Editor: The mayor of London’s proposal for residential rent control and tenancy reform is proving controversial, but when so many Londoners are having to rent indefinitely, and 68% of them apparently agree with rent control, it would be more controversial to do nothing about the London rental market (‘Khan says rent control for London is “overdue”’).
Any reform has to ensure it is still worthwhile to let out a property in London. And despite fears, some BTR investors could make long-term tenancies at controlled rents work. They could also adapt to losing ‘no-fault’ evictions.
But BTR only comprises 2% of the market, so for these reforms to work they cannot harm those who own most of the private rented housing stock in the city.
It is hard to see why an individual would choose to let out their property, at a controlled rent, reduced over time by a centralised Rental Commission, if the individual also had to get a court order in order to sell it, and make a payment of a month’s rent to the tenant for the privilege.
Indeed, the impact of rent restrictions on price would be most harmful to individuals who choose or have to rent their homes out.
What if this blueprint is used to start a new conversation where, if the BTR parts of a scheme are legally bound to offer longer tenancies with capped rent increases, the landlords can provide fewer traditional affordable housing units, and fewer or none at a discount market rent?
What if an individual could opt to let their home out on a controlled basis, in exchange for SDLT or CGT incentives? And tenants have to give two to three months’ notice? Something to think about?
Brian Dowling, real estate partner, Irwin Mitchell
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