Lord Greaves
Main Page: Lord Greaves (Liberal Democrat - Life peer)
Lord Campbell-Savours (Lab)
My Lords, perhaps I can deal with the noble Baroness’s comment on what happens in the event that the landlord dies. This is an amendment moved by my colleague on the Front Bench, and if there is a difficulty with it there is no reason at all why the Government cannot come back with an amendment to deal with the thrust of the case laid in the amendments by my Front Bench but which includes a provision for those circumstances. That is what we are here to do: to legislate. These amendments have been proposed but Ministers could take them away and say, “Yes, there is a point here but if we build in a system of exemptions then these particular problems will not arise”.
I can also deal with the question of tenants in arrears, which the noble Earl, Lord Lytton, referred to. As I understand it, under Clause 55—in Part 3, which is headed “Recovering abandoned premises”—the Government’s position is actually to simplify the whole process of dealing with what happens where,
“the unpaid rent condition is met”.
That would cover where people are in arrears and where mortgages are being paid, as I presume that under that provision the landlord would then be entitled to secure possession of his property. That deals with one of the main objections in the contribution of the noble Earl, to which I listened carefully.
Finally, the noble Earl referred to people working at Gatwick Airport who did not necessarily need longer-term tenancies. The amendment says that,
“it is an implied term of such a tenancy that the tenant may terminate the tenancy by giving two months’ written notice to the landlord”.
The tenant is not locked into the agreement at all. The tenant can pull out of the agreement at a moment’s notice simply by saying, “I gave two months’ notice to the landlord”. What we are doing here is protecting tenants by not locking them in, in the sense that they can pull out. We are protecting landlords—or the Government are protecting them—under the provisions of Clause 55 in terms of arrears. In terms of landlords dying, as I said, that could be dealt with by further consideration by the Government.
However, what we are doing more than anything else is giving people who take on tenancies a sense of security as to where they live. From what I hear from tales brought to me by my sons’ friends, who have had different tenancies in London over a period of years, many tenants in London do not know where they are going to be. They do not know whether the landlord will want the property back at the end of 12 months. People are entitled to know that the weight is moving at least a little more in favour of the tenants to give them more rights. We are not granting people long-term security of tenure and indefinite tenancies. We are simply extending it from one to three years to give more balance to the way that tenancies operate in the United Kingdom.
Lord Greaves (LD)
My Lords, I want to put this problem in a slightly wider context. The noble Baroness, Lady Hollis, said that the present system of short tenancies was bad for tenants, bad for landlords and bad for housing. It is also bad for the local community. There are areas in the north of England of cheap, mainly terraced, housing and former council estates. The houses are cheap—as I will explain later—the rents are cheap, and keeping them in a decent condition is a constant struggle for owners, for the council and for people living in them. The result of the system is that there is a high churn—that is the technical word—of tenants. Many people live in a house for only a short period. That is clearly linked to the system of tenancies.
More than 10 years ago, I was chair of the governors of the local primary school. One problem the school had was the children who were living in that kind of property. It is a traditional area of working class owner -occupation. Some 50 or 100 years ago, people bought the houses from the mills that they worked for. When I first knew the area, owner-occupation was 80% or more, but private landlords have moved in very significantly and taken over many of the properties: one-third or more in the period I am talking about. Two-thirds of the children in the school spent most of their primary education there. In that respect, it was a very stable school: children went into the nursery or infants at the age of three or four and left at 11 when they went to secondary school. However, one-third of the children turned over every year. Every year, one-third of the children in each class were new and did not stay long enough to settle, to get a proper education and have the stability of being in the same school for some time.
That is just one example. When I first knew it 40 years ago, this was a pretty stable working class community of extended families. People who bought houses there as young couples had their parents living in the next street and their grandparents round the corner or in the sheltered housing just down the road. That has been broken down. There are lots of reasons for that, but the single most important one is the growth of private sector housing at the bottom end of the market. There are some good landlords. In that area, the best ones are those who live in the street and own one or two other properties in it. Other very good landlords are those who were left a house when their parents died, look after it well and live in the same town. However, there are absentee landlords who operate through housing agents. I have had people ringing up from Bognor Regis demanding to know why, as their councillor, I was not doing something about the rotten tenants in their house who had just done a moonlight flit and taken all the copper. I had to explain that I was not their councillor but that I was concerned about the house. But I also had to ask why they put those tenants in. I said, “Well, you know what the street is like. It is like that. We are desperately trying to hang on to the good residents there, but you know what it is like”. They said, “No, we have never been there, why should we?”. It is that kind of landlord in the private rented sector which is a disaster. That is why I would tend to support this amendment, which is just one of the things that might be done.
Baroness Williams of Trafford
My Lords, Amendment 29, if enacted, would introduce a minimum of three-year tenancies in the private rented sector in England and would mean that landlords would not be able to rely on the notice-only or no-fault ground for possession—known as Section 21—within the first three years of a tenancy. Tenants would be able to end the tenancy by giving, as the noble Lord said, two months’ notice at any time.
Let me make it clear that this Government are committed to building a bigger and better private rented sector which provides security and stability for tenants and flexibility for landlords. We have taken action to support the supply and quality of private rented accommodation by resisting unnecessary and unhelpful regulation while cracking down on the worst practices of some rogue landlords.
Our model tenancy agreement, introduced in September 2014, promotes longer tenancies for those landlords and tenants who want to sign up to them, but there is no one-size-fits-all approach to tenancy lengths, as noble Lords have said. Many landlords are looking to rent out a property for the longer term, but there will be some for whom letting a property is a short-term plan and who will need the property back at some point, perhaps for their own family to live in, as the noble Earl, Lord Lytton, said. So, the system does need flexibility.
Although I understand the spirit in which this amendment is tabled, the amendment would be counterproductive. It would overburden the market with restrictive red tape, stifling investment and the supply of rented housing at a time when we most need to encourage it. This would not help landlords or, indeed, tenants.
Let me explain. Before assured shorthold tenancies were introduced in the Housing Act 1988, the private rental market was in decline. Lifetime tenancies and regulated rents meant that being a landlord was simply not commercially viable for many property owners. But since 1988, the private rented sector has grown steadily—growing from just over 9% of the market in 1988 to 19% today. Landlords, and in most cases tenants, welcome the flexibility of the current assured shorthold tenancy regime, which does not lock either party into long-term commitments and promotes mobility.
We must be mindful that recent figures show that tenancy lengths are on average three and a half years. However, without the certainty that landlords can seek repossession when required, many would be reluctant to let their properties.
Lord Greaves
“Review of effectiveness of empty dwelling management orders etc.
(1) The Secretary of State must, within six months of the passing of this Act, commission a review of the operation and effectiveness of empty dwelling management orders and other provisions for bringing into use domestic properties that have been abandoned by their owners.(2) A report on the findings of the review must be published and laid before each House of Parliament.”
Lord Greaves
My Lords, my purpose in moving this amendment is to raise a significant problem in some parts of the country. I am very aware that the kinds of areas I am talking about are very different from the areas that the Bill seems to be concentrating on—in London and the south-east and perhaps in similar areas. The sort of areas I am talking about are, for example, east Lancashire or west Cumbria, and lots of other places like them around England. It is a different world, but it is important.
The first point that I want to make is that there is not a housing market in this country that is the same everywhere. There are many different housing markets in different places which operate in different ways. The real problem that many of us have is that legislation is almost always on a one-size-fits-all basis and is written by people with what we would see to be a very south-east England viewpoint, although it is not just south-east England. I mention EDMOs—empty dwelling management orders—in this amendment but I want to talk particularly about the “et cetera” bit to mark the problem rather than just EDMOs. I will come to EDMOs towards the end.
Baroness Evans of Bowes Park
The noble Lord makes a valid point. As he has kindly suggested, I will write to him with further details as I do not have the figures to hand. I hope that, in light of what I have said, the noble Lord will agree to withdraw the amendment.
Lord Greaves
My Lords, I am grateful to the Minister, half of whose speech was exactly the one I made in listing some of the powers that local authorities have in order to deal with empty homes and reduce their number. She is exactly right that some of those powers, such as levying council tax on empty homes, have contributed to a substantial reduction.
However, the Minister did not home in on my specific point about the relatively small number of properties which have effectively been abandoned and made derelict. They are the rotten teeth of the terraced streets, which cause immense problems. I am sure noble Lords can imagine the social problems that kids get in, or the effects of broken water pipes on neighbours. These problems are quite apart from the fact that people do not want to live on a street facing an empty property and therefore do not buy property on those streets, which reduces property values. This is a major problem in some parts of the country. The point I was trying to make—I thought I made it fairly well, but perhaps the Minister will read what I said and decide whether she agrees with me—is that the existing powers are no longer sufficient for allowing local authorities to deal with these problems.
The Minister mentioned improvement notices, which I deliberately did not include in order to keep my speech within 10 minutes. They are just the same. A council can make an improvement notice and if the owner does nothing do the work by default. It then has to put a charge on the property. Getting money back from people who have abandoned a property is not an easy thing to do and may well take many years, if it can be done at all. This is another example of a funding gap, where there is a cost to a local authority of using these powers in areas where the level of house prices and rents are low but the cost of the work is about the same as anywhere else in the country. In these areas, the cost of buying, doing work to and managing property is not matched by what the local authority can get in from selling, putting a charge on or renting the property. That is the difference. There is a gap and it is a serious problem, which applies to all of the different means that the Minister mentioned.
All I can ask is that the Minister and her colleagues look at this and write to me about how they think it may be solved. I beg leave to withdraw the amendment.
Lord Greaves
My Lords, I have three questions for the Minister. They are not particularly related, but they are all part of the starter homes thing. First, I shall pick up what the noble Lord, Lord Horam, said. He caused my eyebrows to rise a little bit when he said that it is all about quantity of housing and not about tenure. I basically disagree with that, but perhaps I am a more ideological politician than the noble Lord.
Lord Greaves
Well, yes, it would not be difficult. Perhaps that is why he was never in the same party as me.
Lord Greaves
He came very close. We had our times together.
Then I heard the noble Lord talk about unintended consequences, and it seems to me that this proposal is full of the threat of unintended consequences. I go back to the point I made previously, which was picked up by the noble Lord, Lord Best, that this Bill is trying to fit everybody into the same pot. It is one size fits all, when what we need is a series of different answers to the problems of the housing market in different parts of the country.
When I spoke previously, I said that there are lots of different housing markets—perhaps 100—around the country. The person who first gave me that idea is now in his place and is my noble friend Lord Stunell, who gave us a talk when he was a Minister in the Department for Communities and Local Government in which he kept hammering home the point that you cannot have one rule for everybody. That means that there have to be local mechanisms for finding solutions. The only people who can legitimately do that and set out to find those mechanisms and policies are the elected local authority.
Having said that, I will ask the Minister the following three questions. One relates to the point made by the noble Lord, Lord Horam. In 2001, owner-occupation in this country reached a peak of 69%. By 2011, it had gone down to 64%, and it is now somewhere in the low 60s. I suggest that that is an unintended consequence of a number of different policies. I believe that owner-occupation is the best form of tenure, although there are people for whom it is not appropriate and people who would not want it. I first got involved in politics at the end of the 1950s, joining the Liberal Party when “Ownership for all” was a Liberal slogan. It is still a good slogan, if a little on the extreme side. My question for the Minister is: do the Government have a target of what they think is a reasonable level of owner-occupation in this country? Are they content for the level to continue to slip until it gets down to perhaps 50%, or do they want to boost it again, and if so, how far do they think we can reasonably get the level to?
The second question is totally unrelated to that and is just a question I realised I did not know the answer to. Is a person or a young couple who buy a house which is a starter home, and therefore get the 20% discount on the market price, also entitled to the 20% Help to Buy discount if they qualify for that? That is just a straight question, because if that were the case it would have an interesting impact.
My final question goes back to the kind of area which I know best, which covers a lot of the north of England outside the most rural areas and the big cities—and perhaps some of the big cities, too—as well as a lot of the rest of the country as well. What is a local authority supposed to do if it cannot find anybody who wants to build starter homes? That may seem a ludicrous question in some parts of the country, but it is not a ludicrous question in the part of the country where I live. It is quite possible that local or big housebuilding companies will not want to build any starter homes, for a whole series of reasons.
Lord Beecham
My Lords, this has been a very interesting debate. I have to say that I rather struggled, as, I suspect, other Members of your Lordships’ House may have done, with the huge number of amendments in this group and the following group, which are in many ways connected. It has not made preparing for the debate—or, I suspect, replying to the debate, for the Ministers—a very easy job. However, we have heard some extremely interesting contributions, and I hope the Government will listen very carefully to the views not just of members of different political parties but particularly of the Cross-Bench Members, who have brought their experience and independence of mind to bear on these very important problems.
In the first instance, I will speak to Amendment 48, which relates to the provision of starter homes and which relates particularly to Clause 3, under which the Bill lays down:
“An English planning authority must carry out its relevant planning functions with a view to promoting the supply of starter homes in England”.
So far, so good. Subsection (2) continues:
“A local planning authority … must have regard to any guidance given by the Secretary of State in carrying out that duty”.
Amendment 48 would add to that subsection (2) something of a restriction so that it would continue,
“except where the local authority considers that providing starter homes would prevent other types of affordable housing being built”.
In other words, it introduces into the Bill the notions that there has to be a balance between the provision of starter homes and other affordable homes, and that the Secretary of State should not be able simply to prescribe that the one—starter homes—must always prevail over any other considerations. That seems a sensible way forward.
It is interesting to read the policy fact sheet on starter homes published by the department, which lays down the general nature of the Bill. It asks what the Bill hopes to achieve and answers,
“a general duty on English planning authorities to promote the supply of starter homes when carrying out their planning functions”.
So far, that is quite acceptable. However, it continues with,
“allowing the Secretary of State to make regulations to create a starter homes requirement, so that English planning authorities may only grant planning permission if the starter homes requirement is met. This will ensure that starter homes are delivered on suitable, reasonably sized sites”.
That is not necessarily a logical conclusion, but the important thing is that it makes an absolute duty, which will ultimately be fleshed out in regulations and which, needless to say, we will not have sight of before the Bill is enacted, if it is enacted in its present form. Moreover, nothing is said either here or in any other area about the salient fact that the requirement will not necessarily be confined to providing such starter homes for residents within the locality. They could come from far away or perhaps from adjoining authorities, but there is no indication that the planning requirement will address the needs of people within the very authority that will have to carry out these proposals.
Interestingly, the fact sheet says that the Government are consulting until 22 February. Admittedly, that is only a week or so ago; given the time we have to consider the Bill, I agree that that is rather a limited period, but we do not know quite when the consultation started. They are consulting,
“on changes to national planning policy to complement these legislative reforms”,
which seems somewhat akin to the old Alice in Wonderland trope of “Sentence first—verdict afterwards”. We do not know what the consultation will produce, but the Government are in any event determined to impose their view. The noble Lord, Lord Horam, who is in some danger of being accused of political recidivism on the basis of his extremely sensible contributions to the debates on the Bill, has indicated, rightly, that we are proceeding in the dark. Of course, we have been stumbling in the dark over many Bills, given the way the Government decide to conduct their business, particularly with reference to pending secondary legislation or regulations. However, the noble Lord is also right to identify that there are no available financial data within the information that is before the Committee or, presumably, that is likely to be before it. These are surely major considerations.
Reference has been made to some of the issues which are clearly of concern, in particular the position on who will be eligible for, and capable of benefiting from, the starter home concept. In particular, we have heard of the Shelter report, which makes it clear that for a majority of people who are not on high wages or without dual salaries, the starter home project will not help them get on the ladder at all; they simply will not be able to afford it.
My noble friend Lady Royall referred to the very small percentage of authorities—I think it was 2% of authorities—in which people on the national living wage would be capable of buying a starter home; even those on average earnings are likely to be able to buy in only 42% of local authorities. That is not a particularly impressive extension of what is meant to be an important right.
Baroness Williams of Trafford
My Lords, the £1.6 billion to build 100,000 affordable rented homes will add to the mix of addressing supply. As noble Lords have said this afternoon, the fundamental issue of the housing market today is lack of supply. All these different types of tenure will add to the supply. I accept that we will disagree, but one cannot—
Lord Greaves
I wonder if I can just tempt the Minister again to say perhaps that in many parts—or even most parts—of the country that is the case? Lack of supply is not the case in areas where the market has collapsed, and we need different policies to solve the problems we have got and provide people with good homes.
Baroness Williams of Trafford
I do not think that the noble Lord is wrong that in certain parts of the country—and I think I know the parts he is referring to—home ownership has declined because people do not want to live there. I think that some of the regeneration and transport policies and some of the policies for the northern powerhouse for rebalancing the economy will contribute to all parts of the country being able to maximise their economic potential and make people want to live there. I give the example of Salford, where MediaCity was built. That area of Salford is a very desirable place to buy.
There are a number of interventions that the Government can make that all add to the mix of a place being an attractive place to live. I have seen where transport investment suddenly has made areas that people did not want to go near—Wythenshawe—into ones where suddenly the house prices have increased dramatically. They are becoming very vibrant places in which to live because of those transport links and investment in the airport. I accept that point. We cannot just take individual government policies and criticise them. We have to take everything in the mix in terms of improving and rebalancing our economy outside the south-east while recognising that the south-east is a fantastic place to live and is the engine of this country in many ways.