Enterprise and Regulatory Reform Bill

Baroness Brinton Excerpts

Wednesday 6th March 2013 Lords Chamber

That is the background to my amendment. I believe that reform is needed in this area. I am not expecting the Minister to give way at the Dispatch Box today, but I hope, following my conversation with civil servants last week on these matters, that we can have some legislative change in this area at Third Reading. I beg to move.

[Baroness Brinton]

My Lords, I spoke on this in Grand Committee and I do not want to repeat either the points I made then or the many comments that have been made by noble Lords this afternoon. I want to make two or three additional points.

I have noticed in my home town of Watford a proliferation of letting agents, a constant change in their brand and marketing or moving address. Certainly, for the tenant, there is no clarity in the difference between an estate agent and a letting agent. The Government have argued that accepting this amendment complicates the landscape in this area. I think the exact opposite is true. I have two examples of tenants suffering problems with letting agents and one of landlords.

A typical prospective tenant might be a single mum who has found her way back into work. I happen to have a friend who was in this situation last year. The letting agency decided that it was going to demand of all single mothers with children, regardless of whether they had work and were able to show they had continuous employment, four months’ rent and, in addition, a guarantee from a male whose work they also wanted guaranteed. These are most extraordinary conditions.

One of the major problems is that many people who are desperately seeking rented accommodation would not know where to go. If you are struggling to find accommodation in your home town, to be able to go to Citizens Advice means that in reality you will lose the property. Certainly, in the south-east, lower cost rented property is at an absolute premium. This sort of behaviour, when there is no ombudsman and no code of conduct, is very difficult to police. I only know about this because of a personal contact.

More familiar to your Lordships’ House will be the example of students in a university town trying to find accommodation. If they have been lucky enough to have a year in halls, they often end up trying to find accommodation elsewhere. One of my children’s universities used to say: “Please find your accommodation through the university accommodation syndicate. If you go outside, we cannot guarantee that you will not be ripped off by letting agents. In particular, many letting agents have a reputation for finding every reason under the sun not to return your deposit”. The fact that you have to warn students of this before they have even entered into a contract tells me that there is something wrong with the letting agency business.

Many landlords pay extra money for their agent to manage the day-to-day business, perhaps if they are away. I have had, again, anecdotal evidence from two landlords who have been away from their town—which is why they pay the extra percentage charge—and discovered the letting agent ringing them to ask them to clean the house between lets and to arrange for the plumber to call and all the other things that they had thought were included in the extra percentage charge that they were paying. The noble Baroness, Lady Hayter, referred to the Liberal Democrat paper that was passed by conference, Decent Homes for All, and my honourable friend Annette Brooke MP has also been fighting with EDMs and other comments in another place on this important issue. My party certainly believes that we need to regulate the letting area.

I will add one final point. The coalition agreement, rightly, seeks to reduce red tape. Not accepting this amendment allows the continuation of a red tape for a consumer and a tenant, simply because, at the moment, a tenant has to understand the difference between being with an estate agent and a letting agent and to understand that if they are with an unlicensed letting agent, instead of going to the ombudsman and taking redress through the code of practice, they may have to go Citizens Advice, a small claims court or trading standards. My 19 year-old son in his first foray at university would not have known where to start with that. If we can do what his university rightly tries to do in guiding the students and say, “You need to be assured that the people you are dealing with actually follow a code of conduct and there is an ombudsman to whom you can turn”, then we would have a much simpler system, which is free of red tape.

I am very grateful to the Minister for the meetings that have been held over the past few days and hope that we will be able to hear some progress when he informs the House of any further consideration.

[Lord Jenkin of Roding]

My Lords, I hope that the noble Lord, Lord Campbell-Savours, will forgive me if I do not follow him in his very interesting description of what may happen in auctions, but I look forward to hearing the reply from my noble friend on the Front Bench.

Coming back to the amendment that was moved by the noble Baroness, Lady Hayter of Kentish Town, I will just raise one or two points. Members of my family have been both lessors and tenants in the present market and, apart from one case, have on the whole had good experiences. I was approached by the Association of Residential Letting Agents, ARLA, and have been quite impressed by what it has told me. Its primary function, as it puts it, is to professionalise the profession and to make sure that it has high standards and that those who enter the profession understand what the standards should be. It operates a voluntary scheme of registration and its anxiety is that a number of letting agents do not register for whatever reason, one of which may be that they do not want to comply with the standards.

Can my noble friend refer to one particular point when he replies? The noble Baroness, Lady Hayter, reminded us that, in opposition, my honourable friend Mark Prisk moved very similar amendments to legislation before the House produced by the then Government. In the debate in Grand Committee on 16 January—I apologise, again, that I was not able to be there—after referring to the speech that I have read from my noble friend Lord Deben, who gave the clear impression that he supported the amendment of the noble Baroness, Lady Hayter, my noble friend Lord Younger said:

“I note and respect the intervention of my noble friend Lord Deben in this respect as well. I know that the Housing Minister is aware of these concerns but I will raise them with him for further consideration. It is clear from the speech from the noble Baroness, Lady Hayter, that he—Mark Prisk, my honourable friend in another place—is aware of the issues that she has mentioned”.—[Official Report, 16/1/13; col. GC 250]

At this stage, all I need to ask is whether my noble friend Lord Younger approached Mark Prisk and what his response was. What was his reaction when reminded that he had in fact moved a very similar amendment himself when in opposition?

One is tempted to say, “Let us return this clause, with this amendment, to another place so that my honourable friend Mark Prisk may have an opportunity to say why he has changed his mind”. I am not sure that that would necessarily be the right thing to do but I will be impressed and influenced by the answer that my noble friend on the Front Bench gives me to this point. I find it difficult to accept that you can hold one very clear opinion in opposition and then find yourself responsible in the same field and hold a completely different one. It is often, as my noble friend Lord Deben said quite firmly in Committee, because it is a departmental attitude, which in this case may stem from the Treasury. As a former Treasury Minister, all I can say is that I understand that does in fact happen from time to time. However, whatever the reason, it does not seem to be a very satisfactory position and I look forward to hearing my noble friend on the Front Bench explain it.