Private Rented Sector

Baroness Bray of Coln Excerpts

Wednesday 25th June 2014 Commons Chamber

[Angie Bray (Ealing Central and Acton) (Con)]

It is important to recognise the opportunities that the private rental sector offers in terms of choice for people and of benefits to the work force. To be able to move to a city for a new job with no worries about finding somewhere to live is hugely attractive and allows people to experience living in different places without the commitment of buying a property. The fact that a third of private tenants in London have lived in their property for less than a year should not be seen as a uniformly negative thing. In my constituency, we see a great deal of churn, with young renters coming and going. They like the flexibility. Moving around different areas and sharing with friends and colleagues is an interesting and formative stage for many young professionals. Not everyone considers three-year tenancies to be either desirable or the norm. For others with different needs, more supply providing more choice and more competition is surely the right way forward.

Of course there are cases of unscrupulous landlords, but there are ways of minimising the problem without wholesale state intervention in the market. The Mayor of London has introduced the London rental standard, aimed at accrediting landlords and bringing transparency to the market. Landlords with the accreditation will be more attractive to both renters and agents, and in a competitive market, the advantages of signing up to it are clear. Councils could, in some cases, do more to ensure that private landlords, to whom they pay housing benefit, do more to ensure their properties are maintained to a good standard.

Estate agent fees can be unpopular, but the agents are operating in the free market and will be paid for their service. It is unrealistic to think that the costs would not simply be passed on by increasing rents if the one-off charges were scrapped. Someone has to pay them for their professional time spent doing the admin work. In any case, estate agents are starting to reduce fees in many cases in order to be competitive. Many landlords will acknowledge the speed with which the marketing undertaken by agents can fill their properties, and similarly, agents make finding a property remarkably straightforward for the renters. Agents can fulfil a useful purpose.

The best solution to affordability of housing, whether rented or not, is to increase supply, as so many in the Chamber have said today.

[Frank Dobson]

In terms of fees paid, the hon. Lady surely cannot think it is right that some agents charge people £450 simply to change the name on an agreement, because one of the people sharing a flat has moved out and someone else has moved in.

[Angie Bray]

To my knowledge, in many cases, agents do considerably more than that. They check the credit details for people who are going to be renting the property, and there is often quite a lot of admin work involved in the work they have to do. As I say, I think they would expect to be paid for that.

[Mr Prisk]

On that point, I think sometimes Members of the House forget that we have consumer legislation with trading standards, which are able to challenge unreasonable charges and fees. Does my hon. Friend agree that rather than passing many more laws, we ought to get the current laws enforced?

[Angie Bray]

Predictably, that is a very sensible point from my hon. Friend. As I was saying, the best solution to affordability of housing, whether rented or not, is to increase supply. That is happening in London, with 100,000 purpose-built affordable homes being built—5,000 for rent for each year across the two mayoral terms. However, we must not get into a situation where private landlords are in some way viewed as a necessary evil. The Opposition’s plans to flatten the market will simply mean it is less attractive to invest in property. Controlled rents in other capital cities point to how detrimental it can be for those seeking to rent. Properties are neglected and choice is limited. Waiting lists are long, and unrealistically high deposits can be needed simply to secure somewhere to live—I am thinking of places such as New York.

Until the 1960s, the private rented sector took care of a substantial part of housing need in this country. As I mentioned earlier, it was an important part of the mobility required to seek work wherever it could be found. Yes, there were bad landlords, and names like Rachman loom large in that regard, but slum landlords such as him could have been dealt with more effectively by law enforcement.

Instead, the Labour Governments of the ’60s decided to bear down on the private rental sector in general, starting a long decline in the number of private properties available to rent. I remember well coming down from university to London in the 1970s—I am showing my age here—and finding it quite difficult to get a room. I was not in a position to go on a waiting list for a council property and I certainly could not afford to buy my own. Since then, the private rental sector has picked up again, providing a great deal more flexibility. If Labour were to win power and put some of its proposals on the sector into practice, I greatly fear that we would again see a decline in the private rented sector, and less flexibility with fewer properties available.

It is all very well to talk about controlling the private rental sector with increased regulation, but if we find there are very few properties available to be rented out, because the landlords have been disincentivised, those who need a property will suffer. How can that possibly be of benefit to anyone?