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Legal challenge to Boris Johnson's ban on rent caps

PUBLISHED: 12:36 23 September 2013 | UPDATED: 12:36 23 September 2013

Hackney is teaming up with seven other London councils to take legal action against the Mayor of London for preventing local authorities from capping rents in new publicly-funded homes.

London Mayor Boris Johnson has banned councils from setting rent levels in new homes being built with state subsidy, as part of planning permission requirements.

This means the default rent for new government-funded homes will be at up to 80 per cent of market rates, a level introduced by legislation in the Localism Act 2011 and known as Affordable Rent.

In Hackney, market rate rents for a two-bedroom flat can vary between £1,520 and £3,600 per month, and the council is concerned that rents set at 80 per cent of these levels will be unaffordable for people on low incomes.

In contrast most housing association or council homes charge social rents, which are on average less than half of market rent levels.

The decision to prohibit such local authority powers in the London Plan was taken against the advice of a Government-appointed planning inspector.

Now Hackney, Islington, Brent, Camden, Lambeth, Royal Borough of Greenwich, Southwark and Tower Hamlets councils are taking legal action to challenge the decision-making process behind the issue.

Jules Pipe, elected Mayor of Hackney, said: “This is about making sure that local people can actually afford to live in taxpayer-funded homes built in Hackney in future.

“I believe that councils are best placed to assess local market rents and what local people on low incomes can afford, and Hackney together with other councils will be legally challenging the Mayor of London’s decision.”

The move would not affect existing government-subsidised homes, but only those built in future.

A spokesman for the Mayor of London said the London Plan conforms with national planning policy.

“Rent controls across 33 different boroughs would simply have the negative effect of driving away vital investment and reduce the number of homes built, exacerbating London’s housing crisis,” he said.

“The Mayor is absolutely committed to maximising affordable housing delivery to help lower income working Londoners who would otherwise face higher housing costs in the private rented sector.”

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