Landlords told to brace themselves for non-AST tenancies

Longer tenancies, accreditation of landlords, and incentives for landlords to use agents that are members of a trade body are among new proposals being made by the London Assembly. The ideas are set to be taken up by other authorities.

The new report, ‘Bleak House – Improving London’s Private Rented Housing’, is also calling for landlords to be given tax incentives to improve their housing stock, thought to amount to some 850,000 homes across the capital and which are lived in by one in four London households.

The report, from the all-party housing and planning committee, says that one-third of the properties are below standard, and estimates that one in three private landlords is a ‘rogue’ operator.

It estimates that over £1bn is needed as investment into the sector.

The report calls for the Mayor of London to develop a kitemark or accreditation ‘badge’ which sets out minimum standards of private rental housing, together with a publicity campaign to raise awareness of the scheme among tenants. It suggests that there should be standards in the private rented sector that are similar to the decent homes standard for social housing.

The report urges councils to only place tenants in properties belonging to landlords who meet the standards. It also calls for agents to ensure that the properties they deal with also come up to the standards.

Acknowledging that rogue landlords will never be swayed by any amount of incentives or encouragement, the report calls for the Mayor to consider greater use of selective licensing. Licensing requirements could be relaxed, it suggests, where the properties are managed by an accredited agent.

But it is the call for longer tenancies which, if adopted, could have the greatest impact on the industry, with Assured Shorthold Tenancies a strong focus of the report.

It criticises ASTs as not offering tenants sufficient security, with landlords having the right to give tenants two months’ notice to quit after four months, without needing to give a reason.

It says families, particularly those with school-age children, need longer security of tenure and it calls on the Mayor to lobby the Government for changes, including giving tenants protection from ‘retaliatory eviction’, possibly via the Localism Act.

The report says £400m is paid to private landlords in London annually by local authorities using the sector to house homeless people.

Jenny Jones, a Green Party member who is chair of the Assembly’s planning and housing committee, said: “In many ways, London’s private rented sector can be regarded as a success story. The problem lies in the fact that private rented housing is increasingly acting as social housing, but without any of the standards and security.

“Families need certainty about where they will be living so that they can settle their children in schools and forge community links. In exchange for the hundreds of millions of pounds of public money they are receiving, private landlords must be compelled to provide certainty in the form of longer tenancies.”

Last week, both mayoral candidates, Ken Livingstone and the incumbent Boris Johnson, stirred up the debate on the private rented sector.

Livingstone will set up a non-profit lettings agency, covering the whole of London, if elected, and would impose a rent cap of no more than one-third of the tenant’s wage.

Johnson confirmed his own plans to accredit private landlords and the publication of a rents map to give tenants information about rents in their area.

The National Landlords Association, which provided evidence for the report, welcomed its publication.

Richard Lambert, chief executive, said: “We are pleased that the Greater London Assembly has recognised the importance of accrediting landlords as a way of raising standards within the sector and look forward to continuing to work with the GLA and local authorities to promote the benefits of becoming accredited.
 
“We also welcome the fact that the Committee recognises that tax should be part of the solution to encourage investment in the sector, recognising landlords in a similar way to other small or medium-sized businesses.”

At a glance:

    •    The Mayor, in conjunction with London boroughs and the private rented sector, should develop a ‘kitemark’ for London’s private rented housing in the form of an ‘accreditation badge.

    •    The Government should explore tax incentives for private landlords to encourage increased investment in property standards and longer tenancy model.

    •    A greater emphasis for the sector in the Mayor’s Housing Strategy.