Accreditation
The Mayor believes that now is not the time for further regulation of the PRS. Any further changes would bring instability and costs to the sector at a time when new investment is what is required. The case for further regulation is weaker still when the poor use and enforcement of existing legislation is taken into account. The Mayor will continue to promote the better use of existing legislation and enforcement powers to deal with the worst standards in the sector.
The Mayor remains committed to significantly expanding the number of accredited landlords and agents in London. The single badge of accreditation will be key to improving consumer awareness of accreditation and promoting the London Rental Standard.
It is important that these proposals are delivered in a way that doesn’t compromise on standards, is enforceable and sustainable, and can include all accreditation schemes. The Mayor has set out a plan to deliver the London Rental Standard and a single badge of accreditation, whilst also supporting a significant expansion in accreditation. In summary:
- the GLA and the London Landlord Accreditation Scheme (LLAS) will work together to deliver the London Rental Standard and will ‘license’ other compliant schemes to use the single badge of accreditation
- significant investment in LLAS will ensure that it is capable of expanding its membership and better targeting its services at a wider variety of landlords
- the Mayor will support a major public awareness campaign, lasting at least one year, which will be aimed at promoting accreditation to tenants, landlords and agents
- the boroughs will be asked to continue their support for accreditation and to explore how they can encourage local landlords and agents to sign up to the London Rental Standard – this includes offering incentives and working with landlords with whom they already have a relationship.
New housing supply
The single biggest housing challenge facing London is increasing the supply of new homes. The private rented sector and buy-to-let landlords in particular, are central to dealing with this challenge. Around two thirds of new market housing supply is private rented housing, demonstrating the scale of investment by landlords in the capital’s housing stock. In the future, the Mayor wants to see even more new supply of good quality private rental homes, to meet public demand and reduce price volatility. The £1 billion Build to Rent Fund was launched in January 2013 and is designed to promote institutional investment, by long term professional landlords, in our private rented sector. The GLA is working with government to ensure that as much of this investment as possible comes to the capital.
There is very little evidence that landlords keep a large number of their homes empty – though the wider issue of empty homes is, of course, very important.
Letting agents
The Housing Covenant also applies to letting agents; changes through this consultation will include letting agents and management agents being subject to the same ‘fit and proper person’ tests as landlords. It committed to ‘explore proposals to encourage competition and transparency in the letting agent market’, and consequently the Mayor supported a campaign to ensure the letting agents are forced to join a consumer redress scheme. This has now been adopted by government and is being implemented.
The estimated average cost of accessing the PRS in London is now £2,166, consisting of a deposit, upfront rent and various letting agent and landlord administrative charges. The Housing Covenant identifies this as a major barrier to entering the private rented sector and moving within it, worsened by a lack of information for both tenants and landlords about what all the charges are for. The London Rental Standard includes standards related to transparency of fees and charges, collection of rent and the operation of a complaints procedure.
Quality of housing
Promoting standards is a key tenet of the Housing Covenant, with particular emphasis on energy efficiency and preventing the conversion of illegal outhouses into ‘beds in sheds’.
In terms of design issues, the Mayor intends to bring forward GLA-owned and other sites specifically for purpose-built PRS schemes and these schemes will be designed with the needs of renters in mind. We will work with design experts and advisors, including representatives from RIBA, and ensure that additional weighting is given to the design element of bids.
Deposits
The London Rental Standard reiterates the minimum legal standards for the protection of tenants’ deposits. They must be held in a secure deposit protection scheme and tenants must be informed how their money will be kept.
Affordability
The Mayor recognises and is seeking to address the affordability issues facing London’s private tenants, not least through a range of measures to increase housing supply in the capital. However, the Mayor does not support rent controls as an answer to these issues, which are essentially a function of housing supply. Experience of rent controls in the UK points to a smaller, poorer quality tenure and their reintroduction would be disastrous for investment in London’s PRS, which already has some of the lowest yields in the country.
On-going Mayoral policy promoting the London Living Wage across London’s businesses works to ensure that every hard-working Londoner can earn enough to afford a home that meets their needs.
