Housing: Private Rented Sector

Thursday 14th June 2018 Lords Chamber

Question

11:07

Asked by

[Baroness Wilcox]

To ask Her Majesty’s Government what progress they have made in encouraging the private rental sector to increase housing supply.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, 20% of housing is in the private rented sector, which has doubled since 2002. Since 2012, the Government have been encouraging investment in the segment of the private rented sector known as Build to Rent.

[Baroness Wilcox (Con)]

I thank my noble friend for his short reply; it is very helpful. Have the Government any plans to extend the tenancy length before stamp duty land tax is charged, and what are they doing to ensure that local authorities and people in general are aware of the new changes that are coming? I have only recently visited some of these things that are being built and the people who are moving in. It is absolutely wonderful to see the change; it is so well suited to the fast-changing lives of our younger generation.

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend for her encouragement of my short responses, followed by her two questions. Stamp duty land tax will not be payable by many people purchasing tenancies; it will be very unusual outside London, and then only at the higher-value end of the market. Any changes are clearly a matter for the Treasury. My noble friend is quite right about the need for publicity for many of these excellent schemes that we are pursuing and, quite apart from her and others’ questions, we obviously ensure that details are provided on the website and that our partners are aware of this. It is a very good story to tell: we are progressing many changes through this House and the other place in relation to the private rented sector.

[Lord Clark of Windermere (Lab)]

My Lords, the Minister has indicated that there has been a considerable increase in the buy-to-let market. The informed newspapers say that it is drying up. Are they wrong?

[Lord Bourne of Aberystwyth]

My Lords, if I may slightly correct the noble Lord, I said that there was great growth in the private rented sector generally. I think it is fair to say that there has been a slowdown in the buy-to-let sector. Some of that is in response to tax changes, but I think it has stabilised now.

[Lord Best (CB)]

My Lords, 99% of the growth of private renting has not been about private landlords building new homes but private landlords buying existing homes, hence the corresponding decline in owner-occupation. May I ask the Minister about the concerns of Generation Rent, which are really about affordability and security—what you pay and how long you can stay in the property? Is there any progress with the important proposition from Sajid Javid—then Secretary of State for housing—that tenancies be for four years or so in the future in normal circumstances, rather than six months to one year, which can be so unsettling for tenants, particularly those with families and children?

[Lord Bourne of Aberystwyth]

My Lords, first, the noble Lord may not appreciate that the latest figures indicate an increase, although a modest one, in the rate of owner-occupation. On Generation Rent and the issue of longer tenancies, he is right that most of the private rented sector is not new builds, although we have 97,000 in the pipeline for the Build to Rent sector. However, in relation to longer tenancies, the noble Lord is absolutely right that the previous Secretary of State was in favour of this, as is the present one—very much so. We are pursuing that with the British Property Federation, which is the main player here and is committed to offering three-year tenancies and longer.

[Baroness Thornhill (LD)]

My Lords, the National Planning Policy Framework is due to report shortly. Will the Minister assure us that, in order to incentivise Build to Rent—I have some hope that this might provide additionality—there will not be further policy shifts which will in effect let developers off the hook when it comes to their financial contributions to councils with regard to the community infrastructure levy and Section 106 agreements? They provide important amenities and, in particular, contributions to social and affordable housing. Secondly, can he assure us that there will not be a trade-off in the quality of build against speed and the quantity of delivery?

[Lord Bourne of Aberystwyth]

My Lords, quality of build is important and is included in the NPPF; we have consulted on that and are now considering the responses, as the noble Baroness will know. There is also a commitment in the NPPF, as she will know, to people who want to rent their homes, and a particular provision on affordability.

[Lord Marlesford (Con)]

My Lords, I draw the attention of the House to my interests as declared in the register. Will the Government do more to encourage local authorities to facilitate the conversion of redundant agricultural buildings into residences to let?

[Lord Bourne of Aberystwyth]

My Lords, we are clearly in favour of anything we can do in that regard. As my noble friend will know, we are progressing a policy of a higher premium on empty buildings in legislation that is currently passing through this House, and it is important that we look at all avenues available to us to ensure that we use buildings for housing.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer the House to my relevant interests. While the overwhelming majority of private sector landlords do a good job, does the Minister agree that compulsory landlord licensing schemes, like the one in the London Borough of Newham, are an effective way of tackling rogue landlords? Will he join with me in congratulating Newham Council, the present mayor, Rokhsana Fiaz, and the previous mayor, Sir Robin Wales, on the effective work they have done in conjunction with the Metropolitan Police which has protected tenants but also uncovered council tax and income tax fraud, people trafficking, and people hiding in plain sight who were wanted by the Metropolitan Police in connection with serious crimes?

[Lord Bourne of Aberystwyth]

My Lords, I know that the noble Lord has raised this issue before, but not quite on such a broad front. This morning it is almost as if he had been sponsored by the London Borough of Newham. However, I congratulate him on getting that in. It does much good work, as all London boroughs do, and licensing, where appropriate, is certainly effective. The noble Lord will know that we are doing much in this House and elsewhere to encourage effective licensing of landlords, and I thank him very much for his support in that regard.

[The Earl of Listowel (CB)]

My Lords, I declare my interest in the property I have. I welcome what the Minister says about the increasing supply of housing in the private sector given the latest statistic released in March that 120,510 children are living in temporary accommodation, which is the 26th rise since December 2010. Would the Minister consider, among other options, developing an arm’s-length body to oversee the private rented sector so that more tenants would enjoy security and more landlords would enjoy security and a predictable future in their investment?

[Lord Bourne of Aberystwyth]

My Lords, I congratulate the noble Earl on what he does in promoting the position of children and families. That is absolutely appropriate and is something that we watch very closely. We will seriously consider any means of ensuring that that figure, which is too high, comes down.