Assembly calls for longer tenancies and better standards in London’s private rented sector

16 December 2011

The London Assembly today calls for longer tenancies of at least five years and tax incentives for landlords who improve their properties, as part of a push to improve conditions for the growing number of Londoners living in the private rented sector[1].

About a third of the private rented sector in London – around 280,000 homes - fails to meet the “decent homes” standard used in the social rented sector, and one in three private landlords is considered to be “rogue”[2], leaving tenants at the mercy of poor conditions or sudden eviction.

At the same time, London’s boroughs are paying more than £400 million of public money to private landlords[3] to house some of the capital’s most vulnerable households[4], sometimes in appalling conditions or with little or no security of tenure. 

The Planning and Housing Committee’s report, ‘Bleak Houses’ calls on the Mayor to lobby the Government to introduce longer and more secure tenancies - with protection from retaliatory eviction - and conduct a review of tax incentives[5] to help landlords carry out maintenance and improvements.

The Mayor should also promote a campaign to inform private tenants about their rights, and develop an ‘accreditation badge’ so tenants, estate agents and councils can have confidence that properties – and the landlords who own them - meet an acceptable standard.

Jenny Jones AM, Chair of the Planning and Housing Committee, said:

“Now home to one in four Londoners and still growing, in many ways London’s private rented sector can be regarded as a success story.  The problem lies in the fact that private rented housing is increasingly acting as social housing, but without any of the standards and security.  

“Families need certainty about where they will be living so they can settle their children in schools and forge community links.  In exchange for the hundreds of millions of pounds of public money they are receiving, private landlords must be compelled to provide this certainty in the form of longer tenancies.

“Giving its growing importance and changing role, it’s time the Mayor turns his attention to the private rented sector and makes it a priority to bring properties and landlords up to scratch.”

Notes for editors:

  1. At present, the private rented sector is the only growing housing tenure in London.  Between 2000 and 2010, the private rented sector grew from 464,000 households to 850,000 (an increase of 83 per cent).  In 2010, 25.8 per cent of all London households were in the private rented sector – compared with an average for England of 17.4 per cent.  Over the period 1994 to 2007 rents in London, already twice as high as the rest of England, more than doubled.  The Committee is particularly concerned that the strategic approach to the private rented sector - which has almost doubled in size in ten years - is not keeping pace with its growing role as home to people who would previously have lived in social housing. 
  2. The Committee heard that “Landlords comprise the professional, the well meaning and yet not well informed, and then the rogue.” The London Borough of Newham estimates that a third of their landlords are within each of these categories – a profile that most other experts believe is a reflection of London as a whole. 
  3. Increasing amounts of public subsidy, through housing benefit, is being paid directly to private landlords.  In July 2011, there were 272,400 households in the private sector in receipt of housing benefit through the Local Housing Allowance (LHA).  The private rented sector now accounts for some 33 per cent of all recipients of housing benefit in London.  In total, more than £400 million of public subsidy is being paid to private landlords in London annually.  Figures from CIPFA show that in 2010 private rented accommodation leased by London boroughs cost some £311 million; accommodation leased or managed by housing associations cost £20 million and rents paid directly to a private sector landlords by London boroughs amounted to £58 million.
  4. In July 2011, there were 272,400 households in the private sector in receipt of housing benefit through the Local Housing Allowance (LHA).  The private rented sector now accounts for some 33 per cent of all recipients of housing benefit in London.
  5. The report calls on the Government to look at the potential of tax incentives for private landlords to encourage them to make improvements to their properties.  Currently, many landlords in London, especially the smaller ones, do not seem to see long-term maintenance as a priority while others claim they cannot afford to make improvements. 
  6. A number of innovative ways of improving conditions in the private rented sector were uncovered by the Committee, including the London Borough of Newham’s ‘selective licensing’ approach.  The Mayor is urged to look at Newham’s scheme with a view to recommending its use elsewhere in London to help tackle the worst private sector landlords and properties. 
  7. Newham has piloted a Neighbourhood Improvement Zone under its selective licensing powers that aims to improve many of the problems arising from high numbers of private rented sector properties.  As part of this project it has required all landlords (in a small pilot area of the borough) to apply for a licence to rent accommodation to ensure that rented accommodation is well managed and meets required standards.  So far it has achieved 88 per cent compliance from landlords.  More details available at Appendix 9 of the report.
  8. The report will be considered for formal agreement at the Committee’s meeting on 1 February 2012.
  9. Jenny Jones AM, Chair of the Planning and Housing Committee, is available for interview. 
  10. 10.  As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.

For more details, please contact Dana Rothenberg in the Assembly Media Office on 020 7983 4603/4283.  For out of hours media enquiries please call 0207 983 4000 and ask for the Assembly duty press officer.  Non-media enquiries should be directed to the Public Liaison Unit, Greater London Authority, on 020 7983 4100.