Last week Sadiq Khan kicked off his campaign to be re-elected as Mayor of London with a pledge to introduce rent controls, a peculiar topic upon which to set out his pitch. The fact that the launch took place in a housing estate in Hackney provides a pretty clear signal that this won’t form just part of his messaging to voters: it is the message.
Spinning his tussle with the Government in David and Goliath proportions, Mr Khan has made no secret that he wants May’s election to be a referendum on rent controls. Whilst this might make good headlines, he knows full well that his efforts will ultimately prove futile. The Tories will never acquiesce to his request, and not without good reason.
The merits of rent controls remain hugely divisive, with the Government consistently reminding proponents that the last time they were tried in the UK the size of the private rented sector shrunk from 55% of households in 1939 to just 8% in the late 1980s. Their case is that yields from rental properties are often surprisingly low and that introducing caps will only prevent many landlords from being able to afford to adequately maintain their properties, in short acting as an anathema to investment and reducing the quality of accommodation available. The interests of tenants are far better served, the argument goes, by increasing supply and, in turn, competition, not through excessive regulation.
Awkwardly for Mr Khan, that’s a view secretly shared by many of his more pragmatic colleagues, with a Treasury report published during the time of the last Labour government coming to precisely the same conclusion. As a well-regarded economist once famously remarked: “rent control appears to be the most efficient technique presently known to destroy a city – except for bombing.”
Of course, this won’t matter much to Mr Khan. Indeed, the detail of the policy is irrelevant in comparison to the notions of fairness and decency it conjures, which is what the Mayor will be hoping voters focus on rather than his far from impressive track record on crime, public transport and housing, or for that matter his spending priorities whilst in office. For now, judging by the polls, it looks as if this virtue signalling ploy is working for the populist Mayor.