Cost of Living: Private rented sector

Christopher Chope Excerpts

Tuesday 18th July 2023 Westminster Hall

[Sir Christopher Chope (Christchurch) (Con)]

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

I had not intended to participate in this debate, but having listened to what the hon. Member for Stretford and Urmston (Andrew Western) said in introducing his debate, I wondered where the issue of supply comes into this equation. The crisis in the rented housing sector is largely one of a lack of supply. When I had the privilege of being a junior housing Minister in the 1980s, we transformed the supply of rented housing by introducing the Housing Act 1988, which freed up tenancies and introduced shorthold tenancies. It enabled those with surplus accommodation to let it out through agreements under which they realised that, if they wanted to recover possession, they could do so at a time of their choosing and by agreement with the tenants. As a result of the 1988 Act, the supply of private rented housing in this country soared, and the sector was completely transformed for the better.

[Lloyd Russell-Moyle]

Does the hon. Member recognise that 50% of former council houses that have been sold off are now just rented out, rather than providing stable homes? The reforms that he talks about have led to an increase in private rents above and beyond the inflation in the housing market, less home ownership, less stability in the housing market and more insecurity. They have partly caused the crisis that we are in now.

[Sir Christopher Chope]

Obviously, I do not accept that analysis, and I certainly do not accept the hon. Gentleman’s proposition that, just because somebody lets out a property that used to be a council property, that somehow means it is a meaningless value to the person renting it. If a former council tenant buys a house and ultimately chooses to let it out, that property is available in the private rented sector. On supply, a lot of people in that sort of situation are now withdrawing their properties from the rental market, thereby reducing the supply and forcing up pressure on costs and rents.

[Lloyd Russell-Moyle]

Does the hon. Gentleman agree with the chief executive of the National Residential Landlords Association that it is a myth that landlords are leaving the market, that in fact the private rented sector is growing, despite further regulation, and that there is no evidence that the private rented sector is being vacated? Some people are leaving, but more people are joining.

[Sir Christopher Chope]

I do not accept that, because I have looked in vain at the impact assessment that accompanies the Renters (Reform) Bill—I looked at the latest iteration a couple of weeks back—and the Regulatory Policy Committee condemned that impact assessment as totally inadequate in dealing with the consequences of the reforms for the supply of housing from the private rented sector. The Government’s own impact assessment does not answer the question as to the quantity and quality of private rented accommodation that would be available were those reforms to be implemented. One can only assume that the Government either do not know the answer to that question or do not wish to disclose it.

As somebody who believes in the market, my instinct is that, if we put pressure on potential suppliers of a product through regulation, the likely consequence is that the potential suppliers will withdraw some of that product from the marketplace. That is exactly what is happening at the moment. One of the figures used by the hon. Member for Stretford and Urmston in introducing the debate was the large increase in section 21 evictions. My understanding—admittedly, it is only anecdotal—is that that is because private landlords now feel that they are going to be squeezed by both a nominally Conservative Government and the prospect of a real socialist Government, both of whom are basically anti-private landlord and are determined

The Renters (Reform) Bill has only been printed and had its First Reading—it has yet to receive a Second Reading, which is a complaint from the Opposition—but I hope the Government withdraw that legislation, because the mere fact that it has been printed in the form of a Bill is driving a large number of people away from renting out their private homes and causing them to bring property back under their control, with a view to selling it. A lot of the property that is available for sale at the moment is property that was formerly rented.

[Chris Stephens (Glasgow South West) (SNP)]

May I take the hon. Gentleman back to his analysis—I will be polite and say “analysis”—of section 21 evictions? If there is fear of a Labour Government, can he explain why so many Members of Parliament are having to move out of their London accommodation? Landlords are putting up prices by so much, and when an MP says to the landlord, “Let’s negotiate,” they are immediately served with a section 21 eviction notice. If landlords are doing that to Members of Parliament, surely they can do it to anybody else. That why the legislation needs to be scrapped.

[Sir Christopher Chope]

Surely a landlord should have the right to decide whether they wish to rent out a property. If they decide that they cannot rent it at a price that they think is reasonable, they can withdraw it from the marketplace.

The hon. Gentleman raises an interesting point about Members of Parliament and the rented sector. When I was first a Member of the House, we had a system whereby the taxpayer subsidised the cost of Members of Parliament renting a second home. Then the rules were changed, because it was decided that it was very poor value for taxpayers to keep on paying rent for Members of Parliament. The rules were changed to allow Members of Parliament to take out a mortgage on their constituency home or second home, and the interest on that mortgage, rather than rent, was paid by the authorities in Parliament. That was because prices in the rental market could only increase, and it is why, traditionally in this country, most people choose to be owner-occupiers, rather than renters, if they can afford it.

The point was made earlier about the reduction in the number of people who own their home, particularly among the younger generation. It is really sad and a chronic problem. Between 1 million and 2 million more people would probably own their home if we had the same policies in place for home ownership as we had in the late 1980s. The advantages of home ownership include flexibility, and the fact that when someone retires, they will probably have paid off their mortgage and not have any ongoing housing payments. It also means that people can be mobile; if their job takes them to another part of the country, they can move. All the rigidities in the private rented sector were reduced, to an extent, by the 1988 legislation, but it seems that there is pressure, from both my Government and the Opposition, to reintroduce a lot of the controls. That would make it very difficult for somebody to move from one private rented home to another in another part of the country for a job.

The supply of private rented housing is key, and nothing suggested by the hon. Member for Stretford and Urmston would do anything other than reduce the supply of private rented accommodation.

[Beth Winter (Cynon Valley) (Lab)]

The hon. Gentleman is arguing very strongly on behalf of landlords in the private rented sector, but the overwhelming evidence shows that the majority of tenants are on a low income. Their tenure is often insecure, and the properties are often low quality, with damp and mould. Did you consult tenants? Can you speak on behalf of the tenants who are suffering?

[Dr Rupa Huq (in the Chair)]

Order. The “you” should be “he”.

[Sir Christopher Chope]

I shall try to address the hon. Lady’s remarks by saying that in my constituency, there is a lot of social rented accommodation, and to suggest that poor-quality accommodation with damp and mould is the exclusive purview of the private landlord is a complete travesty of the facts. In much of the social rented sector, the stock is very poor quality, insulation standards are very low, repair standards leave much to be desired, and rents are increasing. This year, the Government have allowed social rents to go up by 7%. The point was made just now that there may be a 6.5% increase in private sector rents by the end of 2023.

There is a problem right across the rental market—it is not confined to private landlords—but one thing is absolutely certain: if we restrict the supply of private rented accommodation, rents will go up, and the Government’s response will be to control the rents, which will produce an even worse result. Landlords will not even have the resources to maintain their properties in good repair. Those of us who were privileged to be around in the late 1970s and to see the state of the accommodation across much of our urban areas, particularly London, know that that resulted from years and years of neglect by the public sector, and of penalising the private sector and driving it out of business. My concern is that we should not get back into that scenario. I hope that when my hon. Friend the Minister winds up the debate, she will confirm that the Government will not go ahead with the renters’ reform legislation, because that will have the perverse consequence of reducing supply and increasing rent.

My final point is about population. The population of this country is expanding exponentially and unsustainably. Since 1990, which is also the base date for measuring CO₂ omissions, the population of this country has gone up by between 10 million and 11 million, or about 20%. Last year and the year before, net migration was more than 600,000. The number of people who wish to live in this country is increasing far faster than our ability to provide rental accommodation for them.

[Dr Rupa Huq (in the Chair)]

Order. I am told by the Clerk that we are straying from the terms of the debate. There are others who want to get in.

[Sir Christopher Chope]

I have given way a lot, and hope that I have been able to give some more balance to the debate. My hon. Friend the Minister should not forget the undoubted success of the 1988 reforms, and should remember that she is a Minister in a Conservative Government.

[Several hon. Members rose—]

--- Later in debate ---

[Rachel Maclean]

I will not give way, if the hon. Lady does not mind, because I have a lot to get on the record.

Cost of living pressures go beyond housing costs, and that is why we have taken decisive action to support households, totalling £94 billion or £3,300 per household on average, across 2022-23 and 2023-24. We uprated benefits and state pension by 10.1% in April. For 2023-24, the Government are providing additional means-tested cost of living payments of up to £900. We also provided significant support for households with their energy bills, covering about half of a typical household energy bill this past winter. I utterly reject comments to suggest that the Government are not interested in helping people on low incomes. I have set out how we are doing just that with billions of pounds of taxpayers’ money.

I will touch on the Members who have spoken. I thank the hon. Members for Pontypridd (Alex Davies-Jones), for Cynon Valley (Beth Winter), for Barnsley East (Stephanie Peacock), for Birmingham, Erdington (Mrs Hamilton) and for Leicester East (Claudia Webbe), the Front Benchers of the SNP and the official Opposition, the hon. Members for Glasgow South West (Chris Stephens) and for Greenwich and Woolwich (Matthew Pennycook), and my hon. Friend the Member for Christchurch (Sir Christopher Chope).

[Sir Christopher Chope]

Will the Minister give way?

[Rachel Maclean]

I am about to refer to my hon. Friend’s comments, if he will allow me, so he can come back to me after that. He asked about the RPC and the impact assessment. I agree with him that this is about supply, and I assure him that the number of PRS properties increased by 11,000 in 2022 compared with the previous year. The data from UK Finance shows that the number of buy-to-let landlords reached a record high at the end of last year. There is no evidence that private rented landlords are leaving the market. Our Bill is fair to decent landlords, and the RPC has estimated the net cost to landlords to be just £10 per property. The committee has given the Bill a green rating, and I do not think £10 per property is a significant sum that is going to force landlords to leave the market.

[Sir Christopher Chope]

rose—

[Rachel Maclean]

If my hon. Friend wants to challenge me further, I will allow him.

[Sir Christopher Chope]

I want to ask the Minister about her aspiration to move from generation rent to generation buy. When does she expect the Government to deliver the voluntary right to buy for housing association tenants, which was first promised in 2015?

[Rachel Maclean]

I refer my hon. Friend to my earlier remarks, which set out that we are building record numbers of houses both to buy and for rent. We will make further announcements on that point in due course.

I gently remind the other Members who have spoken that all of them, I think, represent areas that have Labour-run councils, or else represent areas in the devolved nations. Their own councils have considerable powers, funding and tools, especially in enforcement, to tackle a lot of the issues that have been raised in their casework.

I was struck by the complaint made by the hon. Member for Birmingham, Erdington about the way her own city council, which is run by the Labour party, is allowing HMOs to be delivered. I suggest that she takes that up with her own Labour-run council—likewise for the hon. Member for Stretford and Urmston, whose constituency is of course part of the Greater Manchester Combined Authority, which is run by Labour Mayor Andy Burnham, who has considerable powers, influence and devolved funding from the central Government.