Private Rented Sector

David Lammy Excerpts

Wednesday 23rd January 2013 Commons Chamber

[Mr David Lammy (Tottenham) (Lab)]

May I draw the House’s attention to my entry in the Register of Members’ Financial Interests?

At the turn of the 20th century, the image of private sector housing tattooed into our collective memories was of the slums brought to life in “Oliver Twist”:

“rooms so small, so filthy, so confined, that the air would seem too tainted even for the dirt and squalor…dirt-besmeared walls and decaying foundations”.

That was Dickens’ portrait of Jacob’s Island in Bermondsey, and just a few years ago I spoke to two pensioners in Bermondsey about those conditions. We did something about that situation. The Addison Act of 1919 changed those circumstances. Slums were cleared and, for the first time, the Government took an active role in providing housing at low rents to working people.

In the decades after the second world war, my father was able to arrive in this country and get a mortgage for £6,000 on a house in Dongola road in Tottenham, whereas my aunt got a brand new flat in a new housing development called the Broadwater Farm estate. By the 1980s, the explosion of cheap credit meant mortgages were affordable and many now had the opportunity to buy their house for the first time. That was not perfection by any means, but at least there was a choice. For those who wanted affordable accommodation with a lengthy and secure tenure, council houses were available; for those who wanted their own home, mortgages were available and house prices were reasonable; and for those who wanted the flexibility, there was an affordable private rented sector.

The situation did not last. Right to buy was not accompanied by funds to replace and the Housing Act 1988 created assured shorthold tenancies that allowed landlords the power to raise rent by however much they wanted or evict tenants with only two months’ notice. People were crowded out of renting socially and they have now been priced out of home ownership. In place of those options, the private rented sector has boomed. From a low of just 1.7 million at the start of the 1990s, the number of households in the private rented sector has more than doubled, but most are there through circumstance, not choice. They enter the sector holding none of the cards. The result is that people are conned, exploited and, frankly, ripped off.

As the sector booms, it is time to talk about how tenants can share in the proceeds of that growth rather than being the victims of it. Right now the system is rigged against the very people it is supposed to serve. Every new tenant enters a sector where demand soars but supply remains stagnant. The consequence is an explosion in rents, even during a recession. Ten years ago, private rents averaged a fifth of weekly earnings; today they are creeping towards a third. Those living in the capital are finding that rent alone claims more than half of their pay, and that is taking its toll. As Shelter has pointed out, 7.8 million people are struggling to pay their rent each month.

What do we need to do? Clearly, we need some solutions. The state should not be subsidising slum landlords who force their tenants to live in Dickensian squalor. As recommended by the Rugg review in 2008, we need a compulsory register of landlords, such as that being pioneered in Newham, which would at least create the minimum means by which the worst landlords would no longer be able to operate. That is why we need a new statutory code of practice for letting agents that ends the practice of extortionate fees. There need to be tax incentives for responsible landlords and we need to encourage longer tenancies with the option to index any rent increases to inflation, to ensure both tenant and landlord can plan financially.