London Living Rent, Landlord Accreditation and Ken and Boris

David Lawrenson of LettingFocus worries about Ken Livingston’s idea of rent controls and says that that accreditation and registration schemes for landlords are not needed because the vast majority of landlord and tenants enjoy good relations and the minority of rogue landlords will never register anyway.

Oh dear, oh dear, I spend a nice day at a CIH Conference telling many good people from the local authorities how they could make a better job of their relationships with the private rented sector and when I come back, I find that at another conference taking place on the same day, Ken Livingston and Boris Johnson are doing their best to come up with schemes for the private rented sector that will be hard to make work and will likely fail in their objectives.

Ken Livingston

Ken’s idea is for some kind of rent control.

Mmm. This has been tried in the past, and of course, gave us Rachman and a whole bunch of equally nasty landlords back in the 1960s and 70s.

For the benefit of younger readers, what happened was that horrible landlords like Peter Rachman just ignored rent controls anyway. And if a brave and foolish person ever stood up for their rights, they would find their lives rapidly took a turn for the worse when Rachman’s goons came to pay a visit.

In the 1960s and 70s the majority of fair minded landlords who obeyed the rent controls (and didn’t ask for “side payments”) found that they could not make any money from letting property, so their properties often fell into disrepair and gradually they all sold up – which is why by 1988, the private rented sector in the UK was so tiny – with only about 8% of the total housing stock. (In 1945 it was about 50% of the stock).

This tiny private rented sector was a problem for the economy – it meant that without a flexible housing alternative, people couldn’t move easily for work, which is why the government of the day brought in the new assured shorthold tenancies, to create a flexible housing tenure.

New York not as Great as Ken Makes Out

Ken Livingston referred to the success of New York’s rent control. I don’t know too much about New York’s experience apart from the fact that I have a friend who lived there 3 years ago and who said that side payments were the norm (to avoid the controls) and it personally helped him get a property when he offered a “contribution” to his landlord’s favoured religious charity. (In his case it was useful to have been of the same faith as the landlord or else he would not have even got a viewing.)

People familiar with Greece and the old communist Eastern Europe would be more than familiar with this kind of side payment left in a brown envelope.

It’s not clear how would Ken stop this kind of cheating of a rent control system and how would it be enforced anyway.

I’ve always rather liked Ken and have tended to vote for him, but I think he needs a history lesson here. Or maybe just spend some time in Greece.

Not for Profit Letting Agency

Ken’s other idea was for a Not for Profit Letting Agency.

We have commented here at this blog on the issue of local authorities setting up Local Lettings Agencies and the like on numerous occasions. Please see the links under “Categories” and the “Tags”.

But just two observations for now: Most private letting agents work at weekends and evenings. We would just hope that any such letting agency is not staffed by local government officers, as when I call my council it’s pretty much dead after 5pm and at weekends!

I also found his comments rather generalistic. Most letting agencies are decent and the people who work in them are fair and whilst I agree that more regulation of agents is needed, to appear to paint them all as ogres was going too far.

Boris’s Brainwaves

Boris’s ideas are rather simpler.

He too is in favour of accrediting all private landlords.

This idea has a little merit but accreditation has to be light touch (as Rugg proposed) and low cost too – with all landlords accepted. And accreditation must be accompanied by a very tough approach on the tiny number of rogue landlords who deliberately and consistently treat tenants in an awful way, housing them in appalling properties which break the law.

What we must avoid do at all costs is the kind of system of landlord registration that they have in Scotland. This scheme costs a huge amount of money to set up and run, is clunky, inefficient and few rogue landlords have ever been bought to book. And the majority of good Scottish landlords see it as a tax on them (and hence their tenants) with little benefit for their tenants either.

In London, we fear the same thing could happen – the same bureaucracy, the same waste, the same failure to root out the rogue bad apples in the landlord universe.

I have commented at previous blog posts about the appalling Sheds with Beds situation in Southall where a national newspaper (not the council) found that rogue landlords were routinely abusing mostly migrant (often illegal migrant) tenants by housing them in appalling “sheds.” These “tenants” did not know their rights or cannot enforce them.

The Problem with Accreditation

Would accreditation help these poor souls in the sheds in Southall and elsewhere?

No, somehow, we don’t think their landlords will be in the front of the queue to be accredited. And their (often illegal) immigrant tenants will hardly be reporting them either!

All the same, Boris has ploughed on. His big idea is to make membership of accreditation schemes a condition for a landlord to be paid Housing Benefit direct.

The London Landlords Accreditation Scheme is one such scheme with laudable objectives and which is much loved by the great and the good in London’s councils. After all, it was invented by councils, so it tends to get a good press at County Hall.

But we think it is currently a tad too hard to get accredited on it, which is why LLAS accredited landlords are still small in number – (fewer UK landlords are accredited than have my book) – even though the scheme has been around for years.

Getting Paid Housing Benefit/ LHA Direct

In relation to Boris’s idea to link membership of it to receiving HB payments direct, we find ourselves baffled, because at the moment private landlords are hardly jumping over barriers to accept “benefit tenants” irrespective of whether they are paid LHA direct or not.

Making them join LLAS or some other accredited scheme as a pre-condition is not going to assist this situation.

Who Cares About Accreditation?

Boris and Ken could do well to pay heed to my survey of the 2,000 landlords on my mailing list. Not a single one said they had ever been asked by a tenant if they were accredited.

They should also re-read the Rugg Review – which clearly said that the vast majority of landlords and tenants in the PRS enjoy very good relationships – and try to avoid getting distracted by TV programmes which naturally highlight the very worst landlords and tenants.

If most landlords and tenants get along fine and as all rogues would ignore ignore a landlord register, we would ask – where is the need for it.

I’d hoped for a better understanding from both Boris and Ken of two basic truths:

One. That private rents (like house prices) are on the up because of a lack of housing and a rising population (which is not going to stop rising as long as the UK remains in the EU).

Two. That what’s really needed is for local authorities to start using their existing powers to deal with rogue landlords harshly. If accreditation can be shown to assist the driving out of the rogues then great, but it’s hard to see how it could actually do this.

Time for the Mayor of London hopefuls to think again, we think.

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