Private Rented Sector

MQT on 2014-06-11
Session date: 
June 11, 2014
Question By: 
Tom Copley
Labour Group
Asked Of: 
The Mayor


Do you believe that tenants in London's private rented sector get a good deal?


Answer for Private Rented Sector

Answer for Private Rented Sector

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  Thanks, Tom.  It is interesting.  Tenants in the private sector do show quite high levels of satisfaction and their levels are improving.  However, there are obviously many, many problems in that.  There are many people who have had a terrible experience and that is why we are encouraging all landlords to get accredited to the London Rental Standard (LRS), which is supported by all London boroughs, as far as I know, and all the major private rented sector industry bodies.


Tom Copley AM:  Thank you, Mr Mayor.  I think, as Shelter would probably point out, that satisfaction levels in the private rented sector are a little bit more complex than perhaps some of the figures would suggest.  I wanted to ask you specifically about lettings agencies.  The Royal Institute of Chartered Surveyors have described lettings agents as the property industry’s Wild West.  Do you agree?


Boris Johnson (Mayor of London):  I do not want to get into pejorative language about any group of people necessarily.  I think it is important that renters, potential tenants, have confidence that their landlord is somebody who has been through the hoops, who knows what it is, who knows all about putting the deposit in escrow, knows that you have to check the gas, knows about doing essential repairs in a timely and effective way, all those things that are on the LRS.  I want to see far more landlords signing up and I would like to see the entirety of the private lettings agency sign up to this body.  We mean what we say about this, however the only way to do this is for the consumer generally to say, when they walk into one of these places on the high street, “Are you accredited and, if not, why not?”


Tom Copley AM:  I am sure your intentions are very good, Mr Mayor, however the question is, is it going to work?  In June 2013, Shelter published a report, which argued that up-front fees charged by lettings agencies are preventing households from being able to adequately predict and meet the cost of renting.  While rental costs can at least be anticipated and paid over time, high and unpredictable lettings agency fees leave many in unanticipated financial difficulty.  Some lettings agents charge fees of up to £500 or even more.  Do you agree with Labour’s proposal to ban lettings agencies from charging tenants up-front fees?


Boris Johnson (Mayor of London):  I will look at that proposal, Tom.  I am focusing for now on what we can do to get people to join the LRS and that has got to be consumer driven.


Tom Copley AM:  You say you will look at it. I would have thought you would be aware of it already, it is not a very complex proposal that requires much in-depth study, it is quite simple really.  Should lettings agencies be banned from charging tenants up-front fees, which is the situation that exists in Scotland?


Boris Johnson (Mayor of London):  I will have a look at it.  I see you have moved off asking for rent controls, which is your normal panacea.


Tom Copley AM:  Sometimes I like to mix it up a bit, Mr Mayor, just to keep you on your toes.


Boris Johnson (Mayor of London):  That may be because you have accepted intellectual defeat in that argument because rent controls do not produce anything like what you think they do.


Tom Copley AM:  Mr Mayor, you will be eating your words in a moment.  Before I move on the very subject of which the Mayor has just spoken, just to say that Shelter have looked into the issue of lettings agency fees where they have been banned in Scotland and 60% of lettings agency managers said the ban had no impact on their business and 17% said the change was positive for their business.  Therefore, I hope you will look at the issue of banning lettings agent fees in more detail.


Boris Johnson (Mayor of London):  Yes, I will look into it.  It is not something that --


Tom Copley AM:  Make sure you do because I will raise it with you again and if you then say to me, “I will have to go back and look at it.” I expect you to have an answer.

Boris Johnson (Mayor of London):  Of course I will.  I am very diligent in addressing all the things you raise, Tom.  You did not ask specifically about this.  Had you done so, I would of course have been able to give you an answer immediately.  I will give you an answer later.  [RJ1] I am very happy to give you an answer on rent controls, which is your normal quack medicine.


Tom Copley AM:  I would hate to think that I was becoming predictable, Mr Mayor, however can I ask you then, do you think the families in London’s private rented sector deserve more security than a six-month tenancy agreement?


Boris Johnson (Mayor of London):  I do not want to get into the business of trying to over-regulate a market that needs to develop.  We need to expand the supply of private rented accommodation in London and we need to encourage investors to help us build hundreds of thousands more homes in London, many of them for private rent as well as for affordable rent.


Tom Copley AM:  You are of course aware that there are many European countries with much larger private rented sectors and much more regulation than we have in this country.  I know you are aware of that, Mr Mayor.


Boris Johnson (Mayor of London):  For instance, I know that you are a great fan of what goes on in Berlin as far as the rented --


Tom Copley AM:  As far as the housing is concerned.


Boris Johnson (Mayor of London):  I notice in Berlin, where they have rent controls, the rents have risen by about 35% in the last seven years.Even though we all know the huge problems the London market faces, if you compare London and Berlin, Berlin has abundant property comparatively speaking.  The population of Berlin has fallen by 180,000 in the last ten years.  The population of London has gone up by about a million.  Yet, rents in Berlin in the last seven years have gone up 35% whereas rents in London have gone up (overspeaking) [RJ2] that is because ‑‑


Tom Copley AM:  From a much lower base of course, Mr Mayor.


Boris Johnson (Mayor of London):  That is because they have --


Tom Copley AM:  It is precisely because they have regulation in the first place.


Boris Johnson (Mayor of London):  That is because they are going for the wrong policy, which is they are going for rent control which constricts supply.


Tom Copley AM:  This is of course in a large part about the cost of living, however it is also about stability for people and particularly for families. In the ten years up to 2011 the proportion of privately rented households with children has increased from 19% to 29%.  Therefore, do you think that Labour’s proposal of giving longer tenancies as standard, is right to protect particularly families with children from being evicted?


Boris Johnson (Mayor of London):  The right proposals to protect families with children in London is to build more homes for private rent that will help accommodate those families with children.  The way to do that is to make sure that you expand supply and --


Tom Copley AM:  No, you need to answer this question, Mr Mayor; you need to answer this question.


Boris Johnson (Mayor of London):  You do not introduce unnecessary constraints on the rental sector of the kind they have in other European capitals ‑‑


Tom Copley AM:  Which work.


Boris Johnson (Mayor of London):  ‑‑ that you think work, where all that happens is that homes are left empty in huge numbers because landlords do not put them on the rental market because they do not want the botheration and the expense of the rental controls that would apply.


and where those landlords that do put their homes on the market endlessly whack up prices.


Tom Copley AM:  When I am contacted, as I am every so often, by families who face retaliatory eviction at just two months’ notice because they made a complaint about, for example, their boiler, I will have to turn around to them and say, “Well, I am sorry, the Mayor thinks that is absolutely fine”.


Boris Johnson (Mayor of London):  No, what you must say to them, --


Tom Copley AM:  Well you do, because you do not support regulation.


Boris Johnson (Mayor of London):  No, let us go back to what we agreed on, and you were kind enough to say that I had the best possible intentions, and I do.  What you should say to those families is that they must insist that their landlord is signed up to the LRS and that is the way forward because, if they sign up to that standard and then fail to comply, they will have their certificate taken away, and they will be shamed --


Tom Copley AM:  My gosh, these landlords must be quaking in their boots, and meanwhile they are continuing to rake in the money because tenants do not have a choice.  Tenants do not have a choice.  Landlords have plenty of choice.  Landlords can choose whichever tenants they want.  Tenants have no choice.


Boris Johnson (Mayor of London):  What landlords can choose to do is whether or not to rent out their property at all.  I think that is what landlords can choose to do and if they have a market, which, if we go back to the system in the 1970s or we go to systems that are prevalent in other European countries, we will simply constrict supply of rental accommodation at a time when Londoners desperately need it.


Tom Copley AM:  Hang on, you have been speaking a while there.


Boris Johnson (Mayor of London):  I think you are actuated by good motives; however your methods will produce the exact opposite of what you want.


Tom Copley AM:  It strikes me, Mr Mayor, that had you been living in the Victorian era where you may have been happier, you would have said that the ban on sending children up chimneys was a terrible over-burden of regulation, however perhaps the employers would like to have a voluntary accreditation scheme to say that they would not send children up chimneys.


Boris Johnson (Mayor of London):  Which government was it?  Which party was it that took the children out?  It was the Conservatives.  It was [former Prime Minister Benjamin] Disraeli.  It was us who (overspeaking)


Tom Copley AM:  Disraeli would not have been a Conservative these days, Mr Mayor.


Boris Johnson (Mayor of London):  Of course Disraeli was a Conservative.  Thank you very much for reminding me of the longstanding credentials of the Conservative Party.  By the way, which is the administration in London that in one year alone has built more council homes than Labour did in 13 years in power?  The Conservatives.


Tom Copley AM:  We got there in the end, we got that bit in.


Boris Johnson (Mayor of London):  What does Tom Copley think that the Labour Party should do about their record in housing?  What does he think they should do?  He thinks they should apologise.  When is the Labour Party going to do what Tom Copley has already asked them to do on many occasions and that is apologise?  When are they going to apologise for their dismal record in housing?


Roger Evans AM (Chairman):  We need calming down.  Assembly Member Dismore.


Andrew Dismore AM:  I would like to test your rental standard, Mr Mayor, against a real case.  I want to put to you a case, a real case of a Barnet landlord, who has 15 properties in his and his wife’s name and four in his company name.  We have spoken to seven of his tenants, of which six are on housing benefit.  Zoopla market rents estimates for these six properties a range from £989 to £1,186.  The local housing allowance, which is obviously the average over the whole of northwest London, and on which the maximum housing benefit is based, is higher, £1,300 for a three-bed and £1,560 for a four-bed.  Rents were charged to these six tenants, not at market, but much closer to the Local Housing Allowances (LHA) rate, and in three cases more than the LHA.  All these tenants happen to be black, Asian and minority ethnic (BAME), so the rental charged at ‑‑


Boris Johnson (Mayor of London):  I cannot hear what you are saying, Andrew?


Andrew Dismore AM:  I am going to put this case and then I will put the question to you.  BAME rent of £1,350 to £1,846.  This looks like an exploitation of the housing benefit rules and overcharging to the detriment of the public purse.  The tenancies, I have seen the leases, which are assured shorthold for 12 months minus a day, permit rent increases by any amount at any time during the tenancy.  Shelter says, “We would almost certainly classify this as an unfair term”, and they go on to say it is probably illegal.


We have talked at length to one of the tenants and I will just put this particular case to you, and this is what she told us.  She had been a tenant of this landlord for 12 years on one of these leases.  He subdivided the living room with a flimsy partition to create the fourth alleged bedroom.  The landlord showed up at their doorstep completely unannounced late at night and asked for a new lease to be signed.  He only showed them the last page of the lease, pressuring them to sign the lease without reading it.  The most recent lease agreement had a named individual who witnessed the signing, however she never saw the witness before the lease was given to her, pre-signed by the landlord and the witness.


According to the terms of the lease, the landlord should give notice before showing up at the property; however he often appeared without any prior notification to discuss rent payments.  In 2010, the rent was £1,792 per month.  In March 2011, less than 12 months later, it was increased to £1,846 per month.  The NHA was £1,560, the Zoopla market rent was just £1,093.  The tenant was informed by the landlord of discretionary housing payments (DHP) and he would make arrangements for her to go to Barnet Council to discuss DHP-related matters.  The housing benefit was cut due to the benefit cut, but partially made up by DHP[RJ3] .  The landlord agreed informally to accept the housing benefit amount, however did not waive the arrears.  When discretionary housing benefit was stopped, he used the accumulated arrears as grounds to seek eviction.  When she was given the eviction notice, which took place on 25 March this year, the landlord deducted a sum equivalent to the last discretionary housing benefit from the tenant’s deposit once she was evicted.  This is what she has told us.


Do you think this is how a good landlord should behave, exploiting the housing benefit system by setting rents at a higher level, and indeed above LHA, unfair lease terms, turning up unannounced, dodgy lease signing arrangements.  Would this conduct meet your recently announced LRS?


Boris Johnson (Mayor of London):  No, of course not, Andrew.  If I understood you correctly, although you must forgive me because I could not get all of it as you were reciting it, it sounds like a terrible case, however it sounds to me as though this landlord has broken the law.  Am I right in thinking that?


Andrew Dismore AM:  I think there is an argument certainly in relation to the terms of the lease and whether the lease is effective.


Boris Johnson (Mayor of London):  In terms of misrepresentation of the terms of the lease, from your account, it sounded to me as though he had not been fair to the tenant.  That tenant should have protection under statute against that misrepresentation and I will certainly be very happy to assist you or to join you in any way that may be useful to vindicate the rights of that tenant.


Andrew Dismore AM:  Would it surprise you also to know the landlord was not a member of the London landlord accreditation scheme set up in 2004 in which Barnet Council participates?


Boris Johnson (Mayor of London):  It would not surprise me in the least, however I think our first step in protecting the rights of your tenant, who you are rightly trying to help, should be to look at exactly how that landlord has behaved in terms of concealing elements of the lease from her at the time he got her to sign it.  That seemed to me prima facie to be illegal and it may well be that there is redress that could be obtained there.


Andrew Dismore AM:  Well, would it also surprise you to know the identity of the landlord?  The landlord I describe is none other than the recently elected Mayor of Barnet, Councillor Hugh Raynor, Conservative councillor, and the pre-signed witness was Conservative Councillor John Hart.  As you have agreed to look into this, will you raise these issues with him direct as one of your party colleagues?


Boris Johnson (Mayor of London):  I am very happy to do so[RJ4] .  I hope very much, Andrew, and it would be very unlike you of course to have calumnied in any way the reputation of any Conservative colleague of yours, I cannot believe that you would be so underhand as to introduce any suspicion about the conduct of a Conservative member.


Andrew Dismore AM:  It is well researched, here is the research, Mr Mayor.  Here is the research.  Here is the file of research.


Boris Johnson (Mayor of London):  If anybody has behaved illegally or wrongly in the treatment of their tenants, then the law is there to protect the tenant and I suggest that what you should do, as the Assembly Member concerned, is establish that point, work out whether you think an offence has taken place, and I believe you are a lawyer of some description, and then see what you can do to help that person.


Andrew Dismore AM:  Well, will you take it up, as you agreed to do earlier?


Boris Johnson (Mayor of London):  I will certainly be of any assistance I can, however I think the first thing that this person needs is a lawyer, perhaps even more able than you, to look at the matter and work out whether there is legal regress.


Andrew Dismore AM:  This is not funny, Mr Mayor.  I know you are laughing, it is not funny.  This is a serious matter.  It is not funny.  It is not a joke.


Boris Johnson (Mayor of London):  I appreciate that very much and I am grateful to you for bringing this to the attention of the wider public.  I am sure that you had the courtesy to notify the councillor concerned that you were going to do this, did you?


Andrew Dismore AM:  I am finished.


Boris Johnson (Mayor of London):  Did you have the courtesy to notify the councillor concerned?


Roger Evans AM (Chairman):  Mr Mayor, we ask the questions by and large.


Boris Johnson (Mayor of London):  It is a fair question.  If the Assembly Member cannot tell us whether he had the courtesy to, we will take his silence as ‑‑


Roger Evans AM (Chairman):  I will move on to Assembly Member Fiona Twycross.


Fiona Twycross AM:  Thank you.  Mr Mayor, the most recent London Poverty profile report found that the private rented sector now houses a larger number of people living in poverty than any other type of housing tenure in London.  How do your policies towards the private rented sector tackle this problem?


Boris Johnson (Mayor of London):  The best answer to all these problems, Fiona, is to increase the supply and the range of private sector accommodation and, notwithstanding what Tom [Copley] and Andrew Dismore have to say about rents in London, they have gone up too much.  In the last year there was an increase of 1.4%, which is lower than the rate of inflation, but there are rental increases in London.  The answer is to increase supply and that means making the widest possible stock of housing available; however there will be many people who simply cannot get into the private rented sector just because the prices are too high for them.  They need help through social rent for affordable rent and we are building, as I say, a record number of such homes.


Fiona Twycross AM:  I do not recognise the figure of 1.4%.


Boris Johnson (Mayor of London):  These are Office of National Statistics (ONS) statistics, which show that private sector rents have increased at a level considerably below inflation in the last three years, but the most recent data shows that rents rose only 1.4% in the last year.


Fiona Twycross AM:  All right, if that is the case.


Boris Johnson (Mayor of London):  Contrast that, by the way, with social rents, which increase at above inflation every year.


Fiona Twycross AM:  Yes, the figure I have is that they averaged around an increase of 13% alone, therefore even if it has gone done this year, it has still been going up rapidly over time.  One of the issues for families is they see rents increasing and they face a choice of moving out of areas because of increasing rent, or staying in the area and having stability for the family, however with overcrowding.


I just want to talk a little bit about what you are doing particularly on reducing and preventing overcrowding for families. A teacher in Hackney told me that the greatest thing that you as Mayor and that the Assembly can do would be to reduce overcrowding in the private rented sector.  She has children in her school who share four to a room, so two sets of bunk beds in a room.  The cannot sleep, they have nowhere to study at home, and are suffering due to overcrowding in the private rented sector with impacts on their health, their education and their social life, and ability to play, which is a really important thing for children to have a right to be able to do.  The effects of overcrowding do not just last the length of the tenancy; they can last a life time.  Therefore, what are you doing to reduce overcrowding in the private rented sector?


Boris Johnson (Mayor of London):  I am going to give you roughly the same answer I gave you before.  The answer is, when you have a problem of overcrowding, as we have, the answer is always everywhere to increase supply across all tenures and --


Fiona Twycross AM:  Yes, you gave me a very similar question about a year ago and I hope that when we come back to this question in a future Mayor’s Question Time we do not just have the answer that we need to increase supply, but you can demonstrate, as you say we should judge you on your record and your results.


Boris Johnson (Mayor of London):  You should.  We have delivered a record number of affordable homes and I think I am right in saying that in 2013 we saw the biggest increase in live births in London we have had since 1966.  There is a huge population boom going on, we have to cope with that.  That inevitably has an impact on crowding.  I am not denying the scale of the problem, Fiona, I am not remotely denying it, however what I am saying is I believe that the approach that we have to dealing with it, which is to build more homes, to create housing zones, to massively expand the private rented sector; that is the right way.


Fiona Twycross AM:  I think we would like some more action.  Thank you.


Roger Evans AM (Chairman):  Assembly Member Sahota.


Dr Onkar Sahota AM:  Mr Mayor, recently a report by BRE Trust showed that 15% of Londoners live in poor housing conditions.  This of course causes illnesses and I as a doctor readily see patients bringing in photographs of their flats with dampness, mould on the windowsills, and asking me to intervene on their behalf.  I know that you talk about the supply all the time, however your LRS have no teeth at all.


Boris Johnson (Mayor of London):  That is not true, because I think the LRS is a very good idea.  I accept the points that you make, Onkar, about the health implications of poor housing and everybody understands that and that is why we have a massive need to expand the supply.  That is why we brought in, the Parker Morris plus 10% housing standards, which were deeply difficult to get past the developers.  It is one thing that they found very difficult to build so many homes with rooms of a size that you would expect, however we have done it and we insist on it and we also insist on building as many family homes as possible.


Dr Onkar Sahota AM:  Mr Mayor, we are dealing with the most vulnerable people in society, who are subject to these conditions.  They really have no choice.  Why are Londoners now living in this situation in London? It is because there is a failure of regulation.  We know that there is a great belief the market will self-regulate themselves, however what we have learned in the last 10 years is that human greed takes over and then regulation does require some intervention by people in authority.


Boris Johnson (Mayor of London):  Yes, which is why we brought in the space standards and, as I say, that was very tough and the building companies, the developers, were very much against it.


Dr Onkar Sahota AM:  Yes, however you can enforce them, Mr Mayor.  Why are you not enforcing the housing conditions standards?


Boris Johnson (Mayor of London):  We do --


Dr Onkar Sahota AM:  In planning you can enforce the planning.


Boris Johnson (Mayor of London):  This is something that, as you know, Onkar, is in the remit of the boroughs, and I am very concerned that they should enforce good housing standards and that they should come down very hard if there is social accommodation, if there are housing association properties that have damp, that have mould, then that is an offence and it should be dealt with.


Dr Onkar Sahota AM:  I can tell you, Mr Mayor, that I regularly write letters  and yet these people still continue to live in these conditions, no one acts upon it.


Boris Johnson (Mayor of London):  The problem is, if it is Ealing Council, because you live there, do you not?


Dr Onkar Sahota AM:  I do have practices in Ealing.


Boris Johnson (Mayor of London):  If it is Ealing Council that is failing to attend to mould and to damp in property that it controls, then I will be very happy to join you, Onkar, in trying to get some action there.


Dr Onkar Sahota AM:  It is at Hillingdon also.


Boris Johnson (Mayor of London):  Ealing Council, as everybody knows, is a Labour council.  But I would be very happy to join you in attacking that Labour council, Onkar, for their failure to deal with the problem you rightly highlight.


Roger Evans AM (Chairman):  OK. We will move on to the next question on neighbourhood policing.  Assembly Member Dismore.