Source: Mayor of London
- Freeze would be an emergency measure to ease burden on renters as economic fallout from the pandemic continues
- During this time private rents in London would be allowed to fall, but not increase – landlords could still reduce rents
- GLA analysis shows half a million Londoners potentially facing eviction
Today the Mayor of London, Sadiq Khan has written to the Secretary of State for Housing, Communities and Local Government, Robert Jenrick, calling on the Government to give him the powers to freeze private rents in London for two years as the economic fallout from COVID-19 continues.
Recent research from the GLA and YouGov estimated that a quarter of London’s 2.2 million privately renting adults 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, with half a million Londoners now potentially facing eviction.
The Government’s temporary extension to the evictions ban finishes at the end of this week (20 Sept). The Mayor has warned of an impending ‘tsunami of evictions’ without further Government support for renters, who are already in debt as a result of the pandemic, or face the prospect of further arrears as the full scale of the economic fallout from COVID-19 becomes clear.
The new powers to freeze private rents in London for two years would be an emergency measure to protect renters from the impact of COVID-19. During this time rents would be allowed to fall, but not rise. There would be a freeze on rent increases both between and within tenancies, effective immediately, meaning landlords must not charge new tenants a higher rent than the previous tenant. There would also be an option to extend the two-year freeze if COVID-19 results in the economic outlook for renters not improving.
Freezing rents is not without precedent – earlier this year the Berlin state Government froze rents in the city until 2025, both within and between tenancies.
Further GLA research has shown that with the ending of Government support schemes such as the furlough scheme, unemployment is expected to be even higher next year, with the continuation of social distancing rules, and the absence of an effective vaccine. With no further support to help renters stay in their homes, thousands of low–paid Londoner struggling with reduced incomes will simply accrue more and more debt, with no means of paying it off.
Mayor of London, Sadiq Khan, said –
“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.”
Alicia Kennedy, Director at Generation Rent, said –
“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.”
Alongside his calls for a two-year freeze in rents, The Mayor is asking the Government for a wider package of support for renters. This includes:
- Grants to allow renters to stay in their homes and clear arrears, until the Government can make changes to welfare that will support everyone to sustain their tenancies in the longer term.
- Expanding access to welfare, including scrapping the Benefit Cap, uprating Local Housing Allowance to median market rents, and making additional discretionary housing payments to cover shortfalls and extending eligibility to all renters, including those not currently entitled.
- Scrapping section 21 “no fault” eviction as soon as possible, and restricting access to section 8 evictions until the wider welfare measures outlined above are brought in. (section 8 evictions give landlords legal powers to evict tenants under certain circumstances)
The Mayor has used his own limited powers and resources to provide information and guidance to renters and landlords on the City Hall website and has paid for hundreds of local government officers to be trained in combatting illegal evictions and supporting renters. His team has also worked with the Metropolitan Police to deliver training to almost 1,500 police officers to help them to respond better to illegal eviction calls.
The Mayor is doing more than ever before to tackle the capital’s housing crisis. Last year City Hall started more than 17,000 new genuinely affordable homes in London – the most since GLA records began in 2003, and exceeding the target agreed with the Government. In fact, more new council homes were started than any year since 1983. The Mayor will continue to do everything in his powers to build the genuinely affordable homes Londoners need, unlike the Government whose reckless planning reforms will lead to more small, poor-quality, expensive homes – out of reach of the vast majority of Londoners.
GLA/YouGov polling results available on the London Datastore here: https://data.london.gov.uk/dataset/gla-poll-results-2020
Further GLA research has shown that with the ending of Government support schemes such as the furlough scheme, unemployment is expected to be even higher next year, with London’s economy not expected to return to pre-crisis levels before the end of 2022. https://data.london.gov.uk/dataset/macroeconomic-scenarios-for-london-s-economy-post-covid-19