Mayor sets out proposals to empower tenants and landlords

13 December 2012
  • Mayor publishes new ‘London Rental Standard’ to promote high standards and empower consumers
  • Pledges to boost custom-designed, purpose-built private rented housing
  • Pilot to explore longer, more secure tenancies
  • Increased supply, not rent controls, key to keeping sector affordable

 

The Mayor of London, Boris Johnson, today set out a number of key proposals to empower tenants and landlords in London’s burgeoning private rented sector.

 

With almost one in four Londoners living in private rented accommodation and the proportion of households projected to increase to 37% by 2025, the Mayor recognises that the private rented sector is increasingly important for many working Londoners who contribute to the city’s economic success.

 

Today, publishing the first ever detailed blueprint on the sector by City Hall, the Mayor has called for the establishment of a new deal with landlords, letting agents and tenants based around a voluntary and transparent ‘London Rental Standard’ (LRS), which will be consulted on with the industry and launched next year by the GLA. The LRS 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 landlord and letting agent training and development through professional training courses.

 

The Mayor believes the majority of landlords offer professional services to their tenants, with around 68% of Londoners reporting that they are either satisfied or very satisfied with their landlord. However, with a large number of landlord and letting agent accrediting organisations, the Mayor wants to establish a set of ambitious universal standards that renters should expect from any accreditation scheme operating in the capital, matched with incentives for landlords to join.

 

To help meet increasing demand for private rented accommodation the Mayor will be targeting funding from the Government’s forthcoming £200m equity fund for the construction of more homes, rather than introducing burdensome regulation or rent controls. He also wants to explore ways in which the design of new homes can better reflect the needs of renters - such as better use of communal space and bathrooms for every tenant – as well as launching a design competition to seek out the best ideas for new developments.

 

The Mayor of London, Boris Johnson, said: “The private rented sector is a vital and growing component of our city's dynamic economy. 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 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: “This paper goes to the heart of the challenges of renting in London - how we provide more homes and promote a better quality private rented sector. Through detailed analysis the GLA has really sought to understand the private rented sector in London. We welcome the end result, which shows the Mayor is prepared to do all he can to promote investment and raise standards. 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.”

 

With research showing that longer-term tenancies can improve people’s economic prospects and be in landlords’ longer-term interests, and significant growth in the number of families in the private rented sector, the Mayor will also be inviting major landlords to participate in a pilot to test out how they can offer tenants longer contracts and greater certainty over rent increases.

 

The GLA has been working with accrediting organisations for over a year to agree a set of universal standards including: London Landlord Accreditation Scheme (LLAS), National Landlords Association (NLA), National Approved Lettings Scheme (NALS), Association of Residential Lettings Agents (ARLA), Residential Landlords Association (RLA), British Property Federation (BPF) and Accreditation Network UK (ANUK).

Notes to editors

Today's publication, 'The Mayor's Housing Covenant: Making the private rented sector work for Londoners', is a comprehensive stock take of London's private rented sector and sets out the Mayor's proposals for improving private renting for Londoners. The full document is available on the GLA's website and consultation runs until 15 February 2013. Please visit www.london.gov.uk/housingcovenantThe 'London Rental Standard' was a Mayoral manifesto commitment and, together with the target to increase the number of accredited landlords and agents to 100,000, represents a significant push to drive up standards and professionalise the sector. The Standard, which is today published for consultation, includes approximately 20 measures which the Mayor anticipates will be implemented by all of the main landlord and letting agent industry bodies. The Mayor's plans for the London Rental Standard include a radical shift in focus towards consumer empowerment. The Mayor wants every Londoner to ask the question "is my landlord accredited?" Through this process it will become increasingly important - and in their financial interest - for landlords and agents to demonstrate to tenants that they are accredited.

 

Some accreditation schemes, e.g. the one that operates in the East Midlands, offer a range of incentives including discounts with local firms. We encourage London's accreditation schemes to adopt similar incentives.

 

Local authorities could do more to promote accreditation, e.g. through offering discounts on landlord licensing fees (including fees for HMOs).The Mayor will be discussing with Government the option of allowing direct payment of housing benefit to landlords who are accredited.

 

This is the third publication in the Mayor's 'Housing Covenant' series. Key findings of the review include: One in four London households now rent privately and this is projected to increase to around one in three by at some point in the mid 2020s.Most of the growth in London's private rented sector - around 80% - has come from within the existing housing stock (i.e. landlords buying existing properties and then letting them out to tenants). At the same time, around two thirds of new market housing supply in London is supported directly or indirectly by the private rented sector. Rents in London have generally risen far slower than house prices, however, recent increases in demand and the wider economic circumstances have heightened affordability issues for many Londoners who rent privately. Private tenants in London tend to be younger, more mobile, and more likely to be professional or technical occupations. However, there is evidence to suggest that the demographics of private renting are changing. There are now 200,000 families with children in London's private rented sector, and more renters are staying in their homes for longer periods of time. The government's forthcoming £200m equity fund and £10bn loan guarantees were announced in November as part of the government's housing stimulus package. The GLA will take a leading role in the £200m equity fund, which is due to be launched shortly. The Mayor is also exploring a range of other options for increasing the supply of new homes in London, and many of these are set out in the consultation paper.

 

The 'design competition' will invite proposals for purpose-built private rented homes and will build on the growing evidence that new typologies are required to help support the transition to more private renting. The competition will be open to concept as well as 'real life' proposals and will be launched in the New Year. In order to promote the use of longer tenancies, the GLA will invite landlords to participate in a pilot scheme and will fund an evaluation of that scheme. As Shelter has demonstrated with its 'stable rental contract' concept, landlords are able to grant longer tenancies within with existing statutory framework. This approach avoids the need for costly and heavy handed regulation.