Housing: Lettings Fees

Debate between Baroness Grender and Lord Bourne of Aberystwyth

Thursday 19th January 2017 Lords Chamber

[Baroness Grender]

To ask Her Majesty’s Government what steps they are taking to implement the ban on lettings fees announced in the 2016 Autumn Statement.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

The Government are committed to introducing legislation as soon as possible to implement the ban on letting agent fees for tenants. We will consult in March/April on the detail of the ban and will consider the views of property agencies, landlords, tenants and other stakeholders before introducing legislation. Impact assessments will follow the consultation and support the detail of banning fees to tenants.

[Baroness Grender (LD)]

Does the Minister understand our need to see the small print, given the arguments he made against the proposal during the progress of my Private Member’s Bill? Does he recognise that all fees—up-front, renewal and exit—charged to tenants need to be included in the ban for it to work?

[Lord Bourne of Aberystwyth]

My Lords, first, I pay tribute to the work that the noble Baroness does on this matter. With her background in Shelter, she certainly knows what she is talking about. It is important that we have detailed consultation. I am sure that she will be pleased to hear that officials were in Scotland yesterday to learn lessons from there. I have sympathy with a wide-ranging ban on fees, although we have to be careful to ensure that we get it right through the consultation. For example, if somebody loses their key, it is legitimate that they should pay the letting agent for getting a new one. But I agree with the general thrust of what she says.

Homelessness

Debate between Baroness Grender and Lord Bourne of Aberystwyth

Wednesday 21st December 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I pay tribute to the work that Crisis does in this area, particularly at Christmas. I am sure that we have all seen the great efforts that it makes. The noble Lord is right that often these complex housing needs are met by complex health needs as well, particularly in the field of mental health. We are seeking to address these issues across government by working with our partners in other government departments as well as with the charitable sector. But the noble Lord is absolutely right, there is a very close allied problem in relation to mental health.

[Baroness Grender (LD)]

My Lords, is the Minister confident in his figures? Are they robust? Is he convinced that it is accurate to compare today with 2003 in the way that he has; or, one year on from being asked to take urgent action, can DCMS still be accused by the UK Statistics Authority of potentially misleading on homelessness? Is the Minister confident in his figures, yes or no?

[Lord Bourne of Aberystwyth]

Yes, my Lords. They are not my figures, they are government figures and I trust them entirely.

Renters’ Rights Bill [HL]

Debate between Baroness Grender and Lord Bourne of Aberystwyth

Committee: 1st sitting (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

[Baroness Grender]

If the Minister believes that there will be an impact on rents, can he cite evidence of any research done by the Government into the changes in Scotland, given that at the moment we have one piece of research that says—and I say it again—120 landlords were surveyed and only one had put up costs as a result of the change in Scotland? Does he have some alternative research to present?

[Lord Bourne of Aberystwyth]

The noble Baroness will have heard me say very clearly that we are awaiting the outcome of both the working groups looking at the issue. They will provide important evidence and will have looked at this issue in far greater detail than I have, so I anticipate looking at that when we have the report. I want to take this away and consider it further. I am not opposing the amendment; I am expressing reservations. The noble Baroness and other noble Lords have raised some important issues. I will take this away: we really do need to see the evidence. I hope noble Lords will understand that this is an evidence-based approach that I want to be pragmatic about.

[Lord Bourne of Aberystwyth]

The noble Lord will have previously heard me and the noble Lord, Lord Thurlow. There is an issue of housing supply across the board. There is no question of that: it has been a problem for successive Governments and we have to address it. It is not as simple as addressing a particular part of the problem: it is across the board. There are challenges in all the sectors: private rented, social rented and owner occupied. This is not a straightforward issue and we have to be careful that any changes that we make do not have impacts elsewhere. I therefore want to reflect on this in a positive way and consider all the evidence.

[Baroness Grender]

Noble Lords will not be surprised to hear that, as the promoter of the Bill, I am minded to accept my own amendment. There is no doubt that there are good lettings agents out there who are members of government-accredited redress schemes and pursue best practice. They should continue to charge a fee for the work that they do but the fee should be from the landlord, who can shop around and choose which lettings agency to use. Landlords can decide to use the decent, regulated ones. I particularly thank the noble Lord, Lord Thurlow, for bringing the Committee the perspective from the private sector, which is critically important. I again praise Dorrington Residential, one of London’s leading private sector residential landlords. It has announced that it will work only with lettings agencies which agree not to charge renters any fees. In its own words, it cannot see why other landlords and the Government do not follow suit. There is evidence that it can work and does not impact adversely on the private sector. It is advocated by some private sector landlords, which I praise for doing so.

Citizens Advice produced a report entitled Still Let Down, which found that 18% of letting agents were still not members of a redress scheme, despite this being required since October 2014. Only 4% of renters knew the name of the scheme of which their agent was a member. Generation Rent researched 720 agency websites, of which 96 had no fees published and 240 did not list, as they should, which redress scheme they belong to. We heard from the noble Lord, Lord Thurlow, whom I thank for his support, about the spurious and unreadable small print. I thank the noble Lord, Lord Best. The critical issue, which is not covered in the Bill, is housing benefit and universal credit and the attitude of private sector landlords to it. This is, of course, why we need a healthy, burgeoning social rented sector and we need to build more social housing. I expect with a heavy heart a White Paper which is coming in two weeks. According to an exclusive which I read in the Sun yesterday, this will tell us to build higher and higher—a new whizzo wheeze. I still say that we should give the money to local authorities, or remove the cap, and let them build. We all hold our hands up; there is a 30-year legacy which all of us in government have owned, but building social housing is now critical and we have to get on with it.

I thank the noble Baroness, Lady Gardner, for her support and long years of campaigning in this area. I am sure that all tenants are grateful for this and her pursuit of trying to sort through the complicated issue of leaseholds. The purpose of Amendment 1 is to simplify: it takes away all the lists and bans all lettings fees, but allows the Secretary of State to specify exemptions through regulations. I think that is a better and tidier way of doing it. However, if the Government were to kindly indulge me with a Report stage, I would be happy to work with the noble Baroness and look at any tidying up that could be done to accommodate that issue.

The noble Baroness said that the money has to come from somewhere. I again refer to the experience so far in Scotland. I am very happy to look at alternative evidence on this but so far the evidence is that rents did not go up. However, let us assume that the noble Baroness is correct and rents go up. If they did so, they would be eased out over a 12-year period. I have another example publicised by the BBC yesterday of a lady, Lucy Surridge, who has spent nine weeks living in a hostel in Dagenham, east London, with her 11 year-old daughter and six year-old son. She is a full-time school chef and was made homeless when her landlady sold the property. She is 29 and has approached several agencies, which have told her that she needs to earn £38,500 before they would consider renting to her, and she would need £3,500 in deposit fees. I challenge most noble Lords, bar the obviously extremely wealthy ones, to find that kind of ready cash immediately. That is the critical question we are addressing, that of up-front cash in such cases. I have an 11 year-old who is applying to secondary schools, but I have a fixed and permanent address. However, the two ladies I have described are applying for places in secondary school for their children from an unclear and unfixed address. I know that everyone is up in arms about Brexit, but why we are not rioting on the streets about this is frankly beyond me.

I pay tribute to the Debrief organisation, which has campaigned to make renting fairer and has many examples of people who have experienced exorbitant tenancy fees. A lady called Emily has talked to me. She has moved four times in four years, only once out of choice. Her most recent moving fee was £1,850. She has had to pay that sum up front four times. When this Bill was initiated, most people who contacted me were young professionals living in London. However, as the Bill has been publicised, a striking number of older people have contacted me with similar issues. Whatever we think of the private rented sector and its suitability for tenants on low incomes, we are stuck with that form of tenure for a while. Government data released yesterday show that the affordable housing stock is growing at the lowest rate since 1992—52% lower than last year. Lack of affordable homes is forcing more and more people into the private rented sector, so we are stuck with the private rented sector as an immediate stop-gap solution, even if we could all wave our magic wands and instantly start building social housing at a very fast pace. Therefore, we have to make the private rented sector suitable for people on low incomes.

For all those reasons, I particularly thank the Minister for saying that this is not the end of the journey on this amendment, and that he will consider it. I very much like the suggestion of the noble Lord, Lord Best, which I will call the Hayter/Palmer precedent. I see that as a very valuable way to move forward on this. I am aware, of course, that there is a working group and people are holding meetings to discuss this. However, at some point people will be at loggerheads and the Government will have to make a decision. I beg the Government to make a decision in favour of the tenants I have described.

Finally, I thank my noble friends on these Benches—and my noble friend Lord Shipley, in particular—for their support for this area of the Bill.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Tope, for moving these amendments and the noble Lord, Lord Kennedy, for his brief contribution. If approved, these amendments would require the Secretary of State to introduce regulations requiring landlords and/or their agents to ensure that electrical safety standards are met in their rental properties. I am conscious that many noble Lords, rightly, feel strongly about electrical safety—I also pay tribute to the noble Lord, Lord Tope, for his campaigning role on this—and that it has raised considerable debate. I also know that Shelter has campaigned on this; I pay tribute to its role.

Yet again, the Government are taking a measured and pragmatic approach. As noble Lords have appreciated, we have taken an enabling power in the Housing and Planning Act 2016 that allows us to introduce requirements on regular electrical safety checks in rented properties at a future date. It has also been stated, correctly, that we have established an electrical safety working group and are working with experts from across the sector to fully assess whether regulations are needed and, if so, to determine the detailed options for regulation. It would therefore not be appropriate for me to say, “These are the regulations that we will bring forward” or to give a date when we will bring them forward, because we are awaiting the report. The working group has met twice, is due to meet again in the coming weeks, and it is due to present its reports to Ministers by the end of this calendar year.

Six months is an appropriate period in this regard; it is entirely right that on something of this nature we look to a working group to report in a six-month period, and that is what we are doing. The Government will then need to consider it and will of course do so—it is an important issue. I am afraid that I cannot give an undertaking about when regulations will come forward if they come forward. I will not say “in due course”, “timely” or “coming shortly”. However, the Government take this issue seriously, and I can understand the spirit in which these important amendments have been tabled. I can provide the reassurance that the Government regard this as important and will carefully consider the report of the safety group.

However, as I said, it would be premature to commit to legislation, and particularly the scope of any legislation, before the working group has concluded its research and before we have had a chance to look at it and consider what is appropriate in the light of that research.

[Baroness Grender]

My Lords, again it will not surprise the House to hear that I am minded to accept Amendments 2 and 3. This is a Government leaning on the rented sector for support, like leaning on a walking stick that has woodworm, damp and dry rot. We need to improve the rented sector to meet the needs of people over at least the next decade, if not two. Shelter’s research states that one-third of privately rented homes in England do not meet the Government’s decent homes standard, while almost one-fifth pose serious health and safety hazards. The lack of compulsory electrical checks plays a significant part in that.

As I conclude on the final part of this amendment, I would like to pay tribute to Electrical Safety First, which has been campaigning, along with my noble friend Lord Tope, to bring about these changes. More widely, I would like to thank Debrief and its petition, Generation Rent, Shelter, Crisis and Citizens Advice, all of which supported the Bill. I would also like to thank Hull City Council, which yesterday passed a motion at full council supporting the Bill. The motion was proposed by Liberal Democrat Councillor Charles Quinn and supported by Labour councillors. I am sure that the Minister will be pleased to hear that Conservative Councillors John Fareham and John Abbott also voted in favour in Hull, because all three parties think that renters now need a fairer deal and that getting rid of up-front costs will help.

I want to take the opportunity to say that I am pleased that the earlier clause on rogue landlords received the support of the noble Baroness, Lady Gardner. That information should be publicly available in the same way that, for instance, employers who flout the national minimum wage are made public. I see no reason why information on rogue landlords cannot similarly be made public.

In conclusion, and in the knowledge that there possibly will not be a Report stage for the Bill, I want to say that we on these Benches will not let any of the issues in the Bill rest here. My colleague Tom Brake in the Commons will take up as many of them as he can. If a White Paper is to be forthcoming, we will try to ensure that all four of the substantive clauses are continued through other legislation. In particular, we will continue to pursue, with some passion and vigour, the issue of up-front costs to tenants, which is hurting tenants every day.