Millions of Londoners rent the roofs over their heads. Yet the private rental sector faces meltdown, with unaffordable rents, some agents charging huge fees, and rogue landlords seemingly free to offer substandard properties without penalty. Lifelong renters are far more common on the Continent. Our series starting today examines how other nations cope, and whether their systems would work here.
Leases are usually signed for an unlimited period of time, eliminating the need for regular renewals. A landlord needs concrete proof that a tenant has seriously transgressed, by subletting or damaging the property, for example, to evict them.
A landlord can ask a tenant to leave if they or their family require the house, but must prove genuine need. If a property is sold the tenant can stay, and becomes the responsibility of the new owner.But tenants need give only a couple of months’ notice.
Could it work here? Antonia Bance, head of campaigns at homeless charity Shelter, backs compulsory five-year tenancies, to give renters more stability while not tying down landlords permanently. She says this could be achieved using legislation, or by tax penalties for landlords who offer only six- or 12-month leases. Alexander Hilton, director of pressure group Generation Rent, wants two-year tenancies, with six months’ notice of a “no fault” eviction.
Chris Norris, head of policy at the National Landlords Association, says about 15 per cent of landlords offer longer leases, but claims some letting agents encourage 12-month leases so they can charge annual renewal fees, while some lenders won’t allow landlords to offer long leases. He says tenants should talk to their landlords, who could be open to negotiation.
Will it happen? Longer leases are unlikely to become compulsory, as no party would want to lose landlord votes. But government could easily press banks to alter terms of buy-to-let mortgages to allow for longer leases.
Tenants in homes built before 1991 benefit from regulated rents based on the landlords’ running costs plus a fixed profit. Once agreed, a landlord cannot raise rents by more than the inflation level unless specified in the original, usually open-ended, lease.
Could it work here? Adam Challis, head of residential research at Jones Lang LaSalle, says rent controls would need primary legislation plus all-party support, and fears that if landlords’ profits were cut, they might stint on maintenance. Shelter’s Bance feels landlords should set initial rents but annual rises should be limited to the inflation rate. Generation Rent’s Hilton would prefer rent caps linked to cost of living in London. Norris says rent control would drive investors out of the sector, and insists landlords are not greedy: “We do not see yields much above five to six per cent.”
Will it happen? All political parties agree house building must increase to lessen rent and house price rises. Labour wants to cap rents and rent rises, while the Government is encouraging big institutions to invest in developments built specifically to be rented, aiming to increase supply of rental homes run by professional landlords as long-term businesses.
One in five French people rent and long leases are available, plus rent caps in some areas. Landlords can only evict those who fail to pay their rent, damage the property, or commit another major breach of contract.
Could it work here? Jonathan Pitt, regional lettings director at Hamptons International, said: “Many tenants have been the victim of ‘accidental landlords’ who couldn’t sell their home when the market was down and let it instead. Many of these landlords now want to sell in a strong market, forcing tenants to move out.” Antonia Bance wants landlords treated more like employers, who can’t sack a staff member without a legal process and providing proof of breaches.
However, Chris Norris feels tenants’ current protection against being asked to move on is strong enough, as landlords can’t instigate a “no fault” eviction within the period of the contract without a court order.
Will it happen here? Labour says it would increase notice periods to two months and crack down on “no fault” evictions. This still falls short of providing secure long-term tenancies.