A new City Hall consultation sets out plans to see at least 6,000 rent-controlled homes start construction by 2030, reports Noah Vickers, Local Democracy Reporter

Sadiq Khan’s plan to build thousands of rent-controlled homes could save ‘key workers’ in London up to £600 per month on their rent, according to City Hall.

The mayor on Monday launched a consultation on the plan, which aims to see at least 6,000 such properties start construction by 2030.

To ensure the new homes are “genuinely affordable”, Khan is proposing to set the rents at 40% of average key worker household incomes after tax.

This is an established measure of affordability, mirroring what is already enshrined in the mayor’s London Plan – an official document which guides future development in the capital.

Khan’s team said that, when compared with renting from a private landlord, this model could save key workers up to £600 per month on their rent.

The figure comes from the fact that the average market rent for a two-bedroom London home in 2023 was £1,825pcm, whereas a rent-controlled two-bedroom property would have a benchmark rate in 2023/24 of £1,236pcm.

Annual rent increases would potentially be set in line with wage rises, or at 2% each year, depending on which is higher.

The mayor has already produced a list setting out who he considers to be a key worker, based on definitions drawn up by the Office for National Statistics.

It includes people working in education and childcare, such as nursery assistants, school secretaries and caretakers; in the ‘food and necessary goods’ sector, like retail cashiers, shelf-fillers and shopkeepers; and in health and social care, such as nurses, midwives and paramedics.

City Hall’s list is wide-ranging, and includes several high-paid jobs, like chief executives, barristers and doctors. However, it is proposed that only households with a joint annual income of no more than £67,000 will be eligible for the rent-controlled properties.

The promise to deliver purpose-built, rent-controlled homes was made by Khan in his election manifesto earlier this year, saying that they will be created “in areas where they are needed most”.

He did not, at the time, set a date by which the 6,000 properties would get started. The new announced deadline of 2030 means that some may only begin construction two years after he has left office, if he chooses not to stand for a fourth term in 2028.

City Hall has said the new homes “are not an alternative to social rented homes” and are instead “for households with ordinary incomes for whom paying private rents is a struggle”.

Khan said: “I am determined to do everything in my power to make housing more affordable for Londoners. The housing crisis in our capital doesn’t just affect those on the lowest incomes, it impacts those on ordinary incomes who struggle to meet high housing costs in London.

“That includes the everyday heroes who are the backbone of our city – our nurses, teachers, bus drivers, shop workers, and cleaners. To deliver on my manifesto commitment, we want to introduce new rent-controlled homes for Londoners, which could save key workers up to £600 per month on their rent.

“I welcome views from all Londoners on how we can make this new type of housing a success, for the thousands who need and deserve a more affordable home, as we build a fairer London for everyone.”

The plans are being progressed by Mr Khan after five years of arguing that the government should give him the power to impose rent controls across all private tenancies in the city.

This was a request repeatedly refused while the Conservatives were in power, as it was argued by a government spokesperson at the time that “rent controls do not work” as they lead “to declining standards and a lack of investment and may encourage illegal subletting”.

In August, the new Labour government made clear it would also not be devolving full rent control powers to City Hall, saying that ministers have “no plans whatsoever” to do so and that “no conversations” have been had with the mayor on the topic.

At Mayor’s Question Time last week however, Khan was asked by Zoe Garbett, a Green member of the London Assembly, whether he was lobbying for those powers to be put forward in the English Devolution White Paper.

“The Government’s current policy is not in favour of rent controls,” the mayor said. “We’re doing what we can to try and persuade them to change their minds in relation to this issue.”

Garbett recently hosted her own ‘London Rent Commission’ at City Hall, which brought together renters, renters’ unions, community groups, campaigners, think tanks and academics “to discuss what a workable rent control could look like in London”.

She argued that the mayor should establish his own such commission, as he proposed himself five years ago, but Khan said he was “reluctant” to commit resources towards one, as he would not currently have the power to implement its findings.

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