“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.

 
 
 
 

Transport for London’s fare zones secretly go up to 15

Some of these stations are in zones 10 to 12. Ooooh. Image: TfL.

The British capital, as every true-blooded Londoner knows, is divided into six concentric zones, from zone 1 in the centre to zone 6 in the green belt-hugging outer suburbs.

These are officially fare zones, which Transport for London (TfL) uses to determine the cost of your tube or rail journey. Unofficially, though, they’ve sort of become more than that, and like postcodes double as a sort of status symbol, a marker of how London-y a district actually is.

If you’re the sort of Londoner who’s also interested in transport nerdery, or who has spent any time studying the tube map, you’ll probably know that there are three more zones on the fringes of the capital. These, numbered 7 to 9, are used to set and collect fares at non-London stations where the Oyster card still works. But they differ from the first six, in that they aren’t concentric rings, but random patches, reflecting not distance from London but pre-existing and faintly arbitrary fares. Thus it is that at some points (on the Overground to Cheshunt, say) trains leaving zone 6 will visit zone 7. But at others they jump to 8 (on the train to Dartford) or 9 (on TfL rail to Brentwood), or skip them altogether.

Anyway: it turns out that, although they’re keeping it fairly quiet, the zones don’t stop at 9 either. They go all the way up to 15.

So I learned this week from the hero who runs the South East Rail Group Twitter feed, when they (well, let’s be honest: he) tweeted me this:

The choice of numbers is quite odd in its way. Purfleet, a small Thames-side village in Essex, is not only barely a mile from the London border, it’s actually inside the M25. Yet it’s all the way out in the notional zone 10. What gives?

TfL’s Ticketing + Revenue Update is a surprisingly jazzy internal newsletter about, well, you can probably guess. The September/October 2018 edition, published on WhatDoTheyKnow.com following a freedom of information request, contains a helpful explanation of what’s going on. The expansion of the Oyster card system

“has seen [Pay As You Go fare] acceptance extended to Grays, Hertford East, Shenfield, Dartford and Swanley. These expansions have been identified by additional zones mainly for PAYG caping and charging purposes.

“Although these additional zones appear on our staff PAYG map, they are no generally advertised to customers, as there is the risk of potentially confusing users or leading them to think that these ones function in exactly the same way as Zones 1-6.”


Fair enough: maps should make life less, not more, confusing, so labelling Shenfield et al. as “special fares apply” rather than zone whatever makes some sense. But why don’t these outer zone fares work the same way as the proper London ones?

“One of the reasons that the fare structure becomes much more complicated when you travel to stations beyond the Zone 6 boundary is that the various Train Operating Companies (TOCs) are responsible for setting the fares to and from their stations outside London. This means that they do not have to follow the standard TfL zonal fares and can mean that stations that are notionally indicated as being in the same fare zone for capping purposes may actually have very different charges for journeys to/from London."

In other words, these fares have been designed to fit in with pre-existing TOC charges. Greater Anglia would get a bit miffed if TfL unilaterally decided that Shenfield was zone 8, thus costing the TOC a whole pile of revenue. So it gets a higher, largely notional fare zone to reflect fares. It’s a mess. No wonder TfL doesn't tell us about them.

These “ghost zones”, as the South East Rail Group terms them, will actually be extending yet further. Zone 15 is reserved for some of the western-most Elizabeth line stations out to Reading, when that finally joins the system. Although whether the residents of zone 12 will one day follow in the venerable London tradition of looking down on the residents of zones 13-15 remains to be seen.

Jonn Elledge was the founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.