London’s private rented sector is ‘out of control’ and needs a tenants’ union backed by mayoral decree, campaigners claim.
The London Housing Campaign (LHC) says Sadiq Khan’s ‘vision’ for housing in London has to focus on limiting rises and increasing affordability.
LHC spokesperson Tom King said: “It’s time for us to take control of London’s rents.
“The mayor’s proposals for more secure tenancies are an important step forward, but are meaningless if landlords are still free to impose sky-high rent increases that force Londoners out of their homes.
“The mayor’s housing strategy must be bold and ambitious and deal with the affordability challenge that is at the heart of London’s housing crisis head-on – rent controls are a vital tool in making London’s homes affordable again.”
LHC is calling for rent increases to be capped, between and within tenancies, in line with increases in wages and cost of living.
A tenants’ union would address what LHC identifies as an ‘enormous power imbalance’ between tenants and landlords across the capital.
Where private renters need a ‘louder voice and greater power’, the mayor’s housing strategy should account for funding and support to ensure that the union is able to be a viable and legitimate voice for London’s private tenants.
In addition to consulting on rent increases, LHC sees the mayor engaging with tenants’ union on all new housing policies; ensuring that the union’s views are reflected in policy development and ensuring that any objections to proposals are taken seriously.
A union based on the collective experience and knowledge of the renters it represents, will, says LHC, be an important forum in which solutions to the city’s housing crisis can be developed.
The union is also seen as working closely with the capital’s boroughs in the development and implementation of their housing policies.
Since 2010, rents in London have risen five times faster than wages and homelessness has doubled.
For many, the neighbourhoods where they grew up and the homes where they live and are raising their families are increasingly becoming unaffordable.
There is a recognised issue with key workers – cleaners, nurses, teachers, firefighters – priced out of the capital.
Across the city, private tenants spend on average half (53.5%) of their wages on rent and, in some boroughs, the monthly cost of a two-bedroom home is more than 60% of average wages for the area.
There are 13 boroughs where rents have increased by more than a third since 2011.
For London as a whole, the rent of a two-bedroom home has increased by 26% since 2011 while inflation has been around 12% over the same period and wages in London have grown by only 6%.
The Trust for London says that housing costs are key driver of poverty in the capital.
A decade ago, private renters were the least likely to be in poverty, but now there are 860,000 more people living in poverty in private rented housing than there are in social rented or owner-occupied homes.
Around half of the children living in poverty in London are in privately rented homes.
The crisis of affordability means that 37% of Londoners say they are very or fairly concerned about their ability to meet the costs of housing and a similar number (40%) are stressed about housing costs.
Crisis reports that homelessness in London has increased from 40,500 in 2011 to 63,300 in 2016 and is forecast to reach 236,600 by 2041, with the capital seeing a much greater increase than other regions and accounting for more than half of the homeless population.
Landlords in the UK are estimated to make £77.7bn each year in rent and capital gains and the taxpayer pays landlords £26.7bn in tax breaks and housing benefit.
To the LHC this public subsidy is greater than government spending on overseas aid, job seekers allowance, the Department for Culture, Media and Sport and the Affordable Homes Programme combined.
The LHC says the stats make it clear the capital’s private rented sector is out of control.
A solution is seen in the mayor setting a maximum level of rent rises each year with explicit regard to affordability in consultation with a newly-established private tenants’ union.
Rather than linking rent rises simply to inflation, LHC wants a London Rental Affordability Index established as a ‘sophisticated measure’ of affordability that takes account of increases or decreases in real wages, benefit changes and uprating, and increases in the cost of living.
But in outlining a future, LHC says current rent levels in the capital are already too high and need a ‘clear intent’ to freeze so they can stabilise relative to earnings and to help bring housing costs back to a more affordable level.
For properties entering the private rental market, the mayor, in conjunction with local boroughs, should, says LHC, be responsible for setting the maximum initial rent based on an assessment of the home’s value.
On this the campaign cites examples in a number of countries and cities across Europe that operate such a mechanism for determining new rental properties’ value.
Specifically, the system used in the Netherlands awards points to properties based on the size of the home, the number of rooms with central heating, the energy efficiency level, the standard of kitchen and bathroom amenities, access to, and the size of, a garden, balcony or terrace, and the amenities of the local area.
The greater the number of points awarded to a property, the higher the initial rent that can be charged is.
LHC accepts that this would require the mayor’s office to work closely with the London boroughs to ensure that a new rent setting infrastructure can be quickly established and operate in a consistent manner across the capital.
Moreover, where there has been a significant change to the quality and value of the property, either through improvements or a lack thereof, both landlords and tenants must have the right to request an independent reassessment of the property’s rental value.