An open letter to Sadiq Khan and his plans for a rent freeze

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.”

Powers to impose a rent freeze

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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