Housing: Rented Homes

Baroness Hanham Excerpts

Thursday 1st December 2011 Lords Chamber

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what action they are taking to deal with the shortage of homes for rent.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the Government are committed to the provision of affordable housing and are investing nearly £4.5 billion to help deliver up to 170,000 new affordable homes, mainly for rent, by April 2015 in England. This is more than the 150,000 originally estimated and means that the Government will be able to deliver more affordable homes in that timescale than had originally been anticipated.

[Lord Kennedy of Southwark]

My Lords, we have the lamentable failure of the Government on new homes for rent. There is also the impact of 80 per cent of market rent, which means that a family of two adults and two children living in the London Borough of Newham needs an income of £48,000 a year to afford a home without claiming universal credit. Does the noble Baroness understand that, because of the lack of joined-up thinking across government and failed policies, hard-working families are paying the price?

[Baroness Hanham]

My Lords, that scoops up a whole lot of things, some of which are not entirely to do with me. The universal credit is not part of my department, although I recognise that the housing benefit goes towards the contribution of housing facilities. We are trying to provide, and will provide, affordable housing for as many people as we can. The universal credit and the amount of money paid in housing benefit is something that my noble friend Lord Freud will deal with in due course.

[Lord Shipley]

My Lords, does the Minister agree with me that the reason for the shortage of homes for rent is the failure of the previous Government, over 13 years, to build council houses? Given the pressure on the private rented sector, and the fact that 40 per cent of homes in that sector do not meet the decent homes standard, what consideration is being given to further regulation of the sector? Will the Minister consider the advice of the British Property Federation, the National Landlords Association and the Association of Residential Letting Agents that there should be a system of compulsory regulation of letting agents to ensure that professional and ethical standards are applied to private sector lettings?

--- Later in debate ---

[Baroness Hanham]

My Lords, with regard to the last point made by my noble friend, the Minister for Housing, Grant Shapps, has said that he is looking to see whether there is any requirement for letting agents to be registered. He is keeping that under review but there is no plan to do so at the moment. With regard to decent homes, yes, the decent homes money will still be there, and we expect to make a big contribution to that in the next few months and have done so already. Yes, the number of affordable homes was going down, rather than up, under the previous Government, and it is a matter that we are having to deal with.

[Baroness Turner of Camden]

My Lords, is the Minister aware that one of the problems is the size of the rents that are being charged, particularly in places such as London? For example, in my area of London a two-bedroom flat will cost £500 a week to rent. That is right out of the range of ordinary working people. Is the Minister aware that after the last war there was rent regulation that enabled at least some people to get into affordable homes? Some regulation is needed in this area at present.

[Baroness Hanham]

My Lords, young people on the waiting list who require affordable homes, or who are being asked to find private accommodation, will, like everybody else, have to see where they can find accommodation that they can afford. That is happening across London in particular. Housing benefit will support what it can, but I am afraid that people either have to pay the additional amount or find somewhere that falls within their capability. I do not think that anybody wants to go back to rent control. It was not helpful, did not leave properties in good condition and was not fair.

[Lord Best]

My Lords, will the Minister tell us what is happening about the real estate investment trusts, which are the intermediaries that allow insurance companies and the big pension funds to invest in residential property? They have been held up for a long time by the bureaucracy and complexity of the system but we badly need the finances that those big City institutions could put into residential housing. They would probably be rather good landlords. Will she tell us what is happening about those REITs?

[Baroness Hanham]

My Lords, I recognise entirely what the noble Lord has said. This is a very important aspect of getting money into residential accommodation. I think this matter is still being discussed with the Treasury. I hope that it will be able to say something about that in the not too distant future.

[The Lord Bishop of Hereford]

My Lords, we have heard questions about the rental prices in London. Will the Minister be kind enough to say something about what the Government are doing to try to ensure that there are more affordable rental homes in villages and the countryside as well?

[Baroness Hanham]

My Lords, the Government have a number of policies. The right reverend Prelate will know that a community right to build is one of the policies coming forward, which will enable communities to decide whether they can contribute in some way to getting affordable housing. Secondly, we are allowing decisions about the requirement for housing to be made locally so that local people have a bigger say in what is provided and where. We fully recognise the fact that affordable housing is needed in country villages but we also believe that if local people know where it is going to be, understand where it is going to be and are happy with that, there is far more likelihood that those properties will be built.

[Lord McKenzie of Luton]

My Lords, the Minister will be aware of provisions in the Welfare Reform Bill whereby housing benefit will be docked for those tenants deemed to underoccupy their house, even if there is no suitable available accommodation for them to move into. The noble Baroness will also be aware of the announcement on Tuesday about the so-called reinvigoration of the right to buy, with 50 per cent discounts. Will those tenants deemed to underoccupy their house be able to benefit from the right-to-buy provisions at the full 50 per cent discount?

[Baroness Hanham]

My Lords, I must be perfectly honest that I cannot answer that correctly. I will write to the noble Lord on that aspect. However, as regards the proposal on the right to buy, it is suggested that the discount will go up to 50 per cent, which means that there will be more opportunity for people to take advantage of the right to buy. The other side of that is that, unlike in the past where a substantial proportion of a deposit had to come back to central government, it will be retained locally so that it can be used to provide further affordable housing.

[Lord Cormack]

My Lords, will my noble friend recognise that although the right-to-buy policy was rightly and widely welcomed, and many of us welcome what the Chancellor said in outline, nevertheless it took a lot of houses out of the affordable bracket? It was a particular mistake to allow those occupying old persons’ bungalows to buy their houses because it meant that their children bought them and then sold them on at a great profit, thereby depleting the stock of that sort of housing. Can we please not repeat that mistake?

[Baroness Hanham]

As I said in my previous answer, any money that comes from right to buy will be invested in new affordable housing. As for residential homes, they are slightly different to the mainstream right to buy, but I note what my noble friend says.