Mayor unveils plans for new rent-controlled homes to make housing more affordable for key workers in London

• Mayor launches consultation on manifesto commitment to build rent-controlled ‘Key Worker Living Rent’ homes for Londoners.  
• Sadiq is proposing rents based on 40 per cent of key workers’ average household incomes, with rent rises potentially linked to wage growth – saving them up to £600 per month on their rent. 
• Mayor looking to hear from Londoners, particularly key workers, housing developers and providers on innovative new proposals.

The Mayor of London, Sadiq Khan, has today shared an innovative new proposal to deliver ‘rent control homes’ for Londoners, potentially saving key workers up to £600 a month on their rent, and providing a new, simpler rent-setting model for developers to deliver thousands of these homes across the capital. 

In his 2024 election manifesto, Sadiq pledged to introduce a new form of rent control homes, with rents capped and linked to the incomes of key workers, as part of his wider commitment to make housing more affordable for Londoners. 

The Mayor is taking the first steps to delivering on his commitment by proposing rent control homes, which would be built in addition to social rented homes and aimed at Londoners on ordinary incomes, who are unlikely to secure social housing but struggle to pay high private rents. The Mayor will work with partners to begin building these homes, with the aim to start at least 6,000 homes by 2030.

At present, 24 per cent of private renting households in London spend over half of their gross household income on housing costs [1] and 21 per cent of London’s private renters said they were struggling to make ends meet, going without meeting their basic needs or relying on debt to do so, with another 40 per cent reporting that they were just about managing. [2]

These homes will be primarily targeted at London’s key workers and therefore referred to formally as Key Worker Living Rent (KWLR) homes. To ensure KWLR homes are genuinely affordable, Sadiq aims to link rents directly to key workers’ incomes. He is proposing rents based on 40 per cent of their average key worker household incomes after tax – an established measure of affordability, mirroring what is already enshrined in the Mayor’s London Plan – which could save key workers up to £600 per month on their rent when compared to renting from a private landlord. [3] For the first time, the Mayor is also proposing the option of rent increases being tied to wage growth.

The Mayor has launched a consultation on his new proposals and is particularly keen to hear from key workers and organisations that employ and represent them, as well as from developers and providers of affordable and market housing. Sadiq believes their insights are critical to making this new form of housing a success that benefits Londoners who need and deserve a more affordable home. 

These homes are not an alternative to social rented homes - rather they are for households with ordinary incomes for whom paying private rents is a struggle. KWLR homes will build on the Mayor’s pioneering work developing London Living Rent [4], but with the proposals set out in this consultation aiming to make this next generation of homes even better. For Londoners this will mean a clearer, stronger link to keyworker incomes and a simpler rent-setting process. For builders it will mean more certainty over future rental income, so they can plan to deliver these homes at scale.

The Mayor has already published a list of key worker occupations, based on official ONS definitions. This list includes the occupations of around a third of Londoners who work and covers both private and public sector occupations, including nurses, teachers, bus drivers and shop workers.  

The Mayor of London, Sadiq Khan, said: “I am determined to do everything in my power to make housing more affordable for Londoners. The housing crisis in our capital doesn’t just affect those on the lowest incomes, it impacts those on ordinary incomes who struggle to meet high housing costs in London.  

 “That includes the everyday heroes who are the backbone of our city – our nurses, teachers, bus drivers, shop workers, and cleaners. To deliver on my manifesto commitment, we want to introduce new rent-controlled homes for Londoners, which could save key workers up to £600 per month on their rent. 

“I welcome views from all Londoners on how we can make this new type of housing a success, for the thousands who need and deserve a more affordable home, as we build a fairer London for everyone.” 

Ben Twomey, Chief Executive of Generation Rent, said: “While the cost of renting crisis continues to rage across the capital, it is welcome that the Mayor of London is looking at new ways to protect people from soaring rents.

“We rely on key workers for our communities to function. They build our homes, look after our health and educate our children, so everyone benefits when they can afford to live near their workplaces. Generation Rent encourages tenants and key workers to have their say on these new proposals.”

UNISON London regional secretary Jo Galloway said: “This is a crucial step in tackling the housing crisis facing London’s key workers. It should help deliver more safe, secure and affordable homes for staff who keep the capital's vital public services running.

“UNISON has long campaigned for a fairer rental market and for essential workers’ voices to be heard and represented.”

Regional Director for the Royal College of Nursing London region, Lisa Elliott, said: “Accommodation costs in London are rising at an astronomical rate and nursing pay has not kept pace. More and more nursing staff are telling us that high accommodation costs are pushing them into financial difficulty. In a survey of our members earlier this year, 56% said they plan to leave London in the next five years, and 58% of these cited the lack of affordable housing as the main reason. 

“London’s health and care system desperately needs to retain its nursing staff. It’s crucial that politicians, employers, and other key stakeholders work constructively together to make homes genuinely affordable for London’s nursing community, and we want to support that ambition.”