means that many of London’s private renters are facing a really uncertain future.
“More likely to be in lower-paid and insecure work, the end of the furlough scheme means even more renters in the capital are now at risk of pay cuts or losing their job.
“Yet at every stage of this pandemic, renters have been treated as an afterthought by the government, with protection measures only ever rushed out at the last minute.
“This uncertainty is causing unnecessary anxiety and stress.
“I’m today calling on ministers to give me the powers to stop rents rising in the capital for as long as this virus is with us, to give London’s 2.2 million renters more financial security.
“If Berlin can freeze rents for five years, there’s no reason London shouldn’t be able to freeze rents for two years in these extraordinary times.
“Without an operational vaccine, the economic fallout of Covid-19 will continue for months into the future.
“A rent freeze is only one part of a package of measures renters urgently need from government to ensure no one is forced out onto the streets as a result of this pandemic.”
Generation Rent director Alicia Kennedy says: “Evictions have been paused, but that hasn’t stopped some London landlords from raising the rent, which can force a tenant to leave their home.
“At Generation Rent we’ve heard from tenants who have been hit with a rent increase after telling their landlord that their income has been affected by the pandemic.
“Unwanted moves can leave struggling tenants with nowhere else to go, and contribute to the spread of coronavirus.
“With the economy in recession and coronavirus cases on the rise, landlords should not be permitted to raise rents and force a tenant into an unwanted move.
“We’re delighted that the Mayor has adopted Generation Rent’s proposal for a freeze on rents to ensure tenants are able to stay safely in their homes for the duration of this crisis.”
The NRLA has highlighted a report published by the Treasury in 2010 under the last Labour government, of which the mayor was a member.
Referring to the impact of rent controls before they were abolished in 1988, the report warned that they had been a major factor in the “decay of much of the inner city housing stock”.
The landlord group says the mayor’s proposals also “fly in the face” of a report by the Centre for Cities which warned that strict rent controls “would close off London to new residents”.
It says that London School of Economics professor and housing expert Kath Scanlon also warned last year that proposed rent controls would push landlords out of the market.
NRLA policy director Chris Norris says: “Rent controls would be a disaster for anyone looking for somewhere to rent.
“As history and experience elsewhere tells us, all they would do is drive landlords out of the market exacerbating an already serious shortage of homes available.
“Rather than driving a wedge between landlords and tenants the mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.
“Only then will he make any discernible impact on improving the affordability of housing across the capital.”
Norris adds: “We do though support the mayor’s calls for greater financial support for tenants struggling with rent arrears.
“In the end this would help them, and the majority of landlords who are individuals and not property tycoons, to sustain tenancies.”