Another week gone by, lets see what was in the news.
Rent Controls in London?
The Mayor of London, Sadiq Khan has called for powers to impose rent controls in London making it a central plank of his re-election campaign, saying
The case for rent controls is now absolutely undeniable. But Tory ministers have blocked us from introducing our plans for rent controls in London and have simply said no.
“That’s why today I am making the mayoral election on 7th May a referendum on rent controls – showing Londoners that I will stand up for renters. The prime minister will have to give us the powers we need, because if he refuses to do so he will be denying the express democratic will of millions of Londoners. And as we have all heard Boris Johnson repeatedly say, the democratic will of the people must be respected and it is not for politicians to frustrate it.
Other cities are said to be watching this with interest.
However, the landlord and letting agent organisations have warned that rent controls do not work and simply serve to reduce supply. David Cox, Chief Executive, ARLA Propertymark saying
Rent controls do not work; it hits hardest those its designed to help the most, and the Mayor of London has failed to learn the lessons of history.
The last time rent controls existed in this country, the private rented sector (PRS) shrunk to the lowest levels ever recorded.
At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink. In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help, will be forced into the hands of rogue and criminal operators, who may exploit them.
John Stewart, Policy Manager for the Residential Landlords Association, said (of rent controls):
All they would achieve, as history and experience elsewhere tells us, is to drive landlords out of the market exacerbating an already serious shortage of homes available. Instead of putting out simplistic and superficially appealing proposals in an attempt to win votes, the Mayor should focus on boosting the supply of available housing using the powers he already has.
Are there too many homes?
Property Industry Eye cites a report from investment bank Goodbody which has apparently claimed that there is an oversupply of property in England. Although there is an undersupply in London and the east where too few homes were completed over the last three years as the result of a “soft” market.
Using the Ministry of Housing, Communities and Local Government’s own figures, the report says that 589,000 additional homes were required in the three years to 2019, but 667,000 were actually delivered.
As a result of 66% of local planning authorities over-delivering, the report says that new dwelling completions were 13% greater than housing needs in England in the three-year period.
I have not been able to find a link to the report itself. It seems to fly in the face of the accepted view that we are in the middle of a housing crisis.
Client Money Protection Issues
The government has given agents another year to comply with the CMP legislation due to the difficulties many have found in setting up the required bank accounts.
However, MPs have warned the industry that this is their last chance saloon to get on board and that the remaining non-compliant agents should ‘pull their fingers out’.
The problem is that many agents are still struggling to find a bank who will provide them with a pooled account to handle client payment, as the regulations require. Research by Hamilton Fraser recently found that 20% of all agents were not members of a CMP scheme yet.
One of the problems is that banks will not allow agents to set up the special accounts unless they have CMP cover but the agents cannot get CMP cover unless they have the bank account. Another is that many banks are insisting on a separate trust account for each customer rather than allowing one ‘pooled’ account.
Then if the agent finds a bank that will allow them to open the account, the bank will generally expect the agent to transfer all their accounts over – which may not be what the agent wants to do.
Its a mess.
Tenant of ‘Lifestyle Club’ awarded £56,675.91
This is a rather long report from Nearly Legal on the case of Del Rio Sanchez v Simple Properties Management Limited – a claim by a tenant of a ‘Lifestyle Club’ who was illegally evicted.
Its a complex story and a good illustration of Ben’s post here where he describes how criminal landlords use multiple identities to confuse the authorities.
The upshot of the case is that Ms Del Rio Sanchez, the ‘club member’ was found to have been a tenant and awarded £56,675.91 plus costs. However, as the landlord has also been on the wrong end of various other fines I suspect she will be waiting some time to obtain payment – if indeed she is ever paid.
Generation Rent call for the right to check London landlords online
Analysis by Generation Rent has shown that half of London’s boroughs did not fine any landlords for letting out unsafe homes in the past year.
Based on this, Generation Rent is now calling for the next Mayor of London to step up the fight against criminal landlords by letting tenants check online if their home needs and has a licence. Which will allow tenants to bring claims themselves for Rent Repayment Orders.
For example, Southwark, Sutton, Merton and Bromley do not even publish registers of their licensed properties.
This is part of Generation Rent’s ‘blueprint’ for fixing the capitals renting crisis. They are also calling for a National Landlords Register.
- Letting agency fined £12,000 after falsely claiming safeagent membership
- Fleas take a bite out of a tenant’s deposit when infestation found after departure
- Housing Court LATEST: all-party reform group sets out how landlords will access justice
- Eighteen agents could be flouting tenant fees ban and facing penalties
- RENT TO RENT: ‘Why landlords should read my horror story, so they don’t get ripped off like me’
- Conwoman who used rental platform to advertise properties she did not own hands herself in
- Beware ‘guaranteed rent’ schemes, warn undercover blogger and evictions specialist