Settle down, everyone. I do not need to speak for very long, because my hon. Friend the Member for Westminster North (Ms Buck) has done the heavy lifting for us by clearly setting out why section 21 should be banished. She has even persuaded Members from the Government Benches; let us hope that she has persuaded the Minister. I am sure that we will listen carefully to what the Minister has to say on this issue, having heard those arguments.
I also thank my hon. Friend the Member for Easington (Grahame Morris) for his speech, because the property market in his constituency is very different from that which we experience in London. Quite rightly, a lot of attention is focused on London because it is a hothouse of a market. Exploitation of tenants for financial reasons has certainly been very much on the increase with house price rises, but he correctly points out that that is a problem across the country. In some ways, we are lucky in London, in that properties tend to be valued and perhaps kept in a better state of repair. What one does not tend to see now, because the properties are such valuable commodities, is whole areas that have fallen into disuse.
On 15 January next year—just over a month’s time—it will be 30 years since the Housing Act 1988 came into effect. Assured shorthold tenancies are now, as was anticipated under the Act, the major form of tenancy in the private sector. That is not something we need to celebrate. I became a councillor in 1986 before the Act came into effect, and that was probably when I first started to get involved in tenancy matters and tenants’ rights, but it was probably not until I became a housing law practitioner from 1993 onwards that I fully understood just how dramatic a change had been wrought on the private rented market. It was quite an audacious piece of legislation. That was appreciated by practitioners and experts—there was quite a lot of fuss about the 1988 Act at the time—but it probably did not register so much with politicians or tenants, although it possibly did with landlords, just what a change we had made.
Perhaps the best way I can illustrate that change is from what I found by googling “protected tenancies”. Most tenancies before the 1988 Act would have been some form of regulated tenancy. That was the case for decades before, but many would have been protected tenancies under the Rent Act 1977. The first thing that came up when I googled “protected tenancies” was the Landlord Law Blog. I read from it not to be sarcastic—perish the thought—but because it gives insight into how landlords view assured shorthold tenancies. The post is titled, “Three ways to recognise a protected tenancy under the Rent Act 1977 (And avoid buying a property with a tenant you can’t evict)”. It states:
“If you work in property, particularly if you are an investor, it is important that you are able to recognise a protected tenancy when you see one.
Why? Because protected tenants have long term security of tenure.
This means that you will not normally be able to evict them if you want vacant possession. Not unless you are able to provide another property for them to live in. And even then, only if it is considered ‘suitable’…The main effects of this are…The tenant can register a ‘fair rent’ which is then the only rent the landlord is allowed to charge…The tenant can normally only be evicted if he is in arrears of rent (sometimes) or if the landlord is able to provide ‘suitable alternative accommodation’, and”—
“If the tenant has a spouse or family member living with them at the time of their death, they will inherit either another protected tenancy (if they are a spouse) or an assured tenancy (which also has long term security of tenure!)
The effect of all this is that you are stuck with a tenant who you cannot evict and who is usually entitled to pay a rent which is considerably lower than the market rent you could have charged had the property been an AST.
So how can you recognise when a property is being sold with a protected tenant?
Here are three tips for recognising protected tenancies.
1. The property is being sold for a low price…2. No tenancy agreement is available…3. Check the Valuation Office rent register”
to see whether a fair rent has been registered.
What could be worse than for a landlord to end up with a tenant who has protected rights? That was the norm, however, prior to the 1988 Act. Most tenants would have rights of that kind: rights of succession, rights to a fair rent and rights to be shown cause before eviction took place. In many ways, a private sector tenancy had more in common with a social tenancy than with an assured shorthold tenancy now. The irony is that the rights of social tenants have been substantially weakened under Conservative Governments, both in terms of so-called affordable rents, which generally are not affordable, and in terms of the end of lifetime tenancies or fixed-term tenancies. Actually, social tenancies have gravitated towards that lack of security and affordability at the same time as they have declined as part of the housing sector.
I make those observations not to suggest that we simply repeal the 1988 Act and go back to the pre-Act regime, but to point out that it is within living memory —it is within my memory of my time as an elected representative—that that was the norm. Indeed, I am sure that other Members will still have protected tenants coming to them. It is very few now, obviously, because we are 30 years on, but it is usually about landlords trying to get rid of them to maximise the value of the property for sale or rent. The majority of our casework will be for social tenants or private sector tenants who are living in poor conditions or are subject to eviction because they have no security, but it is always interesting to look at the cases of protected tenants.
It puzzles me why we did not notice the fundamental change that the 1988 Act made to the way the housing market operated. One reason, which my hon. Friend the Member for Westminster North alluded to, is that the private rented market was very different 30 years ago. I suspect that the Government knew what they were doing in legislating to shift the balance of power wholly in favour of landlords. The balance had always been that way to some extent, but then it became massively so. One reason that was not noticed was that the private sector had got itself a bad name, partly for the conditions, but partly because it was no longer seen as desirable as compared with owner-occupation or a social tenancy with a council or a housing association. In 1988, 9% of homes were in the private rented sector in England. That has more than doubled to 20%. That is mainly accounted for by a decline in social tenancies across England. If one looks at London specifically, it is even more dramatic. The best figures I have are census figures. In 1991, 14% of homes were privately rented, and that is now 30%. Again, it has more than doubled. Interestingly, there has been a decline in owner-occupation from 57% to 48% and in social rent from 29% to 22% over that period.
For my borough of Hammersmith, the situation is different again. Again, the most recent figures I can get are census figures from 2011, but I am not sure things have changed much since then. A third of properties are private rented, a third are owner-occupied and a third are social tenancies. There has been a significant decline in owner-occupation and a significant increase in private rented from 23% to 32% over that 20-year period. That is a massive change in how the housing market operates. I suspect therefore that the sort of people who become private tenants now are different, too. I am not saying that having no security of tenure is good for anyone, but when, predominantly, those in private tenancies were those who would have chosen short-term rents—perhaps students or people waiting to buy properties—it was clearly less traumatic to be asked by a landlord to leave in a set period than it is for a family who want to stay and live in that area. Increasingly, it is families who are occupying private rented accommodation.
What has also changed is where someone then goes. One of the worst things that the coalition Government did—I apologise to my Lib Dem friend over there, the hon. Member for Bath (Wera Hobhouse), but we have to remember the Liberal Democrats’ complicity in all these matters at all times—was to introduce a duty to permanently discharge into the private sector those in housing need. That means that many families now have no expectation of ever getting a social tenancy. They are therefore at the mercy of a private landlord who may evict them. If they are still in priority need, they will go back to the local authority and ask to be rehoused. Due to benefit cuts and caps, that may be impossible in that area, and they may be moved a long way away. In any case, the process of recycling tenancies and moving on will occur on a regular basis.