Monday, 5 October 2015

The need for rent controls

If tenants had the model of rent control advocated by the majority of the London Assembly in the two years since the Mayor was re-elected, they could have saved a total of £2,796 in rental payments.

Darren Johnson, Assembly Member for Housing, has led calls to replace Assured Shorthold Tenancies with a five year tenancy agreement, during which time annual rent increases would be capped to provide a fair compromise between landlords and tenants.

Andrea Carey-Fuller, Lewisham Green Party housing spokesperson, writes more about the issue:

The statistics provide evidential proof of the urgent need for the rent controls being put forward by the majority of London Assembly members:

According to Rentals website Rentonomy 90% of central London is now even out of the reach of graduates who are prepared to rent just a room. So, for an average graduate earning £22,400 per year, an unaffordable room costs over £129 a week or £560 per month.

According to the GLA's own figures, 59% of the private rented sector is comprised of young adults aged between 16 and 34 (twice as high as the proportion of this age group in London's overall population (29%)).

The net effect of the lack of affordable housing is a direct increase in the waiting lists of people on the housing register. Again according to the GLA's own figures there are "over 350,000 households on housing waiting lists in London."

The Homelet Rental Index (April 2014 edition) states that "Greater London saw monthly and annual increases of 2.4% (March - April 2014) and 9.4% (April 2013-April 2014) respectively to £1,348 per month - the highest amount on record." This report goes on to state "it is currently 96.2% more expensive to rent a home in the capital than the rest of the UK... and tenants in Greater London are currently paying rents almost double that the rest of the UK."

Added to this is the fact that for too long the Capital has been and continues to be mis-used by the Mayor of London to allure foreign investors into the housing market. These investors have bought into new developments, often off-plan, forcing most Londoners (excepting the rich ones) out of the House Buying Market, which has driven up demand for rental housing, which has lead to the insanely high costs of private renting in London (putting most people including graduates effectively out of the private rented market). Additionally, a handful of powerful developers are reaping rich rewards from housing developments profits at the expense of affordable rents. The Convoy's Wharf development for example will only provide 15% (or just over 500 affordable properties) within a development of 3,500 properties. The remaining 85% will provide untold riches for the Developers who will gain also from the commercial leases as part of this development. A fair and just amount would be at least 33% - 40% of affordable housing which would still leave ample profit for the developers.

It is all about greed.

It doesn't have to be this way. There is nothing wrong with developers and landlords making a fair amount of profit; no-one is talking about taking away incentives for the private rental market. The introduction of fair and proportionate measures such as the security of five year tenancy agreements, with capped rent increases which protect the rights of the tenants whilst providing a reasonable rate of return for the landlord, would be a fair and proportionate way of satisfying the needs of all parties.

This is the 21st Century, and as an advanced, humane decent society, I think all of us would agree that everyone has a right to a roof over their heads. If graduates are struggling to afford to even rent a room in a house how are people and families living on low-incomes, or relying on benefits able to afford even the most basic housing? The answer is they aren't which is why we have over 350,000 people 'falling back on local authority housing' because there is no viable option to do otherwise until the rental market costs are established at sensible levels and rental controls are put in place to ensure that the private rental market is not able to continue to spiral out of control.

You can find Darren Johnson's Living Rent calculator here:

Andrea Carey Fuller is a Green Left supporter

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