Date Published 18 December 2012
London mayor Boris Johnson has announced plans for a major new voluntary accreditation scheme for landlords and agents, the ‘London Rental Standard'.
The proposals, which do not include rent controls but do suggest that all letting agents become members of an ombudsman scheme and offer client money protection, are now out for consultation, with a launch due next year. The scheme will be carefully watched by other authorities across the UK.
In London, the aim is to increase the number of accredited landlords and letting agents to 100,000 by 2016. Eventually, tenants would have access to a register to check whether a landlord or agent is accredited.
Approximately one quarter of all Londoners – equating to 800,000 households – live in private rented accommodation, with the proportion predicted to grow to 30% by 2025.
Johnson has steered away from any form of mandatory licensing, saying that the private rented sector has not yet exhausted its capacity for self-regulation.
The document details 12 core commitments, including minimum expectations around protection of deposits, provision of contact details, emergency and urgent repairs response times, property conditions, complaints handling, fee transparency, as well as courses for landlords and letting agents offering training and development.
Although 68% of Londoners say they are either satisfied or very satisfied with their landlord, the Mayor said he wants to establish a set of universal standards that tenants should expect from any accreditation scheme.
He is also proposing incentives for landlords to join, which could include discounts on services, and is planning to support the establishment of private sector tenant groups who can hold their landlords to account.
Landlords will be invited to take part in a pilot to test how they can offer tenants longer contracts and greater certainty over rent increases. Johnson will also seek funding from the Government's £200m fund for new ‘build-to-let' private rental homes, and launch a competition for the best-designed purpose-built private rented accommodation.
Where letting agents are concerned, Johnson expresses concerns, saying there are currently limited avenues for redress when things go wrong. He is also concerned about the charges and fees levied, and says that because agents are not transparent about these, tenants and landlords are not able to shop around. He wants agents to agree to publish their charges on their websites as part of their accreditation.
A future aim would be to insist that agency staff undergo training as a prerequisite to accreditation.
Johnson also makes it clear that he would listen to other proposals, including making all agents belong to ARLA.
Letting agents should, says the document, be transparent about their fees and charges; belong to an ombudsman scheme; and offer client money protection. In effect, this last requirement would mean that agents would have to belong to one of the trade bodies.
Johnson said: `The vast majority of the capital's landlords provide a highly professional service, but with a vast array of accreditation schemes there is a strong case for landlords and letting agents to get round the table to agree a set of ambitious standards that will empower them and their tenants.
`Boosting supply, not burdensome regulation like rent controls, is the key to ensuring that the sector remains a significant feature of London's housing market.
`I will also be looking closely at how we can cater better for the needs of private renters through new developments across the capital that show commitment to truly innovative design.`
Richard Lambert, chief executive of the National Landlords Association, said: `The National Landlords Association has worked extensively with the Mayor's office and welcomes the proposals outlined in the London Rental Standard.
`The NLA believes that building on existing landlord accreditation schemes is the most effective way of establishing minimum management standards in the capital's private rented sector.
`Accreditation gives tenants peace of mind in a housing market which can seem daunting to those looking for a place to live, by providing the assurance that their landlord and agent knows what they are doing. Crucially, this is backed up by a specific and robust complaints process in the unlikely event of a dispute.
`We will continue to work with the Mayor and other industry bodies to ensure that Londoners can expect a certain professional standard from their landlord or agent.`
Ian Fletcher, director of policy at the British Property Federation, said: `Ultimately, bringing various schemes together under one Rental Standard will make it more easily recognisable to consumers and therefore of greater value to those signing up. It has our full support.`
Bodies which have worked on the new Universal Standards include the London Landlord Accreditation Scheme, National Landlords Association, National Approved Lettings Scheme (NALS), Association of Residential Lettings Agents, Residential Landlords Association, British Property Federation and Accreditation Network UK.
Currently, accreditation numbers of both landlords and agents appear to be low. NALS has 450 accredited agents in London and ARLA has just 50, according to the document. The London Landlord Accreditation Scheme is easily the most active, with 11,129 accredited landlords and over 800 accredited agents. The National Landlords Association has just 68 accredited landlords in London