Cost of Living: Private rented sector

Andrew Western Excerpts

Tuesday 18th July 2023 Westminster Hall

[Andrew Western (Stretford and Urmston) (Lab)]

I beg to move,

That this House has considered the cost of living and the private rented sector.

It is a pleasure to serve under your chairmanship, Dr Huq.

I am pleased to have secured this debate on an aspect of the cost of living crisis that does not get the attention it deserves: the huge financial challenges facing private renters. Much focus is rightly placed on the Tory mortgage bombshell that is causing misery for millions of homeowners, but we should not forget that this crisis also affects renters, who are seeing increased mortgage costs passed down to them as a result, or landlords selling up and leaving them at the mercy of a market in which rents are soaring. It is the latest blow to renters, whose home lives are already characterised by insecurity and extortionate costs. For many of the approximately 11.6 million people privately renting in this country, the situation is becoming increasingly untenable. Average rents in the UK are almost 10% higher than they were in 2020, and rents on new tenancies recorded by Zoopla have increased by 22% since March 2021.

National statistics do not tell the whole story, as they mask staggering increases in certain areas. For example, average monthly rents for lets in my home borough of Trafford were £1,093 per month in January 2023—a 12% increase on the year before. Rent as a share of income is at its highest level in over a decade, at 28% of average earnings, rising to 40% in London. That is among the highest in the OECD, and around three times higher than in Germany and France. Evidence from Shelter shows that a third of private tenants are now spending over half of their monthly income on rent.

The steep increases are a result of local housing allowance rates being frozen since 2020. In the past year, the number of private rented homes that are affordable on LHA dropped by some 55%. When less than one in five private rents in England is viable for those on LHA, and virtually everyone accepts that there is not enough social housing, what do we expect low-income renters to do? Grim figures released by the Office for National Statistics last week revealed that one in seven renters have reported running out of food and being unable to afford more. According to Shelter, almost 2.4 million renters are behind on their rent or consistently struggle to pay it. It is clear that renters have been experiencing the cost of living crisis for some time and are reaching breaking point.

Let me illustrate the situation by sharing some stories from my constituency of Stretford and Urmston. A single mum recently contacted my office in desperate need of help. She has two children, one of whom is disabled, with multiple health issues that mean she is now awaiting the fourth surgery of her young life. My constituent told me:

“The cost of living crisis makes it impossible to stay where I am.”

The family, unable to afford their rent, are now homeless and living in temporary accommodation under a level of stress that I cannot begin to imagine.

Another mum from my constituency suffers from a tumour on her spine, as well as anxiety and depression. She is currently living with her baby in a third-floor flat with no lift. There is mould in the flat, which is making her baby and her ill. She is in arrears, as the flat is so mouldy that she has been spending £100 a week trying to heat it. She has recently been issued with a section 8 eviction notice by a landlord who will not even return her messages.

I thank both constituents for allowing me to share their stories today, but the sad reality is that their experience is not uncommon. I could provide dozens of examples from my constituency alone, and many hundreds more, as a result of the engagement work that the parliamentary engagement team did in advance of the debate. On behalf of my constituents, and every other renter living under this intolerable pressure, I ask the Minister why support is so slow to arrive. Why is the plight of renters so often ignored? What will the Government do to help? The Renters (Reform) Bill, first promised in 2019, yet introduced only in May 2023, is moving at a snail’s pace—still no Second Reading, two months on from First Reading. During that time, the House has risen early on 10 occasions, which tells us the simple truth that this is not an issue of parliamentary scheduling; it is an issue of priorities.

We are going into a summer where, according to Generation Rent, a section 21 eviction claim—something the Government promised to end—is being made once every 15 minutes. That means that 96 tenants a day will be forced to find new homes over the summer, in this incredibly difficult market. Inevitably, that means that renters will be forced into cheaper substandard parts of the market, where approximately 600,000 homes pose a serious risk to health, with issues such as damp and mould.

Some renters will fare even worse, and be made homeless, adding to the shameful record of this Government, under which the number of people living in temporary accommodation has increased by 97% since 2010. The Government are sitting on the sidelines as our housing market, from rents to mortgages, is in crisis. Because of that, the situation is set to get even worse, with rents now expected to rise by 6.5% by the end of 2023, and the number of homeless people potentially reaching 300,000.

As the chief executive of the charity, Crisis, has said, low-income renters are facing a “catastrophe”. The Labour party grasps the urgency of the situation. Our renters’ charter will deliver substantial new rights and protections for tenants, including longer notice periods and, finally, a ban on no-fault evictions. Ultimately, the cost of living crisis for private renters is, at its core, another symptom of our broken housing market. The increased demand for private rentals, driven by years of Government failure to invest in genuinely affordable social homes, is the major reason why rents are so high. The only solution to this, and to the wider housing crisis, is to build, build, build. That is not just my view. The Levelling Up, Housing and Communities Committee says in its report on the private rented sector:

“The affordability crisis in the private rented sector, the source of many of the other problems in the sector, can only be properly solved by a significant increase in house building, particularly affordable housing.”

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

My hon. Friend is making an excellent speech. Does he acknowledge that we have more houses now per head than we did in the 1950s? It is not just a crisis of the number of units but, as he has just said, it is the tenure of those units that is vitally important. If we do not get that mix right, the crisis will not be solved.

[Andrew Western]

My hon. Friend is right and, like him, I look forward to a Labour Government ensuring that social rent is returned to the second highest form of tenure. We retain a significant shortage of homes overall. We are nowhere near where we should be, compared with the European average. He is correct, and I agree, that we are in desperate need of a significant increase in social homes, up and down this country.

Conservatives seem to have given up on building, as demonstrated by their capitulation on housing targets, which will leave house building at its lowest since the second world war. Only last week, we learned that, under this Government, we are in a situation where, despite the UK being short of approximately 4 million homes, the Department that is meant to build those homes is handing back £1.9 billion to the Treasury after failing to find housing projects to spend it on. I am pretty sure that, had the Minister sought advice or support from Members in this room and beyond, that money could have been well spent.

Thankfully, Labour has not given up on house building. Reforming planning rules, reintroducing house building targets, building on parts of the green belt that are in fact far from green, and, as I have just discussed with my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), restoring social housing to the second largest form of tenure will be key drivers in our mission to achieve the fastest growth in the G7.

I congratulate the shadow Minister, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), on all his work to raise this issue and to promote house building but, as he knows, I would go further still. Our 76-year-old planning system needs to be scrapped so that we can shift away from a discretionary system at the mercy of nimbyism towards one that is rules-based, underpinned by a flexible zoning code and determined nationally for local implementation. Only then will we be sure that we can build the number of homes, and the types and tenures of property, that we require.

[Lloyd Russell-Moyle]

Does my hon. Friend welcome the Labour party’s proposal to empower local councils to set up development bodies, which would not only be reactive in the planning policy debate, but would be proactive, in the sense that they could buy up land at the current land-value cost rather than inflated future costs, and develop it themselves or with partners?

[Andrew Western]

My hon. Friend makes an important point. I welcome the Labour party’s commitment not only to end the hope value that exists in the sale of land at present but, as he says, to introduce the vehicles that empower local authorities to build. As a formal local authority leader, I know how challenging it is, particularly without a housing revenue account, to build those homes, and therefore to influence the place-shaping of communities. It is imperative that local authorities can do that to ensure that we get the homes that our local neighbourhoods require.

[Munira Wilson (Twickenham) (LD)]

I congratulate the hon. Gentleman on securing this important debate. I am a London MP, representing a constituency in south-west London. On average, renters in London are spending almost 50% of their pre-tax income on rent, and the housing supply in the private rental sector has dropped dramatically. The impact is that our key workers—our nurses and teachers—cannot afford to live in the capital, and young families are being driven out, which is demonstrated in falling school rolls. However, London Councils says that local authorities could be building 143,000 new social homes; they are ready to do that, but they just need the funding. Does the hon. Gentleman agree that the Government need urgently to come forward with that cash so we can boost the supply of social housing in our capital?

[Andrew Western]

I agree with the points made by the hon. Lady. I commend the work of the local authorities that are leading the way in building social and affordable homes in an incredibly difficult climate. It is not an easy thing to do with the way the grant regime is set up, but I know how fixated council leaders are on tackling the housing crisis, particularly in places such as London and my constituency in Greater Manchester, where prices are driving key workers and low-income workers out of the local area, which causes all sorts of issues with labour shortages and the provision of skills that we desperately need.

I support planning reform, but it will not be easy. Difficult choices must be made to end the gross inequities of our housing market. In the current system, we are set to spend more on housing benefit than on building affordable homes, and renting is no longer a step in the journey towards owning a home, but an expensive, insecure quagmire, dragging down a generation of younger people. The cost of living crisis is affecting us all, but especially private renters. They are generally, younger, poorer, more vulnerable people, trapped in the vicious circle of a broken rental market. It is no wonder that Sky News found last week that low-income private renters are suffering the most in the current financial climate, and the need for action to tackle this social catastrophe is now acute. Labour has shown that it gets this. I hope that when the Minister responds to the debate, she will show that she understands it too.

[Dr Rupa Huq (in the Chair)]

Members should bob up and down if they wish to speak, so we can calculate how long everyone gets.

--- Later in debate ---

[Andrew Western]

I thank all colleagues who have taken the time to contribute to what has been an important and insightful debate into an issue that affects all our constituents very acutely. I will not speak to all the contributions from Opposition colleagues, but they have all accurately reflected the plight of private renters, both in terms of the impact of the cost of living crisis on their living standards and ability to pay for basics such as food, energy and rent, and in terms of the condition of the properties that many constituents have to live in. Many constituents are unable to afford to move and terrified to challenge their landlords on the need for repair.

I want to spend rather longer, though, on the comments of the hon. Member for Christchurch (Sir Christopher Chope). He is absolutely right to state that we need additional supply in the housing market. He seemed to suggest that I had not referenced that when I set out the need to scrap the Town and Country Planning Act 1990 to build, build, build, to utilise the green belt, and to drive up housing supply in a way that delivers significantly more affordable and social homes. None the less, we agree on that point. I stress that because it was probably the only part of his contribution I agree with. He will appreciate that I am not in a position to comment on many of the changes made 40 years ago in the 1980s; sadly, I was not born until 1985. However, it is certainly the case that the interventions made back then have done nothing to ease the terrible situation for those at the sharp end of private rent, who are experiencing this cost of living crisis, often on very low incomes.

I also object to the suggestion that immigration, or indeed any form of demand issue, is driving the housing crisis. It is simply a fact that the biggest driver of demand for private rent is the 307,000 young people looking to move out of their parents’ homes in 2022, which was caused by many of them staying at home for longer during covid, as well as the impacts on their employment during that time and so on. Although that is the biggest aspect of demand, it is important to remember that the housing crisis is always fundamentally about supply.

I am sure the hon. Member for Christchurch will be aware of this, given that he has already subjected us to one history lesson. If I point to the history of house building in this country, we have not been building enough homes for the past near 70 years. In some of those years we had net migration out of the country, so to suggest that immigration is a driver of the housing crisis does not bear any alignment with the evidence before us. It was wholly unsurprising to hear that the hon. Gentleman stands against the Renters (Reform) Bill—not only from his contribution today, but from the significant delay in bringing the Bill forward for both First and Second Reading. We know now that it is the Tory Back Benchers who have caused significant delay to this important legislation.

I thank the hon. Member for Glasgow South West (Chris Stephens) for his comments. I am not going to speak to the merits of the system that has been brought forward in Scotland, other than to note the significant difference between the interventionist approach there and the inertia from the Government here in bringing forward their proposals.

Again, I thank the Opposition spokesperson, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), who was absolutely correct to highlight the ONS data showing that private renters are five times more likely to be struggling, and that 2.5 million of them are struggling to pay their rent. I know he understands that, which is why he is pressing so hard for the Renters (Reform) Bill to come forward, as he did today.

In many ways, the Minister echoed that desire to see the legislation come forward, which leaves one wondering why there has been such a delay. I appreciate that we have had a number of Housing Ministers over the past few years; I can only hope that she is still in the job on Monday. The issue with that many changes, and with the number of Prime Ministers over the past few years, is that this legislation has been kicked down the road time and again. When people are in desperate need and struggling to pay their rent, that is simply not good enough.

I was interested by what the Minister said about the £1.9 billion not actually being clawed back, but reprofiled. I am sure that will be of great reassurance to the many people struggling to get on the housing ladder and to access social and affordable property, not least because the Minister promised that the money will be available from 2026. How wonderful!

[Rachel Maclean]

I did not say that.

[Andrew Western]

I believe that the Minister said it was from 2026 to 2030.

[Rachel Maclean]

What I said was that the programme is from 2016 to 2023. It is already delivering affordable housing. I will send the hon. Gentleman a copy of my speech, and he will find it in Hansard.

[Andrew Western]

I am grateful for that and I apologise if I misheard the Minister. However, the fundamental point is that there is still much work to do. Yes, we need to see the Renters (Reform) Bill come through urgently. We also desperately need to see the support package that is being brought forward to stop mortgage holders being evicted extended to renters. Of course, we also need to build, build, build social and affordable homes in a way that gets them back to the second largest form of tenure in this country, giving the housing security that people desperately need.

Question put and agreed to.

Resolved,

That this House has considered the cost of living and the private rented sector.