Longer read: Mayor of London announces plans to cap rent and bring in controls but Redbridge landlords call proposals 'fanatical' and 'dogmatic nonsense'
PUBLISHED: 10:36 23 July 2019 | UPDATED: 10:36 23 July 2019
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The Mayor of London's plans to bring in rent control across the capital has been called "dogmatic nonsense" by Redbridge Landlords Form.
Sadiq Khan published a report setting out how the private rented sector in London should be transformed to give renters open-ended tenancies and to create powers to bring rents down.
The report sets out a detailed blueprint of how tenancy laws should be overhauled and what new powers the mayor wants from government to enable City Hall to introduce rent control.
Under the proposals, the mayor would establish a new London Private Rent Commission, with renters on its board, to implement and enforce measures to reduce rents and keep them at lower levels.
"It is high time for private renting in London to be transformed - Londoners need fundamental change that is long overdue," Mr Khan said.
"Unlike other mayors around the world, I have no powers over the private rented sector. That's why this landmark report sets out a detailed blueprint of what the government must do to overhaul tenancy laws, and what powers City Hall needs from them to bring rents down.
"We have made important progress over the past three years by working closely with councils and renters - from 'naming and shaming' rogue landlords and banning letting agents fees for tenants, to being part of the successful campaign to scrap Section 21.
"But now we need the government to play their part by making tenancy laws fit for purpose, and by enabling us to bring in the rent control Londoners so urgently need."
The report also outlines recommendations, developed with a wide range of stakeholders, which set out how the law on tenancies should be overhauled.
These include introducing open-ended tenancies, ending "no-fault" evictions by removing Section 21, scrapping break clauses in tenancy agreements and giving all renters and landlords access to better support and dispute resolution services.
In addition, it also details increasing the landlord-to-tenant notice periods to four months.
However, Richard Blanco, chairman of Redbridge Landlords Forum, said the strategy is "ill-informed, fantastical and fails to understand the business of renting".
"Rents rose by 0.9per cent in London in the past 12 months, well below inflation which stands at 1.9pc and more importantly well below wage inflation which stands at 3pc," he said.
"The problem with rising rents was felt most acutely between 2012 and 2016 when wages were rising much more slowly than inflation. The economy and rental market are now rebalancing.
"Politicians have failed all of us by allowing social housing to decline from 32pc to 17pc and not encouraging enough house building.
"It's the lack of housing that has forced rents up, politicians simply use landlords as a scapegoat."
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Mr Blanco said the private rented sector forms a "vital 26pc of homes in London" and rent controls will mean that landlords cannot cover their costs and will force them to sell.
"A large sell-off could cause negative equity for many homeowners and local authorities will have to put even more families into expensive temporary housing," he added.
"The private rented sector fell to 7pc of housing after rent controls in the 1970s, it's a policy that has been panned by most economists.
"The mayor's strategy would simply create another kind of housing crisis."
The chairman believes if no-fault eviction was abolished it would drive many landlords out of the market.
He explained that the vast majority of tenancies are ended by the tenant and when landlords halt the tenancy, it is usually after arrears when a relationship has broken down.
He said the alternative court process is slow and cumbersome and "wholly inadequate".
"Comparing London to rental markets in other countries is nonsense," he said.
"In Berlin, tenants rent shells and install their own kitchens and bathrooms.
"Most landlords are institutional investors there and the London market is structured completely differently.
"The mayor has failed to address some of the real problems facing London renters. Boroughs like Redbridge restrict landlords from letting properties to sharers, preventing tenants from accessing cheaper housing options.
"Unjoined up policy-making means we are hamstrung by overlapping and burdensome regulation.
"We need action to bring more empty homes back into use and a greater emphasis on the promotion of good practice through landlord accreditation.
"Landlords in Redbridge are tired of dogmatic nonsense from the mayor who is simply chasing votes. Who wouldn't want cheaper rent?
"The reality is that the housing market is infinitely more complex than he portrays and it is his policy failings that have created the housing crisis.
"The vast majority of landlords are hard-working people who aim to provide good homes for their customers. We have been under consistent attack from the government through punitive tax changes and many feel we are simply being scapegoated for successive government failure to replace social housing that was sold off."