Date Published 11 June 2013
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.