Private Rented Sector

Diana Johnson Excerpts

Wednesday 25th June 2014 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

In Hull, about 23,000 families—one in five of all local households—rent privately, and this figure has risen over the past decade. Across my constituency, families who rent privately regularly report concerns about the instability of short-term lets and the high charges imposed by under-regulated letting agents. I therefore fully support the motion.

First, I want to draw attention to the problems faced by students living in Hull who rent in the private sector. Secondly, I will highlight a particular constituency case regarding the failure of landlords who do not maintain their properties and thereby blight local communities. Students in Hull who do not live in university-owned accommodation end up relying on the private rented sector. Most student housing in Hull is provided through seven big companies that act both as landlords and letting agents. They own some of their own housing and provide it directly, but also act as letting agents for smaller landlords’ properties. In Hull, as in many other university cities, student unions have raised concerns about these kinds of letting agencies, which often mount very effective marketing campaigns targeting students. In Hull, many of their offices are situated very near to the university, so most students go straight to them.

Most of these letting agencies are not accredited. Of the seven I mentioned, just one, which is a smaller company, advertises membership of the Association of Residential Letting Agents on its website, and just one—the same one—is signed up to the property ombudsman’s code of practice for residential letting agents. The rest are not listed on their websites as being thus accredited. When my office rang to try to confirm their membership of these bodies, they were unable to comment. This shows that self-regulation is not working terribly well. I welcome the DCLG’s moves towards a redress scheme, but I would be interested to hear from the Minister what representations have been received from students and universities about its use as regards student letting agencies. What good is a redress scheme if tenants do not know about it in the first place?

Many of these agents charge students up-front, non-refundable administration fees ranging from £50 to £150 per person. Sometimes those fees are not advertised on their websites and people will be told about them only when they ask specific questions. Hull is by no means the worst for student up-front fees, but I still find it curious that it apparently costs some Hull letting agents up to three times more to administer exactly the same transaction than it costs others. The National Union of Students estimates that, nationally, over a third of students enter into some kind of debt to pay these tenancy set-up costs. One could suggest that the lack of longer-term tenancies and letting agents’ fees are interlinked, in that tenancies are so short, for students and non-students, because that can give letting agents more in fees. Many Hull students have said that they would like to enter into longer-term contracts with landlords while they are studying—that would also be far easier for the landlords to manage—but unfortunately this does not happen very often.

Under the standard assured shorthold tenancy, tenants can generally pull out of the contract if they give a month’s notice, but I have heard from students in Hull that many students’ landlords write tougher clauses into their contracts whereby there is no provision to pull out with a month’s notice and students are often liable for all their rent for the full tenancy period, even if they drop out and lose their student finance. Because of aggressive marketing by landlords, some students end up signing contracts up to seven months in advance. That can cause problems as students’ circumstances can change. When the Government finally get round to publishing their model tenancy agreement, will it apply to student housing, and what will it say about the provision for ending tenancies?

A lot has been said about substandard housing. In Hull, compared with other university cities, a high number of student properties continue to go unlet each year. One consequence of this is relatively low levels of investment in properties. A survey by Hull university student union of properties it inspects showed that nearly 40% had evidence of damp, mould or peeling paper. Those are just the properties that are signed up to the union scheme; nothing is said about the landlords who do not sign up. In the absence of proper regulation of the private rented sector, it is difficult for unions such as Hull’s to ensure good standards for all student properties.

I must give credit to Hull’s union for having brought in two additional arms of regulation. I particularly commend its excellent president, Richard Brooks, for the work he has done in this area. The union has introduced its own letting agency to compete with the others—HUU Homes—and brought in a student-run accreditation scheme for substandard houses called HullSTARS. Unlike the previous accreditation scheme, which gave only generic good or bad ratings to 10% of homes, this student-run scheme gives five-star ratings to 100% of the homes it covers and allows students individually to review each property posted. However, these local measures can go only so far. We need to deal with the problem of unaccredited landlords and letting agents.

Finally, I want to raise the case of Ms Daniels, an owner-occupier in my constituency who lives in a row of six properties owned by private landlords. Some of the properties hold seven-plus tenants, and they generate a lot of waste. Rubbish and food waste is often left outside the property when the tenants leave. This means that the street looks untidy, and it encourages fly-tipping and attracts vermin. As the properties are registered with the council as family homes, not as HMOs, the council has very little room for manoeuvre in dealing with them. Ms Daniels, in the spirit of wanting to keep the community looking as nice as possible, takes it upon herself to put out wheelie bins. She told me recently that she had a sit-in in one of the refuse collecting vans to ask the refuse collectors to take some action to remove all the rubbish. The council tells her that it can give the landlords 42 days to remove the rubbish but there is nothing further it can do. Some of these landlords own hundreds of properties but do not live in the city and do not care about them. They have no incentive to keep them clean and tidy, and they are a blight on the local area. Will the Minister see what further action we need to take to make sure that landlords keep their properties in a fit and proper state in local communities?