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. The report also outlines detailed recommendations which set out how the law on tenancies should be overhauled such as introducing open-ended tenancies, ending ‘no fault’ evictions, scrapping break clauses in tenancy agreements, better access to support and dispute resolution services, and increasing landlord-to-tenant notice periods to four months.
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 rent control system. It would set out how rents should be gradually reduced and recommend incentives to encourage investment in 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 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. 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.”
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. 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.
The Mayor hopes the Government will embrace these ideas when formulating their own proposals for consultation on tenancy reform.