Tenancy deposit loans

MQT on 2017-11-16
Session date: 
November 16, 2017
Question By: 
Siân Berry
City Hall Greens
Asked Of: 
The Mayor


What progress have you made in helping private renters by expanding the use of tenancy deposit loans across London?


Answer for Tenancy deposit loans

Answer for Tenancy deposit loans

Answered By: 
The Mayor

As we know, Chair, it is often those Londoners who rent privately who are hardest hit by the rising cost of housing in the capital.  In the long run, building new affordable homes to rent and buy will help private renters but in the meanwhile I am determined to do what I can to help renters who are struggling with the cost of renting now.  A key part of this, as your question highlights, is by promoting tenancy deposit loans amongst employers in the capital.  This is why over the past year I have been working with London First to promote the scheme as widely as possible.  I have written to employers encouraging them to sign up and I welcome the fact that 28 major London employers have so far agreed to offer tenancy deposit loans to staff.  These employers include Heathrow airport, Westfield, Morgan Stanley, as well as the entire GLA Group.  Over 107,000 Londoners are now covered by the scheme.  I want to go further in driving up this scheme take up so I will look at whether we can include tenancy deposit loans in my forthcoming Good Work Standard.  This standard will support businesses across London to adopt good employment practices.  My team are analysing the responses to the call for evidence and will provide me with advice and what actions and resources are needed to take this forward.  In the meantime, I will continue to encourage key partners such as local authorities and housing associations to introduce tenancy deposit loans.



Sian Berry AM:  Okay, thank you very much, Mr Mayor.  As a private renter for more than 20 years I cannot tell you the difference these kinds of loans would have made to me over the years so I am very, very pleased you have championed the initiative here in the GLAas I asked, I think more or less one of the first things I asked when I came here.  Also, that you are working to encourage businesses to do the tenancy deposit loans as well.  I want to check a couple of things.  Are all the other GLA functional bodies such as London Fire Brigade, MPS, TfL are they now all offering tenancy deposit loans to their employees?




Sadiq Khan (Mayor of London):  I think so, yes, and if that is not the case I will write to you, but I think that is the case.




Sian Berry AM:  Okay.  Do you know how many GLA Group staff members have used the tenancy deposit loans?




Sadiq Khan (Mayor of London):  I am sorry, I cannot actually answer.  The GLA, MOPAC, Metropolitan Police Service police, TfL, London Fire and Emergency Planning Authority (LFEPA), LLDC, Old Park and Park Royal Development Corporation (OPDC) have all signed up to provide the loans.  I have not got the figures of how many have taken it up but I can write to you on that.




Sian Berry AM:  Okay, that will be really --




Sadiq Khan (Mayor of London):  You will be the first to know.




Sian Berry AM:  That will be really useful, thank you.  You mentioned the London First campaign, that is the 50,000 homes campaign, they started out with a target of 500,000 employees to be covered by companies providing these loans by the end of this year.  You have said just now, that is the latest figure from them as well, that over 107,000 employees have access to the loans so we are behind.  Do you know what might be leading us to drift behind this target?  What kinds of employers are finding it difficult to sign up or is it a case of making more effort to tell them?




Sadiq Khan (Mayor of London):  I think we have got to persuade employers why it is the right thing to do.  If you remember 10-15 years ago there was discussion about season ticket loans and a good employer was providing loans to their staff.  We have got to move things on in relation to tenancy deposit loans and also childcare and so one of the things I am hoping the good work standard that we are working on will do is have a compact where a good employer will have a package of measures to help their staff be able to survive in LondonI am not quite clear why the progress London First has made has not been able to move from 107,000 to 500,000 but I am optimistic we can get more people in by the good work standard as well.




Sian Berry AM:  Okay.  That sounds really positive.  Another question about deposits, in your draft Housing Strategy you talk about the idea of private renters being able to passport their deposits.  Can you tell us more about how this would work and what you will be doing on this?




Sadiq Khan (Mayor of London):  The idea is that if you as a tenant have given your deposit to landlord a and you move to another property where there is a landlord b, can you passport over the deposit over from a to b?  We are working on a model in London with landlords, tenant’s groups which we hope to present to the Government and say look we are trying to do some of this by agreement but when it comes to a new deal with the Government are they powers you can give us as a capital city, bearing in mind the challenges we face.  The reality is, as you and I both know, those who are renting from private landlords are going up for a variety of reasons and for the foreseeable future it will carry on going up.  We can we improve the security of tenure, the rents you pay not going up every year but also when you have to go from property a to b not being lumbered with the delay getting your deposit back here and having that delay giving that deposit to the next landlord.  Can it be a swift pass over?




Sian Berry AM:  Again, that would have made a huge difference to me.  The amount of deposit is something that is contentious at the moment.  The Government have said they will cap it at six weeks’ rent which is a heck of a lot of money if you are in LondonIt is very hard to save up that amount.  You have said some very good comments about this recently.  Will you be doing any more to lobby the Government to reduce this cap?




Sadiq Khan (Mayor of London):  Firstly we should pat ourselves on the back, the Government agreed to get rid of the letting agent's fees that we wanted to ban.  They also were quite warm in relation to capping the deposit.  We think it should be roughly speaking three weeks.  The Government, the bad news is, has come back and said it should be six weeks’ rent which is already the standard for many London tenancies.  We want to cap at three, by the way, letting agents and landlords were supporting the six week cap, the Government sided with them, not with us, so we are going to carry on lobbying and support from this Assembly is obviously really important but I think the Government has not really understood the challenges most Londoners face in relation to six weeks deposit and so we are trying to go down to three weeks if we can. 




Sian Berry AM:  Okay.  thank you very much.  I have run out of time.