London Assembly Calls for Longer Term Tenancies
At LettingFocus we are pleased to see our evidence to the London Assembly on the private rented sector was accepted and made it through as a key recommendation.
The London Assembly has issued another report on the private rented sector – this time calling for the mayor to intervene in the capital’s private rented sector to “stabilise rents” and encourage longer tenancies.
In the report published yesterday, the Assembly’s Housing and Regeneration Committee calls for a series of reforms to the capital’s private rented sector.
We have had a quick look at the report and whilst I find much in the report I don’t agree with – including “rent stabilisation” (which is actually NewSpeak for the old “rent controls” chestnut) – it’s still really pleasing that one key proposal, which came from us at LettingFocus.com, managed to make the final report and list of recommendations.
LettingFocus.com was invited to give expert evidence to the Committee back in December – along with a few other landlords’ representatives. (We must give the London Assembly credit for doing this much, because so many private rented sector conferences I see being marketed by the governments of the UK, by the housing charities and by councils have no one from the private rented sector actually speaking or even invited to attend).
A key part of our submission to the Committee was that the 12 month restriction on tenancy length imposed by most mortgage lenders along with some lenders’ “no benefit tenant rules” and RBS’s “no lending in areas of selective licences” restrictions acted to badly restrict private landlords letting activities and tenants’ housing options.
Restrictions are Not Logical
I went even further and suggested that, quite apart from the bad PR, these types of restrictions were often not actually even justified from the business point of view of the mortgage lenders themselves.
The fact that these restrictions existed at all was (somewhat surprisingly perhaps) news to the members of the Committee, to the audience watching and to the journalists who turned up to watch the proceedings.
We are delighted that this has matter been picked up and ran with – and it seems with no dissensions either. (The Conservative group added a list of dissensions at the end of the report, but they did not dissent on this important matter).
So a key recommendation has gone forward from the Committee that pressure is bought to bear on the lenders to stop these restrictions. This pressure could come from the Mayor and / or others in government.
Of course, since December, the pressure has clearly told (or a more enlightened approach has dawned among lenders) and two key lenders in the buy to let space – Lloyds Banking Group and Nationwide – earlier this year stopped their restrictions and now allow landlords to let to people on housing benefit.
Maximum twelve month tenancy length restrictions are still generally in place, though, except among a few more forward thinking lenders.
It is just a shame that in much of the press it has been reported that the Assembly is telling landlords to issue longer term tenancies. Most journalists have just looked at the Assembly’s rather terse and misleading press release and not bothered to read the full report, thereby completely missing the point that the Assembly is actually calling for the lenders to look at this restriction and reverse it.
Tenants want the security of longer term tenancies and many private landlords would like to be able offer them too in the right circumstances. Hopefully the proposal will be supported and all lenders can be made to eliminate these often pointless restrictions.
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