Localism Bill

Lord Taylor of Goss Moor Excerpts

Wednesday 7th September 2011 Lords Chamber

[Lord McKenzie of Luton]

My Lords, perhaps I should start by declaring that I am a landlord of a property that is let through a letting agent in London, and it is in the register of interests. I shall take the amendments in reverse order.

I have a great deal of sympathy with the thrust of Amendment 93, spoken to by the noble Lord, Lord Palmer, although I feel that it is overly prescriptive. No doubt in the private rented sector in particular there is enormous pressure, and we all know that that pressure is going to build and be exacerbated by what his Government are doing on housing benefit. It will put pressure on homelessness in that sector in particular. Of course there is bad practice, and we should support propositions which look to protect vulnerable tenants. He also made the excellent point that the organisations to which tenants traditionally may have looked, such as Citizens Advice, are under pressure because of funding.

Again, I have great sympathy with Amendment 92, but I would like to read the technicalities a bit better. The thrust of it is that it would give the courts some added leeway before actual possession is obtained. In the current climate, if people are being thrown out of their properties, that must be something which should gain our support.

On Amendment 91, I believe that just before we left Government, we did have proposals coming forward to do just what the amendment is seeking. The noble Lord may say that we took too long to get it done, but again I support regulation. It is interesting to note that good providers in the field, the good letting agents, also support this. They know that their reputations can be tarnished by bad practice out there and that they can be undercut by unscrupulous letting agents. We need some proper regulation in this sector.

I am therefore broadly supportive of the thrust of all these amendments. However, given where we are with the Bill, at the Report stage and just about to move out of the housing environment, it will not be until Third Reading that we get to this. I do not know what the Minister will be able to say in winding up the debate that will give us any assurance about progress, but along with the proposers of these amendments, we would like to see progress on all three fronts.

[Lord Taylor of Goss Moor]

I rise to speak very briefly. I suspect that for all sorts of reasons Ministers are going to be reluctant to go down the regulatory route and indeed that, while my memory may fail me on this, I had thought that the previous Government ultimately came to that conclusion as well, although they certainly investigated the possibility of taking it. However, I may be wrong. I just want to throw into the discussion that in the absence of regulation we must recognise the absolutely fundamental role the private sector will have in housing all sorts of vulnerable people because there are not enough houses in the social and affordable sectors. Furthermore, these people are often at the lowest end of the private sector market and, in those circumstances, they are very vulnerable. It seems that an opportunity has been consistently missed over the years to reward those landlords in the private sector who behave best and, indeed, to encourage landlords in the private sector to do some of the things associated with social housing.

For example, there is no recognition in the rents that are available through housing benefit if landlords are willing to give longer tenancies, and there is little likelihood of recognition of relative quality. I have never understood why we would allow payments through the state in terms of housing benefit to the worst landlords offering the meanest opportunities and yet do nothing to reward those who behave better. That reward could involve a voluntary system of signing up to charters. In particular there is an issue for tenants in this sector over lack of security. Tenants in the private sector may be elderly and have lived long periods in a house, or they may be people with young children, and yet they may not have any real security in the tenancy. It would encourage landlords to offer security if we were to reward longer periods of tenancy and if we were not to draw such a sharp line that says a brief tenancy gives the landlord the security of being able to get the property back or the tenants become secure and highly protected. Why cannot we have something in between and why cannot we reward landlords for such behaviour? I think the Minister is going to be averse to regulation but perhaps he will be a little bit more supportive of an approach that uses the carrot rather than the stick.

[Lord Taylor of Holbeach]

My Lords, my namesake reads the situation pretty well and makes a very thoughtful contribution, as he always does on housing matters, rural housing in particular. It has been a very useful debate. In principle we have discovered the difficulties of an imperfect world where not everybody behaves as they should. I am delighted that the noble Lord, Lord McKenzie, did not get hissed at when he declared his interest as a landlord because it is important that landlords are recognised as having an important part to play. Many of the amendments introduced by my noble friend are directed at encouraging landlords to maintain high standards. The question is whether regulation is the way to deal with this problem, particularly given the need not only to deal with the current situation but to plan and develop this sector for the future, because we all know that it is an area which will need considerable investment.

Amendment 91 makes proposals for the regulation of letting and management agencies. The noble Lord, Lord Whitty, said he was going to speak to Amendment 92 but he meant Amendment 91 because that is what he spoke to. Around two-thirds of landlords let and manage their property through an agent so it is important that they can rely on a good service. We are aware of poor practice within the letting and management agent sector but regulation already exists in this area. Between a third and a half of all agents belong to voluntary schemes which set standards and offer redress when things go wrong, including client money protection. Unfortunately, far too few consumers of the agency system—both landlords and tenants—are aware of the risks of using an unregulated agent. I am delighted that the Government have been able to endorse the Safe Agent Fully Endorsed scheme—SAFE—recently launched by the industry which highlights a key risk around clients’ money. We want to explore these voluntary approaches further before a move to statutory regulation but we do not rule this out in the longer term. However, we cannot support the introduction of enabling powers where we have no plans for their use.

Amendment 92 in this group would extend the court’s discretion to postpone awarding possession of dwellings. We do not think this is necessary. We estimate that, even using an accelerated procedure available under the legislation, gaining possession through the courts takes at least six months. That is more than enough time for a tenant to find alternative accommodation and it already places a significant burden on landlords, particularly in cases where rent arrears are accumulating.

On Amendment 93, my noble friend Lord Palmer joined my noble friend Lord Shipley in presenting the argument for local authorities’ tenancy relations services. We agree that both landlords and tenants in the private sector should have access to advice and support, but local authorities already provide such advice through their housing options services. This advice is supplemented by existing powers to deal with poor practices by landlords. We therefore see no need to legislate further. New legislation would have the effect of restricting local authorities in their existing work and quite possibly add burdens simply in order to reinforce what is already there.

All the amendments pursue a proper ambition: to raise the standard in the industry. In the case of letting and management agents, we acknowledge that some bad practice exists. I have considerable sympathy with those who have been caught out by bad practice, but for the reasons that I have set out we do not think that regulation now is the right answer. Therefore, I ask my noble friends not to press their amendments.