Housing and Planning Bill
Debate between Baroness Grender and Lord Kerslake
Lord Kerslake
The noble Lord makes a very strong point. The stock transfer mechanism has been available to local authorities of all political persuasions as a means of improving the quality of the stock for, and therefore the well-being of, their tenants. It has been a very powerful model for improvement. Indeed, there are plenty of examples of transfers. They are not always appropriate but, where they have gone well, they have resulted in significantly improved stock. The question here is: why would a local authority continue to progress such a transfer when it would carry on paying a substantial levy with no means of financing it? Therefore, the noble Lord makes a very good point.
Local authorities are now in quite challenging circumstances in relation to managing their stock. A number of smaller authorities are asking whether they can sustain the management of their stock, given such things as the rent reductions and the impact those have on the viability of their stock. I know this for certain because I have been in conversation with a number of them. For some local authorities, the logical answer is to deliver a stock transfer. So, not only does it prevent the opportunity of transfer because of the positive benefit to a local authority; it also inhibits the transfer where local authorities have very significant issues that they need to address and that can only really readily be dealt with through a transfer process.
I should emphasise that I am not suggesting local authorities should or must transfer their stock—that must be their decision. What I am saying is that it is a perverse position that those authorities that choose to do that in a year’s time will be subject to a levy that those who chose to do it a year ago will not. I cannot believe that it is fair or reasonable for that to stay in the Bill. Therefore, I suggest that it be taken out.
Baroness Grender (LD)
My Lords, I rise to speak to Amendments 67, 68E and 69 in particular, but am generally supportive of all other amendments in this group. Other noble Lords have talked about how concerned they are that this part of the Bill will reduce the number of low-rent social homes in places where they are needed most. I am a governor of an inner-city school where over 50% of children are on pupil premium, but in an area where market rents are at a premium and house prices have continued to rise, even during the 2008 recession. I want to use that small community as an example of some of the challenges posed by this particular part of the Bill and to raise the questions that I have. I will then go on to explain my amendments.
How will key workers be able to live near a place such as I have described on reasonable rents? How will government objectives on the need for cohesive communities be met? We need a mix of tenure in every block and every street. I was particularly struck by what the noble Lords who spoke about that earlier had to say, especially the noble Lord, Lord Carrington of Fulham. What about children in the most challenged families who need a stable home near a school like the one I have described, in a very expensive part of inner-city London, so that they can have the stability they need to help them overcome all the other challenges in their lives? The school must stick with them throughout their childhood. For that reason, I support many of the amendments in this group and have extreme concerns about the sale of these high-value asset houses. I make those general comments as this is the first time I have spoken in the debate.
The amendments tabled by me and my noble friend Lady Bakewell of Hardington Mandeville are about newbuilds for local authorities and an exemption of those from sales. Without an amendment of this nature, the threatened forthcoming sell-off puts at risk existing building programmes. I will focus on that because councils are pausing, rather than building an asset, because they believe that they may lose the value of that asset almost as soon as it is built.
Shelter estimates that almost 113,000 council homes are likely to be above the value threshold, of which 78,778 will be lost from the most affected local authorities, of which half are in inner-city London. As other noble Lords have said, we are basing this on Shelter figures because, at the moment, that is our best grasp of figures in this area pending more detail from the Government. The top 20 councils that are most impacted currently have plans to build 20,390 homes. However, even the threat of this legislation means that they are pausing in building these homes. For example, Islington Council has said that the policy could end its newbuild programme. I would be interested to hear how the Minister believes councils can even borrow at the moment to build, given that lenders can have no confidence in future revenue from that property if, as soon as it is built, it is in jeopardy of being sold. Indeed, existing council building programmes are often partly financed from the revenue projected from the sale of a small number of high-value council homes, with one fundamental difference, which has been much debated already: the councils get to keep the money.
Housing and Planning Bill
Debate between Baroness Grender and Lord Kerslake
Baroness Grender (LD)
My Lords, in the most recent discussion, the noble Lord, Lord Kennedy, suggested that perhaps this section should go. Like his fairy godmother, here I am with that moment. What I am proposing applies to all the clauses relevant to abandonment, and it is that they should go at this point in this discussion.
My reasons are as follows. This is a new and complex change in the law for which there is no need. The impact is on a small percentage of tenancies, so why introduce new legislation? Clauses 8 and 21 already cover this area. This change may be exploited by unscrupulous landlords with vulnerable tenants, especially if it is taken out of the county court process and without any kind of oversight. This goes against the flow of a really good piece of the Bill on rogue landlords. Above all, there is a danger that it will make people homeless.
The section on abandonment of property appears to us to be a sledgehammer to crack a nut. The number of tenancies where abandonment is an issue that would fall within the remit of this legislation is estimated, not by Crisis or Shelter but by the Government’s own analysis, to be 1,750 each year out of a total of 4.4 million tenancies. That is a tiny amount, which makes me question why we should introduce a new and deeply complex layer of additional process and legislation.
This therefore appears to be for landlords who are worried that they cannot quickly reclaim a property where it has been abandoned. Their concern seems to centre on the fixed-term period for a tenancy, which is most commonly six months—a period in which they cannot use a Section 21 notice. If, on the other hand, a property was abandoned outside the fixed-term period, an uncontested Section 21 notice would mean that possession could take place in around three months, which is about the same amount of time as is proposed in the Bill. So it seems that the issue is about getting possession in the fixed-term period.
In the fixed term, the issue that perhaps landlords have is that Section 8, a fault eviction, takes—in the view of some landlords—too long. However, as I have already said, there are very few cases of abandonment and not all of these will be in the fixed term; by the Government’s own estimate the number of properties that are abandoned within the fixed term is likely to be very few. If the Government are concerned that their own eviction processes—namely, Sections 8 and 21—are not working, should there not be a complete review of that rather than the addition of this complex layer?
This proposal, which sets a dangerous precedent, takes this outside the court’s oversight in any way, so who oversees this? There are already powers for a landlord to take possession when they are convinced that the property is abandoned. For instance, if someone’s possessions have been moved out and they have left the keys, the landlord can immediately and legally reclaim the property under something called “implied surrender”. But the tenant’s actions must clearly indicate that they have abandoned the property. So I would like to hear from the Minister why the current system of implied surrender is not being used in these very rare cases.
Shelter and other organisations deal with vulnerable tenants—and we need to focus on vulnerable tenants with regard to this, since the number of tenancies is so small. First, it opens up the possibility of unintentional evictions, where someone is taken ill or suddenly called away to care for a relative and is unable to respond to notices. If that person pays their rent in cash or their housing payment benefit payment is disrupted, they could easily get into arrears while they are away and could be mistakenly assumed to have abandoned their property.
Secondly, an unscrupulous landlord could use this process to evict a tenant they did not want outside the processes of the court or any kind of oversight. As discussed just now, we are very concerned about Clause 57(6), which states:
“The first warning notice may be given even if the unpaid rent condition is not yet met”.
In fact, by our calculations it means that the process could take as little as nine weeks, not 12 weeks. So we worry that notice could start to proceed at a much faster pace. Is there any concern here at all that landlords can use this, frankly, to jump the gun?
We recognise, as a result of objections in the Commons, that a new third warning has been added, which merely specifies that it would be fixed not to the door, as I read it in the Bill—I ask the Minister to correct me if I have got that wrong—but,
“to some conspicuous part of the premises”,
which will be specified in regulations at a later date. Let us hope that it will not be a yellow Post-it note on a lamp-post—but how do we know that it will not be? There is no specification at the moment, but how would we know? Above all, who has oversight to prove that that notice was put there, since this is out of the courts? So will the Minister explain how that will be overseen? Who will be the judge of whether the landlord, claiming to have fixed that conspicuous notice, has indeed fixed it?
The main concern is that unscrupulous landlords would be allowed to use the abandonment procedure as a pretence to carry out illegal evictions. Other noble Lords who are familiar with this area are already familiar with some of the things that landlords can do. Let us remind ourselves of some of the illegal things that landlords attempt to do, even under a Section 21 notice. I do not refer to all landlords. There are a lot of very responsible landlords. But some attempt to do things like this.
I will give you a case study with which Shelter provided me. Emma was served with a Section 21 notice. The notice was invalid because it gave only one month’s notice. She informed the landlord of the invalid notice. Since then she has experienced harassment from the landlord and his colleagues. The landlord threatened to jump over her fence, force entry, kick the door down and sublet the rooms in her house, even though she had exclusive occupation of the home—all in an attempt to force her to leave before she has to legally. Her windows have been broken and her phone line has been cut from outside. This is the kind of thing that, obviously, will be done by rogue landlords. There are a lot of good things in the legislation, but abandonment opens up a possibility of abuse by people such as this.
The vast majority of landlords, as I have said, are decent and responsible, but there are some who will try to apply this bit of the law to intimidate and evict tenants. By taking evictions outside the court and through unclear legislation, it is not difficult to imagine that an unscrupulous landlord will lie about sending the notices and tenants will become homeless.
Citizens Advice, which has great expertise in dealing with these kinds of vulnerable tenants, is also deeply concerned about this and about the likely costs and implications for local authorities. In contrast to the rest of this Bill, the section on rogue landlords is supported across the parties. It seems a shame to introduce this new, complex and unnecessary addition to the Bill. It has all the hallmarks of something that, frankly, should be submitted to the Red Tape Challenge rather than agreed by this House. The threat remains that it will be used by landlords who are unscrupulous. I asked for reassurances on this issue at Second Reading and I am still seeking them at this stage.
Lord Kerslake (CB)
My Lords, I have concerns about this section of the Bill. I am very much taken with the arguments of the noble Baroness, Lady Grender, that this section needs a fundamental rethink and that, in trying to amend it, we risk simply ameliorating what is not a terribly well thought-through part of the Bill. The balance of power between landlords and tenants now is so strongly in favour of the landlord that we should think very carefully about adding a further power to landlords in relation to this issue, or indeed any issue. We should be very persuaded that there is a big enough problem to solve. We have heard quite clearly from many noble Lords that there is not a sufficient issue to be solved—that, in comparison to the scale of the private rented sector, it is a very small issue. I think we risk putting in quite a bad piece of legislation, seeking to tweak it along the way to make it slightly better. We are actually putting in place something that we do not need and that is not likely to be helpful in tackling the issues we are talking about.
I want to make a point on which I declare my interest as president of the Local Government Association. We talked earlier about the burdens on local authorities from the previous amendments. Let me tell you the burden that will come from inappropriate evictions. I think it will be considerably greater in cost, leaving aside the damage to individuals, so it is right to think again about whether these provisions are needed at all.