Khan claims that if rent rises are allowed to continue unchecked then the average monthly rent bill faced by London’s 2.5 million strong army of renters is set to hit £2,300pcm – a £370pcm increase.
The grim forecast is based on current rent levels plus research from estate agent Savills, which has predicted that London rents – excluding brand new homes - will increase by 19 per cent between 2020 and 2025
“Today’s analysis paints a stark picture,” said Khan. “If we want the next generation of nurses, police officers, transport workers and key workers to train and work in the capital, we have no option but to keep a check on spiraling rents.”
Alicia Kennedy, director of Generation Rent, agreed rent is out of kilter with the incomes of many Londoners. “Over the past decade it has become impossible for many people to live close to their workplace or support networks they rely on, while others cannot afford to start a family,” she said.
The pandemic has had a big impact on the London rental market, not only by cutting the incomes of many of its residents but also impacting rent levels.
According to research from Hamptons a two tier system has emerged with rent in central London down almost 18 per cent as people fled the centre of the city. However suburban rents grew by more than five per cent.
Jack Reid, founding director of Orlando Reid estate agents, is based in south west London. He estimates that rents in Battersea and Clapham have dropped ten per cent during the pandemic, with even higher losses – of up to 30 per cent – around Vauxhall and Nine Elms, markets which have been hit by the absence of overseas students over the past year.
However, as Covid restrictions are loosened he believes rents are starting to rise once more.
He agrees that Khan’s forecast on rent rises is plausible - but feels that there will still be demand from renters able to pay more.
“I have been doing this for 20 years, and people are always saying rents are unaffordable, but they keep on going up and up,” he said. “Somehow people just manage to afford them. The demand is always there.”
Khan has been lobbying the Government to introduce a system of rent controls to rein in price rises, citing a YouGov poll last year which found that a quarter of London’s private renters are struggling financially.
There are, however, major downsides to rent controls, which are in force around the world everywhere from Norway to North America and which generally act by capping rent increases.
Introducing controls in the UK would require primary legislation, which would take at least three years, so it is certainly not a quick fix.
There are also concerns that if landlords’ profits are cut, they respond by cutting back on basic maintenance or simply sell up.
Propertymark, the body which represents letting agents in the UK, is – predictably – against rent control.
Instead, it wants to see more employers offer tenancy deposit loans to staff, and a crackdown on short lets, which take homes away from the private rental pool.
“It is vital that landlords are not deterred from the market and have finances to invest and improve property standards,” said a spokeswoman.