Mayor answers to London

Housing Crisis

Question number4042/2012
Meeting date19/12/2012

Question by Tom Copley

Has London’s housing crisis worsened this year?

Answer by Boris Johnson

Tom Copley (AM): Thank you, Mr Mayor; good morning. It was a simple question. Has the crisis become worse? Yes or no.

Boris Johnson (Mayor of London): I think I gave you a good answer which is we built a record number of affordable homes this year but it is certainly true we face a crisis that is many decades in the making.

Tom Copley (AM): If you look at the figures since April, of course, Mr Mayor, only 425 new affordable homes have been started since then which is a pretty worrying figure I think you would agree.

Boris Johnson (Mayor of London): It is always true that there are slow starts in the first half of the year. We are confident that we will do, as I say --

Tom Copley (AM): This is the second half of the year.

Boris Johnson (Mayor of London): -- another 55,000 homes over the course of this Comprehensive Spending Review (CSR) period.

Tom Copley (AM): I wanted to ask you about your London rental standard which you --

Boris Johnson (Mayor of London): London rental standard. Yes.

Tom Copley (AM): Yes, your London rental standard. I have it here, which you have just published. In it, you acknowledge many of the major problems there are in the private rented sector in London which now stands at 25% of all households. You sort of concede that regulation is a good thing because you say you support regulation of housing standards and management but you think it should be self-regulation. Is that correct?

Boris Johnson (Mayor of London): What I do not think, and what I think people on your side of the argument want us to apply, are rent controls and to start to set maxima, to start to set limits on rents and that, I think, is not the way forward. Jurisdictions, where they do that, find that leads to a reduction in the choice, the availability. It drives people away from the market. It is a curiosity at the moment that after years in which I remember people saying, “Oh, we should be more like the Germans. We should be more like the Continental economies and we should have a larger and more thriving private rental sector”, people are now saying - now that it is, as you rightly say, a greatly increasing number - people are now saying it is a tragedy that people cannot get home ownership. We should be going for more home ownership but actually --

Tom Copley (AM): I am glad you mentioned Germany, Mr Mayor. I am glad you mentioned Germany because Germany has a system of rent regulation. You use the term ‘rent control’. I do not think many people on what you describe as my side of the argument want to go back to some sort of crude system of rent capping. In Germany, they had exactly the --

Boris Johnson (Mayor of London): Well, I thought, sorry, that was the manifesto on which your candidate fought the last election, last mayoral election.

Tom Copley (AM): No, he did not, Mr Mayor.

Boris Johnson (Mayor of London): Yes, he jolly well did.

Tom Copley (AM): No, he did not. He did not.

Boris Johnson (Mayor of London): Oh, yes, he did.

Tom Copley (AM): That is misleading, Mr Mayor. That is very misleading. The system they have in Germany, which as you mentioned, 57% of the German housing stock is in the private rented sector, a system which you praise in your draft housing covenant which is longer tenancies and indexed linked rent increases. You acknowledge that is a positive step forward.

Boris Johnson (Mayor of London): Sorry, what is the question?

Tom Copley (AM): The question is you seem to acknowledge that is a positive step forward because you propose a voluntary system, to trial a voluntary system of that here in London.

Boris Johnson (Mayor of London): What we want to do is to expand the private rented sector. Fundamentally, we want to build more homes and indeed more homes for private rent. That is the way forward and in a very difficult market, we want to make sure Londoners are not gouged, not victimised by their landlords and there are various approaches you can take. We think the London rental standard is a good way forward. It is going to be launched next year by us. We intend to make a big thing of it. We intend to make sure we do everything we can to increase supply whilst giving as much protection as we possibly can to tenants. That is the programme.

Tom Copley (AM): Mr Mayor, I would submit humbly to you that without any form of compulsion or statutory regulation on landlords to uphold this, the draft rental standard isn’t worth the paper it is written on.

Boris Johnson (Mayor of London): I do not agree with you. About the options you support - I do not quite know what you support - but the options you talk about, index link, whichever way you cut it, you are talking for some kind of coercion or compulsion in rental maxima. All the evidence I have suggests that would lead to a reduction in the choice and the availability for Londoners, and I do not think that is the way forward.

Tom Copley (AM): Mr Mayor, I think that is something you assert without evidence but I shall leave my questioning there.

Boris Johnson (Mayor of London): I have no evidence; it is hard for me to know what your policy is but it seems to be a little bit obscure this morning. You say you support what is going on in Germany. From what I understand of the Germans, they have a historic tradition of a massive rental sector. We have been under continual pressure as a matter of public policy in this country to try to expand the rental sector. It is now expanding. What we want to do is to keep it expanding but in such a way as to protect the interests of those who are renting. We think the best way to achieve both things is to have the rental standards approach that we are going to be launching next year.

Tom Copley (AM): Thank you, Mr Mayor. I am going to leave the questioning there.

Main question

Tom Copley

Supplementaries

1John Biggs
2Darren Johnson

Commitments

1Housing Crisis