The Mayor of London, Sadiq Khan, has declared that the Government’s proposed Tenant Fees Bill is a “missed opportunity” to protect the 2.4 million private renters in the capital, and criticised Ministers for breaking their promises to publish key plans for social housing and rough sleeping before the summer.
Extortionate fees and deposits mean London’s renters need to find nearly £3,700 each time they move home, compared with the nationwide average of £2,000*. In a joint letter to the Prime Minister, Sadiq, along with Crisis, Generation Rent and Citizens UK set out how a reform of private renting is desperately overdue.
The Mayor welcomed the Chancellor’s announcement in the Autumn Budget 2016 that deposits would be capped and fees banned – but is now concerned that several parts of the Tenant Fees Bill have been watered down. In addition, Ministers have failed to publish their Social Housing Green Paper and their Rough Sleeping Strategy – both crucial policy areas – before the end of July as promised. Sadiq believes Londoners are being let down by this lack of action.
During the development of the Tenant Fees Bill, the Mayor called on the Government to cap deposits at no more than three weeks’ rent. But despite Ministers earlier promising to support a cap of four weeks, they have backtracked and now propose six weeks, a measure that is not supported by any organisation representing renters.
In addition, the Bill contains loopholes that mean letting agents could still end up charging tenants excessive fees – now spread throughout a tenancy rather than charged up-front. It formalises agents’ ability to charge renters for basic services – such as responding to emergency call-outs – that should be covered by the management fee landlords have already paid. The Mayor and organisations representing renters say these measures mean the Bill “opens the door to an entirely new culture of exploitation”.
As the Bill is passes through its parliamentary stages, the Mayor is calling on Ministers to make amendments to give renters much-needed protection from exploitation by:
- capping rental deposits at three weeks’ rent, and holding deposits at one day’s rent, to reduce up-front costs for renters;
- scrapping provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements, and for ‘charges to enact a change of sharer’ which will fall disproportionately on renters living in shared housing; and
- deterring bad behaviour by increasing the penalties councils can charge for illegal fees to £30,000, and by enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid.
The Mayor of London, Sadiq Khan, said:
“Rising rents, ongoing insecurity, and in too many cases poor quality housing make the 2.4 million private renters in London amongst those worst-affected by the housing crisis. By backtracking on proposals and watering down the strength of this Bill, Ministers are in danger of opening the door to an entirely new culture of exploitation, with the legislation left unfit for purpose and simply a missed opportunity to truly help renters.
“This is just one area of housing where Ministers are letting people down, both in London and across the country. Social housing residents need a much stronger voice, and yet the promised Green Paper about this is nowhere to be seen. Rough sleeping is at a crisis level, yet the Government’s strategy remains unpublished. Ministers need to show they mean what they’ve said by urgently taking action – with increased funding – rather than breaking their promises and hoping no-one notices.”
Earlier this year Sadiq launched his Rogue Landlords and Letting Agents Checker, which allows Londoners to check if the landlord or letting agent of a rental property has been convicted of any housing offences. All 33 London local authorities have signed up to the tool – the first of its kind in the country.
Chief executive of Crisis Jon Sparkes, commenting on the joint letter, said:
“Thousands of people across England are trying to move on from homelessness, but they have no way of finding a home. There’s a shortage of social housing, and deposits and other fees for private rented housing are hundreds of pounds – amounts that many homeless people simply can’t afford. This is a desperate situation, and it’s all the worse because our research shows that homelessness can be ended with the right policies in place.
“The Tenant Fees Bill is a chance to address some of these issues – but we’re concerned that the bill as it stands actually risks making the situation for renters worse. For example, it only proposes capping deposits at six weeks’ rent, which could make deposits at this high level the norm. Among other amendments, we’re calling for this cap to be set at three weeks, to reduce the upfront costs that shut out homeless people and others on low incomes.
“Around 142,000 households across England are currently experiencing the worst forms of homelessness and our research shows that this will double by 2041 if nothing is done. The government must put in place the measures that will end homelessness for good.”
In addition to more protection for renters, more social rented and other genuinely affordable homes are desperately needed. Sadiq is doing everything in his power with the resources he has, including launching the first-ever City Hall programme specifically designed to support council homebuilding, which will help get 10,000 new council homes underway over the next four years.
In 2017/2018, the Mayor’s ‘Homes for Londoners’ programme saw 12,526 genuinely affordable homes started – more than in any year since City Hall took control of housing investment. Crucially this included 2,826 new homes based on social rent levels – up from zero homes for social rent in the pipeline inherited from the previous Mayor. SADIQ is also working to bring more small sites forward for development using his £250 million Land Fund to play a more interventionist role in the land market to speed up delivery of new homes.
Tackling rough sleeping is also a top priority for the Mayor, and earlier this year he published a detailed Rough Sleeping Plan of Action, investing in additional services and outlining how Government, City Hall and charities could work together to end rough sleeping in London.
Hannah Gretton, Community Organiser at Citizens UK, said:
“Affordable housing is an issue that concerns many of our members. The Tenants Fees Bill has the opportunity to prevent millions of renters in London from being exploited by hidden fees and bad landlords, but unfortunately the current plans do not go far enough. Tenants paying such extortionate hidden fees is completely unacceptable. We’re urging the government to scrap potentially exploitative default fees and give Councils the stronger enforcement powers to deter criminal landlords.”