Labour leader Sir Keir Starmer is set to reject calls by London mayor Sadiq Khan for powers to introduce a rent freeze in the UK capital, where payments for new tenancies jumped by 17 per cent in the past year, research has found.
Khan has argued for rent controls since he was elected to City Hall for Labour in 2016 and said in a speech on Monday that he would continue “fighting the corners of renters”. However, he lacks the authority to implement them and his demands have so far been rejected by the UK Conservative government.
With opinion polls suggesting a Labour general election victory as early as next year, Khan stepped up his calls for the power to introduce a rent control system that would enable him to “give renters badly needed respite”.
Labour said Khan had carried out “trailblazing work” on affordable homes and boosted tenants’ protections. But senior party insiders told the Financial Times that Starmer’s office was not exploring introducing national rent controls or devolving related powers to mayors if elected.
The admission marks a further break by Starmer with the policies of former leader Jeremy Corbyn, who backed Khan’s proposals, and comes as Labour and Tory plans to address Britain’s housing crisis come under greater scrutiny.
London rents on newly let properties rose 17.2 per cent in the year to April, according to data from estate agency Hamptons on Monday, with the average monthly rent in the capital surpassing £2,200 for the first time.
In order to curb spiralling prices, Khan has proposed a “rent controls commission”. Bringing together renters and property owners, it would use a new register of landlords and rents to work out how existing rents should be gradually reduced and impose limits on rent rises between tenancies.
Scotland already caps increases in rent in the private sector to 3 per cent a year. Although the limit is due to expire in September, the governing Scottish National party has said it will extend it if necessary.
Dan Wilson Craw, acting director of campaign group Generation Rent, said tenants in the rest of the UK “desperately” needed rent freezes to protect them from being priced out of properties, but also called for more homes to be built.
“We’ve not been building enough homes in the areas people want to live,” he said. “Not enough homes we build are at social rents, which is the only way people on low incomes can afford to stay in the places they grew up.”
Housing secretary Michael Gove is poised to publish a renters reform bill, first promised in the 2019 Tory manifesto, which will abolish section 21 or “no fault” evictions that enable landlords to throw out tenants in England with eight weeks’ notice without any explanation.
However, property industry groups say that caps on rent increases discourage investment and reduce housebuilding. Last month, the Scottish Property Federation said the SNP’s rent control measures had deterred investors from backing new projects and led them to “divert capital elsewhere”.