St Michael’s Gate, Peterborough

Lord Barwell Excerpts

Tuesday 10th January 2017 Westminster Hall

[The Minister for Housing and Planning (Gavin Barwell)]

It is a pleasure to serve under your chairmanship, Mr Pritchard, for what I believe is the first time.

I would like to start my response by praising my hon. Friend the Member for Peterborough (Mr Jackson) for raising this issue in Westminster Hall today. It is not the first time that he has raised it with me or with my Department; I believe he presented a petition to the House and I have just signed off our response to that petition. As all Members of the House will know, he is a highly diligent constituency MP, and it does him great credit that he has raised this particular issue today. I also join him in congratulating his local newspaper, the Peterborough Telegraph, on the interest that it has taken in this issue.

As my hon. Friend said, and as I understand it, nearly all the current tenants at St Michael’s Gate hold assured shorthold tenancies under the Housing Act 1988. That gives them the right to live in the property as their home and to get repairs done, and they cannot be made to leave within the first six months of the tenancy. However, the legislation also enables a landlord to regain possession at or beyond the end of that six-month term, with two months’ notice.

Before assured shorthold tenancies were introduced by the Housing Act 1988, the private rental market in this country was in decline. Regulated rents and lifetime tenancies meant that being a landlord was simply not commercially viable for many property owners. Since the law was changed in 1988, the private rented sector in this country has grown steadily, from just over 9% of the market at that time to 19% today. It now fulfils a major role in providing housing to people in Britain. The sector is not without its problems, but it is worth saying that both the quality of accommodation in the private rented sector and the satisfaction of the people living in that accommodation have increased over time.

There are certainly problems, with which my Department continues to grapple, but overall that story of deregulation has been a success and has allowed more people to access accommodation in the private rented sector. The difficulty here is that although we know people want the stability of a secure home, the Government’s view is that more restrictive legislation of the kind that would have prevented this company from doing what it did would mean fewer homes available to rent, which would not help tenants.

My hon. Friend posed the right question in his speech. What happened may well be legal, and we may well have to accept that if we want a thriving rental sector we must allow landlords to ask people to leave a tenancy, with notice. The question my hon. Friend posed is whether the behaviour of the company in this situation is moral or right. I very much share his concern, and I think that anyone listening to this debate or reading the transcript will ask that same question about what has happened, which has, as my hon. Friend said, a sort of Alice in Wonderland quality to it: a group of people essentially being told that they need to leave their homes, resulting in many of them being made homeless, to provide housing for the homeless. That seems to be a highly irrational way for a company and a city council to behave.

Accepting that if we want a thriving rental market in this country we must accept the ability of landlords to regain possession of their property, what can the Government do to try to make the situation—

--- Later in debate ---

On resuming—

[Gavin Barwell]

Before I was so rudely interrupted, I was trying to address the concern my hon. Friend raised. If we accept that to have a thriving rental market in this country, we need to allow landlords to regain possession of their properties, what can we do to make the kind of situation that his constituents have experienced far less likely? The key answer is to increase the supply of housing. Many of the issues that he referred to—I will answer some of the detailed questions in a second—come back to the point that for probably 30 or 40 years, we in England have not been building enough homes, so the demand for housing far exceeds the supply.

Those constituents who had to approach the council and seek protection under homelessness legislation are an example of a wider problem. Historically, the main causes of statutory homelessness—when people go to their council and ask for help with rehousing—have tended to be relationship breakdown and those kinds of issues. The most common cause of statutory homelessness in this country now is the ending of a private rental sector tenancy. My hon. Friend describes a particularly strange and indefensible situation, because of the role that the company played in provoking it, but it is a fairly common one in a general sense. People lose a private rental sector tenancy and find themselves unable to find alternative accommodation in their area, and therefore have to present themselves to their local authority.

To try to alleviate that problem, the Government are doing two things. In addition to supporting the largest affordable housing programme by any Government since the 1970s, we are investing very large sums of public money in trying to help local authorities prevent homelessness and support those affected by it; we are investing £149 million in central Government programmes and giving £315 million over the course of this Parliament to local authorities.

The House is also playing a part, and we should put that on the record. The private Member’s Bill promoted by my hon. Friend the Member for Harrow East (Bob Blackman), which is currently before the House, does two critical things. First, it looks to widen the safety net. My hon. Friend the Member for Peterborough did not touch on this, but it is possible that some of his constituents find themselves outside the safety net; single people who are not vulnerable in any way are not currently covered. The private Member’s Bill would widen that safety net. It would also get councils to intervene much earlier to prevent people becoming homeless, rather than just dealing with the problem when it occurs.

The second main thing the Government are trying to do is increase the supply of housing. The fundamental solution to so many of the housing problems we face in this country is to build more homes—in this particular instance, more homes for rent—to offer people greater security than is often the case currently, without forcing landlords to offer that security. In the forthcoming housing White Paper, my hon. Friend will see a lot of measures on that. I will mention two briefly.

First, the Government are very keen on build to rent. In this country, most of our private rental sector properties are owned by individual landlords, many of whom are responsible for only one property. We are keen to see institutional investment in building new private rental sector homes. That brings not only a degree of professional management and a very welcome new supply, but the potential to offer longer assured shorthold tenancies, because we are not talking about individuals who may need to access their assets six, 12 or 18 months down the line, but major pension funds and the like who are interested in a long-term, secure return on their investment. That would address some of the concerns of his constituents. Secondly, the Department is also promoting a model tenancy agreement, which encourages landlords to offer longer tenancies and therefore greater protection to people.

I want to address three questions that my hon. Friend asked on behalf of his constituents. He told us that the properties in question had at some point been what we would call social housing; they had been owned by a registered provider. He asked why that housing had been allowed to pass into the private sector. I cannot answer that question for him today—my briefing was unclear about the history. My officials believe that, if it was owned by a housing association, that was some time in the past. He is right to say that if that was the case, the transfer would have to have been authorised by the housing regulator. I am very happy to see if we can find out, without disproportionate effort, when that occurred and what the rationale was for approving that decision. That is clearly something that his constituents would want to know the answer to. It is a highly relevant question.

My hon. Friend raised two other questions to which I think he deserves an answer. He talked about the management fee, and the distortion whereby somebody can earn more money renting out accommodation to local authorities looking to place homeless families than renting it out as normal, general-purpose, private rented accommodation. The management fee is not paid directly to the landlord—it is paid to the local authority—but my hon. Friend is right that, because many local authorities are so short of emergency accommodation to place homeless households in, the rates that landlords charge them are often of that kind. The long-term solution to that is to get more housing in our country, so that local authorities are in a much stronger position in the market when trying to secure accommodation and do not have to pay such high fees.

Given the way that the management fee, which is managed by the Department for Work and Pensions, works at the moment, it may reassure my hon. Friend somewhat to hear that the Government are replacing it, and will move to a grant to local authorities, which will be administered by my Department. The overall pot of funding for that grant will be £617 million. That will give local authorities much more flexibility in how the money can be used, and may prevent the appalling situation that he has reported today from recurring.

My hon. Friend’s final point is very difficult. It is an issue that many of my predecessors have had to grapple with: local authorities are placing families that they have accepted as statutorily homeless outside their area. Many hon. Members have raised that concern with me in the nearly six months that I have been Minister with responsibility for housing. Let me reassure him at least partially. Local authorities have to secure accommodation within their own borough as far as is reasonably practicable. We have changed the law so that councils have to take into account the impact that a change in location would have on a household, including possible disruption to things such as employment and schooling.

In some circumstances, accommodation in another borough may be more suitable for a household. I cannot say to my hon. Friend that that can never happen, but I can assure him that we have made it more difficult. Again—this is probably the right moment to draw my remarks to a close—the long-term solution to the problem of councils placing families in different boroughs is to end the housing crisis in this country. We must ensure that we build more homes and build up our housing supply, so that each local authority has the ability to place the families it accepts within the area in which they live. Clearly, in most cases, that is the right thing for those families, because most people have friends, families and personal relations, whom they risk losing if they are placed at a distance. I thank my hon. Friend for raising this very disturbing case.

Question put and agreed to.