Government denies London mayor Sadiq Khan power to impose rent controls

Arguing for devolved powers: Mayor of London Sadiq Khan. Photograph: Noah Vickers

The newly-elected Labour government has ruled out giving Sadiq Khan the power to impose rent controls across private tenancies in London.

London’s mayor has spent half a decade arguing for the creation of a London Private Rent Commission to impose caps on the amount landlords can charge, but this was repeatedly refused by the previous Conservative government.

Now, in its strongest language yet on the issue, a spokesman for the new government has said ministers have “no plans whatsoever to devolve rent control powers”.

It comes after Labour leader and now-Prime Minister Sir Keir Starmer told the Local Democracy Reporting Service (LDRS) in March that rent controls were not Labour’s “policy at the moment”, while admitting that “Sadiq feels strongly about this” and pledging to “work together as we go forward”.

The Ministry of Housing, Communities and Local Government (MHCLG), now run by Deputy Prime Minister Angela Rayner, has said that “fixing Britain’s housing crisis is one of our top priorities, and giving struggling renters more rights and security is an important issue for this government, but there have been no conversations with the Mayor of London about introducing rent controls”.

Mayor Khan’s spokesman similarly confirmed that no such discussions had been held on the topic thus far.

Since 2022, the mayor has specifically argued for a two-year freeze on all private rents in the capital, saying in August last year that it would be a “lifeline” for Londoners at risk of homelessness.

But the LDRS understands from a source close to the mayor that rent control powers are not currently a priority for Mayor Khan in his negotiations with ministers.

While he has not changed his belief in the need for such devolution, he is understood to instead be focused on discussing how the government can help him increase London’s housing supply, and he is particularly making the case for more social housing.

Remarks to that effect were made by MHCLG’s spokesman, who said: “Lack of supply is fuelling the housing crisis, and we are taking action to boost housebuilding. We will work closely with the mayor and boroughs so we can increase housing delivery in London.”

It was revealed earlier this week that the number of properties started under Mayor Khan’s latest affordable homes programme has fallen to a near-record low in recent months, with just 150 beginning construction across the whole of Greater London between April and June.

One of the main arguments made by opponents of rent controls is that they have the effect of constricting the supply of new properties joining the rental market.

Neil Garratt, leader of the Conservative party group at City Hall, has said rent controls are a “populist nonsense” which have “been a disaster everywhere they have been tried.”

Asked about rent controls in April this year, Mr Khan told the Byline Times: “Should I have the privilege of being re-elected, I’m going to carry on lobbying both the Tory party and the Labour Party to at the very least, devolve to cities and regions the choice about doing so. [And] at the very least allow us to set up this rent commission.”

He added that he “understand[s] the arguments on both sides – those landlords and developers who say if you did this, we’ll just simply withdraw from the property market. And that’s why we’re going to have a commission that includes landlords, that includes developers as well as your tenants and renters as well.”

In a move which would not require permission from the government and is still planned to go ahead, the mayor pledged in his recent re-election manifesto to oversee the construction of “new Rent Control Homes, which will see rents capped and linked to the incomes of key workers”.

These homes will be specifically built with the intention of being rent-controlled, with the first phase promising to deliver 6,000 such properties across the city “in areas where they are needed most”.

Details on how the homes will be funded or who will be their landlord are yet to be given by the mayor.

Quizzed on those plans by Green party London Assembly member and Dalston ward councillor Zoë Garbett in May, Mayor Khan said: “The reason why they are important, just to be clear, is because they will show you can have rent-controlled homes that work and do not cause a problem with the market.

“When you look at some of the models around the world, they use sometimes a year homes were built as a way of deciding which homes come within a rent-controlled system and so forth.

“What I am hoping is, not just all these 6,000 homes lead to 6,000 families being re-housed at rents they can afford in perpetuity, but also [that it] gives reassurance to the market and to the Government that rent controls do not lead to the skies collapsing.”