Sadiq Khan’s rent-controlled homes plan under fire from critics

The Mayor of London has unveiled plans to build 6,000 rent-controlled homes for key workers by 2030.

Sadiq Khan claims building rent-controlled homes will help key workers in the capital save thousands of pounds a year.

However, the City Hall Conservatives argue rent controls do more harm than good and Mr Khan’s plans are a distraction from a collapse in London housebuilding.

Affordable option for long-term rent

Under the plans, new homes will be let at rents based on 40% of key workers’ average net household incomes.

Mr Khan claims these homes will offer an affordable option for long-term rent and there is no expectation for tenants to buy a share of their home, either at the outset, or after a period of saving for a deposit.

Mr Khan is urging housing associations and councils to work with City Hall and bid for funding for Key Worker Living Rent homes through his Affordable Homes Programme

Mr Khan said: “Key workers, including teachers, nurses and bus drivers, play a critical role in keeping our city moving, working around the clock to deliver vital public services for millions of Londoners. It is only right that these hardworking Londoners can afford to live in a decent, safe home in the city they are serving.

“That’s why I’m proud to launch my innovative ‘Key Worker Living Rent’ scheme, which will help NHS staff, police, firefighters and others into thousands of affordable homes for long-term rent, saving potentially thousands of pounds each year.

“I will continue to work closely with government and partners to do everything I can to accelerate the delivery of affordable homes, as we build a better and fairer London for everyone.”

Soaring rents have made London the most expensive place to live in Europe

Ben Twomey, chief executive of Generation Rent, welcomed the news and claimed it would help London renters.

He said: “Soaring rents have made London the most expensive place to live in Europe. Key workers are the backbone of our communities. They care for us when we are sick, build the homes we live in, keep essential services running and educate our children. Yet many are being priced out of the very city they serve.

“It’s right that the Mayor of London is exploring new ways to protect key workers from sky high rents and to provide more stable, genuinely affordable homes. Controlling the rents of key workers is a positive first step towards a fairer approach for all of London’s renters.”

This isn’t a serious plan to help key workers but rather a distraction from the real failure

However, the City Hall Conservatives warn Mr Khan’s plans will not work in reality and point to rent controls not working in Scotland.

Lord Bailey AM, City Hall Conservative housing spokesperson, told Property118: “Helping key workers into genuinely affordable homes is the right thing to do. The people who keep London going shouldn’t be priced out of the city.  But rent controls always sound good, and they never deliver what’s promised.

“They haven’t worked anywhere they’ve been tried, and we only need to look at what’s happened in Scotland to see how quickly the headlines fade and the problems deepen.

“This isn’t a serious plan to help families and key workers but rather a distraction from the real failure: an 84% collapse in housebuilding under his watch. When you stop homes being built, it’s ordinary Londoners who pay the price. Key workers are forced further and further away from their communities.

“London needs more homes, built faster, with the right mix of genuinely affordable housing and a proper strategy to support key workers, not another policy that looks good on paper, but leaves Londoners with less choice, fewer homes, and higher costs in the long run.”

As previously reported by Property118, rent increases in Scotland have accelerated since the introduction of rent controls in September 2022, rising faster and higher than before the legislation.

An analysis from DJ Alexander Ltd, Scotland’s largest letting agency, which reveals that between 2010 and 2022, one-bedroom flat rents rose by £138 (31.2%).

In the two years following rent control implementation, similar properties saw a £130 (22.4%) rise.