Private Rented Sector

Alison Thewliss Excerpts

Thursday 29th November 2018 Westminster Hall

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to join my former colleagues on the Communities and Local Government Committee to debate their excellent report. I can genuinely say that I miss the Committee; if the Committee members know that I have been moved on to the Procedure Committee instead, they will understand quite how much I miss them. The reports we did together on the Committee were very useful and thought-provoking, and the contributions by hon. Members today are indicative of the attitude they take to their work on the Committee.

The report is an excellent piece of work that highlights many issues within the private rented sector in England. I suppose I must be missed from the Committee too: when I was on it, I would try to make comparisons with Scotland, where we have done a huge amount of work in the private rented sector in recent years. I notice that there are some good points of comparison that, if I were still on the Committee, I might have added to the report. I hope to highlight some of those issues here; I know the Minister has come to visit Glasgow before and spoken to some of the professionals in Scotland, so she will understand that there are things we have done in Scotland that may be of use in England also.

I start by mentioning the Private Housing (Tenancies) (Scotland) Act 2016, which came into force on 1 December 2017 and is coming up to its first birthday. The Act made a number of changes within Scotland: it moved tenancies to being open-ended, so that rents were more predictable and there was protection against excessive rent rises, and it included an ability for local government to introduce local rent caps for rent pressure areas, which is important when we see rents spiralling out of control in some places.

The 2016 Act also introduced comprehensive and robust grounds for repossession for landlords, which could only happen in 18 specified circumstances rather than because the landlord felt they wanted to take the property back; they had to meet those tests as well, so that gave protection to both tenants and the landlord. Disputes between tenants and landlords can now be heard in a new specialist tribunal that we brought in to handle them, which is a useful thing for everybody all round.

We also ensured that letting agents have to register and adhere to a code of practice, which goes some way towards what the hon. Member for Hertford and Stortford (Mr Prisk) said about professional qualifications and skills; if there is a code of practice in place at least, then that gives some professionalism to those companies.

I very much agree with what the hon. Member for Hertford and Stortford said about qualifications. An awful lot of people who end up being landlords in the private rented sector did not start out that way. They may have bought a flat as a younger adult and then moved on but kept it and tried to use it to earn rental income, and they may not quite understand their obligations and responsibilities. For a while, buying flats and renting them out became a quick way of making money. A bit more needs to be done to make sure that landlords understand all their obligations.

[Mr Prisk]

I agree with the hon. Lady about codes of practice, and I am keen to support them. However, I have come to the conclusion that we need to be clear that someone cannot operate in this market unless they have the qualifications. It is rare for me to say something like that. Does she accept that mandating qualifications is actually a stronger move than introducing a code of practice?

[Alison Thewliss]

Yes, and I am interested to see how that proposal develops. I certainly think it would be useful: it would reassure tenants to know that their landlord had some kind of qualification to put a roof over their head. It might get rid of some of the more criminal elements in the sector as well.

All landlords have to be registered in Scotland—there is not the hotch-potch of local registration mentioned in the report—which means that, if they step out of line, they can be banned. We have had problems in my constituency, slightly like those mentioned by the hon. Member for Harrow East (Bob Blackman), of tenants being exploited and lots of people being crammed into one flat. Govanhill in my constituency has a very large private rental sector and lots of rogue criminals. The hon. Member for Sheffield South East (Mr Betts) suggested that “rogue” sounds a bit more casual; I certainly feel that “criminal” is the better word.

In May 2018, five landlords were struck off the landlord register for renting substandard properties, and a further nine were struck off and banned in September 2017. That is all publicised and goes in the press, so there is no doubt about who those landlords are, what they have been up to and the conditions that their tenants have been living in. The Govanhill enhanced enforcement area gives council officials the right of entry into properties if there is any suspicion that they are not up to standard. On their first inspection, only 21 properties met the Scottish repairing standard. When they came back for a subsequent inspection, 175 properties met the standard, so there had been a clear improvement through that process.

Giving local authorities the power to enter flats and do those assessments is quite important in making sure that standards are met. It also gets around the issue of some local authorities not having the political will to do things. If everybody has to be registered across the board, that is at least a first step from which prosecutions can follow, if required. However, I do not think it has been in force for long enough in Scotland for us to be able to tell whether there are postcode lotteries, because housing varies quite substantially in my constituency and in other parts of Scotland as well.

I draw the House’s attention to the Nationwide Foundation’s report on vulnerability among low-income households in the private rented sector in England, because it makes for very interesting reading. It mentions that the proportion of privately rented properties failing to meet the decent homes standard has been falling, but that the number of such properties has actually increased. Numbers and proportion are quite different here. It also highlights, as other hon. Members have mentioned, that most properties that failed had a category 1 hazard—a severe or immediate risk. It should frighten us all if people are in such terrible conditions that their lives could be at risk. I urge the Government to do a bit more to make sure that properties meet those standards.

I also urge the Government to do more on revenge evictions, which our legislation in Scotland has militated against. It is something that we have managed to act on. Generation Rent also produced a very interesting briefing on this. It mentioned that, in 2017, 12,711 evictions by bailiffs happened under the accelerated process under section 21 of the Housing Act 1998, but that that is likely to be the tip of the iceberg. An awful lot of those people will not go through the court process, so we do not necessarily know how many people have actually been evicted. It also points out that two thirds of private renters have no savings. If someone with no savings has just been evicted, the last thing they will want is to go through a court process. They will just not have the means to do so, so they will try to find somewhere else as quickly as they can and move on. We need a better understanding of how many people face evictions through this process.

Moving towards a national database with better data gathering on this issue would be useful in informing what happens next, and the Government ought to think again about that. I am interested in hearing what the Minister says about the things that the Government did not accept from the review. The Committee will continue to push those suggestions, because they are good and solid. We particularly need to protect people from revenge evictions.

Private renting is a growing sector, with more and more people who are more and more vulnerable, including families. It is not only young people renting a flat for a while. There are people who live their whole lives in the private rented sector now because there is a severe shortage of housing in some parts of England. We need to look at how we can better protect those people. The hon. Member for Sheffield South East and others made clear that the cumulative effect of introducing legislation on legislation is that the protections are not where they should be. People need those protections so that they can have some certainty in their lives. Not having that certainty has a huge impact on people’s health, wellbeing and prospects, and particularly on children if they have to move quite a lot. We need to make sure as best we can that people are protected.

Lastly, I very much agree with the hon. Member for Hertford and Stortford about lettings from companies such as Airbnb. The Minister would do well to consider that further, because there could be an emerging gap in the market and we need to somehow make sure that there is protection within regulations.

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[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.