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10:37 AM, 4th May 2023, About 12 months ago 13
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Calls by London Mayor Sadiq Khan for a rent freeze in the capital have led one resident to pen an open letter in the hope of a response.
Rob Thomas is a mortgage market researcher, and he was prompted to write to the mayor after reading on Property118 that Mr Khan had signed a letter urging a rent freeze ‘because landlords can afford it’.
He told us: “I write research on the mortgage market and one client has asked me to research the buy-to-let sector.
“My work will highlight the damage that rent controls can do, so I thought it might be nice to see what Mr Khan would say in response.”
He added: “Frankly, I doubt his office will respond.”
Mr Khan has regularly called for the powers from the government to impose a rent freeze.
Among the most recent urgings saw the mayor responding to Rightmove data highlighting that rents in the capital had increased by 15% in a year.
Rob says: “I feel Mr Khan’s position is borne of ignorance about basic economics and how the private rental market works.
“Rents are rising due to soaring landlord costs and limited supply as landlords sell up due to excessive regulation.
“But Sadiq Khan wants to impose a rent freeze, so I’ve sent his office a letter.”
The letter from Rob to Mr Khan is published in full below:
Hello,
I note that Sadiq Khan put his name to a letter calling for a rent freeze for private tenants:
I have some questions regarding this proposal:
What research has Mr Khan’s office conducted on the impact on landlords’ finances on freezing their rental income?
For example, landlords with a pre-2008 mortgage on Bank Rate plus 1.75% will have seen their monthly mortgage payment rise by 224% since December 2021.
On what basis has the mayor determined that such landlords could afford, under these circumstances, to see no increase in their rental income?
Is the mayor proposing to impose a rent freeze on housing associations and local councils?
If not, why is this the case given that the social rented sector contains more low-income households and these bodies have vastly greater financial resources than the average private landlord (who, as I’m sure the mayor knows, are mostly small operators with a few properties)?
What other industries does the mayor believe should be prevented from passing on increased costs to consumers?
Would he support a freeze on the council’s ability to pass on higher costs through council tax?
Food price inflation reached 19.2% in March.
Is the mayor advocating a price freeze on national supermarket chains, whose financial resources are vastly greater than private landlords?
If he is not proposing these things, why has he singled out private landlords?
I note the letter says that landlords have a median income of £55,415 from other sources and therefore have ‘far greater financial resilience’.
Given that government figures show that the median income of private tenants in London is £43,140, could the mayor back up this statement of ‘far greater financial resilience’ bearing in mind that landlords are typically older than tenants so are more likely to have financial commitments related to children?
The mayor’s salary is £152,734.
Could you please inform me what investments the mayor has and whether he would be comfortable volunteering to take sub-market returns on his investments because he has an above average income?
Can you please explain why the mayor thinks landlords will undertake much needed investment in the PRS (not least to improve energy efficiency, which I’m sure he supports) when they are unable to recoup these or any other costs through higher prices to customers as any other business routinely does?
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Rents hit another record high
Churchills Tax Advisers
10:45 AM, 4th May 2023, About 12 months ago
You could also add that many landlords are taxed on profits they have not made. For example:
Profit before finance costs £100k (Tax £40k)
Finance costs £80k (Tax reduction £16k)
Profit after finance costs £20k (Tax due £24k (120%))
Loss after tax £4k.
Ofer Moses
10:53 AM, 4th May 2023, About 12 months ago
Sadiq kahn is blinkered in his quest to remain as Mayor of London.
Londoners votes keep him in power.
Simply put, there are far more tenants than Landlords, therefore, seemingly supporting tenants assures him of more votes.
Furthermore, Shelter, Generation rent, Acorn and others strengthen his quest.
Churchills Tax Advisers
10:58 AM, 4th May 2023, About 12 months ago
Some landlords may now be making losses after finance costs and STILL be paying tax. Aren't landlords being clobbered enough, without having a rent freeze imposed?
For example:
Profit before finance costs £100k (Tax £40k) - assumed 40% applies
Finance costs £120k (Tax reduction £24k)
Loss after finance costs £(20k) (Tax due £16k)
Loss after tax £(36k)
How can such landlords survive a rent freeze?
Property One
11:11 AM, 4th May 2023, About 12 months ago
Brilliant! I wrote a similar reply months ago when originally posted by the very arrogant Mr Khan on his Twitter account. I think his salary should be cut to help renters as he is so willing to sacrifice the wages of others with no understanding, compassion or in my opinion DATA. Happy to meet up with him if he reads this and requires an informed position.
Reluctant Landlord
11:31 AM, 4th May 2023, About 12 months ago
good that your wrote, but you wont get a reply as its of no interest to him. He is safe in his post after spouting what we all know is total crap.
The problem is there are people with votes are keeping him as he tells them what they want to hear (all landlords are evil etc). The others with votes who can see through his lies are disillusioned with the voting system so don't bother to vote thinking nothing will change.
Therein, he is never held to account for what he says... and is essentially given free reign to spout whatever he likes...
In other countries this would be regarded as a dictatorship... just saying...
JeggNegg
12:22 PM, 4th May 2023, About 12 months ago
Reply to the comment left by DSR at 04/05/2023 - 11:31
People who use stats to support an argument I believe by law should have to supply a link to the source of the survey. Especially those in public positions including MPs.
Most of us have heard the phrase “lies, damned, lies, and statistics“. According to Wikipedia, this is a phrase describing the persuasive power of statistics to bolster, weak arguments. If statistics are used, inappropriately, the author should be accountable.
GlanACC
13:08 PM, 4th May 2023, About 12 months ago
I hope he does start the process of legalising a rent freeze because so many landlords will then sell up that he will be swamped with tenants that he cant rehouse, that should wipe the smile of his face. He wont be able to put them in cheap hotels because they are already full of the rubber dinghy squad. Lets see how he copes with that one. Don't delay, sell today.
Blodwyn
13:14 PM, 4th May 2023, About 12 months ago
He's like others in his position, incontinent with other peoples' money?
Hamish McBloggs
9:50 AM, 5th May 2023, About 12 months ago
I love statistics
He has form
https://tfl.gov.uk/info-for/media/press-releases/2023/march/over-90-per-cent-of-cars-driving-in-outer-london-now-meet-the-ulez-standards
'The vast majority of drivers will not have to pay the ULEZ charge when the scheme extends London-wide on 29 August 2023'
'Mayor's £110m scrappage scheme and plans for more than a million extra bus kilometres in outer London are supporting people to make more sustainable travel choices'
Hahahahahah
HAHAHAHAHAHHAAAAA
It won't take a sub-average sleuth more that 1 minute to uncover a more realistic analysis.
Hamish
Hamish McBloggs
10:02 AM, 5th May 2023, About 12 months ago
https://www.bbc.co.uk/news/uk-england-london-65057890
(other news providers are available)
24 March 2023
'Despite repeated requests, the mayor's office has confirmed it will not release, at this time, the full numerical data for non-ULEZ compliant vehicles that will be affected by the expansion.'
This is a typical tactic. Wait for numbers to change, watch the direction of opinion, work out how to 'adjust' policies to prove a point and change the policies in way that does not contradict earlier statements then make only positive announcements ...
Then work on the assumption that we'll suck it up and that the 'compaints process' will grind you down leaving only the best funded, tenacious legal minds working pro bono to challenge in the knowledge that the government's pockets are always deeper.
Hamish