Private Rented Sector

Chris Williamson Excerpts

Wednesday 23rd January 2013 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

We have had a well-informed and excellent debate this afternoon, with contributions from 17 hon. Members. We have heard about issues ranging from the rent differential between the private rented sector and the social housing sector to the impact on the housing benefit bill; about poor, sometimes shocking standards in the private rented sector; and we have heard descriptions of the activities of rogue landlords and the exploitative activities of some of these fly-by-night management and letting agencies.

Members have cited the inadequate supply of council housing, and we also heard about the innovative action that some local authorities are taking to address the problems that we heard about this afternoon. Some Members on both sides of the House talked about the need for family-friendly tenancies and the need for institutional investment. We heard about the European model of the private rented sector and how that might have some application in this country. Some Members spoke about the need for more regulation; others spoke about the need for less regulation. Everybody on both sides of the Chamber agreed that there is a desperate need to raise standards.

Different solutions would, I guess, be proposed from one side of the Chamber or the other, but it is clear to me that there is a consensus across the Chamber that we are living through the worst housing crisis in a generation. The English housing survey suggests that two thirds of all newly formed households now enter the private rented sector. Projections for the next 10 to 15 years suggest that more than a million young people will be permanently locked out of home ownership, and more than a quarter of low to middle-income families will be living in private rented accommodation that they can ill afford.

A recent YouGov survey suggests that 1.4 million people are falling behind on their rent or mortgage payments, 44% are struggling to pay their rent or mortgage, more than a million have had to resort to payday loans, 2.8 million have used an unauthorised overdraft, and 10% of those have to do so every month. To cap it all, families struggling to make ends meet are having their tax credits slashed and their housing benefits squeezed.

The dysfunctional mortgage market is making matters worse. Home ownership is now beyond large numbers of people who would previously have aspired to own their own home. This is contributing to the surge in the number of private tenancies, which is the highest it has been for 50 years or more. Most of those people are paying considerably more than they would if they were buying their accommodation with a mortgage. It is not surprising, therefore, that private rented sector rents have risen twice as fast as wages in the past 10 years. That explains that phenomenon.

Many are living in substandard housing, as we heard during the debate. That is why we need a one nation housing strategy for the private rented sector—a one nation housing strategy that recognises this shift in tenure patterns, a one nation housing strategy that does not leave millions of our fellow citizens subject to insecurity and exploitation, and a one nation housing strategy that tackles the unscrupulous landlords who make so many people’s lives a misery. Of course many landlords are perfectly reputable, but there are a significant minority of rogue landlords who should be driven out of the market. The motion before the House tonight would go some way to achieving that goal.

With 37% of the private rented sector falling below the decent homes standard, the time for action is now. With 4,000 unregulated lettings agencies up and down the country, a laissez-faire approach is unacceptable. A citizens advice bureau survey found that 73% of tenants are dissatisfied with their lettings agency. I therefore do not agree with the Housing Minister when he suggested that self-regulation was the way forward. Meanwhile, rent levels in the private rented sector are soaring and the housing benefit bill is ballooning. Recent research by the House of Commons Library has shown that more than £9 billion or 40% of the £22.7 billion spent on housing benefit each year goes to private landlords. Council housing accounts for £5.6 billion and housing associations £7.9 billion.

When the present Parliamentary Secretary to the Treasury, the right hon. Member for North West Hampshire (Sir George Young), was Housing Minister in 1991, he said:

“Housing benefit will underpin market rents—we have made that absolutely clear. If people cannot afford to pay that market rent, housing benefit will take the strain.”—[Official Report, 30 January 1991; Vol. 184, c. 940.]

Housing benefit certainly has taken the strain in the intervening years, but at what cost? I am sure that the right hon. Gentleman did not mean to create a Mary Shelley monster when he made that public policy pronouncement. Is it now fair to penalise the victims of that policy failure by imposing restrictions on tenants? It is hardly their fault that private sector rents have gone through the roof.

We need a one nation housing strategy, not some kind of abstract housing policy that has unintended consequences. We need a one nation housing strategy to right a social wrong that is leaving millions of our citizens in a precarious situation, including more than 1 million families with children. The introduction of a national register of private landlords would be a good start, and empowering local councils to drive up standards would be welcomed by tenants and landlords alike.

Good landlords have nothing to fear and everything to gain from the proposals in our motion. Promoting long-term tenancies and predictable rents would provide reassurance for tenants and certainty for landlords. It would involve a simple step that would have a significant impact. Tenants would be shielded from irresponsible operators, and decent landlords and agents would avoid being tarred with the same brush as the unscrupulous minority. By introducing consistency in fees and charges across the sector, we would ensure that everybody knew where they stood from the outset. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, we simply cannot have two nations—those who own their homes and those who rent. That is why I urge Members to oppose the amendment and to support our motion.