Oral Answers to Questions

Heather Wheeler Excerpts

Monday 28th January 2019 Commons Chamber

[Dr Matthew Offord (Hendon) (Con)]

5. What progress he has made in discussions with developers and freeholders on ensuring that leaseholders are not liable for the removal and replacement of dangerous building materials.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

We have been clear that owners and developers should protect leaseholders from costs. As a result of our action to date, owners and developers have made a commitment to fund the cost of remediation, or have had a warrantee claim accepted, for 80 buildings so far.

[Dr Offord]

Although that is indeed admirable for those leaseholders, my constituents in Premier House in Edgware are still being told by the freeholder of their building that they must pay for the removal of the dangerous cladding. That has resulted in thousands of pounds of costs for legal fees and safety measures, and it has rendered their properties unsaleable. Will the Minister assure me that the Government have a plan B for leaseholders who are held liable for costs? Will she advise me when my constituents can reasonably expect their situation to be resolved?

[Mrs Wheeler]

My hon. Friend will have to excuse me for speaking with my back to him.

My hon. Friend works tirelessly to support the residents of Premier House in Edgware on the removal of cladding. I understand that that case will be brought before a tribunal at the beginning of April. The Government have made it clear that we expect building owners in the private sector to protect leaseholders from remediation costs. A growing list of companies, including Barratt Developments, Mace Group and Legal & General, are doing the right thing and are taking responsibility, and I can announce that Aberdeen Asset Management and Fraser Property have also joined that list. I urge all other owners and developers to follow the lead of those companies. I will consider all other options if they do not do so.

[Mr Speaker]

The growing phenomenon of Ministers reading out great screeds that have been written is very undesirable. A pithy encapsulation of the argument is what the House wants to hear.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Last week, the Minister told me that the Department is keeping pressure on Ballymore Ltd, following the Secretary of State’s letter of 19 December, for which I am grateful. However, the leaseholders have now received an offer from Ballymore saying that the bill is £2.4 million for fire safety work. They can have half a million pounds off, but they must pay the rest. That offer is only open until 31 March. What more can the Department do to help my constituents? Time is clearly running out.

[Mrs Wheeler]

I am not reading from any notes, Mr Speaker.

I thank the hon. Gentleman for that very useful information. If we can see the letter, we will take the matter forward.

[Mr Speaker]

Excellent.

[Robert Neill (Bromley and Chislehurst) (Con)]

20. The Housing Minister, in response to a debate on Wednesday 22 January, indicated that he had written to the owners and the developer of Northpoint in Bromley. It is exactly the same situation as that outlined by my hon. Friend the Member for Hendon (Dr Offord). Has the Minister yet had a response, and what assurance can be given to Bromley Council about the guidance should it use emergency remedial powers under the Housing Act 2004?

[Mrs Wheeler]

It is a pleasure to be able to face my hon. Friend; I apologise to hon. Members behind me.

The Secretary of State has written, and we are awaiting the outcome to that. As soon as we get a reply, we will be in touch directly with my hon. Friend.

[Mr Speaker]

I call Jim McMahon.

--- Later in debate ---

[Helen Whately (Faversham and Mid Kent) (Con)]

10. What steps his Department is taking to tackle the exploitation of park home residents.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

The Government are committed to ensuring that park home residents are better protected. We have set out a range of measures to review the park home legislation and tackle the abuse and financial exploitation of residents. New legislation will be introduced when parliamentary time allows.

[Helen Whately]

Residents of leisure park homes in my constituency appear to have been mis-sold their properties by rogue site owners, and they are now vulnerable to exploitative charges and intimidation. Will my hon. Friend consider extending the provisions of the Mobile Homes Act 2013 to give leisure home owners more rights and protections, and will she take a broader look at the mis-selling and misuse of leisure homes?

[Mrs Wheeler]

My hon. Friend has been a thorough champion on behalf of residents of leisure park homes. The situation is iniquitous. The Mobile Homes Act applies to residents of sites with residential planning permission, but leisure home owners are protected under consumer rights legislation. My Department is working with the Department for Business, Energy and Industrial Strategy, which is responsible for consumer issues, to better communicate those protections to leisure home owners. I look forward to meeting my hon. Friend shortly to discuss the matter again.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

11. What steps his Department is taking to reduce the time taken to build new homes.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

17. What recent assessment he has made of the adequacy of emergency cold weather accommodation for rough sleepers.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

The severe weather emergency protocol provision ensures that people sleeping rough are provided with emergency shelter during cold weather. Alongside the £30 million rough sleeping initiative funding for 2018-19, we have launched a £5 million cold weather fund to help authorities to provide additional emergency and longer-term accommodation this winter.

[Nic Dakin]

I thank the Minister for that answer. New Life Church, together with North Lincolnshire Council, is providing temporary support for people in really bad weather. Good work is also being done locally with the Forge project. What will the Government do to ensure that such projects continue into the future to help homeless people?

[Mrs Wheeler]

I thank the hon. Gentleman for that excellent supplementary question. The straightforward answer is that I would urge all councils that have not applied before to apply to this new fund and we will see what we can do for north-east Lincolnshire.

[Lyn Brown (West Ham) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

Holocaust Memorial Day

Heather Wheeler Excerpts

Thursday 24th January 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

I thank the Backbench Business Committee, and commend the hon. Member for Dudley North (Ian Austin) for securing this vital debate.

It has been a real privilege to hear nearly 30 powerful speeches and contributions by hon. Members across the House. It was a particular honour to hear the personal stories of the hon. Members for Dudley North and for Bassetlaw (John Mann). I echo the pledge to fight racism and prejudice wherever it is found. To put the mind of the hon. Member for Glasgow East (David Linden) at rest, Lord Pickles is focused on the matter of restitution.

The holocaust remains an incalculable tragedy that has touched so many lives, including hundreds of refugees, kinder and holocaust survivors who now call Britain home. Every year we are privileged to hear their testimony. Some tell of their life before the Nazi occupation and the impact of Kristallnacht. Others give harrowing accounts of conditions in the death camps and the forced marches. Others were separated from their parents as children, to be brought up safely.

There are also stories of those who reached out and saved others. We can take pride in the fact that some of those extraordinary people were British. One such man worked for the Foreign Office. As we have heard, his name was Captain Frank Foley. Just yesterday, at a moving ceremony in the Foreign and Commonwealth Office, a bust of Captain Foley was unveiled by the Foreign Secretary, and holocaust survivor Mala Tribitch.

As we have heard, the theme of this year’s Holocaust Memorial Day is Torn from Home. It is especially poignant for me, as Minister responsible for housing and homelessness. Home usually means a place of safety, comfort and security. As I think about the holocaust and the subsequent genocides in Cambodia, Rwanda and Srebrenica, I am mindful of the thousands upon thousands of people who never saw their homes again. It is also important to note that this year is the 40th anniversary of the genocide in Cambodia and the 25th anniversary of the genocide in Rwanda—in 2013 I had the honour to visit the memorial in Kigali.

Few events have had such a monumental impact on our democracy, our history and our values as the holocaust. That is why this Government are so proud to support the Holocaust Memorial Day Trust and its vital work in communities across the country. I pay tribute to Laura Marks and the team led by Olivia Marks-Woldman who have ensured that Holocaust Memorial Day goes from strength to strength. Their incredible efforts will see more than 10,000 events take place up and down the country this year.

I acknowledge a number of others as well: Karen Pollock and the work of the Holocaust Educational Trust, educating young people of every background about the holocaust and the important lessons it teaches us today; Dr Ben Barkow, his work at the Wiener Library and in setting up the Holocaust Explained website to help us all better understand that dark period of history; Lillian Black, who has worked tirelessly to create the holocaust centre at Huddersfield University, which will provide vital holocaust education for young people; and, finally, the amazing work at the holocaust memorial centre in Newark, which is ensuring that survivor testimony is preserved for future generations.

I will also reflect on the historic task given to my Department to build a national holocaust memorial and learning centre, which we are doing with a cross-party foundation headed by the right hon. Lord Pickles and the right hon. Ed Balls. There can be no more powerful symbol of our commitment to remember the men, women and children who were murdered in the holocaust, and all the other victims of Nazi persecution, including Roma, gay and disabled people, masons and others. It will draw on the history of the holocaust and subsequent genocides. It will stand as a memorial, yes, but equally it will stand as a warning—a warning of where hatred can lead and a warning that when we say, “Never again”, we have to mean it.

After the liberation of Auschwitz-Birkenau—which I was privileged to visit privately in 2017—the world said, “Never again.” Yet exactly 30 years later, in Cambodia, the Khmer Rouge claimed the lives of a quarter of the population through mass murder and starvation, and we said, “Never again.” Twenty years later, almost 1 million Rwandans were murdered in 100 days, in a conflict in which friend turned against friend, and neighbour against neighbour. Once more, we said, “Never again.” We then witnessed the murder of 8,372 mostly Muslim men and boys in Srebrenica—I pay tribute to my hon. Friend the Member for Beckenham (Bob Stewart) for his amazing speech—and we said, “Never again.”

Rather than despair at the world’s collective failures, however, we must reaffirm our ongoing responsibility as citizens, as a nation, to do everything we can to stop such atrocities happening again. We must remember, too, that tolerance and reconciliation begin at home. The rise in the number of antisemitic incidents in the UK is shameful. It saddens me that Jewish communities in the UK should ever feel a sense of threat.

Each year that passes, I am mindful that living witnesses to the tragedy of the holocaust are becoming fewer in number, so I will conclude by remembering two incredible women we lost last year: Gena Turgel, who survived the Krakow ghetto, a death march, Auschwitz and Bergen-Belsen, as we have heard; and Sabina Miller, who was born in Warsaw, survived the Warsaw ghetto and spent most of the second world war on the run from the Nazis. In later life, Sabina worked closely with the Holocaust Memorial Day Trust, receiving the British Empire Medal in 2017 for services to education. Both lives are a warning of the dangers of hatred but, equally, they are profound examples of tolerance, kindness and respect. They are examples we should do our best to follow—and never forget.

Again, I thank everyone for this debate. It is the right thing to do. It has been an honour for me to be the Minister replying today.

Tenant Fees Bill

Heather Wheeler Excerpts

Wednesday 23rd January 2019 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

Today I have placed in the Library of the House the Department’s analysis on the application of Standing Order 83O in respect of any motion relating to a Lords amendment, for Commons consideration of Lords amendments stage for the Tenant Fees Bill.

[HCWS1265]

Tenant Fees Bill

Heather Wheeler Excerpts

Ping Pong: House of Commons
Wednesday 23rd January 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

I beg to move, that this House agrees with Lords amendment 1.

[Mr Speaker]

With this it will be convenient to discuss the following:

Lords amendments 2 to 35.

Lords amendment 36, and amendment (a) in lieu.

Lords amendment 37, and amendments (a) and (b) thereto.

Lords amendments 38 to 47.

Lords amendment 48, and amendment (a) thereto.

Lords amendments 49 to 60.

[Mrs Wheeler]

I draw Members’ attention to my entry in the List of Ministers’ Interests.

I am delighted that today we have a final opportunity to scrutinise the Tenant Fees Bill. I am grateful for the considered contributions from hon. Members to date. In particular, I thank the members of the Housing, Communities and Local Government Committee, chaired by the hon. Member for Sheffield South East (Mr Betts), for their pre-legislative scrutiny. I also thank the Opposition Front Benchers, the hon. Members for Great Grimsby (Melanie Onn) and for Croydon Central (Sarah Jones), for their constructive engagement.

It has been clear throughout that the Bill is one that we all support and that will deliver important changes in the private rented sector, improving the lives of millions of tenants. Letting fees can impose a significant burden on tenants, who often have little choice but to pay them time and again. The Bill will put a stop to such practices by banning unfair and hidden charges, making it easier for tenants to find a property at a price they are willing to pay, and saving renters an estimated £240 million in the first year alone. I know the changes may worry some in the lettings market, but agents who offer good value and high-quality services to landlords will continue to be in demand and play an important role in the sector.

Before I speak to the Government amendments made in the other place, I want to put on the record my thanks to my noble Friend and ministerial colleague Lord Bourne of Aberystwyth, who ably steered the Bill through the House of Lords, and to my noble Friend Lord Young of Cookham, who assisted. I also thank all peers who contributed positively to the debate. The Bill has benefited from their constructive engagement and scrutiny. Finally, I thank the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), for his efforts in leading the Bill through this House last year.

I believe the Lords amendments strengthen the Bill and respond to many concerns raised during the debate in this House. Lords amendments 1, 2, 5 to 12, 15 to 18, 28 to 35, 49 and 55 are minor and technical inclusions that ensure consistency in the Bill and that the Bill best delivers on the policy intent. Lords amendment 5 clarifies that letting agents are prohibited from requiring a tenant or relevant person to enter into a contract with themselves—for example, for additional services such as providing an inventory. Lords amendment 1, 2, 6 to 12 and 28 to 35 replace references to “tenant” with references to “relevant person”. Amendment 55 changes a reference to “incorrect and misleading information” to “false and misleading information”, to align with other references in schedule 2. Amendment 15 to 18 ensure that the language around “day” and “date” in clause 11 is consistent, and amendment 49 makes it clear that the definition of a television licence in paragraph 9 of schedule 1 applies to the entire Bill.

I know that many hon. Members feel passionately about capping tenancy deposits. The issue has been discussed in great detail in both Houses, and we have listened carefully to the arguments made. That is why we tabled Lords amendments 36 and 37 to lower the cap on deposits to five weeks’ rent for properties where the annual rent is less than £50,000; where the annual rent is £50,000 or more, the deposit cap will remain at six weeks’ rent. The vast majority of tenants will be subject to a deposit cap of up to five weeks’ rent. The higher six-week deposit cap will apply only to properties where the monthly rent is £4,167 or more. Valuation Office Agency data show that across England the median monthly rent is significantly less than that. The upper quartile monthly rent for properties with four or more bedrooms in London is £3,142. The higher deposit cap is intended to apply not to the bulk of the private rented sector, but to high-end rentals—a niche area of renting where the costs involved are greater, making a deposit cap of six weeks’ rent more appropriate.

The Government took a balanced view. We wanted to ensure that landlords had sufficient financial security and flexibility for their properties, but recognised concerns that a six-week cap for all tenants might not best deliver the changes to affordability that are needed at the lower end of the market. Importantly, a cap of five weeks’ rent for properties with an annual rent of less than £50,000 extends the benefits of the deposit cap to an estimated one in three tenants. I am sure hon. Members agree that that is a laudable outcome. Also importantly, a cap at five weeks’ rent also aligns with a recommendation made by the Housing, Communities and Local Government Committee.

The amendment tabled by the hon. Member for Great Grimsby would lower the tenancy deposit cap to three weeks’ rent for all tenancies. Above all, the amendment would not help tenants and it risks distorting the market and causing behavioural change. Using data from deposit protection schemes, we estimate that some 93% of deposits now exceed three weeks’ rent. A cap of three weeks’ rent would greatly increase the risk of the deposit not fully covering damage to the landlord’s property or any unpaid rent.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

As a member of the Housing, Communities and Local Government Committee, I am delighted that the Government have adopted the recommendation of five weeks. Does my hon. Friend agree that having a three-week cap is a rather peculiar notion? I do not recall a single piece of evidence from any expert citing that cap. Does she agree that the evidence for such an amendment needs to be produced?

[Mrs Wheeler]

My hon. Friend is completely right. The evidence to the Select Committee showed that there was no reason to have a three-week cap and that five weeks was better.

[Richard Graham (Gloucester) (Con)]

The Minister is absolutely right: the Select Committee was clear in its recommendation, and when the matter was discussed in the Public Bill Committee, a lot of evidence was produced to demonstrate that five weeks was a good compromise, which landlords could accept and which would benefit most tenants. The Opposition’s object in proposing three weeks is purely political, enabling them to say to tenants, “We tried to get it much lower,” when in fact the result would surely be many fewer properties available in the market for renting, which would hurt our constituents.

[Mrs Wheeler]

I could not have put it better myself. We do not want to create a situation that encourages landlords to withdraw from the market or ask tenants for more rent in advance, thus decreasing the overall net benefit of the ban on unfair charges. Also, we do not want to legislate in a way that would disadvantage certain groups, including pet owners and those who have lived abroad or have a poor financial history.

The real risk, as we have heard throughout the parliamentary process, is that a cap of four or three weeks’ rent could encourage tenants to forgo their final month’s rent payment. The Housing, Communities and Local Government Committee and peers in all parts of the other House recognised that risk and agreed that a deposit of five weeks’ rent was the right compromise. Lords amendments 36 and 37 are the result of cross-party discussion and agreement. It is worth noting that the hon. Member for Great Grimsby publicly welcomed the five-week deposit cap when it was announced. With that in mind, I hope hon. Members recognise that the Government have already proposed the best solution to the tenancy deposit cap.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Is my hon. Friend aware of anywhere in the world, and certainly any part of the United Kingdom, where deposits are capped at three weeks’ rent? Indeed, as she knows, the cap in Scotland is eight weeks’ rent.

[Mrs Wheeler]

I thank my hon. Friend. He has great knowledge of these matters and it is always helpful to hear that. In Scotland, it is eight weeks. We are putting forward five weeks. No, I am not aware of a cap at three weeks.

--- Later in debate ---

[Liz Twist (Blaydon) (Lab)]

The Minister will recall that, during the pre-legislative scrutiny in the Select Committee, one of the issues raised was about enforcement of rights. Does she agree that it is necessary to properly fund local authorities so that they can challenge landlords who seek to charge unfair fees?

[Mrs Wheeler]

Yes, indeed. I thank the hon. Lady for her intervention. I will get on to that point later in my speech, so she will have to stay and listen to the end, I am afraid.

[Kevin Hollinrake]

I must draw the House’s attention to my entry in the Register of Members’ Financial Interests. The Minister talks about agents and landlords having reassurance about being able to make reasonable charges where their action or work is required through the fault of the tenant. The Bill does make provision for this in a situation with the loss of keys, but it makes no provision for the costs of chasing late rent, despite the fact that it may take several attempts to collect it. In effect, that means that charges would be increased on the landlord at the expense of good tenants, on the basis that some bad tenants who do not pay their rent on time create a lot more work for the agent or the landlord.

[Mrs Wheeler]

Again, I thank my hon. Friend for his intervention. He is so deeply imbued with knowledge of these issues that I take note of it. I think he will find that later in the Bill there is a clause that might be helpful to him.

There is also a power in clause 3 to amend the list of permitted payments, including the level of the deposit cap and types of default fees that can be charged, should this be required.

Lords amendment 48 clarifies that landlords and agents will still be able to charge for any damages for contractual breaches as they do now. On this point, the hon. Member for Great Grimsby has tabled an amendment seeking to ensure that, where a landlord or agent wishes to charge a payment for damages, they must provide evidence in writing to demonstrate that their costs are reasonable. I would like to reassure her, and other hon. Members, that that amendment is not necessary. It has never been the intention that the Bill affects a landlord or an agent’s right to recover damages for breach of contract under common law. That is why we brought forward Lords amendment 48 to clarify the position and to ensure that such payments will not be outlawed under the ban. I want to reassure hon. Members that this does not create a back door to charging fees. I repeat: it does not create a back door to charging fees. Damages are generally not meant to do anything more than put the innocent party back in the position they would have been in had the contract not been breached. No reasonableness test is therefore needed. There are already large amounts of case law that deal with what is appropriate in a damages case. If an agent or a landlord attempts to insert a clause that requires a payment—for example, saying, “If you do X, you must make a payment”—this will be prohibited under clause 1(6)(b) or clause 2(5)(b). Further, landlords or agents are required to go to court if they want to enforce a damages claim, or they could seek to recover them from the tenancy deposit. In both cases, they would need to provide evidence to substantiate any claim, and they would only be awarded any fair costs.

As such, the hon. Lady’s amendment is unnecessary. It would also not be appropriate for this Bill to start tweaking years of existing case law regarding damages payments. We are more likely to confuse the landscape than to clarify it. We are committed, on this matter, to working with Citizens Advice, Shelter and other industry groups to ensure that tenants fully understand their existing rights with regard to paying and challenging contractual damages. We have already taken steps to update our guidance to make this point clear. I hope that, with those reassurances, the hon. Lady feels able to withdraw her amendment.

Hon. Members will be aware that the Bill introduces a clear set of rules around holding deposits. This will improve transparency and provide assurances from both tenant and landlord around the commitment to entering into a tenancy agreement. To minimise the risk of abuse, Lords amendment 54 introduces a formal requirement for landlords and agents to set out in writing why they are retaining a deposit. This will empower tenants to challenge decisions that they believe to be unfair. It will also ensure that tenants do not continue to apply for properties and risk losing their holding deposit time and again without understanding why.

We also agree that it is not right that landlords and agents accept multiple holding deposits for the same property. That is why Lords amendment 41 ensures that a landlord or an agent can only take one holding deposit at any one time for a property, unless permitted to retain the earlier deposit. Lords amendment 50 will ensure that a tenant receives their holding deposit back when the tenancy agreement is entered into. Previously, it could have been the case that a landlord might have had grounds to retain the holding deposit, and done so but entered into the tenancy anyway. Further, Lords amendment 59 clarifies that a holding deposit must be refunded where a landlord or an agent imposes a requirement that breaches the ban or behaves in such a manner that it would be unreasonable to expect the tenant or relevant person to enter the tenancy. This will, for example, give tenants greater power to object where a landlord or agent has asked them to pay an unlawful fee or to enter into an agreement with unfair terms.

[Rebecca Pow (Taunton Deane) (Con)]

This is a very stressful time for tenants; I have had a case raised with me very recently. That is particularly so for those who are forced, for one reason or another, to move frequently, which seems to happen more often in London than elsewhere, including Taunton Deane. Does the Minister agree that these amendments and this Bill are going to make a real difference to their security, particularly the fact that they have redress over the deposit issue, which is incredibly stressful if they have to try to claim it back?

[Mrs Wheeler]

My hon. Friend is quite right. It does seem to be a bit more of a thing in the south-east than anywhere else. Nevertheless, this Bill, which we hope to get through tonight with no ping-pong, will apply across the whole of England, and it will help tenants going forward, so I thank her for her question.

Lords amendments 13, 14, 19, 20, 38 to 40, 51 to 53 and 56 to 58 are consequential to those on holding deposits that I have just described.

I would like to discuss some amendments made to ensure that the Bill does not adversely affect organisations that were never intended to be in scope. We have taken local housing authorities and the Greater London Authority, or any organisation acting on their behalf, out of the definition of “relevant person”. Lords amendments 3 and 4 ensure that those authorities and those acting on their behalf will be able to make payments in connection with a tenancy when acting on behalf of a tenant or guaranteeing their rent.

Local authorities have a duty to help the homeless find accommodation. We recognise that, as part of this, councils may need to provide assistance to applicants—financial or otherwise—to access private rented accommodation. We do not want inadvertently to prevent a local authority from carrying out that vital work.

Further, Lords amendments 24 to 26 exclude certain licences to occupy where advice or assistance is provided in connection with the grant, renewal or continuation of the licence by charities or community interest companies. The types of licence that will be excluded are those that have been granted primarily for the provision of companionship or companionship combined with care or assistance where no rent is paid. This ensures that the important work of schemes such as Homeshare can continue. Homeshare matches a person in housing need—often a young person—with a householder, who is often elderly and needs companionship, sometimes combined with low-level care or assistance. I am sure we all agree that that is a worthy cause that was never intended to be in scope of the ban on letting fees.

Lords amendments 21 to 23 and 27 ensure that the forthcoming client money protection provisions work as intended. We want to give landlords and tenants financial security, but not in such a way as to impose disproportionate and unnecessary burdens on industry, which might adversely impact tenants and landlords. We have clarified that money that has already been protected through a Government-approved tenancy deposit scheme is not required to be doubly protected by a client money protection scheme. That was never the policy intention.

We will also not require schemes to pay out where certain risks are excluded by insurers. Those policy exclusions typically refer to events such as war, terrorism or confiscation by the state. Neither can we expect schemes to hold insurance for every penny held by agents. Our amendments ensure that the level of insurance held by schemes is proportionate to the risk of client money being lost. We are permitting schemes to impose limits per individual claimant and aggregate limits, where they are at least equivalent to the scheme’s maximum probable loss. That is an accepted industry practice, and the Financial Services Compensation Scheme imposes such limits.

The amendments on client money protection also provide for a transitional period of 12 months after the requirement to belong to a scheme comes into force, permitting agents to join a scheme where they are making all efforts to apply for a client account but have not yet obtained one. We want to give agents sufficient time to find a bank that offers a pooled client account. Schemes will be able to work with agents to find an appropriate banking provider where they are having difficulty. I would like to be clear that the 12-month transitional period only applies in relation to applying for a pooled client account and not the requirement to belong to a client money protection scheme more broadly. That is intended to come into force on 1 April 2019, prior to the ban on fees, and as long as we do not have ping-pong.

Lords amendment 27 clarifies that the lead enforcement authority set up under the Bill can also enforce the client money protection regulations, and Lords amendment 60 is a consequential amendment to the title of the Bill. These amendments will ensure that client money protection gives tenants and landlords the financial security that they want and deserve, without imposing unreasonable and disproportionate costs on industry, which could increase costs for tenants and landlords.

Above all, these amendments improve affordability, strengthen protection for tenants and minimise the risk of abuse by the minority of rogue landlords and agents. They ensure that the Bill’s key provisions are clear and transparent on the face of the Bill, offering tenants the certainty and security that they deserve. I hope that Members will welcome the changes that have been made, which I firmly believe address the key concerns raised in this House. I am confident that the measures in the Bill will help to deliver the fairer and more affordable private rented sector that we all want to see for tenants, but also for decent, professional landlords and agents who are providing a vital service.

It is in all our interests to see this crucial legislation become law as quickly as possible and avoid any delay that ping-pong would inevitably cause. We need to allow a short period following Royal Assent to enable agents and landlords to become compliant with the new legislation. We therefore intend the provisions in the Bill to come into force on 1 June 2019, which means that the ban would apply to all new tenancies entered into on or after that date.

[Bob Stewart (Beckenham) (Con)]

Does the Minister feel, as I do, that the Bill will incentivise private landlords to give more tenancies, particularly to people who are on social benefits?

[Mrs Wheeler]

I thank my hon. and gallant Friend for his question.

[Bob Stewart]

Not so gallant today.

[Mrs Wheeler]

Always gallant. The Bill will help enormously to ensure landlords’ safety, while financially benefiting tenants.

[Bob Stewart]

It is for both sides.

[Mrs Wheeler]

Indeed—well said.

[Bob Blackman (Harrow East) (Con)]

I think my hon. Friend is coming to the conclusion of her contribution. She mentioned when these measures will come into force for new tenancies. Could she clarify that the Bill will apply to not only brand new tenancies, where a tenant moves into a property, but also existing tenancies that are renewed by being rolled over or where the tenant remains in situ and enters into a new tenancy agreement?

[Mrs Wheeler]

I thank my hon. Friend, who has been assiduous in his time on the Housing, Communities and Local Government Committee. The intention is for the Bill to apply to all new tenancies signed after 1 June. As he said—he must have better eyesight than anyone—I am close to concluding.

The exception to the 1 June date is the client money protection provisions in the Bill, which, as I have said, come into force on 1 April 2019. Ahead of that, we will continue to work closely with key stakeholders to support implementation of the ban. We will work with industry groups to ensure that the ban is properly communicated, and we continue to work with local authorities to ensure that they are ready to enforce it. I have already shared the draft consumer and enforcement guidance with Members, and it is now being updated to reflect the Lords amendments.

[Jeff Smith (Manchester, Withington) (Lab)]

I am pleased that the Government want to act quickly on this. Given how hard-pressed local authorities are, what will the Government do to help them manage this situation?

[Mrs Wheeler]

Like my hon. Friend the Member for Harrow East (Bob Blackman), the hon. Gentleman is prescient about what I am about to say. We are working with National Trading Standards to appoint the lead enforcement authority under the Bill. That will be a local trading standards authority appointed by the Secretary of State, and we intend the body to be in place ahead of implementation.

In conclusion, I very much hope that Members will support the amendments made by the Government and look forward to seeing the legislation implemented. I also hope that the hon. Member for Great Grimsby, having heard and accepted my assurances, will withdraw her amendments.

[Melanie Onn (Great Grimsby) (Lab)]

It is a pleasure to speak in this important debate. I would like to thank the Minister for her approach and the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Richmond (Yorks) (Rishi Sunak), who steered the Bill through Committee and was open to hearing the Opposition’s views on this small but very important Bill.

I shall speak in support of amendment (a) to Lords amendment 36; amendments (a) and (b) to Lords amendment 37; and amendment (a) to Lords amendment 48. I shall also pay tribute to the work that has been done in Committee, where there was a lot of fruitful conversation and consideration, and in the other place, which has resulted in the Bill arriving back in the Commons in a far better state. It is not just my hard work or the Minister’s hard work that has gone into the Bill. We are backed up by an enormous number of people, including charities, members of the Housing, Communities and Local Government Committee, who are listening keenly to our debate, and civil servants, who have put in many hours to make sure that the Bill is fit for purpose. I am very grateful to all those people who have participated.

In Committee and on Report, we discussed at length the default fee clause. Originally, the Government fought very hard against opposition from Labour and charities such as Shelter to remove a gaping loophole, which would have left the definition of a default to the discretion of those drafting tenancy agreements. It is interesting that Lords amendment 47 bears a striking resemblance to amendment 3, which I pressed on Report. Back then, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Richmond (Yorks), said:

“We believe it is for the tenant and the landlord to determine what it is necessary and fair to include as default charges, on a case-by-case basis. There are other potential default charges besides those for late payment of rent and lost keys.”—[Official Report, 5 September 2018; Vol. 646, c. 208.]

It is welcome that the Government have rowed back on that, despite being so bullish about it during the Bill’s passage through the Commons. I do hope that they bear that in mind when considering amendments to future housing Bills, in which I hope to play a role, and are more thoughtful. If amendments are tabled in good faith, I hope that Government Members would accept that, and if they are worth adopting, do so at an early stage, so that we do not appear conflicted on measures that are positive overall, particularly in this case for people in the private rented sector who are seeking a home and trying to access one.

As the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for South Derbyshire (Mrs Wheeler), pointed out, Labour always welcomes Government acceptance of the principles and details of our ideas, and we welcomed their acceptance of a Labour proposal in Lords amendment 47 to enshrine what counts as a default fee in the Bill. We believe that that will close a significant loophole in the Bill, moving it far closer to the type of tenant fees Bill that Labour has been proposing since 2013.

We have a number of concerns about the Lords amendments, as the Bill still does not reach its full potential to protect tenants from unscrupulous landlords who want to charge unfair fees. We are very keen to point that this is about the unscrupulous few, not the fair-minded, reasonable and proper many who exist out there. First, Lords amendment 48 adds a new permitted payment of damages to the Bill. The Minister touched on that, so I may have to revise what I am going to say—I hope that hon. Members will bear with me. We tabled an amendment because we are concerned about Lords amendment 48, but that does not extend to a belief that damages in principle are fundamentally wrong. Landlords should not have to pay for repairs when tenants cause damage to their properties, but we do not understand why the Lords amendment is necessary, and why it seemingly misses out a number of protections that are present in other parts of the Bill.

--- Later in debate ---

[Mrs Wheeler]

I am always willing to give the hon. Lady greater reassurance. Lords amendments 42 and 47 ensure that landlords and agents can charge default fees only in specified circumstances, which are listed in the Bill. Lords amendment 48 permits landlords and agents to recover costs for damages only in breach of contract.

[Melanie Onn]

I thank the Minister for that very helpful further explanation.

Another Opposition concern about the Lords amendments is that the Bill still does not go far enough to remove the barriers that high deposits pose to millions of renters across the country. Our amendments seek to address two points. The Minister says that reducing the deposit cap from five weeks to three would not help tenants, but I believe it would. A reduction of two weeks’ advance payment will of course help tenants to access properties. It would reduce barriers for private renters and enable them to access the rental markets, including for the first time. Turning that into a negative takes some extraordinary creative gymnastics, on which I congratulate the Minister.

--- Later in debate ---

[Bob Blackman]

I see the hon. Lady nodding about that point. Those two things are equally important.

Another consideration, which has not yet come out in the debate, is the economic impact of what happens with deposits. If we lowered deposits, I suggest that landlords would likely increase the rent over the period and—this is the key point—tenants would end up far worse off as a direct result, because landlords would have inflated the rent in order to recover the moneys due.

[Mrs Wheeler]

Let me clarify something about the ban applying to all new tenancies from 1 June. There will be a 12-month transition for tenancies signed before 1 June during which tenants can be charged. After 1 June 2020, no tenants can be charged fees banned under the Bill, which gives a clear date for when the provisions of the Bill will apply to all tenancies.

--- Later in debate ---

[Wera Hobhouse (Bath) (LD)]

I, too, draw the House’s attention to my entry in the Register of Members’ Financial Interests.

The Bill has returned to the Commons in a much better state than it was in when it left. The loophole relating to default fees has now gone. The detail on default fees will be on the face of the Bill, which will specify

“a key…or other security device”.

There is much more transparency in relation to the holding of deposits, with a fairer transaction between letting agents and tenants, and the deposit levels are better aimed at people on low incomes, having been reduced to five weeks’ rent.

I listened carefully to both sides of the argument about the length of deposits. I listened to what was said by the hon. Member for Great Grimsby (Melanie Onn), but I also listened to the counter-arguments. I entirely agree with the hon. Lady that we need to protect tenants and make the system easier for them, because there is a tough world out there for people on low incomes. I also agree that we should not inadvertently disadvantage renters. As long as we do not have the number of affordable and social homes that we need, they will always be in that tough world in which, ultimately, they are at the mercy of landlords when it comes to charges. This is only the beginning of an overall improvement for renters, and I hope very much that we will continue to make changes in the law that will make life easier for them, but I also hope that we will eventually provide the number of homes that we need in order to create an entirely fair rental market.

I pay tribute to my colleagues in the House of Lords, Lord Shipley and Baroness Grender. Lady Grender initiated these proposals in a Private Member’s Bill in 2016 and, with Lord Shipley, worked assiduously with the Government to improve the Bill. I also congratulate the groups that have long campaigned for this change in the law, including Shelter, Generation Rent and Citizens Advice.

For too long, upfront costs—often rip-off fees charged to tenants by unscrupulous lettings agencies—have pushed people into unmanageable levels of debt, and sometimes into homelessness. The current system means that people, particularly those on low incomes, must pay as much as £3,000 to move, even if they will be paying a lower rent. Some have predicted that we will see a rise in rents as a result, but evidence from Scotland suggests that that is unlikely. If rents rise, the relatively small amount per month will be manageable in comparison to the extortionate amount that it costs to move.

For too long people living in the private rented sector have been treated as second-class citizens, and the Bill goes some way towards putting that right. The Liberal Democrats welcome it, and welcome the Conservatives’ change of heart. We look forward to its introduction on 1 June, with only the small regret that it has taken so long for it to reach this stage. As I said earlier, I hope that we will continue to make changes in the law to make it easier for people to rent in a fair market where there is a good number of affordable and social homes.

[Mrs Wheeler]

With the leave of the House, Madam Deputy Speaker. I shall be very short and very pithy.

I thank Members on both sides of the House for their passionate and constructive contributions to the Bill’s passage. I also thank the civil servants who have worked so hard to bring the Bill to this successful stage. We particularly wanted that to happen quickly so that the lady who is pregnant would not give birth in the Box. I have told her that if the baby is a boy, it must be called Bill!

I hope we can all agree that improvements have been made, thanks to the work of many Members on both sides of the House, and that as a result the Bill will be even more effective in delivering its promise to protect tenants from unfair charges. I hope that the assurances I have been able to give will mean that the Commons amendments will not be pressed to the vote.

Lords amendment 1 agreed to.

Lords amendments 2 to 35 agreed to.



Schedule 1

Permitted Payments

Motion made, and Question put, That this House agrees with Lords amendment 36.—(Mrs Wheeler.)

The House proceeded to a Division.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I remind the House that the motion is subject to double majority voting of the whole House and of Members representing constituencies in England.

Housing, Communities and Local Government

Heather Wheeler Excerpts

Monday 21st January 2019 Ministerial Corrections

[Mrs Wheeler]

The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned the £10 ground rent. For a peppercorn to exist there must be a consideration of exchange of money. We are concerned that peppercorn could be open to abuse and therefore we have considered that an amount should be specified in statute. We have chosen £10 because that is the annual amount used for right to buys.

[Official Report, 13 December 2018, Vol. 651, c. 204WH.]

Letter of correction from the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for South Derbyshire (Mrs Wheeler):

An error has been identified in the response I gave to the hon. Member for Ellesmere Port and Neston (Justin Madders).

The correct response should have been:

[Mrs Wheeler]

The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned the £10 ground rent. For a peppercorn to exist there must be a consideration, which can include an exchange of money. We are concerned that peppercorn could be open to abuse and therefore we have considered that an amount should be specified in statute. We have chosen £10 because that is the annual amount used for right to buys.

Guildford Borough Council

Heather Wheeler Excerpts

Wednesday 16th January 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Betts. I draw Members’ attention to my entry in the Register of Ministers’ Financial Interests. Mr Betts, do you mind if I shuffle around a bit? Of course I should not have my back to the Chair, but I want to address my hon. Friend the Member for Mole Valley (Sir Paul Beresford) directly.

I congratulate my hon. Friend on securing this debate on local plans—particularly the draft Guildford local plan—and more specifically on the use and development of land within the green belt. I am grateful for the opportunity to speak on the subject and thank my hon. Friend for the interest he takes in housing, planning and green belt matters, and for bringing these important matters to the Government’s attention. I am also grateful for the opportunity to debate with my predecessor, as a Minister in a former incarnation of my Department, and former leader on Wandsworth Council.

It may come as a disappointment to my hon. Friend that I cannot comment on the specific details of the emerging Guildford local plan, although he mentioned that he already knows that. The Secretary of State has appointed an independent planning inspector to examine the plan, and at some point the Secretary of State may be called upon to act formally in relation to the plan. It is therefore important that he is seen to be acting impartially and allowing due process to run its course in the interests of all parties and the integrity of the planning system as a whole. However, I hope that my hon. Friend will find my contribution at least helpful.

I will start by talking about the importance of local plans in the round. The planning system should be genuinely plan-led, with up-to-date plans providing a framework for addressing the social, economic and environmental priorities for an area, which of course include housing need. Local plans are prepared in consultation with communities and play a key role in delivering needed development and infrastructure in the right places. Community participation is a vital part of accepting the development required to meet our housing needs.

Effectively engaging with communities throughout the process creates the best plans. Having an up-to-date plan in place is essential to planning for our housing requirements, providing clarity to communities and developers about where homes and supporting development should be built and where not, so that development is planned for, rather than the result of speculative planning applications. The Government are determined to build the homes our country needs and help more people get on the housing ladder. We are committed to delivering 300,000 homes a year by the mid-2020s through policies that aim to make better use of land and vacant buildings in order to provide the homes that communities need.

My hon. Friend raised a very good point about where it is appropriate to have higher density use—around railway stations or wherever. I am sure that point has been forcibly made to the planning inspector at those public meetings, and I am sure that, where appropriate, the planning inspector will take that on board.

[Sir Paul Beresford]

I understand that, during the presentation of the local plan, the inspector inquired as to why there was not enough of that sort of development.

[Mrs Wheeler]

I am always interested when planning inspectors ask nuanced, leading questions of local plans and answer them themselves at the same time. We await the planning inspector’s comments with interest.

As my hon. Friend correctly stated, the Guildford local plan is currently under examination, with further hearings due to be held on 12 and 13 February. That will give two more opportunities for people already involved in existing issues to make further comments and for the public to attend and listen. The resumed hearings will focus specifically on the implications of the 2016 household projections for objectively assessed need and the plan’s housing requirement. They will not be an opportunity to discuss matters already considered. Following the hearings, we expect the inspector’s report and recommendations to be published later this year. I encourage my hon. Friend and his constituents to study the findings of the examination at that point.

I reassure my hon. Friend of the robustness of local plan examinations. During an examination, an independent inspector appointed by the Secretary of State will robustly examine whether the plan has been prepared in line with relevant legal requirements. That includes the duty to co-operate with neighbouring authorities and whether it meets the tests of soundness contained within the national planning policy framework, including the extensive consultation requirements for involving local communities.

The inspector, in examining the plan against the tests of soundness, will consider, among other things, whether the plan is based on a sound strategy. In examining these matters, the inspector will take account of the evidence underpinning the plan, national planning policy and the views of all persons who made representations on the plan. I trust that reassures my hon. Friend that the examination of a plan is a thorough and robust process.

As the Guildford plan was submitted for examination before 24 January 2019, it will be examined against national planning policy set out in the 2012 national planning policy framework, including the rules on green belt development, which I will say a little bit more about later. The 2012 national planning policy framework maintains strong protections for the green belt and sets a very high bar for alterations to green-belt boundaries. It allows a local authority to use its local plan to secure necessary alterations to its green belt in “exceptional circumstances”. The Government do not list the exceptional circumstances, as they could vary greatly across the country. Instead, it is for plan makers, and the planning inspector at examination, to check that any change is fully justified. Each local authority is expected to plan to meet local housing need, in full if possible, over the plan period. The local authority then has to consider where to find land to fulfil that need. Only if it does not have enough suitable land because of other constraints and circumstances can a local authority consider a green-belt boundary change. That is the national policy position relevant to Guildford’s draft plan.

The revised national planning policy framework, published in July 2018, will apply to any plan submitted after 24 January 2019. In that framework, following consultation, we clarified the steps that a local authority needs to take to ensure that green-belt release is being proposed only in exceptional circumstances and is fully evidenced and justified. The new framework makes it clear that, in order for exceptional circumstances to exist, the local authority should be able to show that it has examined all other reasonable options for meeting its identified need for development. As I hope my hon. Friend will appreciate, there will therefore be more specific tests to demonstrate that exceptional circumstances exist. That will help examining inspectors to pick up on inadequate efforts to find land. It will still be up to inspectors to decide whether the level of evidence provided meets the exceptional circumstances test.

I again thank my hon. Friend the Member for Mole Valley for raising these important issues. He is aware that the Secretary of State has powers to intervene formally in a plan until it is adopted by an authority. However, we consider it important that the plan is allowed to run its full course and be tested properly first, before such action is considered. I strongly encourage my hon. Friend and his constituents to study the findings of the examination carefully when the inspector issues the final report later this year. I genuinely do thank my hon. Friend for his great interest in this matter. The green belt is precious to us all, as is housing for our children.

Question put and agreed to.

Protection for Homebuyers

Heather Wheeler Excerpts

Thursday 13th December 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Sharma, as it was to serve under Ms Ryan’s.

I thank the hon. Member for Stretford and Urmston (Kate Green) for securing the debate and providing an opportunity to debate all the issues. I understand that she and many of us present today want better protection for purchasers of new-build homes. The Government are committed to making the housing market work. We aim to increase house building to an average of 300,000 net new homes a year by the mid-2020s. As we move towards achieving that target, we will not sacrifice higher quality and standards. They must go hand in hand. It is vital that as housing supply increases the quality of new-build homes continues to improve. In our housing White Paper we set out our ambition for a housing market that works for everyone. We expect all housing developers to deliver good quality housing, to do it on time, and to treat house buyers fairly.

I, like other hon. Members, was shocked to hear about the terrible experiences of the poor families featured on “5 live Investigates”, including the home with 354 faults. For families who worked hard to save and buy their new home it should have been an exciting time, as so many hon. Members have said. The programme highlighted the plight of Mr Wakeman and his partner Tracey Bickford. It was heartbreaking to hear Mr Wakeman read the list of issues with their home, and describe the disgraceful disruption to their lives, including having to move out of their home. Although theirs is an extreme example, such cases happen far too often. We all hear of them happening. I have heard it from many constituents who write to me through their Members of Parliament, and also in my own constituency correspondence.

Equally familiar are stories of houses not completed on time and purchasers who are not kept informed, which the hon. Member for Blaydon (Liz Twist) discussed. Families and households save for years to afford a new home. Those of us who are fortunate enough to have bought a home can remember the feeling of excitement and joy at getting the keys. Everyone deserves to be able to enjoy their home and start a new happy chapter in their lives.

We know that mistakes will happen. Building new homes is a complex undertaking, involving many different skills and trades, which necessarily means that there is a higher risk of something going wrong. The critical thing, however, is that when things do go wrong, house builders and warranty providers fulfil their obligations to put things right. The Government have been absolutely clear on that point. In too many cases problems with build and finish quality are not resolved quickly enough. The after-sale service that developers provide must improve. We shall therefore be keeping the pressure up on industry, not only to put things right but to prevent them from going wrong in the first place.

The Government are committed to reforming the process for purchasers of new-build homes to obtain redress. I acknowledge that the current process is complicated, and that the proliferation of schemes and warranties has resulted in varying levels of service and protection. That is why we are taking action.

In October—only two months ago—we announced our intention to bring forward legislation to require all developers to belong to a new homes ombudsman, because it is absolutely right that consumers should have fair, quick and easy ways to get things put right when they have a problem. Earlier this year we consulted on how we could improve redress, not just in relation to new-build homes, but for residents across all housing sectors. I will return to this later, but let me say now that we will be publishing our response to that consultation soon. At the same time as exploring more substantive reforms, we are challenging industry to simplify redress now and to provide proper support for consumers in the early years of a house purchase, when most problems occur, until we have the ombudsman in place.

In November—one month ago—I met the executive chairman of the Home Builders Federation, which is taking forward proposals to implement a better redress system, based on the recommendations in the reports by the all-party parliamentary group for excellence in the built environment published in 2016 and this year. I believe this work is a positive step in the right direction.

The hon. Member for Stretford and Urmston was very agitated, as were many other hon. Members, about the potential conflict of interest with solicitors. It is not acceptable that there is a conflict of interest. The Secretary of State has written to the Law Society on the issue and has also written to the Solicitors Regulation Authority, in the context of leasehold reform and conflicts of interest between developers and conveyancers. I expect those two authorities to take note and come back to us on the matter.

A number of hon. Members mentioned that we often hear that new-build homes are not completed to the standards required under building regulations. These regulations set the standards for the design and construction of new homes. The primary responsibility for compliance rests with the people carrying out the work. Work on new homes is subject to building control either by the local authority or a private approved inspector. However, it is the responsibility of the building control body to take all reasonable steps to assess compliance. It is a spot check process carried out at certain points during the building work. A building regulations compliance certificate issued by a building control body is not a guarantee of the highest standards and the responsibility is not removed from the builder or developer. If a consumer feels that the building control body did not carry out its functions properly, they may complain to the local government and social care ombudsman in respect of a local authority. A complaint about an approved inspector can be made to CICAIR, the Construction Industry Council Approved Inspectors Register, which is the body that approves inspectors.

The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) asked about sections in the Housing Act 2004 and about local authority powers to make developers undertake remediation for unsafe cladding. I will write to him about that and also about retrospective fire sprinklers.

[Melanie Onn]

I recently visited London Fire Brigade to talk about building regulations and the checks that are undertaken. The issue with spot checks is a real concern for safety. The failure to put an insulation sock underneath a window caused a new-build block of flats to be engulfed by fire just weeks after people had moved in. Can the Minister think of anything more that can be done to strengthen the system, to make sure it goes further than spot checks, so that key factors that support people’s safety in their homes are not missed?

--- Later in debate ---

[Mrs Wheeler]

I thank the hon. Lady for that very useful intervention. My team will take that back and we will write to her with an answer.

We know more needs to be done and expect more to be done. That is why the Government announced measures to champion the rights of buyers of new-build homes, including a new homes ombudsman. That will provide one obvious place for consumers to go, and will have the powers such a body needs and the interests of consumers at its heart. It will ensure that when people buy a new-build home and do not find the standard of build they expect, they are treated fairly and their concerns are dealt with quickly. We will work with consumers and the industry to develop our proposals, which will be published in more detail soon and will set out the scope and powers of the ombudsman.

In the meantime, we have been challenging industry to improve redress in the shorter term. The work being done by the Home Builders Federation could lead to a voluntary new homes ombudsman and better redress for consumers in the short term, while Government works towards legislation. In our response to our redress consultation we will set out the standard we expect these voluntary arrangements to meet. We also expect that any new redress scheme for buyers of new-build homes should be free to the consumer, as in other sectors.

We believe there should be a clear and quick escalation route for issues of building safety and are exploring a number of options. Again, we call on the industry to implement actions and processes so that the examples we heard on BBC “5 live Investigates” do not happen in the first place. We want to see a marked improvement in the standards of new homes and will ensure that home buyers get those standards, not only for new-build homes but across the market.

Further to building regulations and standards of new-build finish, the leasehold system needs to be fair and transparent to the consumer, so that their home truly feels like their own. Unfair practices in the leasehold market have no place in the modern housing market, nor do excessive ground rents, which exploit consumers who get nothing in return. In July, the Government announced that no Government-funded scheme would be used to support the unjustified use of leasehold for new houses.

[Sir Peter Bottomley]

We are all grateful for what the Government have said in the past and what the Minister is saying now. One of the problems with ground rent is the question of what it is there for at all. The commonhold gets rid of ground rents. We do not know whether the help to buy scheme is used to commonhold. Can the Minister make an announcement about how that problem will be solved, so that commonhold homes can be accepted for help to buy?

[Mrs Wheeler]

There are discussions going on about commonhold. I will be happy to talk to my hon. Friend about this offline.

Our technical consultation on how to improve the leasehold market and make it fairer for consumers has now closed, and we are analysing the responses. We want to see developers support everyone who has onerous ground rents, including second-hand buyers, and for customers to be proactively contacted. We are helping existing leaseholders by making it easier and quicker for leaseholders to form residents’ and tenants’ associations. We are proposing a single, mandatory and legally enforceable code of practice covering letting and managing agents, giving people a clearer and simpler route to redress. We are publishing a how-to-lease guide for consumers and looking carefully at how we currently give support and advice to leaseholders.

The hon. Member for Washington and Sunderland West (Mrs Hodgson) was very interested in educating leaseholders. We are publishing the how-to-lease guide, which will educate leaseholders. We have also held workshops with the industry to develop the how-to-buy and how-to-sell guides, which will be published in 2019.

The hon. Member for Poplar and Limehouse asked about leasehold reforms. LEASE, the group that we use to help give information, is unambiguously on the side of leaseholders. LEASE no longer pursues any commercial interests and it does not advise leasehold professionals. [Hon. Members: “Good.”] Yay—I just had a good. Get that in Hansard—sorry, I shouldn’t say that.

The hon. Member for Washington and Sunderland West asked about permission fees. Lord Best has a working group that is considering permission fees and whether they are reasonable or they should be banned in total.

The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned the £10 ground rent. For a peppercorn to exist there must be a consideration of exchange of money. We are concerned that peppercorn could be open to abuse and therefore we have considered that an amount should be specified in statute. We have chosen £10 because that is the annual amount used for right to buys.[Official Report, 21 January 2019, Vol. 653, c. 1MC.]

[Justin Madders]

It is helpful to have that explanation, because I have been mystified about what led to that situation. Obviously, peppercorns have been around for centuries; I do not know whether there is some legal advice that the Minister may be able to share, even confidentially, about why we still have to have a financial figure rather than a peppercorn.

[Mrs Wheeler]

Given the previous week’s history of sharing legal advice, I might skip over that one, if the hon. Gentleman does not mind. Perhaps he and I could have a cup of tea. The £10 peppercorn ground rent was part of our recent leasehold consultation and we will be considering our approach in light of the responses to the consultation.

[Sir Peter Bottomley]

How about 10 lbs weight of peppercorns?

[Mrs Wheeler]

Black pepper or white pepper?

[Melanie Onn]

Or pink?

[Mrs Wheeler]

Or pink—yes, please—or green; we could have green pepper as well. This poor Hansard writer, dearie me.

I recognise that many freeholders have to pay charges toward the maintenance and upkeep of communal areas on an estate. That is especially prevalent on new estates, exactly as the hon. Member for Blaydon mentioned. Freeholders who are unhappy about the transparency of those charges are becoming an increasingly frequent part of my ministerial postbag, and I understand why they are unhappy. Leaseholders have a whole suite of protections and rights that enable them to hold management companies to account, but freeholders have no such equivalent, even though they may be paying for the same or similar services.

The Government agree that the current situation is unfair to freeholders, and we are committed to legislating to plug that gap. We have set out our proposed approach to implementing those measures in part 4 of the recent leasehold reform consultation, which closed on 26 November. We intend to create a new statutory regime for freeholders, based on the rights enjoyed by leaseholders, which will ensure that maintenance charges must be reasonably incurred and services provided of an acceptable standard, and include a right to challenge the reasonableness of charges at the property tribunal.

[Helen Goodman]

The Minister is being generous in giving way. I do not know whether she noticed my ten-minute rule Bill on that precise point, but when she brings forward the legislation or proposals on freeholders, would she consider capping the charges and making it possible for the freeholders to buy and self-manage the common areas, which, as she knows, are being sold on and on and on to a series of exploitative management agents?

[Mrs Wheeler]

The hon. Lady poses a number of questions, all of which are very interesting. I will reread Hansard after the debate and take on board what I can.

The Government agree that the situation is unfair, so we intend to introduce a new statutory regime and are considering whether freeholders should have a right to change the provider of maintenance services by applying to the tribunal for appointment of a new manager, which may be useful if a freeholder is dissatisfied with the service they are receiving. As it happens, my officials are now analysing the responses and the Government intend to bring forward legislation to implement changes as soon as parliamentary time allows.

We move on to another area in this vast debate, home buying and selling. Around 1 million homes are bought and sold in England each year, but another 25% to 33% of planned sales fall through, costing consumers around £270 million and creating stress for far too many people. The Government published our response to the home buying and selling call for evidence in April 2018, setting out an ambitious programme of action to make the buying and selling process in England cheaper, faster and less stressful, in line with our manifesto commitment. There is no silver bullet that can change everything at a stroke and fix the process. Instead, we will need to make a number of practical changes, some big, some small, which taken together will make the experience much better. To put hon. Members’ minds at rest, we as a Government are here to tackle those issues.

We have already started work. We have created a new working group focusing on the regulation of property agents, chaired by Lord Best. We have begun working with industry and the National Trading Standards estate agency team to develop guidance on making referral fees more transparent and to look at the case for banning them. We have also doubled the funding available to that team. We have written to all local authorities reminding them of the Government’s ambition to have a property search request completed within 10 working days. We have consulted in implementing reforms to the leasehold system, seeking views on fixed timeframes and maximum fees for freeholders and managing agents to provide leasehold information.

We have held workshops with industry to develop detailed and thorough how-to-buy and how-to-sell guides to inform consumers, to be published in 2019. We have started work with industry and consumers to make conveyancing data more transparent so that buyers and sellers can make a more informed choice and we have worked with industry to develop a standardised reservation agreement. We will commission behavioural insight analysis to support its implementation; it will increase commitment between buyers and sellers much earlier in the process. Together, our reforms will create a much better process, which guides buyers and sellers and gives them the information they need at the time they need it, allowing them to make the biggest purchase of their lives with confidence.

I confirm to the hon. Member for Poplar and Limehouse that I will write to him regarding cladding and sprinklers. My hon. Friend the Member for Worthing West kindly brought up the question of VAT on service charges. As he will know, that is a matter for Her Majesty’s Treasury, but it is something that has only recently raised its head, so I will write to him about that.

On bonuses for those larger businesses, we announced in August that we are helping to improve shareholder scrutiny of executive pay, strengthen the employee voice in boardrooms and build confidence in how large companies are run. Under those reforms, all quoted companies will be required to disclose and explain annually the rationale for the chief executive’s pay and the ratio to the average pay of their UK employees. The new reforms will provide greater transparency on the impact of share growth and executive pay.

The Government have been clear that this should be a country that works for everyone. That means building more of the right homes in the right places and ensuring the housing market works for all parts of our community. We must ensure that ordinary people purchasing a new home have the protection they deserve and are treated fairly.

[Mrs Hodgson]

I was listening carefully to the Minister, but I may have missed this—if I did, I am very sorry. I wonder if she could say something about a point that both my hon. Friend the Member for Bishop Auckland (Helen Goodman) and I mentioned, about referring some of these dodgy lawyers, conveyancers or solicitors to the Law Society when they are not acting in the best interests of their client, who should be the buyer.

[Mrs Wheeler]

Absolutely. I am sorry that the hon. Lady did not hear me say it, but the Secretary of State has written to the Solicitors Regulation Authority, the SRA.

[Mrs Hodgson]

Thank you.

[Mrs Wheeler]

My absolute pleasure. We must ensure that everybody has the protection they deserve and is treated fairly, and that all efforts are made to ensure that builders build to the standards and finishes that we expect. Once again, I thank the hon. Member for Stretford and Urmston for securing this valuable debate, and I look forward to her summing-up speech, right now.

Oral Answers to Questions

Heather Wheeler Excerpts

Monday 10th December 2018 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

12. If he will make an assessment of the effect of social housing providers’ allocation policies on levels of homelessness.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

Access to social housing is managed locally, but certain people must be given priority, including homeless households. The social housing Green Paper announced an evidence collection exercise to understand how the allocations framework is working and whether it is striking the right balance of fairness, support and aspiration.

[Wera Hobhouse (Bath) (LD)]

Two hundred and eighty-nine young people are presenting themselves as homeless in Bath and North East Somerset Council alone. Will the Minister’s Department use the current review of social housing regulation to ensure that social housing allocation policies do not lock out young people, who are especially disadvantaged by the current policy?

[Mrs Wheeler]

Yes.

[Mr Speaker]

We are very grateful.

[Bob Blackman (Harrow East) (Con)]

What assessment has my hon. Friend made of local authorities assisting rough sleepers into a home of their own following the Homelessness Reduction Act 2017 coming into law?

[Mrs Wheeler]

I thank my hon. Friend for his question. Unfortunately, I did not hear the very beginning of it, but I think the gist was that the Homelessness Reduction Act 2017 is a very welcome new Act. We are grateful for everybody’s hard work on it earlier this year. We will review it after 24 months, but so far my understanding is that local councils are impressed with how well it is being embedded.

[Steve Double (St Austell and Newquay) (Con)]

13. What progress he has made on plans for the UK shared prosperity fund.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

T2. I thank the supported housing Minister for the letter she has just sent me about the case in my constituency. Can I urge her to talk to as many colleagues as possible, because although the case in my constituency, where several residents died, might be one of the worst examples, it is not unique? There is a real problem in this sector.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

The hon. Lady is absolutely right. It was appalling what was happening in Bristol in that hostel. The Government are committed to protecting vulnerable people. We are developing robust oversight of all supported housing, including homelessness hostels, and are undertaking a review of housing-related support services to ensure that all provision is of good quality and that appropriate support is provided. We are working with local government to support those experiencing rough sleeping and homelessness including with safety measures.

[Jack Brereton (Stoke-on-Trent South) (Con)]

T4. I was very pleased to welcome the high streets Minister to Stoke-on-Trent South recently. Would he agree that towns such as Longton and Fenton in my constituency are exactly the sorts of places that should benefit from the future high streets fund?

Section 21 Evictions

Heather Wheeler Excerpts

Thursday 6th December 2018 Westminster Hall

[Grahame Morris (Easington) (Lab)]

I congratulate my hon. Friend the Member for Westminster North (Ms Buck) on securing this important and timely debate. It is an honour to serve under your chairmanship, Mr Hollobone. I apologise for arriving a little late.

As hon. Members on both sides of the House should recognise, my hon. Friend has done some steadfast work to advocate the rights of tenants. She has my unwavering support in her campaign for all homes to be fit for human habitation. The Government’s failure to support the Homes (Fitness for Human Habitation) Bill in 2015, or to back a similar amendment to the Housing and Planning Act 2016 a year later—I served on the Bill Committee as an Opposition Whip—shows the scale of the challenge we face on this side of the House.

We have a flawed system that completely lacks balance, as my hon. Friend said. The housing security enjoyed by the post-war generation has been systematically eroded through the right to buy, the failure to build truly affordable low-rent social housing, and the boom in the buy-to-let sector. Those factors have moved many tenants from housing security to housing insecurity in the private sector. The right to buy, coupled with the failure to build, has created generation rent, as my hon. Friend said, and our children are paying the price. They are financially excluded, and for many home ownership is a distant dream. Their reality is insecurity and relatively high-cost private rents with few enforceable rights.

We must address the issue of tenants’ rights. The private rented sector has substantially increased, even in my time in the House. The private rented sector comprised just 9% of households in 1988. It has more than doubled since then and today accommodates one in five households.

Clearly, section 21 of the Housing Act 1988 and “no fault” evictions create—in fact, add to—a one-sided power imbalance, with landlords having practical rights while tenants have what are, in effect, unenforceable paper rights. This power imbalance encourages poor management practice, with tenants worried about challenging rent rises and often afraid to ask for essential repairs because they fear eviction.

I am grateful to my hon. Friend for circulating a briefing in advance of this debate, which notes that there were 12,711 evictions by bailiffs under section 21, which was recorded by the Ministry of Justice under the “accelerated” procedure. However, that figure is a baseline; it is really the tip of the iceberg, with the vast majority of tenants actually moving out without going through the daunting court process.

I will now mention some of the issues in my constituency; they are different from those in the inner-city areas of London, but they are very real, and in some respects probably more acute. I have seen constituents move from one bad landlord to another and from one dilapidated house to another. It is a never-ending cycle of debt and disruption, which traps families in poverty. And no matter how hard they try to escape, it seems that they are caught in a vicious circle.

I hope that the Minister is aware of Horden in my constituency. I have raised the problems of the private rented sector there on a number of occasions. Indeed, I invited the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry), who is the Minister with responsibility for the northern powerhouse, to visit Horden. He promised that he would do so, but has not so far. In addition, I have written to the Minister for Housing, the hon. Member for North West Hampshire (Kit Malthouse), inviting him to visit and discuss some of the particular problems that we have and how they might be addressed.

Without going into too much detail, I will just mention that some of the problems arise from the withdrawal of Accent Housing and the subsequent fire sale auction of houses in Horden, which led to an influx of absentee landlords with little interest in their tenants. We talked a little earlier about the tale of landlords who are not acting in a socially responsible manner, and that is certainly evident in some of the former mining communities that I represent in east Durham. Many people now find themselves living among derelict houses. Dilapidated housing, smashed windows, arson and fly-tipping are the epitaph of a failed private rented sector market in Horden, in my constituency.

Frankly, the situation in Horden is nothing short of a national housing scandal and I hope that the Government will engage with this issue, because we cannot sit by passively and see the situation continue. I hope that the Minister and her colleagues will prove me wrong.

My own local authority, Durham County Council, is nearing the publication of a Horden master-plan to address some of the issues with the private rented sector. It will set out a range of options and I hope that if we can work with the council, it will help to deliver some housing regeneration. However, there is still a need for Ministers to engage and support the proposal with appropriate funding, because we have an influx of absentee landlords, housing conditions are poor and tenants are being exploited. I am glad that my local authority is now seeking to challenge that situation.

I am told that it is not a formality to get an authority-wide landlord licensing scheme. I had thought it was a formality, but I understand that the Government have some reservations about such schemes.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

indicated dissent.

[Grahame Morris]

The Minister is shaking her head. However, where we have had a landlord licensing scheme in a small defined area, that has proven to be effective. However, that has simply pushed the problem into another area.

The consensus is around a scheme that I believe has worked very effectively both in Liverpool and in Newham in London. I am grateful to my hon. Friend the Member for Liverpool, Walton (Dan Carden), who has hosted visits from local elected representatives.

--- Later in debate ---

[Lyn Brown]

And less long-winded!

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

We live in hope.

[Andy Slaughter]

We will hear from the new shadow Minister in a moment, but I hope she will not take it amiss if I say that I am particularly looking forward to hearing what the Minister has to say and finding out how far policy has moved on within the Government—not just on the rabble-rousing Conservative Back Benches where the hon. Member for Cheltenham sits with the radical, provisional wing of the Conservative party.

Can the Minister give us some indication that the issues of balance and no-fault eviction are understood? May we look forward to some beneficial changes that give security to families, particularly in high rent areas, but also—as we heard from my hon. Friend the Member for Easington—across the country? Those changes are long overdue. Whatever the merits or demerits of the 1988 Act, it is time we took another comprehensive look at housing legislation and redressed some of the obvious unfairness in the private rented sector.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Sir Graham. I refer Members to my entry in the Register of Members’ Financial Interests. I congratulate the hon. Member for Westminster North (Ms Buck) on securing the debate and thank all those who have made wonderful contributions today for their interesting stories from across the country, which tug at the heartstrings.

This is an important issue and I am glad to be able to respond to some of the concerns raised. We are committed to rebalancing the relationship between tenants and landlords, to deliver a fairer, better-quality and more affordable private rented sector. The sector plays a pivotal role in providing homes across the country and is an integral element of the Government’s approach to making the housing market work for everyone.

On the specific points made by the hon. Members for Westminster North and for Hammersmith (Andy Slaughter) on section 21, the legal framework underpinning the private rented sector works to build a fair and robust private rented sector that protects tenants, supports landlords and empowers local authorities to deliver a healthy rental sector. The Government provide support to landlords and tenants to navigate the legislative landscape and have recently updated the “How to Rent” guides that offer comprehensive guidance and signposting to relevant resources. The Government are committed to providing practical guidance to relevant agencies and local authorities when new legislation is created.

Interestingly, according to the most recent English housing survey, 84% of private renters were satisfied with their current accommodation, and two thirds were either very satisfied or fairly satisfied with their current tenure. However, we also recognise that many tenants feel insecure and that their house is not their home because they are on short initial fixed-term tenancies of six to 12 months. We are committed to improving security for tenants.

Section 21 provisions provide an important guarantee to landlords that they will always be able to get their property back at the end of the tenancy. The flexibility for landlords and mortgage providers to recover their asset if they need to is crucial to retaining investment and supply in the sector, including the availability of buy-to-let mortgages. I want to make this point specifically in reply to my hon. Friend the Member for Cheltenham (Alex Chalk), who has had to leave us. There are clear legal protections for tenants and a clear process that landlords must follow when carrying out a section 21 eviction.

Outside the fixed-term tenancy period, a landlord can evict a tenant using a section 21 notice, but only when they have complied with certain legal obligations. Those include protecting their tenants’ deposit in a tenancy deposit scheme, providing a gas safety certificate, and also providing a copy of the Government’s “How to Rent” guide. If, in response to a complaint about property condition by a tenant, the local authority has served either an improvement notice or a notice of emergency remedial action, a landlord cannot evict a tenant using a section 21 notice for six months. Furthermore, under the Tenant Fees Bill, we propose that if a landlord charges a prohibited fee, they will not be able to serve a section 21 notice until those payments have been reimbursed.

The Government want to protect the rights of tenants and give them more security, but we must do so in a way that does not impact on the supply of good-quality rented accommodation.

[Andy Slaughter]

The Minister highlights important and hard-won preconditions for taking eviction proceedings, but that does not alter the fact that, in the generality of cases, we are talking about no-fault evictions. Opposition Members are anxious to hear what the Government will do about no-fault evictions. Do they still maintain that that is the right general approach or do they think that its day has come to be removed?

[Mrs Wheeler]

Fortunately, as we have so much time, I have an extremely long speech and the hon. Gentleman might be stunned to hear what I have to say. Or he may not.

Growing numbers of tenants are families or older people and the Government are firmly committed to helping them. The measures announced in the housing White Paper mean that most tenants in the build-to-rent sector are now being offered tenancies of a minimum of three years. We recently consulted on overcoming the barriers to longer tenancies in the private rented sector. We sought views on a three-year longer tenancy model with a six-month break clause and asked for views on its viability and how it can be implemented. The consultation closed at the end of August and we are now analysing responses.

A three-year tenancy is one option. However, we have not made any policy decisions regarding tenancy length, whether to change the legislation on section 21 evictions or how our proposed model could be implemented. We are considering the consultation responses fully before making any policy decisions and will set out next steps shortly. In the meantime, for tenants who want a longer tenancy, we have published a model tenancy agreement that landlords and tenants can choose to use as the basis for longer, family-friendly tenancies. We have also published “How to Rent” and “How to Let” guides for tenants and landlords to support them in understanding their rights and responsibilities.

To answer some of the points made by the hon. Members for Westminster North and for Easington (Grahame Morris), the Government recognise the important role that private landlords play in supporting the UK economy and in providing homes to millions of people across the country. We recognise that in order to continue to offer housing, landlords need the flexibility to be able to get their property back quickly when circumstances change. Without those assurances, landlords would be less willing to enter and stay in the market, which does not help tenants.

We recognise that some landlords have concerns about the section 8 eviction process and instead use the section 21 accelerated procedure. We are keen to understand those concerns, and last month, on 13 November, we launched a call for evidence to better understand the experience of courts and tribunal service users in property cases. The call for evidence seeks views from members of the judiciary, landlords and tenants on the private landlord possession action process in the county court and the case for structural changes, such as an extension to the remit of the property tribunal or a new housing court.

There have been calls from hon. Members here today to abolish section 21 evictions. As I have said, we have not yet made any firm policy decisions on whether to legislate to alter the provisions set out in section 21. We first want to consider carefully the responses to the call for evidence on user experience of the courts.

[Lyn Brown]

I am grateful to the Minister for giving way; she knows that I have a soft spot for her. What will I say to Martin about what she has offered this afternoon? Can I say that she is considering getting rid of section 21, or that his rights will be enhanced by the Government’s future actions? What advice would she like me to give to Martin?

[Mrs Wheeler]

I am sure that the hon. Lady has espoused the brilliance of the licensing scheme in Newham and the brilliance of her council. Perhaps her council should have gone round to the flat to deal with the dreadful situation that she has enlightened us with today.

[Lyn Brown]

We will talk about it outside.

[Mrs Wheeler]

We will indeed; I would be delighted to have that conversation.

As I stressed at the start of my speech, property is a valuable asset and landlords may need to gain possession quickly for various reasons, perhaps because they wish to sell the property, or to enable them or a family member to move in. As I said, there is a clear legal protection for tenants, and a clear process that landlords must follow when carrying out a section 21 eviction.

I appreciated hearing what the hon. Member for Easington had to say about selective licensing and borough-wide licensing, and about enforcement of property standards. Selective licensing is meant to be a targeted tool that can deliver improved standards and safety in the private rented sector for areas suffering serious problems. It can be used at local authorities’ discretion, but where it covers more than 20% of the private rented stock, confirmation by the Secretary of State is required. That is to ensure that local authorities focus their activity on the worst areas and avoid an adverse impact on good landlords. Local authorities have an array of powers at their disposal for enforcing property standards. We expect them to use those to maximum effect and have set up a £2 million fund to help them kick-start enforcement and share best practice. Having said all that, the offer that I would like to make to the hon. Gentleman is that my officials will contact his local authority to talk about an application for licensing.

The 2016-17 English housing survey found that only a tenth of private tenants, when asked about their most recent move, said that they were asked to leave or were given notice by their landlord. There were 1.1 million moves into and within the private rented sector in 2016-17, with private renters making up a larger proportion of movers compared with other tenures. However, there has been an overall decrease in the number of private landlord possession cases since 2014. In England and Wales there were 20,590 private landlord possession cases in 2016-17. That shows that only a small percentage of moves in the sector end in the courts. Of course, where that does happen it can have a devastating impact on the tenants involved. The Government acknowledge that the end of an assured tenancy in the private rented sector can cause homelessness.

I want to make it clear that we have one of the strongest safety nets in the world to prevent homelessness, and we recently strengthened it through the Homelessness Reduction Act 2017. The Act came into force in April and brought in a new prevention duty, extending the period for which an applicant is “threatened with homelessness” from 28 days to 56 days. That will ensure that those served with a valid section 21 notice that is due to expire will be classed as threatened with homelessness and supported until their situation is resolved—to answer a question that was put during the debate—with no gap between prevention and relief duties, if they have nowhere else to go. If the landlord intends to seek possession and there is no defence to the application, the local housing authority must take reasonable steps to prevent a person’s homelessness. Local authorities must work with applicants to develop personalised housing plans, tailored to the needs and circumstances of the household.

[Melanie Onn]

I thank the Minister for her further explanation of the point about the Homelessness Reduction Act 2017. Can she confirm that, were someone to leave their property early, having received the possession notice, and were they to attend the local authority, they would be deemed homeless, and not intentionally homeless, and given the same support as someone who was homeless as a result of another set of circumstances?

[Lyn Brown]

No, she cannot.

[Mrs Wheeler]

The hon. Lady says from a sedentary position that I cannot. The absolute truth is that the person must go to the local authority as soon as they get the section 21 notice, and the local authority then has a duty to help them.

[Ms Buck]

They will not.

[Mrs Wheeler]

They will not go? Okay, we will find out.

The hon. Member for Bath (Wera Hobhouse) mentioned affordability. That issue is exactly the reason the Government introduced the £1 billion Build to Rent fund, and the £3.5 billion private rented sector guarantee scheme, to help support the building of thousands of extra homes specifically for private rent. We want Build to Rent to continue to grow and make a significant contribution to housing supply.

[Wera Hobhouse]

I fear that the Minister may have misunderstood what I meant. We need to build social homes for rent, because the private sector will just not build the affordable homes we need. Giving the private sector money to build homes for the private sector will not solve the crisis.

[Mrs Wheeler]

Fortunately, as I go on with my speech, the hon. Lady will hear even more good news.

We are going further, delivering the homes that the country requires. The Government are committed to building more affordable homes, supporting the different needs of a wide range of people. The Government are committed to increasing the supply of social affordable housing and have made £9 billion available through the affordable homes programme to March 2022, to deliver 250,000 new affordable homes on a wide range of tenures, including homes for social rent. Furthermore, we abolished the housing revenue account borrowing cap on 29 October. That will help to deliver a new generation of council homes. We expect it will help local authorities to double their building from around 5,000 to 10,000 homes per year by 2021-22.

[Melanie Onn]

The Minister is being incredibly generous in giving way. On the lifting of the HRA cap, which has been well received on the whole, what is the Government’s plan for those local authorities that do not have an HRA account because they disposed of their stock wholesale, at the time when housing associations became involved, about 10 years ago?

[Mrs Wheeler]

From memory, if a local council wants to go back into the market, as long as it builds a minimum of 100, it can. Obviously, I shall write to the hon. Lady to confirm that.

The change will diversify the house building market, as councils are better able to take on projects and sites that private developers might consider too small. To help further, we are providing a longer-term rent deal for five years from 2020 that provides housing associations and local authorities with a stable investment environment to deliver new homes. That will help to deliver the new generation of council house building that the Prime Minister announced recently.

Our position on retaliatory eviction is clear. To answer the hon. Members for Blaydon (Liz Twist) and for Leeds North West (Alex Sobel), no tenant with a genuine complaint about the condition of their property should be fearful of retaliatory eviction. That is why we have already taken steps on the matter, legislating to protect tenants from retaliatory eviction through the Deregulation Act 2015. As we are all aware, the vast majority of landlords provide well-maintained properties, and thankfully only a small number of tenants encounter the threat of retaliatory eviction. We share the ambition of ensuring that tenants are properly protected from retaliatory eviction—I shall begin to call it RE, as I cannot get my teeth around it.

We want to take a strategic approach, empowering tenants to raise issues with their landlords through greater security of tenure. Our recent consultation on overcoming the barriers to longer tenancies in the private rented sector included a question seeking views on the effectiveness of RE provisions. That ensures that we have the most up-to-date information to inform our thinking. We are currently analysing responses. We are supporting the private Member’s Bill promoted by the hon. Member for Westminster North, the Homes (Fitness for Human Habitation) Bill. It adds a new dimension to the fight against rogue landlords, empowering tenants by allowing them to seek redress from their landlords if their rented house or flat is in an unacceptably dangerous condition. Tenants will be able to seek that redress without having to rely on their local authority. Of course, they will still be able to report problems to their local authority if they prefer, and will then be protected from unfair eviction by the 2015 Act. We are also exploring how we can strengthen redress in the housing market and are committed to requiring all private landlords to join a redress scheme as part of that. We will be publishing the response to our redress consultation shortly.

I hope that my remarks today demonstrate the Government’s commitment to building a private rented sector that works for everyone—one that supports good landlords to deliver the homes the nation needs and provides safe, affordable and secure homes for tenants. We do not shy away from the challenges facing us and are aware that we need the support of the entire private rented sector if we are to achieve those goals. It is in that spirit that I thank all hon. Members for their speeches and questions. I hope the hon. Member for Easington survives his cold—he has just toddled off. It would be a pleasure to talk to him about organising a visit to his area. I look forward to working with the hon. Member for Westminster North and other hon. Members in the coming weeks and months on this very important issue.

Private Rented Sector

Heather Wheeler Excerpts

Thursday 29th November 2018 Westminster Hall

[Bob Blackman]

I thank the Chair of the Select Committee for that intervention. That is particularly true in the Edgware ward of the London Borough of Harrow, where I asked the council a series of questions about how many registered houses in multiple occupation they had on their books. I was astonished when they told me they had 89 for the borough. I can take Members to roads in Edgware where there are 89 in the road. One problem is the local authority’s resources to deal with these issues, but, more importantly, people just ignore their responsibilities. That has to be dealt with.

I come now to the report itself. I will not deal with the recommendations that the Government have taken on board, because they are fine and we all agree with them. I am delighted that they have been taken on. I worry about some aspects that the Government are not addressing so far. When the Minister replies, will she update us? The Government response was some five months ago and I hope that things have moved on. I will go through the report, looking at the questions that I would like the Minister to answer.

In the Government’s response, the housing health and safety rating system recommendation is partly accepted, but the view is that the Government will review the position in due course. Can the Minister update us on where that review is? The Chair of the Select Committee mentioned the reality of carbon monoxide poisoning and other safety measures in homes. The hon. Member for Dulwich and West Norwood (Helen Hayes), who is no longer in her place, raised a desperate situation in her constituency. The issue is ensuring that tenants’ safety is paramount. Over the time I have served on the Select Committee, we have considered various different aspects of safety, and my concern is that building regulations and safety regulations do not seem to be being updated as they should, both to protect tenants and to point out to landlords their responsibilities. I would like to understand the Government’s position in that area.

Equally, where the Government and Law Commission are reviewing what legislation could be enacted, the Government say they are having discussions with the Law Commission. That is always helpful, but could we be updated with the results? As I have said, if we introduce legislation we must be careful that we do not put off good landlords from renting out their properties and maintaining good order at the same time as squeezing out the criminal behaviours that are clearly unacceptable.

I turn now to section 21 notices; we will have a debate on that subject next Thursday, I think, and I do not want to rehearse the discussions we will have there, because no doubt the Minister will be answering that debate too if it proceeds as expected.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

My Thursdays are your Thursdays.

[Bob Blackman]

That is welcome.

Let me take up the issue, because we made recommendations on this and the Government have not accepted them, but they agree to keep the issue under review. We have a delicate balance to strike, because the sad reality is that if landlords are in a position where they cannot evict bad tenants, there is a serious problem and they will say that it is not worth being a landlord and letting out the properties.

As the author, promoter and sponsor of the Homelessness Reduction Act 2017 on section 21 notices, I know them in infinite detail. They are deemed to be no-fault evictions, and clearly we need to preserve the position whereby a landlord can get their property back, but at the same time, some landlords seem routinely to issue section 21 notices on six-month tenancies as protection for getting the property back at the end. One solution is to have longer tenancies, with protection for the tenant and for the landlord, with the potential for break clauses on both sides. That seems to have gone very quiet in Government thinking, and I hope my hon. Friend the Minister can update us on where we are going with longer tenancies and protection of tenancies.

There seems to be a suggestion from the Government that retaliatory eviction is a relatively rare occurrence. For those people who gave evidence to us having suffered it, it might have been a rare occurrence but it was a life-changing experience and we must condemn it. Landlords have a duty to keep their homes up to a reasonable and safe standard, and if tenants complain that the property is not kept up to that standard, it is quite right that the landlord should then put it right. If the result is that the landlord evicts the person or the tenants, that is an outrage and we need to ensure that action is taken. At the moment there is not enough protection for the tenants. The Chair of the Select Committee mentioned the specialist housing court, which would be warmly welcomed by both landlords and tenants. If we could have an update on the status of the Government review, that would be terribly helpful and informative to the Committee.

I will say two last things before I sit down. First, we made a recommendation on the local housing allowance, particularly regarding studio accommodation. In London, this is becoming a big issue. Properties are subdivided into small units and put out to rent and the tenants are therefore being exploited. There is a case, which we have made in the report, for taking action in this area, and I would welcome the Minister’s taking some action. I accept that this situation is not necessarily true across the country, but in London it is a serious issue that must be addressed.

Secondly, on penalties for bad landlords and the protection of tenants, although I do not normally read The Guardian, it has provided a very helpful brief in its coverage on rogue landlords and what has happened. The sad reality is that if landlords fail the fit and proper person test and are banned, all their tenants should know about it. That just makes sense. To have a position where a landlord can be banned in one borough but carry on renting in others just does not make sense at all. One thing we need to see is urgent action to introduce a position where landlords are banned and action is taken.

I agree that in the most serious cases, a fine just becomes part of doing business, so having the ability to confiscate the property and protect the tenants from the behaviours of rogue or criminal landlords must be the final resort. On that point I will sit down, but I look forward to the Minister’s response and to working with colleagues to improve the position for both tenants and the good landlords in this country.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank hon. Members from across the House for their considered speeches. I congratulate my friend, the hon. Member for Sheffield South East (Mr Betts), on securing this debate. I thank him and all the members of the Housing, Communities and Local Government Committee for their inquiry into the private rented sector and for working with the Government to improve the lives of those living in it.

The private rented sector plays a vital role in providing homes across the country and is an integral element of the Government’s approach to making the housing market work for everyone. As we outlined in our response to the Committee’s inquiry, the sector has changed dramatically over the past decade. Not only has it grown to become the second largest tenure, but it also houses an increasingly diverse range of tenants. It is of great credit to those who deliver and support the private rented sector that it has managed to react to such change, and continues to drive forward improvements in quality, standards and safety.

I want to use this speech to reflect on the Committee’s report and outline some of the work the Government are delivering to ensure that everyone living in the private rented sector is able to build the life they desire. We agree with the vast majority of the Committee’s recommendations; where differences arise, they are of degree, not kind. Although I cannot cover everything in such a short time, I hope that hon. Members will see how the Government are pursuing a package of measures that will work together to improve the private rented sector. As the Committee cautioned in its report, the Government recognise that they cannot take a piecemeal approach to the sector—they must take a holistic approach to reform.

Successive Governments have shared the opinion that the rights and responsibilities that govern the private rented sector must be placed on a statutory footing. In its report, the Committee raised concerns that the volume of legislation covering the private rented sector could be creating a complex and challenging landscape to navigate, as we have heard again today.

Although the Government share the Committee’s desire for greater understanding, we do not feel that the legislation is in need of the type of root-and-branch reform that the Committee—or, indeed, the Labour party—suggests. Instead, we believe that the challenge for the Government is to help everyone understand the legislative foundations of the sector, to ensure that people can make the best use of these important protections. That is why we are structuring our work to address the key challenges that flow from our overarching objective, which is to rebalance the relationship between landlords and tenants, to deliver a high-quality, fairer and more affordable private rented sector.

To achieve that aim, we need to address a number of interconnected challenges, which the Committee also highlighted in its report: affordability, property standards, enforcement, and the rights and responsibilities of landlords, agents and tenants. I want to use this debate to set out some of the work under way to drive improvements in the sector, how this work links together and the progress made since we responded to the Committee’s inquiry.

A lack of affordable rental property can mean that tenants are forced to accept substandard or unsafe accommodation. That is not a choice that we want anyone to face, so we are working hard to improve the private rented sector to ensure that no tenant faces that choice in the future. We believe that the key to improving choice and affordability for tenants is to build more homes for rent.

To answer the question raised by my hon. Friend the Member for Hertford and Stortford (Mr Prisk), we want to build more homes. We want build to rent to continue to grow and make a significant contribution to housing supply. That is why the Government introduced the £1 billion build-to-rent fund and the £3.5 billion private rented sector guarantee scheme, to support thousands of extra homes built specifically for private rent. However, we also recognise that house building takes time. That is why we are working to improve affordability and conditions for tenants now.

We introduced the Tenant Fees Bill to protect tenants by capping tenancy deposits and banning unfair fees at the outset, renewal and termination of a tenancy. As well as helping tenants, the Bill will strengthen the hand of good landlords and agents across the UK by levelling the playing field, driving out rogue operators and ensuring that reputable landlords and are no longer undercut by those who overcharge.

[Alison Thewliss]

Christopher Mullins-Silverstein, who works in our Whips Office, brought it to my attention that there are quite often disputes around leaving a tenancy. For example, he had to pay for cleaners before he was allowed to leave. The landlord then disputed the fact that the cleaners had been in and done a good job, and is withholding the deposit. He has to pay for additional cleaners plus the deposit, plus an exit fee. Those fees mount up and make it more and more difficult for people to move on to other tenancies, given all the debt that they accumulate.

[Mrs Wheeler]

Indeed, such stories are legion. That is why we brought in the Bill. Finishing a tenancy is very important and should be done incredibly carefully on both sides, so that that matter does not arise.

It is testament to the work of hon. Members from across the House that the Bill has been so well received and supported throughout its parliamentary journey. I thank the hon. Member for Sheffield South East and the other members of Housing, Communities and Local Government Committee for their detailed prelegislative scrutiny, which served to strengthen the Bill. Although our commitment to improving affordability runs throughout our work, I know the Committee shares our commitment to improving property standards and safety.

I thank the hon. Member for Westminster North (Ms Buck) for all her work in developing and progressing the Homes (Fitness for Human Habitation) Bill. It is an excellent example of cross-party work, which will lead to meaningful progress and strengthen the private rented sector in the future. Under the provisions of the Bill, landlords will have to ensure that any dwelling they rent out is free of hazards, from which a risk of harm may arise to the health or safety of the tenant or another occupier of the property. Where a landlord fails to meet that requirement, their tenant will have the right to take action in the courts. The Bill will give the courts the power to order non-compliant landlords to take action to reduce or remove a hazard, and tenants will be able to seek compensation when landlords refuse to do so.

I will move on, because time is running out and there were so many questions from hon. Members for me to answer. I will do my very best, but if I do not manage to answer them today, I am sure I will be able to write to hon. Members later.

When it comes to the housing health and safety rating scheme—I can never say the acronym HHSRS, which I hate—the Government are explicit that one person in an unsafe home is one too many. We understand the scale of the challenge. We are taking steps to ensure that central Government set out the appropriate standards and that local authorities have the tools they need to enforce these standards. The housing health and safety rating scheme has been around since 2004, and everybody has said that it is very complicated, so we recommend a review. It is the right time to look at it, so we need to put that into practice to see how it needs to be updated. That fits nicely with the Homes (Fitness for Human Habitation) Bill, which I hope will finish its progress and become an Act shortly.

We are also acting to improve safety. In line with the Committee’s recommendations, we have announced the introduction of mandatory five-yearly checks on electrical installations in the private rented sector. We will introduce legislation for those mandatory checks as soon as parliamentary time allows. We will also give the Government response to the consultation before Christmas. We expect the outcomes of the scoping review for the HHSRS next spring—[Interruption.] I know, I got it that time. The second stage, which will also be set out in the scoping review, will follow. We expect the outcome of the review on carbon monoxide shortly, then we expect to consult on the proposed changes. An announcement on the next steps will also be made shortly.

On lockdown properties, it is absolutely unacceptable that a minority of rogue landlords exploit the housing system by converting their properties into tiny, unsuitable self-contained units so they can get a higher rate of housing benefit or rent and try to avoid the HMO licensing requirements. The Ministry of Housing, Communities and Local Government and the Department for Work and Pensions are analysing evidence of the relationship between housing benefit, housing tenure and quality. We are committed to working together to understand how we can make best use of our financial levers and existing powers to support tenants and improve the quality of housing, while ensuring value for money.

Many hon. Members have talked about the housing court, which we are very interested in taking forward. Both landlords and tenants have raised concerns about it. Effective and efficient access to the courts is vital for landlords and tenants who wish to challenge bad practice. When all the other options have been exhausted, landlords should be able to recover their properties when they have reason to do so and tenants should live in the knowledge that the court system should protect and support them where needed and not leave them lost in a sea of legal confusion.

We hope the Committee welcomes our recently launched call for evidence, which will gather views on user experience of the courts and how it could be improved. Building on the Committee’s recommendations, our proposals explore whether a specialist housing court would make it easier for all users to resolve disputes, reduce delays and secure justice for landlords and tenants in housing cases. That work not only speaks to the court experience, but cuts across the Committee’s concerns about retaliatory eviction and is a key consideration in our work on longer tenancies.

To be specific, the call for evidence on the housing court was launched on 13 November and closes on 22 January, so it is a work in progress. It is designed to understand the correct use and experience of the courts, so I am looking forward to seeing the evidence put before us when it closes.

On retaliatory eviction and section 21, our position is clear. No tenant with a genuine complaint about the condition of their property should be fearful of retaliatory eviction, which is why we have already taken steps on the matter by legislating to protect tenants from retaliatory eviction through the Deregulation Act 2015. We are also aware that the vast majority of landlords provide well-maintained properties and that, thankfully, only a small number of tenants encounter the threat of retaliatory eviction.

As set out in our recent letter to the hon. Member for Sheffield South East, despite the rarity of the practice, our commitment to protecting tenants against retaliatory eviction is undimmed—what a great word; well done to my officials for writing that. We share the Committee’s position that the Government must ensure that tenants are properly protected from that, which is why we have included the consideration of retaliatory eviction in our consultation on the barriers to longer tenancies, to ensure that we have the most up-to-date information to inform our thinking.

The consultation on longer tenancies closed at the end of August—not that long ago—and stakeholder events were held in September. We are analysing the responses and we will respond shortly. We had a large number of responses—more than 8,000—and it is important to consider them fully, and align them with the workload of our experience in the courts. Considering the volume of responses is no small feat. We are working to provide the Government response to the consultation in due course.

I will move on—I appreciate that I have to leave two minutes for my good friend, the hon. Member for Sheffield South East, to close the debate. Local authority capacity and enforcement has been a key point of the debate. From my experience in local government, I know the vital role that local authorities play in the private rented sector, particularly in enforcement. The Committee called on the Government to support local authorities to make best use of the powers available to them, and to go further, and that is what we are going to do. We have designed our enforcement tools to allow local authorities to retain the financial penalties they raise and drive them back into their teams to fund future enforcement activity, exactly as Torbay has done. Torbay has been extremely successful in enforcement work and receiving fines—indeed, it has employed another officer on the back of the fines that it has already received.

Committee members will clearly also be pleased to hear that we have launched a £2 million fund to support local authorities with their enforcement work. That upfront boost will allow local authorities to grow and refine their approach. The funding came as a direct response to my Department’s engagement with local authorities across the country at our roadshow events throughout the summer. In response, we are creating a compendium of enforcement guidance that will bring all the relevant guidance into one place, along with templates. That will form part of our national training offer to local authorities. Equipped with effective powers and armed with guidance and support, local authorities will become ever more effective in targeting their work to remove bad landlords and protect tenants.

I am running out of time, so I thank all hon. Members for an excellent debate. The way parliamentary time works means that, in effect, it has been six months since the work, and it is great that other stuff has been able to come to fruition in that time. I hope my remarks demonstrate the Government’s commitment to building a private rented sector that works for everyone, that supports good landlords to deliver the homes the nation needs and that provides safe, secure and affordable homes for tenants.

We do not shy away from the challenges facing us and we are aware that we need to support the entire private rented sector if we are going to achieve these goals—taking on Airbnb, if necessary. It is in that spirit that I thank hon. Members for their speeches and questions. I look forward to working with the hon. Member for Sheffield South East and the other members of the Housing, Communities and Local Government Committee in the weeks and months to come.