We took the 18 London boroughs where private renters form 25% or more of the population (using Census 2011 data). We assessed them against ten indicators. Six of these indicators are things that councils can do, while three (relating to housing costs) form part of the national or regional context in which London authorities operate and one depends on private renters themselves.
Five of the six indicators under councils’ control carry a weighting of three, as these are more important for this exercise than national or regional factors. Landlord licensing (and steps towards it) carries a weighting of three, as we believe this is the most effective thing a council can do to make landlords accountable and transparent, and to ensure minimum standards. Other indicators carry a weighting of one; they are out of the council’s control but they have an impact on the quality of life of private renters in the borough. The existence of a local renters’ support group carries a weighting of three.
For each of ten indicators, boroughs receive a score of 1-5. The indicators are:
1. How many criminal prosecutions has the council brought against landlords in the last five years?
Local authorities have the power to prosecute landlords who fail to meet basic standards, using the criminal legal system. Many councils struggle to do this due to lack of resources – and the fines issued when a landlord is found guilty are usually not enough to deter them from continuing to break the rules. We are aware that many councils in London would like to be able to prosecute more landlords, but lack the resources to do so, and of course we understand that a high prosecutions rate is only a partial measure of a council’s efficiency; some boroughs will have higher numbers of criminal landlords operating in them to start with. Also, authorities operating mandatory licensing schemes (Newham and Waltham Forest) will have less need to use criminal proceedings, as licensing schemes mean they can use civil proceedings instead.
We should also note that the Ministry of Justice does not keep comprehensive records of landlord prosecutions, so these figures are compiled only from media reports, with thanks to Shelter. Another database, compiled by the Chartered Institute for Environmental Health, recently revealed rates of prosecutions of landlord companies (rather than individuals), but because this database only surveyed local authorities that run a selective licensing scheme, we did not use this for comparison.
The highest scoring borough in this category has successfully brought 7 landlord prosecutions in the last 5 years, while some have managed none.
2. How many units of social housing are there, compared to the number of households in the borough who do not own a home?
Social renting (ie. renting from the council or from a housing association, rather than from a private landlord) is one of two main ‘escape routes’ from private renting. It offers long-term (often lifelong) tenancies, rents pegged to housing benefit rates, and higher standards of accommodation.
Comparing waiting lists for social housing is of limited use, as councils now use different eligibility criteria for joining the waiting list. Similarly, the amount of social housing stock in each borough is not a good measure of need. Instead, we have looked at the number of social housing units compared to the number of households who do not own a home. We have limited this measure to council-owned homes and excluded those owned by housing associations. This is because some housing associations are moving from social tenancies to private tenancies.
The lowest scoring borough in the category, Barnet, has 2.89 households who do not own a home for every unit of social housing in the borough. The highest scoring borough, Southwark, has 1.49.
3. Is there a mandatory, borough-wide landlord licensing scheme in place?
The only two London boroughs to already operate a mandatory landlord licensing scheme across the whole borough are Newham (introduced January 2013) and Waltham Forest (introduced April 2015). These score 5. Other councils are trying to introduce licensing schemes, are in the middle of a public consultation about licensing, or have introduced licensing schemes in selected areas. These authorities score 3, while those who have taken no steps towards such a scheme score 1.
4. Does the council find and fine unregistered letting agents?
Since 1st October 2014, any letting agent not registered with a government recognised redress scheme should be fined £5,000 by the council. However, many councils have simply ignored this new rule, and have not taken the internal administrative steps necessary to issue the £5k fine. Islington and Newham have, and they each score 5. No other London council has yet taken the necessary administrative steps; they each score 1.
5. Is there a direct phone line for private renters?
Four councils (Hackney, Islington, Lewisham and Newham) provide a telephone line dedicated to private renters. These score 5. Two others, Barnet and Brent, offer some level of specialist advice for private renters (either by having a separate number for enforcement and repairs or for an environmental health department with a private sector team) and these score 3. All other councils provide only a general housing advice line. This does nothing to help raise awareness among private renters that they can ask their local council for help. These councils score only 1.
6. Is there a non-profit, council-run lettings agency for private renters?
Although many councils already operate schemes for social tenants who want to move into the private rented sector, or for homeless people, a few councils are starting to go further by setting up non-profit letting agencies aimed directly at private renters who want to avoid the extortionate fees charged by high street letting agents. Islington and Southwark have made the most progress on this, and score 5. Others (Camden and Hackney) are running pilot schemes and score 3. The others score 1.
7. Is there a local renters group?
Eight boroughs have some form of local renters’ campaign group, offering information and support to private renters experiencing difficulty with their landlords. These groups vary in focus and approach. Some prefer protest; others campaign for policy change at their local council; others provide legal advice to private renters. Most offer a combination of all three. Three (Islington, Brent and Camden) are formally constituted and receive funds from either their council or charitable trusts, while others (Tower Hamlets, Waltham Forest, Hackney, Lambeth and Southwark) are informal, self-organised and unfunded. All eight boroughs with a local renters group score 5; other boroughs score 1.
8. What is the median private rent for a two-bed flat?
These figures are taken from the Valuation Office Agency at the Office for National Statistics. Boroughs scoring full marks in this category have a median rent of £1,200 or less, while the most expensive borough, scoring the lowest marks, is Kensington and Chelsea at £2,622 per month.
9. What’s the shortfall between the average rent and LHA (housing benefit) rate?
More than 1 in 10 private renters in London claim housing benefit to cover their rent. Since the rules were changed in 2011, the maximum amount of housing benefit (Local Housing Allowance or LHA) a person can receive is not enough to cover average private rents – so most private renters have to make up the shortfall. In the lowest scoring band (Westminster, Kensington and Chelsea), the shortfall between maximum housing benefit (LHA) and median rent for a two bedroom flat is more than £1,268 per month. The highest scoring band (Lewisham, Newham) has a smaller shortfall: £115 in Newham and £25 in Lewisham.
In some cases, the geographical areas used to calculate LHA rates do not match local authority boundaries exactly. In boroughs that span two or more different LHA areas, we have taken an average.
10. What is the house price to income ratio?
Apart from social renting (from a council or housing association), the other ‘escape route’ from the insecurity and expense of private renting is home ownership. But in every London borough, the average home costs far more than four times the average salary (the amount a person can borrow for a mortgage). Work commitments, children’s schools, community and neighbourhood commitments are all factors that tie people to a particular borough.
Boroughs in the lowest scoring band have income to house price ratios of more than 20, while boroughs in the highest scoring band have income to house price ratios of 8.73 or lower.