Zohran Mamdani could freeze rent in NYC — here’s what it would look like in London

Zohran Mamdani’s win has the potential to completely uproot the very foundations of New York’s housing system, starting with the battle cry: ‘freeze the rent.’

On his transitional website, the newly-elected Mayor pledges to ‘use every tool available to bring down rent, create world-class public transit, and make it easier to raise a family’ in the city.

Heading from the Big Apple to the Big Smoke, this is instilling a sense of hope in Londoners – many of whom hope to see a rent cap in their lifetimes.

Mayor Sadiq Khan has long supported the policy, but has been met with considerable backlash from central government. Without that support, he doesn’t have the power to introduce it alone.

Still, Khan remains keen to introduce a cap on private rents for city-dwellers, committing to building at least 6,000 rent-controlled homes as part of his 2024 re-election campaign and pressing for a two-year rent freeze to provide ‘vital relief’ for the city’s tenants.

But could London do the same as Mamdani is seeking in NYC? And what would it look like?

Could a rent freeze work in London?

If, hypothetically, Khan were to succeed in introducing a rent freeze, it actually wouldn’t be the first time the British capital has seen such a policy.

Rent caps were actually introduced not only in London, but as an emergency measure throughout the UK during the First World War, before being cemented by the Increase of Rent and Mortgage Interest (War Restrictions) Act of 1915, a law that saw rents restricted to 1914 levels.

As the House of Commons Library outlines: ‘The Act was designed to prevent landlords from profiteering during the war years when demand for housing exceeded supply.’

It was only ever intended to be a temporary measure, but this rent cap was in place until January 1989 – when it was revoked by the Thatcher administration.

Decades later, amid the pandemic, Scotland introduced temporary rent controls. These expired in April, but the new Housing (Scotland) Bill will build on this progress and grant councils the ability to cap rent increases on applicable properties to a maximum of 6%.

‘Rent controls would provide stability for renters, rather than constant fear’

Last year, community union ACORN campaigned for the introduction of rent controls across England, arguing that though they alone won’t ‘solve the housing crisis,’ they pose a ‘meaningful step towards building a fairer housing system.’

An ACORN spokesperson tells Metro: ‘We’re excited by Mamdani’s plan to freeze rents in NYC, and it’s about time this was put on the table over here. London rents have risen by 70% since 2020, far outstripping inflation and wage growth. Rents in inner London are now equivalent to 106% of a teaching assistant’s salary.

‘This is breaking up communities, and pushing key workers out. If London rents were frozen, this would allow people to remain in the city they grew up in or work in, and stop forcing them out. It would provide stability for renters, rather than the constant fear of being forced out of their home.’

In terms of how this would work in practice, Zoopla’s executive director of research, Richard Donnell, tells Metro ‘there are many ways of dealing with rent controls’.

The most likely of these is something called rent stabilisation, which he explains is when ‘you have an empty property, you let it out at the open market rent, but then during the tenancy, you’re limited on how much you can increase the rent by.’

Alternatively, Richard says: ‘It might be that you let it at open market rent, and then the rents can only go up by 2% or 3% per year, in line with earnings or inflation.’

Marc von Grundherr, director at Benham and Reeves, speculates that controls might be enforced using rent tribunals overseen by local authorities.

He notes that although this policy would inevitably ‘help tenants’ – 62% of whom have experienced rent increases of more than 20% in the last year, far higher than the 4.1% inflation figure – it would likely come at a cost to landlords.

‘Anything where you stop a landlord from resetting to the market when a tenancy ends is bad news for investment,’ Richard tells Metro.

‘The GLA commissioned a report into rent control to look at lots of international examples, and the conclusion was, it’s not a very good idea. None of this is good news for supply.’

There’s also the question of whether landlords would sneakily circumvent a rent cap rule, although Marc says it would probably be ‘difficult’ for property owners to ‘get around it.’

There will be a number of potential loopholes for lawmakers to consider though; in New York City, for example, there are already rent controls for a small number of buildings (mostly those built before 1947, and with tenants who moved in before 1971).

Here, some landlords used a trick called ‘Frankensteining,’ where they combined two properties – one which was already under rent control, and one which wasn’t – therefore eradicating the need to apply the cap so they could charge market rent. This was subsequently banned in 2023.

Looking at headlines declaring the Renters’ Rights Bill had sparked a mass landlord exodus, you may assume a rent freeze would encourage an even worse one.

Marc perceives that this is nothing but a media frenzy, though, highlighting that just 1% of Benham and Reeves’ clients sold up as a result of this legislation – vastly different to the picture being painted.

‘They’re only selling up because they’re getting old, or they’re worried about taxes, inheritance tax primarily,’ he says. ‘Most of our landlords are overseas, and they aren’t really selling up because they view London asset as a good long-term investment.’

That said, Marc believes that if landlords aren’t able to make a profit (or at least cover their costs) as a result of caps, we could see a number withdrawing from the market, particularly ‘smaller, private landlords with generally high mortgage costs.’

Inevitably, this leaves a vacuum, which Marc suggests could be filled by councils and housing associations. This has certainly been successful before – thanks to a raft of tenant protections and one of the most successful state-owned housing models in Europe, renters in Vienna, Austria, pay a third of their counterparts in London, Paris or Dublin.

Whether these social landlords will be able to buy out the private sector remains to be seen though.

‘Where are they going to get the money from?’ Marc adds. ‘They’re not going to be good in the short to medium term, because they don’t have the money to do that.’

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