Controversy has been ignited after Labour’s mayoral hopeful Ken Livingstone declared all-out war on letting agents and rogue landlords in London, whilst calling for rent caps.
Critics said his plans to intervene in the market, and cut rents to no more than one-third of a tenant’s wage, would result in landlords having to lower rents, leaving their yields in tatters and acting as a deterrent to further buy-to-let investment.
If elected in May, Livingstone will establish a London-wide, not-for-profit lettings agency, paid for by the public purse, and to be run by the Mayor’s office. Although handful of local authorities do run lettings agencies, none begins to be on the scale proposed by Livingstone. There is speculation that other large metropolitan authorities could decide on a similar path.
Castigating agents across London, he called for rent controls and widespread intervention in the sector, including licensing.
Speaking to the Institute for Policy Research, Livingstone said: “We must actually intervene into the private rented sector.”
Livingstone said that no tenant in the private rented sector should have to pay more than one third of their wage in rent.
He went on: “What London needs is a London-wide non-profit lettings agency. So I can announce today that I will work with other stakeholders to establish one that can start to make a change in the private rented sector for the better.
“It will put good tenants in touch with good landlords across the spectrum of private renting so that both can benefit from security of tenure and reduce the costs of letting.”
He said the new agency would get to grips with the problem of rogue landlords and “tackle a series of issues on accreditation, inspection and enforcement, licensing and energy efficiency, as well as tenants’ deposits protection”.
He went on: “Through this work we will challenge the scandal of rip-off agency fees, horrific standards and the daily experience of disputes over deposits in the private rented sector.”
He vowed: “In the coming weeks I will set out more detail of how this new arm of the Mayor’s role will work.”
Meanwhile, incumbent London mayor Boris Johnson hit back at the Livingstone proposals – but his own agenda is to license all landlords. See next story.
See also today’s blog by David Lawrenson.
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Comments
As CASSIO says, this is just a soundbite. Ken cannot determine rents in the private sector any more than he can set prices in shops. What on earth have lettings agencies to do with rents; landlords set these, and the rogues generally have the lowest. A County Hall agency would still have to get stock from private landlords.
This silly old burned-out Marxist might have been elected 10 years ago, but he would not get close today.
If he could think straight, his argument should be against the £400pw cap on LHA in the London BRMA. Or he should campaign for punitive CT on long-term emptys, like Channel 4 are doing. Or on loosening change-of-use planning. Or releasing green-belt land. Or helping landlords costs (make tenant damage criminal) which in turn would lower rents.
Typical Labour, attack the private sector and create more civil servants so they can whinge about actually having to do some work and pensions etc. Profit is a dirty word in the Labour camp, wouldn't it be sooooo easy to run a business if you had a bottomless pit of tax payers money to work with!
Do not guys, Ken doesn't know what he's talking about. I guess some of hes campaigner brought to him what are the most popular slogan at the moment.clearly he didn't learn why the voter kirked him out the last time.
Apart from few Rogue Agencies, Rogues Landlords and Rogue Tenants, the renting market suffer from structural and economic matter and Ken or any one how try to regulate thinking that it will resolve the shortage will burn themselves.
The mayor can open as many agencies as possible it will simply no be enough even to house people who are already in the council housing waiting list
the Councils themselves would love sending the queue to the somebody else, so, the Mayor will not be short of people to house. And if the Mayor concentrate on attacking private Landlords the queue will only get bigger.
No other "stakeholder" would accept the Mayor idea of spending most or all of the his budget on such populist item.
Ken tries to beat and control the market in his favour and good for his political life while wasting public money and ripping off private landlords and push up rent and force tenants out of London.
So, let the market beat Ken. Just DO NOT vote him!
I thought we used to have something like that before...called council houses. Stop selling them off and use them to provide not for profit housing!
Councils around the country are already trying to bring in Selective Licensing. Our council is claiming it will help with anti-social behaviour problems but its really just a stealth tax on landlords. Why are landlords responsible for the behaviour of their tenants? We're not their parents. Landlords - register your objections to Selective Licensing before your council tries to impose it on your area. www.facebook.com\NoSelectiveLicensing.
er mortgages are approximately 40% of the average take home pay so why a third for rent.
Lower yields will result in lower demand landlords are the only ones buying at the moment as there is a huge rental demand.
Instead of fighting the private sector perhaps the government should be trying to encourage by offering cheap development loans to turn run down properties into habital / lettable ones. But that would be too much like a decent idea