Happy Rental Freedom Day! If you’re a Londoner on an average income paying the average rent, today’s the day you’ve earned enough to pay off your annual rental payments.
The date falls over a month after the equivalent day for homeowners. London also has the dubious distinction of reaching Rental Freedom Day almost two months later than the rest of the country, with the average UK renter celebrating it on the 12th May.
The median monthly rent in London is now £1,300 according to the Valuation Office Agency, with double digit annual rent inflation not uncommon. Many private renters are paying eye-watering sums for the privilege of living in poor quality properties with bad landlords. Thirty per cent of privately rented homes in London fail the Decent Homes Standard, and complaints against landlords are up 47 per cent since 2008.
London’s private rented sector has almost doubled in size since 1991. The proportion of private renters with children increased from 19 per cent to 29 per cent between 2001 and 2011. Yet the laws governing how the sector is run have barely changed since rent controls were abolished in 1989.
Ed Miliband has put forward sensible proposals which will create longer, three year tenancies as standard, with a ceiling on annual rent increases within those contracts. This does not, as some have suggested, represent a return to the kind of rent controls that existed in Britain pre-1989. Anyone who suggests that is either ignorant or being wilfully dishonest. What his proposals represent are a shift to the kind of second generation rent regulation seen in most of our European neighbours.
But high rent is not the only cost facing those living in the private rented sector. Lettings agency fees hit tenants with big upfront costs before they even sign a tenancy agreement. Foxtons charge new tenants £420 as an “administration fee”. Felicity J Lord charge £165 per property for a “tenancy agreement”, £65 per person “for reference checks”, a £60 “admin fee” and a £120 “check-in fee”. A constituent that contacted me from the London Borough of Camden was asked by a letting agent to pay £300 just to be added to a tenancy agreement. He was told that this sum would not be refunded even if his references didn’t come through.
Labour has proposed banning letting agents from charging upfront fees to tenants. This is the situation in Scotland, where lettings agents can only charge fees to landlords. When I challenged Boris Johnson to support this at Mayor’s Question Time on Wednesday he refused to do so, despite agreeing that the kind of fees charged by Foxtons are unacceptable. Once again, the Mayor has chosen to put his faith blindly in the free market rather than support sensible regulation to protect tenants.
Tenancy reform would help to create a more stable private rented sector for tenants, and make the rental market more affordable. But ultimately the real solution to high rents is to build more homes. Despite the Mayor’s boasts about his record on housing, London is only building a third of the 62,000 homes we need annually in order to solve our housing crisis. Meanwhile, leaked documents from DCLG show civil servants warning ministers that housebuilding nationally will drop 4 per cent this year despite already being at the lowest peacetime level since the 1920s.
Without reform of the private rented sector, and without a major housebuilding programme, Londoners will be celebrating Rental Freedom Day even later in the coming years.
Tom Copley AM is a Labour London Assembly member
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