Overview
London boroughs support the ambitions laid out in the Fairer Private Rented Sector White Paper to improve conditions in and overhaul the Private Rented Sector (PRS) in particular the proposed end to section 21.
However, the lack of detail on how measures will be enacted – for example around improving decency in the PRS – as well as additional funding to achieve them, is concerning. The lack of supply in the capital and increased rents in the PRS are of particular concern, as local authorities are becoming more reliant on these homes to prevent and relieve homelessness.
Lack of supply and affordability issues
Our greatest concerns with the PRS at present are affordability and, increasingly, supply. Research by Savills on behalf of Capital Letters (a not-for-profit company launched by London boroughs to secure private rented accommodation for homeless households) found that London rents had increased by an average of 15.8% in the year to June 2022. It also found that in 2021/22 only 8.8% (18,072 out of 206,067) of all properties listed for rent in London were affordable on Local Housing Allowance.
Due to the extreme shortage of social homes and the very high bar to home ownership, increasing numbers of people are reliant on the PRS for their housing. Local authorities are often reliant on the PRS to discharge our homelessness duties and to prevent and relieve homelessness. This is becoming extremely challenging.
End to section 21
London Councils supports the proposed end to section 21 ‘no fault’ evictions, which are still a significant contributor to homelessness numbers. Driven by the severe cost pressures in London’s rental market, London local authorities are responsible for two-thirds of all placements made into temporary accommodation in England. Around 150,000 Londoners, including 75,000 children, are homeless and living in temporary accommodation organised by their local borough. London Councils would prefer that notice periods are increased to at least four months (preferably six) to give tenants stability and enable them to make other arrangements.
Decent homes and reaching net zero
London Councils also supports in principle the application of the Decent Homes Standard to the PRS – where, as noted in the White Paper, conditions are worst, especially at the more affordable end of the sector. The White Paper also refers to the government’s target to meet net zero and the importance of the PRS in achieving this.
However, the White Paper does not offer suggestions as to how this will be achieved other than the Minimum Energy Efficiency Standards (MEES) Review and limited references to ‘warm and dry’ homes being part of the new Decent Homes Standard.
London Councils is concerned that the responsibility for implementing net zero in the PRS is therefore being placed on under resourced local authorities without sufficient tools in place to achieve this. We believe there is a significant opportunity to bring together the goal to improve decency in the PRS with the retrofit and decarbonisation agenda. We would support a holistic approach to achieving these goals and hope there will be further work on this.
Enforcement
London Councils is also concerned about the lack of funding attached to the White Paper’s proposals so far, especially with regards to the local authority enforcement role – resources are already extremely stretched in this area.
London boroughs are facing huge financial constraints. Overall resources are now 22% lower in real terms than in 2010, and data recently published by London Councils shows that local authorities in the capital could face up to £700 million of cuts unless the government boosts their funding. Without significant additional funds, we are concerned that the proposals are unworkable.
Councils need both strong enforcement powers and resources to ensure any changes in the law succeed in helping tenants and boosting standards. We would particularly welcome more support for local authorities in receiving fines levied (in addition to mooted proposals to increase or add to fines that can be levied).
