Rent Controls

Meeting: 
MQT on 2015-09-16
Session date: 
September 16, 2015
Reference: 
2015/2597
Question By: 
Andrew Boff
Organisation: 
GLA Conservatives
Asked Of: 
The Mayor

Question

What damage would the introduction of rent controls, as suggested by some Assembly Members, have on London's housing market?

Answer

Answer for Rent Controls

Answer for Rent Controls

Answered By: 
The Mayor

Boris Johnson MP (Mayor of London):  Yes.  I hope I can answer this quite rapidly, Andrew, by saying that rent control is widely accepted to have a very damaging effect.  The Assembly [at the 1 September 2015 meeting of the Housing Committee] recently had testimony from various experts on the impact of rent controls.  Professor [Christine] Whitehead of the London School of Economics (LSE) [Professor of Housing] said that rent controls in New York are deterring investors.  Anne Baxendale of Shelter said that if we forced a rent reduction, many landlords would sell up, which is likely to force out some of the more vulnerable tenants.  Alan Collett, of M&G Real Estate, said that in Amsterdam, new homes and private-rented housing were exempt from existing rent controls, that they have, in order to get more built.

There was a famous quote from the Mayor of Ho Chi Minh City that the one thing more destructive than the United States Air Force for Ho Chi Minh City was, of course, rent controls.

Andrew Boff AM:  Thank you very much, Mr Mayor.  That is a very comprehensive answer and I am struggling to think what kind of supplementary I might ask you, apart from the fact that we have done some number‑crunching in our office using a model by Cambridge University.  It indicates that if rent stabilisation measures were applied in London, it would mean over 51,000 people pulling out of the rental market by 2025.  At a time when obviously we need more people to be renting out properties, not less, that would be a disaster.  Are you familiar with those figures?

Boris Johnson MP (Mayor of London):  The rental market is of growing importance in London.  Vastly more people are renting now than ever before.  We have a London Rental Standard, which has greatly expanded in the last few years since it was brought in, and 170,000 homes in London are now covered by that standard.  Bringing in rent controls and trying to set rent controls of the kind that they had in Vietnam really would be a retrograde step.  There would fewer properties available for rent.

Andrew Boff AM:  Finally, Mr Mayor, do you think you should acquaint Sadiq Khan [MP for Tooting and London mayoral candidate] with a quote from Christine Whitehead, Professor of Housing at LSE, who said that rent stabilisation schemes only work where they are not needed?

Boris Johnson MP (Mayor of London):  That is always worth pointing out.  The salient fact, really, for the purposes of this institution is that rent stabilisation schemes are not legally possible.  We in this body do not have the legal powers to impose.  We do have the London Rental Standard but we still need more supply, which is what we have done: more homes to rent, more homes to part-buy/part-rent as well and more council homes.

Andrew Boff AM:  Thank you very much.  Thank you, Mr Mayor, very much.  I appreciate that.

Tom Copley AM:  I look forward to introducing you to the research that Cambridge has done.

Andrew Boff AM:  Yes.  Bring this before the Committee like you did last time.