Posts with tag: rent controls

Will call for rent controls in London leave tenants worse off?

Published On: April 13, 2021 at 8:08 am

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rent controls in London

A new analysis published by the National Residential Landlords Association (NRLA) shows that rent controls called for by London mayor Sadiq Khan would leave tenants across the capital worse off.

The figures show that private rents have fallen every year in real terms throughout Khan’s time at City Hall. The NRLA’s analysis, looking at figures from the Office for National Statistics (ONS), shows that rents in the capital have fallen by 9.6% between April 2016 (the month before Sadiq Khan came to office) and February 2021.

It also compared them to the Consumer Price Index, including housing costs, which the Government has said it plans to start using, showing rents fell by 5.1% over the same period.

The NRLA is warning that any move to control rent rises by linking them to inflation would leave tenants worse off.

In his manifesto for re-election as Mayor, Sadiq Khan calls for the power to introduce rent controls in London. This is despite a report published by The Treasury in 2010 under the last Labour Government, in which the current Mayor was a Minister, that warned of the devastating impact such a policy would have on inner city housing.

Assessing the impact of rent controls before they were abolished in 1988, the report concluded that they had been a major factor in the ‘decay of much of the inner city housing stock.’

Ben Beadle, Chief Executive of the NRLA, said: “Rent controls would be a disaster for London as the last Labour Government made crystal clear. They would mean tenants actually paying higher rents than leaving them to market forces.

“The story of rent controls wherever they have been introduced is that they exacerbate an already serious shortage of available homes.

“Rather than calling for things he cannot deliver, the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”

Sadiq Khan makes request for two-year rent freeze in London

Published On: September 18, 2020 at 8:21 am

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Categories: Lettings News

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Tenant applications for London rentals double in last six months

Sadiq Khan, Mayor of London, has written to Robert Jenrick, the Secretary of State for Housing, Communities and Local Government, to request powers to implement a two-year rent freeze to help prevent COVID-19 evictions.

This freeze would be introduced as an emergency measure. It would mean that private Landlords could reduce rents in London but not increase them.

Recent research from the Greater London Authority (GLA) and YouGov has revealed half a million London tenants are potentially facing eviction.

Mayor of London, Sadiq Khan, has commented: “More than ever, COVID-19 means that many of London’s private renters are facing a really uncertain future. More likely to be in lower-paid and insecure work, the end of the furlough scheme means even more renters in the capital are now at risk of pay cuts or losing their job.

“Yet at every stage of this pandemic, renters have been treated as an afterthought by the Government, with protection measures only ever rushed out at the last minute.

“This uncertainty is causing unnecessary anxiety and stress. I’m today calling on ministers to give me the powers to stop rents rising in the capital for as long as this virus is with us, to give London’s 2.2 million renters more financial security. If Berlin can freeze rents for five years, there’s no reason London shouldn’t be able to freeze rents for two years in these extraordinary times.

“Without an operational vaccine, the economic fallout of COVID-19 will continue for months into the future. A rent freeze is only one part of a package of measures renters urgently need from Government to ensure no one is forced out onto the streets as a result of this pandemic.” 

Alicia Kennedy, Director at Generation Rent, comments: “Evictions have been paused, but that hasn’t stopped some London landlords from raising the rent, which can force a tenant to leave their home.

“At Generation Rent we’ve heard from tenants who have been hit with a rent increase after telling their landlord that their income has been affected by the pandemic. Unwanted moves can leave struggling tenants with nowhere else to go and contribute to the spread of coronavirus. 

“With the economy in recession and coronavirus cases on the rise, landlords should not be permitted to raise rents and force a tenant into an unwanted move.

“We’re delighted that the Mayor has adopted Generation Rent’s proposal for a freeze on rents to ensure tenants are able to stay safely in their homes for the duration of this crisis.”

Timothy Douglas, Policy and Campaigns Manager, ARLA Propertymark, comments: “Government has provided protection to tenants through the stay on evictions and the job retention scheme, while landlords have fallen outside of government support.

“It is important to be proportionate to all involved in the sector – tenants, agents, and landlords – as the economy struggles to recover in this period. 

“It is therefore vital that the situation is not worsened through any measures on landlords as a kneejerk reaction to the conditions created by Coronavirus.

“The vast majority of landlords are supporting good tenants to stay in their properties but a mandatory rent freeze would serve to deter investment in the private rented sector at exactly the time when more is being asked of landlords.”

Sadiq Khan has also asked for a wider package of support to renters, including:

  • Tenant grants to help them stay in their homes and clear arrears.
  • Expanding access to welfare, including scrapping the Benefit Cap uprating Local Housing Allowance to median market rents, and making additional discretionary housing payments to cover shortfalls and extending eligibility to all renters, including those not currently entitled.
  • Scrapping Section 21 evictions, and restricting access to Section 8 evictions until the above welfare changes have been made.

ARLA Propertymark comments on rent control argument

Published On: March 5, 2020 at 11:56 am

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Categories: Landlord News

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After the Residential Landlords Association (RLA) and the National Landlords Association (NLA) yesterday stated their opposition to Sadiq Khan’s rent control plans, ARLA propertymark has joined them in their disagreement. 

The NLA and RLA have hit out at Mayor of London, Sadiq Khan’s re-election strategy, which focuses on introducing rent controls in the capital, saying that the proposals would drive landlords out of the city.

They point to research by Frank Knight, showing that demand for rental property has increased from 4.7 prospective tenants per listing in 2018, to 6.1 in 2019. 

The Centre for Cities has warned that strict rent control “would close off London to new residents” and the Resolution Foundation commented that holding down the true market price of private housing via rent controls rather than increasing housing supply is unlikely to succeed.

ARLA Propertymark has echoed the NLA and RLA’s worries. David Cox, Chief Executive, ARLA Propertymark categorically says: 

“Rent controls do not work; it hits hardest those its designed to help the most, and the Mayor of London has failed to learn the lessons of history. 

“The last time rent controls existed in this country, the private rented sector (PRS) shrunk to the lowest levels ever recorded. At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink. 

“In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help, will be forced into the hands of rogue and criminal operators, who may exploit them.”

However, Amina Gichinga from London Renters Union believes tenants aren’t much better off as the situation currently stands, stating rent controls were “urgently needed to help end the way that sky-high rents are driving people out from their communities and into poverty”.

It’s not just tenants who believe that rent controls aren’t a bad thing though. Robert Walker, a partner at PwC, said in July:

“Reducing the cost of housing — both renting and purchasing a house — should be a priority, and government and business should work together to improve affordability by increasing the supply of properties to put downward pressure on property price inflation,” 

Sadiq Khan to Push Rent Controls as Part of Re-Election Campaign

Published On: March 4, 2020 at 10:44 am

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Sadiq Khan to Push Rent Controls as Part of Re-Election Campaign

The mayor of London, Sadiq Khan, has placed rent controls at the heart of his re-election campaign, calling the upcoming mayoral election “a referendum on rent controls”. 

Mr Khan is demonstrating that he is on the side of London tenants, who spend an average of 43% of their income on rent and saw rents increase by a third in the ten years since 2010.

He has issued a challenge to the Prime Minister, who had previously ignored Khan’s plans for rent control in the capital, stating:

“The case for rent controls is now absolutely undeniable. But Tory ministers have blocked us from introducing our plans for rent controls in London and have simply said no.

“That’s why today I am making the mayoral election on 7 May a referendum on rent controls – showing Londoners that I will stand up for renters. The prime minister will have to give us the powers we need because if he refuses to do so he will be denying the express democratic will of millions of Londoners. And as we have all heard Boris Johnson repeatedly say himself, the democratic will of the people must be respected and it is not for politicians to frustrate it.”

The Residential Landlords Association (RLA) and National Landlords Association (NLA) have taken the stance that rent controls would harm tenants rather than help them. John Stewart, policy manager for the RLA, and Chris Norris, policy director for the NLA said: 

“Rent controls might appear attractive to those already renting but they would be a disaster for anyone looking for somewhere to rent. 

“All they would achieve, as history and experience elsewhere tells us, is to drive landlords out of the market exacerbating an already serious shortage of homes available. 

“Instead of putting out simplistic and superficially appealing proposals in attempt to win votes, the Mayor should focus on boosting the supply of available housing using the powers he already has. 

“Only then will he make any discernible impact on improving the affordability of housing across the capital.”

But there are many who believe that this argument doesn’t hold weight, pointing to major cities such as Berlin and New York City where tighter rent controls have been shown to be effective. 

The free market dictates that where there is demand, there will always be an enterprising business or individual willing to supply. In effect, rent controls could simply drive out landlords whose business models are unable to adapt, strengthening the market overall.

Caitlin Wilkinson, a policy manager at the campaign group Generation Rent, said: 

“London is one of the most expensive cities to be a renter on the planet. Soaring rents mean the basic necessity of a secure, safe home is out of reach for too many people. Londoners are being priced out of the neighbourhoods they grew up in or forced to leave the city altogether.”

Expectations for changes to the private rental sector in 2020

Published On: January 3, 2020 at 10:28 am

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changes to the private rental sector in 2020

As we enter a new year (and a new decade!), specialist landlord insurance provider Just Landlords has collated a list of the biggest changes it expects to see for the private rental sector (PRS).

Here’s a summary of what is likely to be just around the corner for landlords, letting agents and tenants:

  1. Section 21 – Abolishing this as an option for landlords looking to evict their tenants will mean big reforms to the Housing Act.
  2. EPC law – As of 1st April, landlords will need to ensure the properties of all private tenancy lets have an Energy Performance Certificate rating of E or higher.
  3. Grenfell Tower – All building types are under scrutiny, including those in the PRS, to make sure we’re doing all we can to avoid such a devastating event happening again.
  4. Rent controls – There has been a mixed reaction to this suggestion, so we’ll see if it comes up again in 2020.
  5. Mandatory three-year tenancies – The initial proposal was not well-received, but will we hear more on the matter? It has to be said that some would benefit from the option of a three-year contract.
  6. Rogue landlord database – Will tenants and prospective tenants finally be able to access this database to help avoid falling victim to rogue landlords?
  7. Landlord taxes – Already an issue driving many from the market, will our current Conservative government lessen the burden or increase it?
  8. Brexit – Are you as fed up with this portmanteau as we are? We’re Brired of Brearing about it… The official deadline is 31st January, so 2020 will be the first year we feel the effects of whatever decision is made.
  9.  Lifetime Rental Deposits – This one could really make a difference to the ease of renting for all involved. We hope the Government turns its attention to this sooner rather than later!

Em Morley, spokesperson for Just Landlords, comments: “We say these are our expectations, rather than predictions, as this is the least we’re expecting from the Government and local authorities.

“Progress is vital for the sector, as it’s about more than the businesses of landlords and letting agents. It’s also about the supply of safe, comfortable and affordable housing needed in the UK.”

Read Just Landlords’ full article on their blog.

New statistics show rent controls in London would be a mistake

Published On: November 14, 2019 at 10:26 am

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rent controls

Earlier this year, the Mayor of London proposed to introduced rent controls in the UK’s capital. Looking at fresh data released yesterday, it seems that this plan may have already had a negative impact on the sector.

The latest information from the Office for National Statistics (ONS) shows that, in the 12 months to October 2019, private rental sector (PRS) rents in the capital have increased by an average of 0.9%. This is lower than inflation, which was 1.5% as measured by CPI and 2.1% as measured by RPI over the same period.

The Residential Landlords Association (RLA) has shared its worries about the rent control proposal. It has commented that this suggested change might have actually led to tenants paying more if rent levels had been linked to inflation.

Speaking recently to a committee of MPs, the Housing Secretary, Robert Jenrick, warned that he was “not in favour of rent controls”. He argued that they have “proven to be very negative for both landlords and tenants in the past, and I do not want to see any move in that direction.”

Research by the RLA has also highlighted that rent controls in other parts of the world have already proven to be unsuccessful. They led to a lower standard of housing and less choice for tenants.

David Smith, Policy Director for the RLA, has commented: “Today’s figures show how absurd proposals for rent controls are. Rents in London are falling in real terms yet the Mayor is failing to acknowledge this.

“If he wants to make renting cheaper it would be better to work constructively with good landlords to provide the new homes to rent the capital desperately needs. Without this, supply will fall, rents will go up, and tenants will have even less choice about where they live.”