The London Living Rent: Winners, Losers and the Rest of Us (Part 2 - tenancies)

In September, following the Mayor’s release of some details for this London Living Rent proposal, we blogged about concerns around how genuinely affordable this new tenure would be, and what was needed to ensure it was part of the solution to London’s housing crisis.

This follow-up piece looks at what wasn’t covered in the first blog – broadly, tenancy types – and how again they might best serve Londoners just looking for somewhere affordable and secure to live.

So what do we know so far? In the brief outline on the GLA’s website, it states:

…it is proposed that homes delivered in partnership with the Mayor will be available to households on Assured Shorthold Tenancies, generally of up to five years with annual inflation-linked rent increases.

Where providers are delivering LLR homes without direct Mayoral involvement, they may choose appropriate tenancy terms.

Clearly this needs to be fleshed out, but even this summary suggests a range of possibilities from good, to pretty bad.

To start with, one would hope that the London Living Rent would be significantly increasing security for renters, meaning that indefinite tenancies should be offered, as previously outlined in our recent London policy paper.

Equally, and to ensure that private tenants aren’t locked into inappropriate tenancies, there must be a way for renters to exit the arrangement.

Assured Shorthold Tenancies do not provide a good mechanism for doing this, but contracts that allow three months’ notice to be given, for example, should be mandated by the Mayor.

These terms should apply whether homes are built directly with the Mayor or not, rather than upholding a false distinction which allows different providers to set their own terms.

Regarding how these new homes are allocated, Generation Rent has already pointed towards the income range that should be targeted, but after that, priority becomes more difficult.

These homes should not just become replacements for social housing, and we will be writing to the GLA with some additional thoughts on how criteria may be developed.

Finally, there has been some discussion about a more foundational alteration to the policy, whereby the London Living Rent becomes a rent-to-buy product with tenants encouraged to save and then buy at the end of their tenancy.

While this may be a positive step for certain tenants, there should be no compulsion to leave after a certain time period, or an absolute expectation to move into homeownership.

Those on average wages will find it extremely difficult to save for a deposit in London, and indeed, may have other important living costs that prevent them from making further savings.

Of course we need to move towards a situation where homeownership is affordable and realistic for those on average incomes in London again, but that must come through a different housing market, not making judgements about how much renters can save.

What about affordability for London’s other two million private renters? Write to Sadiq Khan today, asking for him to investigate rent controls in the city.

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