Reading Boris’ plan for the private rented sector is certainly an eye-opener.
On one hand it’s a deserved indictment of London’s fastest growing housing tenure: a virtually lawless sector consisting of unregulated letting agents, endemic health and safety problems, little awareness by landlords of their obligations, poor enforcement by under-resourced local authorities, pathetically low levels of landlord licensing or accreditation, and acute overcrowding (euphemistically termed “making best use of London’s existing housing stock”). It also flags the inherent tensions and problems with the sector, such as the fact that insecurity for tenants is actually good for letting agents and landlords.
Unfortunately, there are some pretty fundamental omissions, such as recognition of the way in which spiralling rents have been inflating the housing benefit bill to the advantage of landlords not tenants, and the difficulties of private tenant organising (which the proposals claim to want to support) when few tenants share the same landlord, have little chance of finding each other, and risk retaliatory eviction if they do try to organise, as the Cally Cows discovered to their cost last year.
Also unacknowledged is the inability of the sector to provide decent housing at anything like a reasonable rent – something that should be obvious with statements such as “properties that require the largest amount of investment are also the ones that generate the lowest rental yields” while large investors “must allow for much higher management and repair costs in order to justify higher rents”. There’s clearly a pretty fundamental problem when London rents, which for the average two-bedroom home currently take up 47 per cent of median income, are way about the level considered affordable (35 per cent), yet the report claims “one of the key factors behind poor conditions in London’s private rented sector (PRS) is that rental yields are too limited to finance capital expenditure on any significant scale”.
Then there’s the misrepresentations, such as the private rented sector being an option (the Hills review found that only eight per cent of private tenants would stay in the sector if they had a choice) or the main problem being rogue landlords (a myth perpetuated by big housing charities; in reality, the vast majority of tenants have had problems with their landlord, whether it be harassment, getting repairs done, or massive rent increases).
Add the tenuous argument about the private rented sector’s contribution to London’s housing supply (the report recognises that 80 per cent of PRS supply has come from conversion of other housing tenures, i.e. not increased overall housing supply at all; the fact that the PRS accounts for two-thirds of new market homes in London reflect how little housing for its owners to actually live in is being built) and jobs (when clearly construction of any type of housing would create employment and homes, regardless of the tenure it was to become on completion) and the picture is becoming seriously distorted.
But what stands out most blatantly is the cosy relationship between Boris and the industry, and his strategy’s ideological opposition to any kind of regulation, despite the evident problems of poor conditions and high rents caused by deregulation. The tenuous argument that regulation would reduce supply (one can only assume it would cause existing rental properties to vanish into thin air) and increase costs (the Mayor has clearly never visited countries like France or Germany where rent increases are controlled) is of course unsubstantiated.
The result is “commitments” such as promises to “work with industry”, and “support” and “promote” a voluntary standard for voluntary accreditation schemes (yes, you read that right – the Mayor won’t actually be accrediting anyone himself) which barely go beyond existing legal requirements, and create a conflict of interest since competing accreditors will inevitably look to make their schemes as undemanding as possible to join so as to attract paying landlords and letting agents.
Unfortunately, voluntary accreditation schemes aren’t going to make a blind bit of difference. When the London Borough of Newham launched a voluntary scheme in 2011, only two per cent of landlords joined. As the Mayor’s own report shows, the existing accreditation schemes include less than 12,000 landlords – a miniscule fraction of the hundreds of thousands renting out property in London.
In fact, voluntary accreditation schemes are likely to exacerbate housing inequalities, since only landlords at the top end of the market are likely to go the extra mile to become accredited, benefitting wealthier tenants who can afford their higher rents, while those renting the cheapest properties are least likely to have an accredited landlord or see any improvement in standards.
Add to the fact that it is difficult enough for tenants to find a decent property without thinking about whether their landlord has a logo to say they probably won’t break the poorly-enforced law, and the inevitable difficulties in making sure that landlords comply with the schemes or are removed if they don’t, and you can pretty much forget about seeing any improvements.
Quite simply, BoJo’s commitment to private tenants isn’t worth the paper it’s written on. Housing is a basic human need and right, not a luxury for consumers that can afford it. Our dysfunctional housing system is in urgent need of a major overhaul, not a license to continue business as usual. We need tough regulation to protect tenants, and public money invested in decent, genuinely affordable, publicly-owned housing stock rather than lining the pockets of unscrupulous landlords. Just don’t hold your breath with the current mayor.