London Assembly calls for rental reform – The London Assembly is proposing significant changes to the way the private rented sector is regulated and managed in London.
The Assembly, which works alongside the Mayor of London, wants to see rents controlled in the capital, longer tenancies and registration of landlords. Assembly member Len Duvall said that reform is needed to ensure that the capital’s housing conditions do not return to ‘Dickensian squalor’.
A changing market
With the percentage of people renting from private landlords growing, politicians are starting to pay the sector more attention. Families in particular are likely to be seen as needing more protection from rent rises and eviction. A shortage of council and housing association properties means the state now relies heavily on the private sector for social housing.
All these things mean that pressure from politicians on landlords is likely to increase. Landlord registration schemes, for example, are increasingly common. London’s Newham Council introduced the first compulsory registration scheme in England at the beginning of this year. Scotland has had compulsory registration in place since 2006.
The London proposals
The London Assembly’s proposals are a response to the increasing importance of the private rented sector. With more people relying on the sector and rents rising, the Assembly has seen an increase in complaints from tenants about their landlords.
The Assembly would like to see rents ‘stabilised’, after rises of 9% a year in the capital. Any scheme to control rents would be highly controversial. A rent control scheme could make investment in housing less attractive to landlords. In the long-term, that could lead to housing shortages and poorer housing stock. Much would depend on how strict the controls were.
They would like to see longer tenancies for previously homeless people and those with children. This would help make families more secure, but it could mean that landlords are unwilling to let to them.
All landlords would need to register in order to let property. This could help drive out rogue landlords, but it could simply drive them underground.
The Assembly would also like to see low-cost loans available to landlords to help them improve their properties. This would be welcome, and would benefit both landlords and tenants.
Cause for concern?
If you are a landlord in London, should you be worried about these proposals? And should landlords elsewhere be concerned about the effects of increased regulation?
It is likely that landlords will face increased costs the more regulation increases. As ever, our advice is to make sure there is some space in your budget for unexpected costs, as well as predictable costs such as mortgage payments and landlords insurance.
On the up-side, regulation could help tenants to see landlords as professionals, and help drive out poor landlords. Either way, greater regulation of the private rented sector is probably inevitable as it grows.