Landlords Will Be 'Forced Out' With Rent Controls

AFS Team·12 March 2020·4 min read
Landlords Will Be 'Forced Out' With Rent Controls

Landlords Will Be 'Forced Out' With Rent Controls

A proposal to introduce rent controls in London will lead to landlords being 'forced out' of the private rental sector and the number of rental homes being available will be significantly reduced, the capital's mayor has been warned.

The warning comes from the National Landlords' Association and the Residential Landlords' Association who say that the rent control plan being floated as part of Sadiq Khan's mayoral re-election bid will be a disaster for the capital's tenants.

Also, the Centre for Cities is warning that rent controls will close off London to new residents.

The market price for rent using controls

And the Resolution Foundation warns that any means to hold down the market price for rent using controls rather than boosting housing supply are likely to be unsuccessful.

The move by the landlords' organisations follows an announcement by Mr Khan urging the government to give him the powers he needs to cap rents in London so he can, he says, rebalance the private rental sector with controls that would make it 'fit for purpose'.

In a joint statement, the RLA and NLA say: "Rent controls may appear to be attractive for those renting already, but they will be a disaster for those looking for somewhere to rent. All they will achieve, as experience and history tells us elsewhere, is that it will drive landlords from the market and exacerbate an already serious shortage of rental homes."

The organisations also say: "Instead of putting out superficially appealing and simplistic proposals in an attempt to win votes, the mayor should focus on boosting available housing supply using the powers he has already. It's only then that he will make a discernible impact on improving housing affordability across London."

Landlords continue to see voids fall

Meanwhile, it's been revealed that the void periods being experienced by landlords are continuing to fall.

The latest Goodlord rental index highlights that the average UK void period in February was 19 days - in January it was 20 days.

The index also reveals that London's landlords saw the largest fall with a void period of 10 days during the month, when in January it was 15 days. Landlords in the South East, North West, West Midlands and the South West also saw void averages drop.

That wasn't the case for landlords in the East Midlands who saw their voids rising to 27 days in February - up from January's figure of 19 days. In the North East, voids increased to 24 days from 22 days.

The firm's chief executive, Tom Mundy, said: "February is a quiet month traditionally for lettings and these figures meet our expectations.

"It's an opportunity for agents to look at the systems they have and ensure they are prepared for volumes increasing as we head to summer but also for upcoming changes to legislation that will grow administration including the new electrical safety standards regulation."