Shock as lettings PropTech firm backs Labour call for rent freeze

A PropTech supplier to the lettings industry that has just signed a deal with OnTheMarket has come out in support of a Labour call for a rent freeze in London for the next two years.

The original call came from Labour London M<ayor Sadiq Khan and the former Labour peer Baroness Alicia Kennedy, who since 2020 has sat in the Lords as a cross-bencher.

Now Chris Hutchinson, chief executive of rental platform Canopy, says: “The proposal from Sadiq Khan to freeze private rents would be a welcome boost for renters at such a testing time. 

“The cost of living crisis is hitting everyone hard and those renting, in potentially energy inefficient homes, are likely to see utility prices skyrocket. And the continuous growth of house prices and increased cost of living makes scrapping together a deposit an increasingly difficult challenge for those looking towards homeownership, meaning they’ll be renting for longer.”

Earlier this week OnTheMarket revealed a deal with Canopy to provide free tenant referencing indefinitely for agents who pay the portal full membership fees.

Hutchinson continues: “Twenty seven per cent of UK adults already feel stressed about money every single day, and this anxiety will undoubtedly grow with tenants needing to dip into savings or stretch budgets further to cope the increasing cost of everyday life. 

“A freeze on rent costs would give renters an element of certainty and what’s paramount now is that people take control of the things they can. That’s positive financial habits and ensuring rental payments are used as a tool to build credit scores so when the time is right to buy, renters are ready.” 

London Mayor Khan has released an analysis - based on estate agent Savills forecasts - showing that freezing private rents in the capital for two years would take £2,988 from landlords, with £881 in the first year and £2107.60 in the second year.

“Private renters make up nearly a third of everyone living in the capital and they are set to be hit by a devastating combination of price and bill rises. Too often the needs of private renters are ignored by both landlords and the government” says Khan.

“Rising fuel and energy costs – which will hit renters in energy inefficient homes the hardest – are already causing anxiety and stress, with a big rise in the energy price cap due next month. That’s why today I’m calling on ministers to give me the powers to stop rents rising in the capital, and help me to give people a chance to get back on their feet after the pandemic” he continues.

Generation Rent director Baroness Alicia Kennedy of Cradley was deputy general secretary of the Labour Party from 2006 to 2011 and was a Labour member of the House of Lords until taking up her Generation Rent post in 2020.

Now she says in support of Khan: “With the cost of living spiralling out of control, the Mayor is right that renters need more protections from unaffordable rent hikes. 

“It's too easy for landlords to raise rent on tenants and it’s too difficult for renters to negotiate, or challenge a rent increase at a tribunal. Without intervention landlords can effectively evict their tenants by making their home too expensive for them to afford. The mayor needs powers to intervene for London's millions of renters.”