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Written by rosalind renshaw

Members of the London Assembly have called for a package of tough reforms in the capital’s private rental market, including rent controls.

Although the report, from the London Assembly’s Housing and Regeneration Committee, does not use the expression – favouring instead the phrase “rent stabilisation” – the meaning is very clear.

It specifically calls on Mayor Boris Johnson to “bring forward an effective mechanism to stabilise rents that are becoming increasingly unaffordable even for Londoners on average wages”.

It calls for the Mayor to go to the Government to seek legislation that would allow a pilot scheme in London for testing “rent stabilisation”.

The Rent Reform report also calls for all landlords to be registered, higher penalties when there are breaches of regulation, and longer tenancies.

Other local authorities which consider that their own private rent markets are expensive and problematic will be watching with interest to see whether the recommendations are implemented.

The London Assembly says that the Mayor’s current proposed voluntary regime for a new London rental standard does not go nearly far enough.

The report calls for Johnson to be “more ambitious” in terms of setting new standards for private rented accommodation and should also incorporate a ‘fit and proper person’ requirement for landlords operating in London.

“He also needs to work at devising a mechanism so that tenants’ complaints can be better addressed – a single industry-wide redress scheme would benefit London renters.”

The report also castigates London letting agents, saying there is growing evidence that they are encouraging landlords to raise rents and to offer short tenancies.

It says: “Shorter tenancies offer the prospect of more frequent upward rent reviews, encourage ‘churn’ of tenancies and allow charges for registration, credit checks and renewal fees that all increase the already high cost of the sector.”

The report says: “It is time these agents were subject to regulation.”

The report also recommends certain measures to benefit landlords, including the ability to access low-cost loans to improve rental properties.

One in four Londoners now rents privately and there have been significant rent rises in the capital. Median rents in London rose last year by 9% to £1,196 per month, says the London Assembly.

Chair of the committee Len Duvall said: “We need urgent reforms for London’s private rented housing. Tenants have had year upon year of inflation-busting rent rises, but this cannot continue.”

He warned that without reforms, there could be “a return to the Dickensian squalor of the past”.

However, the Residential Landlords Association said that rent controls would do untold harm to the market, particularly tenants.

Chairman Alan Ward said: “All the evidence clearly shows that rent controls would take us back to the past, drying up the supply of much-needed new rented homes.

“It is little wonder that nationally all three of the main parties have distanced themselves from such a move. Have the lessons of history been forgotten already?

“When we had rent controls we saw how the sector was damaged and how hard it was to find a property to rent.”

The main measures called for in the London Assembly report are:

    •    Rent stabilisation: the Mayor should bring forward an effective mechanism to stabilise rents that are becoming increasingly unaffordable even for Londoners on average wages.

    •    Landlord registration: landlords must have to register in order to operate in London.

    •    Higher penalties: penalties for landlords breaching regulations must be reviewed, including the size of penalties and making the process of issuing penalties simpler.

    •    Longer tenancies: homeless households placed in the private rented sector should have at least 24-month tenancies – and longer for families with children – instead of the current six-month minimum.

    •    Improving housing: the Mayor should look into setting up a Decent Homes Fund for the private rented sector. This will allow landlords to access low-cost loans to improve the quality of their property.

Comments

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    Landlords have been heavily subsidised via QE and a low base rate for the past 5 years, without which property prices would have fallen through the floor.

    It's now time for them to pay their fair share for this via rent controls.

    • 16 June 2013 14:45 PM
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    I am at the point of despair with the governance of the rented property sector. It seems very much to me that there are so many fingers in this pie all wishing to do well and good that the outcome is, at best, chaos.
    It seems impossible to compile a comprehensive list of all those involved in the sector. If it isn’t possible to establish who the stakeholders are how can meaningful governance be achieved and how can informed comment be considered by those who are charged with developing meaning strategy?
    As usual Alan Ward is spot on, but knowledge and experienced opinion seemingly matter very little to those in a position to affect change. There is clear evidence of misinformed and commercially biased lobbying within the Housing sector and as a consequence hapless MP’s and officials are making decisions based on that misinformation with potentially dire social consequence.
    How is it possible for 3 stories to appear on a single day, all pointing to inevitable social discord focused on housing and yet government is oblivious to the perfect storm that is brewing?

    • 11 June 2013 11:44 AM
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    Alan Ward is quite correct.. In the sixties when rent control was introduced the supply of rented homes dried up completely. I know. I was there with 100 applicants chasing one flat. which was subsequently let to a Company to avoid rent control.

    This is a simple case of supply and demand. The Supply is insufficient for the demand so prices rise. Basic economics.

    For Governments and Planners to restrict home building to about half of that which is required and then seek to further restrict the supply of rented homes by capping the return for Landlords is a suicidal course which will result in an even bigger housing crisis than we have now.

    If you cannot afford to live in Central London, dont live in Central London.

    • 11 June 2013 10:38 AM
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