'Red Ken' plans could drive out landlords, say critics

Controversy has been ignited after Labour’s mayoral hopeful Ken Livingstone declared all-out war on letting agents and rogue landlords in London, whilst calling for rent caps.



Critics said his plans to intervene in the market, and cut rents to no more than one-third of a tenant’s wage, would result in landlords having to lower rents, leaving their yields in tatters and acting as a deterrent to further buy-to-let investment.  



If elected in May, Livingstone will establish a London-wide, not-for-profit lettings agency, paid for by the public purse, and to be run by the Mayor’s office. Although  handful of local authorities do run lettings agencies, none begins to be on the scale proposed by Livingstone. There is speculation that other large metropolitan authorities could decide on a similar path.



Castigating agents across London, he called for rent controls and widespread intervention in the sector, including licensing.



Speaking to the Institute for Policy Research, Livingstone said: “We must actually intervene into the private rented sector.”



Livingstone said that no tenant in the private rented sector should have to pay more than one third of their wage in rent.



He went on: “What London needs is a London-wide non-profit lettings agency. So I can announce today that I will work with other stakeholders to establish one that can start to make a change in the private rented sector for the better.



“It will put good tenants in touch with good landlords across the spectrum of private renting so that both can benefit from security of tenure and reduce the costs of letting.”



He said the new agency would get to grips with the problem of rogue landlords and “tackle a series of issues on accreditation, inspection and enforcement, licensing and energy efficiency, as well as tenants’ deposits protection”.

 

He went on:  “Through this work we will challenge the scandal of rip-off agency fees, horrific standards and the daily experience of disputes over deposits in the private rented sector.”



He vowed: “In the coming weeks I will set out more detail of how this new arm of the Mayor’s role will work.”



Meanwhile, incumbent London mayor Boris Johnson hit back at the Livingstone proposals – but his own agenda is to license all landlords. 

 

 

 

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