Sadiq Khan News: Mayor’s London Rent Control Plan Called ‘Economic Illiteracy’ | UK | New UK News

Amid the mayor’s calls for increased power, Matthew Lesh, head of research at the Adam Smith Institute, said Mr Khan’s plan was a way to undermine his failures. He said: “This is the highest level of economic illiteracy.” Khan only considers the immediate effects of the rent freeze: a short-term benefit for those currently renting – helping higher incomes who have existing rental arrangements.

“This completely ignores the long-term effects.

“Khan’s rent control proposal is ultimately a cynical political ploy to distract from failures in the mayor’s areas of responsibility.

“Crime is on the rise, Crossrail is years behind schedule, Transport for London is running huge deficits and city council rates are on the rise.

“The time has come for serious leadership that evangelizes London and tackles serious problems – not old and failed policies.”

In a fresh attack on the mayor’s plan, Mr Lesh claimed any controls on rent prices would only reduce housing availability, in an article written for the Daily Telegraph.

Indeed, once occupied, the economist claimed that residents would not leave their properties, preventing young families from entering the market.

Because of these rent controls, there will be less construction or even demolition of buildings.

In turn, with residents occupying properties for long periods of time, homeowners will have less income and less pressure to develop properties.

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Using the example of Berlin, the researcher revealed how the city instituted similar plans in 2014 before it was ruled unconstitutional this month.

Indeed, amid Mr. Khan’s plans, around 700,000 people have left the city in the past year, causing rent prices in the capital to drop by 17%.

As Lesh concluded: “This should serve as an important lesson: rents are determined by supply and demand.

“When there is again a growing population in the capital, looking for the same number of properties, the prices will go up.

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“The solution to this problem is clear: build more houses.”

Mr. Khan’s manifesto also includes the construction of 10,000 new social housing units over the next four years.

It is part of his goal to build 116,000 affordable housing units during his tenure as mayor.

However, according to figures acquired by Conservative Assembly Member Andrew Boff, only 35,000 new affordable housing units would have been built on current progress by 2026.

The project is said to have used £ 4.82 billion in government grants when only 56,239 were completed as of December 2020.

Mr Boff commented: “London has a fantastic government deal – we got a third of England’s affordable homes budget.

“It’s the mayor’s job to come up with a plan to turn this investment into new homes. He has no excuse not to be ambitious.

“Under Sadiq Khan, the construction of houses at the town hall became slow.

“After five years, he has started less than half of the houses he has the money to build.

“It’s no wonder he’s chickened out and cut his housing plan by two-thirds.”

Some, however, have claimed that Brexit and the pandemic has resulted in a slowdown in housing production.

Mr Khan’s office has been contacted for comment.