A scheme to license letting agents and landlords in Croydon to help protect thousands of private tenants could be a key proposal from Labour ahead of the 2014 Town Hall elections.
With the national housing crisis reaching acute levels in London, and particularly in Croydon, tens of thousands of private tenants – many of them claiming housing benefit towards the cost of their spiralling rents – are vulnerable to a largely unregulated and often exploitative rental market.
According to research conducted in his constituency for Croydon North MP, Steve Reed OBE, many tenants are being charged “scandalously high fees” by letting agents. Reed has found cases where, even before the deposit and first month’s rent are due, some tenants are receiving demands to pay more than £1,000 in fees and charges by unregulated lettings agents.
Some prospective tenants are forced to pay a fee to register with the lettings agent and to view properties despite landlords also being charged a finder’s fee for securing a property. Other fees charged by unscrupulous agents include up to £500 for “handling the deposit”, or “administration fees”, which can also amount to £500.
“This research shows that tenants are being forced to pay excessive and unfair fees just to put a roof over their heads,” Reed said.
“This rip-off culture among lettings agencies must end. Labour wants to see tough regulation of lettings agents but the government has voted down Labour’s proposals at every turn. Hard-pressed residents in Croydon are having their pockets picked while the government and our Tory council stand back and do nothing.”
As the Conservative-led government has relied on an assault on benefit claimants as a means of reducing the national deficit, many of the left have argued that the spiralling cost of housing benefit amounts to little more than a state subsidy of the private rentals sector, lining the pockets of landlords. Better regulation of the private rental sector – with rent caps, rather than benefit caps – could be more effective at slowing the increase in housing benefit bills.
Reed said, “The housing shortage is pushing more people into private rented accommodation. We need action now to curb these exorbitant fees and charges that are hitting people who don’t have any money to spare.”
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Focus on the notion to license letting agents and landlords is a distraction. Full focus should be in advocating a return for local councils having the right to build council houses and thus providing decent homes with fair and affordable rents. Labour should campaign for this at local and national elections.
Mr Reed is pointing us in the right direction. A fundamental review of the letting market is long overdue.
It should include the length of tenancies, the level of rents and the conduct of letting agents.
But it will be greeted with hollow laughter unless it is accompanied by a properly costed and fully funded medium-term plan to increase substantially the amount of property available to rent in Croydon and the rest of Greater London.
That is best done by subsidising the development costs of housing associations, allowing them to provide homes to updated Parker Morris standards at rents that are affordable to those earning the London living wage.
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