Private renting and private rents excite fierce passions in London. It’s not hard to see why: rents are high and rising, too many landlords are amateurs or crooks and loads of tenants would sooner not be in the sector at all. But proposals for more regulation of the private rented sector (PRS) produce strong reactions too: it will hurt the wrong people, it will shrink the market, it will make us like Venezuela. And so on.
This polarisation was evident when the London Assembly’s housing committee gathered material for its investigation into the PRS last year. Expert guests gave evidence, research findings were assessed and the politicians then failed to reach full agreement about what measures such as restricting rent rises and providing longer tenancies would achieve. It is no big surprise that the committee’s two Conservatives have declined to support the resulting report.
The strength of conflicting feelings on this issue is underlined by the majority report’s considered tone and the caution of its recommendations. These include setting up a London-wide register of landlords to help the city’s boroughs better enforce existing legislation, looking at ways to inject more transparency into the PRS market and championing new institutional landlords and investors who are already offering longer tenancies and “predictable” rent rises, especially to the growing number of families they house.
The others confirm how powerless London mayors are in this area of housing policy: securing a new planning use class for build-to-let, getting the freeze on local housing allowance levels reviewed and piloting “appropriate rent stabilisation measures in London” would all require asking the government nicely and hoping for the best. Given Tory convictions about such things, statutory rent control – or stabilisation or regulation – of even a light touch kind is a long, long way from happening.
This doesn’t perturb those two Conservatives, whose brief minority report contends that the evidence showed “no meaningful benefits on rents, security of tenure or property standards,” would result from the measures proposed, which would instead “restrict the supply of new homes and the choices available to tenants.” In their view: “The best way to tackle all of these issues is to do everything possible to promote new supply, not to put obstacles in its way.”
You may disagree. But in all of this there is some common ground. Most people recognise that the rapid growth in London’s PRS this century, with something like 30% of the capital’s households now accommodated there, is set to continue and that the whole renting culture needs to mature and better meet a widening range of different needs. It also widely held that any added regulation would work best if it served the interests of tenants and landlords alike whilst also fostering expansion of the sector.
For sceptics, such a combination is implausible. But it might not be pie in the sky. At the recent PRS Forum on build-to-let a debate took place between James Murray, who is Islington’s cabinet member for housing and a policy adviser to Labour mayoral candidate Sadiq Khan, and Allan Collett of M&G Real Estate, who is one of the experts the housing committee heard from. Murray is for more regulation while Collett is against it. But Collett said that what divided them was very small while they agreed on a great deal more. And, in the end, there wasn’t much Murray would like the sector to embrace that horrified the assembled delegates.
Informal votes showed strong backing for Collett’s preference for the status quo with the present rules on standards better enforced. Yet Murray’s proposals for London-wide landlord licensing and a right to longer tenancies received just a good a response, while there was also respectable support for more predictable rent rises within them. The question, perhaps, is less about what is desirable but the most effective way to get it. Given that the government isn’t going to help, the range of possible answers looks limited. Might they, even so, be effective?