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What do you think about Boris’ plans to improve renting in London?

boris johnsonBoris Johnson, Mayor of London has launched his Housing Covenant which sets out his vision for improving the private rented sector.

Click here to read the Mayor’s Housing Covenant.

Perhaps unsurprisingly, Boris is not advocating for further regulation of the private rented sector (PRS). Boris argues:

More red tape, regulation and rent controls – is unthinkable given the  disastrous impact it would have for the economic contribution of the sector.

So what is his solution for fixing a system which so badly serves many of the people living in it? Boris is proposing a voluntary system of self-regulation, called the London Rental Standard, which he argues will protect investment in the sector and improve standards in the sector.

But there is no evidence that self regulation actual works. You’re not going to get illegal landlords joining a voluntary scheme. When Newham trialed their licensing scheme as a voluntary option last year, about TWO percent of landlords signed up to it. We need compulsory landlord licensing.

Voluntary accreditation will not make not a difference in areas where demand far out weighs supply, as it does in most of inner London. The supply of affordable homes is so low that whether a landlord is accredited will have no traction. Tenants are not in an advantageous enough position for this to be significant.

Although private tenants are frequently described as ‘consumers’, decent housing is not a luxury item like a designer sofa or an indulgent European city break.

People have choice but to find somewhere to live which and for average London renters this means struggling to find something that is barely affordable in conditions that are only just bearable. Whether the landlord has a London Rental Standard (LRS) will be an insignificance.

If the tenant refuses the accommodation because the landlord doesn’t have a LRS, then it’ll just go to the next person in the queue, and often the next person in the queue will be more vulnerable or less able to self advocate.

So this is what I think about Boris’ London Rental Standard, but what do you think? We need as many renters to give their views on the Housing Covenant if we want reform that is going to truly represent the needs of private tenants. For too long, these needs have been sidelined in favour of landlord’s needs.

Please email your comments, renting experiences and suggestions to: housingcovenant@london.gov.uk

The deadline for submissions is the 15th February 2013.

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9 thoughts on “What do you think about Boris’ plans to improve renting in London?

  1. Licensing is flawed idea. Do you really think, a criminal landlord will apply for a license?

    What is so great about Newham’s Licensing scheme?. Have people read the Licensing proposal?

    Firstly, is it not the landlord who is licensed, but the property itself.

    People seem to be unaware, there are 3 different types of licenses. You have to choose which Licensse you want to apply. You can either have a license to let you rent to (i) a family or 2 sharers (ii) 3+ sharers / small hmo (iii) large HMO. You have to apply for one of those license.

    Here is the problem, if I have a 3 bedroom house with a ‘family’ license, I can’t rent it to ‘students’ groups in the future. Why such restrictions on renting?. Or 3 bedroom house which has a license for 3+ sharers, can’t be rented to a mum, dad & 2 kids….

    Another example, if I have a two bedroom property, rented out to two ladies. A family license is sufficient, however, if the boyfriend moved in, I will need a different type of License, that is the 3+ sharer. Although, I could apply for a new license (the old once would cease), but is will cost another £500. Plus, due to Newham Planning rules, it would need planning permission to be used as a small hmo!! But Newham don’t like sharer’s so they are unlikely to agree.

    Follow me so far?

    Licensing has hurt tenants in Newham.

    In order to get be prepared for Licensing. A landlord have had to look at their tenants. A small number, of tenants had a friend sleep in the living room. They had to be told, this is not allowed. In the past landlords would written a letter and hope the tenant complies, but with licensing a landlord would need to evict tenant for non-compliance of license conditions.

    We had to sadly evict a 4 students renting a 2 bedroom property. Newham’s HMO rules, say you can only have 1 person per bedroom. This is a good idea, but what if the tenants wantes to share a bedroom with his friend – why should Newham interfere?. My tenants told me they are happy with the property, why should Newham Council pokes its nose into a private matter?. These students came to the UK to study, they believe in frugal living…. There are some landlords, who would have taken the risk with these students. They would have broken the licensing conditions. But in my mind it is foolish, to risk loosing your license. So when you read about a rogue landlords…. just think it might be a landlord who has taken a ‘bullet’ for his/her tenants.

    Another problem we face, some tenant have been with us a long time. They have outgrown their homes. They love the home and they don’t want to move. We have never taken action to force tenants out, but with licensing, we have to force to issue. I found the experience distasteful. Let the families decide wether they want to move out. Why should Newham council want to interfere?

    We had to content with issues such as properties with undersized bedrooms (which are not allowed to be used as bedrooms, even though they have been used as bedroom since Victorian times. Although from what I hear Newham has excercised its discretions…

    All these Licensing rules and regulation are a pain for good landlord who obey the rules and read the small print.

    They should bring in Licensing to Hackney… It is only then you will see impact…

  2. Am I missing something here?

    Unless landlords are actually building new homes, then they are not increasing supply.
    They can only expand by taking a home from the property market. This has the effect of increasing scarcity and prices so that more people are forced to rent.

    The logical consequence of this ratcheting effect seems to be the separation between a large number of permanently trapped renters and a small number of increasingly powerful landlords.

    Someone please tell me where I’m going wrong here because this doesn’t sound very healthy from an economic or social point of view.

    • You are out of date. The financing for rental properties is gone. You needd 40% deposit for a rental property. On a £300,000 property, that is £120,000 deposit. If you have £120,000 in the bank would you rather spend it on yourself or buy a property for a tenant to enjoy…

      Secondly, in sold a property in hackney. It was all teenagers coming along with rich mummy and daddy view. It was bought my owner-occupiers looking for the perfect period property. I was told landlord are not buying, unless the price was below the market… blame the FTB for fighting it out… They are the ones who had 100%and 125% Northern rock mortgages. Not the private landlord (although rental sector has both helped and hindered).

      In Hackney, you have a population influx and gentrification… so a bit of a cheek to blame landlords. In the 1990s, you would have been too scared to walk the streets…

      .

      • Hi ‘Anon’,
        You appear to have accidentally posted a readymade assortment of claims as a reply to my post. I’m having trouble linking the two posts but, in case you are intent on doing that, I’ll simplify what I said to help you focus.

        1. Private landlords do not build homes.
        2. Therefore the capacity of the private rental sector can only increase at the expense of the number of owner-occupied homes.
        3. The overall effect of the above transfers is to increase housing prices through scarcity.
        4. If landlords are allowed to leverage large portfolios to build even larger ones and trap even more people in the PRS, this is a bad thing for society and the economy.

        Please feel free to respond to any of these points. Otherwise, I’ll assume we are not having actually having a discussion and leave it at that.

      • @SI You seem to believe housing is a simple game of supply-demand economics.

        Consider this, in Spain, they built millions of new homes, despite all the excess housing supply. Why did House Prices in Spain rocket during the boom years?. The Spanish countryside is littered with unfinished projects….

        Secondly, consider house prices in the London Borough of Newham. According to statiscs, around 35% of the Borough is owned by the Private Rental Sector. Your argument is “The overall effect of the above transfers is to increase housing prices through scarcity”. If your arguments is correct, house prices in Newham should have shot through the roof. However, house prices in Newham at the bottom. Somewhere at 29th place (out of 32 London Boroughs). Only 3 Boroughs are cheaper. Don’t forget Newham hosted the Olympics.

        The price of a 3 bedroom house in the Newham is £220,000 and whilst in Hackney that will get you a 1 bedroom flat.

        I would agree with you, I don’t think further expansion of the private rental sector is desirable, but Hackney Digs are against all landlords. Imagine, a situation, were you got a job in Bristol, but finding that when you got there, there was no where to rent, as they have banned renting. Whaat would you choice be? Take up lodging in
        someones a landlady’s house?

      • @Anon

        Thanks for pointing out that property prices also vary according to location desirability and economic conditions. Not sure how this refutes the principle of supply and demand. If I’m looking for a place to rent or buy in London then I can’t imagine being limited to a particular borough. Your rebuttal attempt seems to assume people would be.

        ‘Hackney Digs are against all landlords’ – really? And you go on to imply that Hackney renters group would actually like to ban renting in principle?!

        Statements like this have convinced me that there’s little point in carrying on with this exchange. I consider my original comment unanswered. See ya!

  3. Boris argues that stronger regulations before 1989 meant there were no private landlords, but the fact is there was so much social housing and home ownership there was very little demand for private housing. Also, private landlords didn’t increase suddenly once the sector was de-regulated. It only increased years later once buy-to-let mortgages were introduced.

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