Private Rented Sector

Debate between Damian Collins and Jake Berry

Wednesday 23rd January 2013 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

In the short time available to me, I want to focus on an area of the private rented sector that gives me particular cause for concern. As we have heard, many people’s experience of the private rented sector will be positive. They will have good landlords with an interest in maintaining good properties because they want to supply the market and to have competitive rents and full properties. That is what a lot of people, institutions and organisations entering the sector will want. As we all know, however, the poorer people on lower incomes or in receipt of housing benefit, who are at the bottom end of the private rented sector, tend to get the worst deal. Those are the sorts of people we see in our surgeries, and Members across the House will be familiar with the situation.

I am particularly angered by the behaviour of some landlords maintaining properties in areas where they know there is a shortage of social housing and a high demand for capacity. They will own a lot of cheap, older properties that need a lot of work done on them, and they are guaranteed an almost constant flow of tenants. Some will be enjoying payments of rent and housing benefit directly from the local authority, giving them a controlled and largely guaranteed income. They will know that in most cases tenants cannot afford to move. If the tenants are unhappy, even though they are renting in the private sector, they do not have the freedom that people with more means have in deciding to end the agreement and move somewhere else. People trapped in that situation will not have the means to move and are stuck there.

Although, as I said earlier, local authorities have the power to take action against landlords who are maintaining properties at a low level that is causing risk of harm to their tenants, those landlords know that by the time the property is inspected by the local authority and a request for change is made, to which the landlord may be resistant, months can go by before anything is done, if it is done at all. The tenants are stuck and the landlords can largely do what they want. That is a disgrace, particularly where landlords are in receipt of housing benefit.

[Jake Berry]

Is not my hon. Friend making a good argument for a massive expansion of selective licensing? Local authorities already have the power to use selective licensing in areas of low demand, and in my constituency that has been used with great success. Is that a good way of regulating landlords?

[Damian Collins]

My hon. Friend makes an important point. Of course, local authorities do already have the power to do that. As the hon. Member for Birmingham, Erdington (Jack Dromey) said, the London borough of Newham has introduced a licensing scheme across its entire area. This should not be a matter of national policy or a compulsory requirement but something that local authorities should have the discretion to enforce at their will. My concern, though, is that the enforcement of a licensing regime might put rents up, because the landlord will pass the cost on to their tenants, and might restrict the number of properties available in the market. Those concerns were also certainly raised in the consultation that Newham itself ran on the introduction of its licensing scheme.

I wonder whether there should be incentives for landlords to be more responsible in the way in which they manage and maintain their properties. Direct payments are probably a topic for debate on another day, but should not a landlord qualify for direct payments of housing benefits that give them a guaranteed income stream only if they maintain their properties at a certain level?