Opportunities to provide rent certainty for landlords and tenants
With London facing an unprecedented housing crisis, Camden Council has entered the debate with a rent stabilisation proposal to tackle unaffordable rents in the private rented housing sector.
A third of Camden residents live in privately rented homes, with more and more families being forced to move into a sector once considered mainly for young professionals and students.
This means that tenants have no long-term security which affects issues such as preventing children settling in their local schools and families becoming part of their community.
The average house price in Camden is £700,000 and is way out of reach of all but the wealthiest families. The average rent for a two bedroom property is £440 per week and these rents and house prices are simply unaffordable for the majority of local people in a borough where average income is around £33,000.
Camden commissioned Professor Christine Whitehead (OBE) from the London School of Economics (LSE) to advise on how rent certainty could work in Camden and London.
Professor Whitehead’s report was published on Tuesday 9 September 2014. It is intended to stimulate national debate and lead to action that results in a better private rented sector for both tenants and landlords.
The report ‘Rent stabilisation: Principles and international experience’ examines the economics of rent regulation, the different forms of rent regulation and the barriers to the success of each model.
It also looks at how the different models work in other countries, Germany, the Netherlands, Ireland, Denmark, France and the USA (New York City and San Francisco).
It makes conclusion and recommendation about what might work in the London context, based on principles and evidence, including:
- Camden should positively enable longer-term tenancies with index linked rent increases, voluntarily agreed by landlords and tenants to improve transparency and contractual enforcement.
- Camden should consider acting to enable longer-term tenancies with index linked, voluntarily agreed rent increases through the London Landlord Accreditation Scheme (LLAS), which Camden operates on behalf of all London boroughs.
- Offering landlords template tenancy agreements for longer terms with rent increases built in to ensure that both landlords and tenants know what their rental costs are going to be in coming years and give certainty to both parties.
- Longer term tenancies that allow landlords to factor in maintenance and repair costs into planned rent increases.
- Training for landlords
We will now look to work with the London Landlord Accreditation Scheme (LLAS) to explore opportunities to test the recommendation to enable longer-term tenancies with index linked rent increases with a small group of landlords and tenants.