Mayor demands powers to bring rents down

19 July 2019

• Landmark City Hall report sets out new powers the Mayor needs to introduce rent control in London
• Fundamental overhaul of private rented sector would create powers to bring rents down
• Sadiq also publishes changes Government must make to end ‘no fault’ eviction and protect tenants

The Mayor of London, Sadiq Khan, has published a landmark report setting out how the private rented sector in London should be transformed to give renters open-ended tenancies and to create powers to bring rents down.

The report sets out a detailed blueprint of how tenancy laws should be overhauled and what new powers the Mayor wants from Government to enable City Hall to introduce rent control.

Under his rent control proposals, the Mayor would establish a new London Private Rent Commission, with renters on its board, to implement and enforce measures to reduce rents and keep them at lower levels.

Despite having no statutory powers over the private rented sector, the Mayor has led the way on rights for London’s 2.4 million renters – campaigning to end letting agents charges to tenants, setting up a new public database to ‘name and shame’ rogue landlords and letting agents, and playing a central role in the campaign to scrap 'no fault' evictions.

With the average private rent for a one-bed home in London now more than the average for a three-bed in every other region of England*, the Mayor believes the case for City Hall being given powers to bring rents down has become overwhelming. Far more Londoners are also now renting, with 26 per cent renting privately in 2018, compared to only 11 per cent in 1990.**

The Mayor is calling for powers to establish a universal register of landlords and rents, which a new London Private Rent Commission - with renters on its board - would use to:

• Design an effective system of rent control, including its own role in implementing, monitoring, and enforcing the new approach;
• Set out how existing rents should be gradually reduced and their subsequent levels limited within and between tenancies; and
• Recommend incentives to encourage investment in new and existing rental housing supply.

As well as the above, the Mayor is calling for interim powers to limit rent increases within and between tenancies whilst the full system of rent control is being implemented.

The Mayor's rent control proposals were developed by Karen Buck MP and Deputy Mayor James Murray, drawing from proposals by the New Economics Foundation. Last year Karen succeeded in progressing the Homes (Fitness for Human Habitation) Bill from a ‘private members bill’ into law as Government-backed legislation.

The report also outlines detailed recommendations, developed with a wide range of stakeholders, which set out how the law on tenancies should be overhauled. These include:

• Introducing open-ended tenancies;
• Ending ‘no fault’ evictions by removing 'section 21';
• Scrapping break clauses in tenancy agreements;
• Giving all renters and landlords access to better support and dispute resolution services; and
• Increasing landlord-to-tenant notice periods to four months;

The Mayor hopes the Government will embrace these ideas when formulating their own proposals for consultation on tenancy reform.

The Mayor of London, Sadiq Khan, said: “It is high time for private renting in London to be transformed - Londoners need fundamental change that is long overdue.

"Unlike other Mayors around the world, I have no powers over the private rented sector. That's why this landmark report sets out a detailed blueprint of what the Government must do to overhaul tenancy laws, and what powers City Hall needs from them to bring rents down.

"We have made important progress over the last three years by working closely with councils and renters - from 'naming and shaming' rogue landlords and banning letting agents fees for tenants, to being part of the successful campaign to scrap 'section 21'.

"But now we need the Government to play their part by making tenancy laws fit for purpose, and by enabling us to bring in the rent control Londoners so urgently need."

Today, Sadiq and Karen Buck MP met with renters and organisations from the rental sector at a roundtable to launch the report.

Karen Buck, Labour MP for Westminster North, said: “The private rental sector has an important part to play in London’s housing supply, but for too many tenants high rents, insecurity and variable quality mean it does not meet their needs. We need more homes and especially more social homes, but alongside that we need urgent reform of London’s rented sector to tackle these problems. I am delighted Sadiq Khan recognises this and it is putting his weight behind it.”

Miatta Fahnbulleh, Chief Executive of the New Economics Foundation, said: “More Londoners are renting than ever before, in a sector that’s unaffordable. Since 2010 average rents have risen three times as fast as average incomes. The scale of this affordability crisis means that action must be taken. We support the Mayor’s call – drawn from NEF’s proposals – for additional powers to design and roll out rent controls.

"With a majority of Londoners now in favour of rent control we urge the Government to grant the powers needed to the Mayor to bring rents down to affordable levels for London’s 2.4m private renters.”

Polling carried out by City Hall and YouGov last year revealed strong support for rent controls in the capital, with over two-thirds of Londoners surveyed in favour of the Government capping the amount that landlords can charge people renting their property.

Rent control and stabilisation can take many forms, but most major cities in Europe and North America have some limits on rents in the private sector. For instance, in Berlin, rents are controlled both within and between tenancies, and the city recently announced plans for a five-year rent freeze.

In some New York City apartments, rents are capped by the NYC Rent Guidelines Board, and others have their rent ‘stabilised’ or reset between tenancies. Scotland has recently introduced new laws that allow councils to apply to implement ‘rent pressure zones’, where rent increases are capped at no higher than inflation. By comparison, London and the rest of England and Wales have a private rental sector characterised by very weak protections for renters.

Dan Wilson Craw, Director of Generation Rent said: “As long as your landlord can evict without needing a reason, or raise your rent by more than you can afford, the rental market can never offer you a true home. Londoners are being priced out of the neighbourhoods they grew up in, couples are delaying having kids and many tenants dare not complain about disrepair in case their landlord retaliates with a rent hike.

“While we need to build to meet the demand for homes, renters are struggling right now to make ends meet - they cannot wait any longer for relief. In this new report, Sadiq Khan recognises the ambition and urgency needed to improve life for private renters. We hope the new Prime Minister recognises this too, and acts quickly.”

Notes to editors

* GLA analysis of Valuation Office Agency, Private Rental Market Statistics

 

** Labour Force Survey

 

Notes to Editors

 

  1. The report Reforming private renting: The Mayor of London’s blueprint can be read here: www.london.gov.uk/reforming-private-renting
  2. This polling was part of the GLA/YouGov polling programme and was carried out between 17th – 20th December 2018, with a response of 1,086 London adults. The figures have been weighted to be representative of all Londoners aged 18+. Respondents completed the surveys online from an email link.
  3. 68 per cent of Londoners were in favour of rent controls or stabilisation. Just 16 per cent of Londoners disagreed with rent controls or stabilisation and felt that landlords should be able to set their own rents. The remaining 16 per cent had no opinion.

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