Housing (London)

Emma Reynolds Excerpts

Wednesday 5th February 2014 Westminster Hall

[Teresa Pearce]

I thank the hon. Lady for her intervention and I agree with her. The Select Committee on Work and Pensions recently visited her constituency, and we heard all about the problems in a rural constituency, such as problems with transport, and people trying to move to London but finding it impossible to obtain properties.

We need rent stabilisation. It is time to protect the consumer while allowing landlords to make a living, but some in my constituency are making a killing. Rent stabilisation is sometimes called second or third generation rent control, and is used in many other countries, including France, Germany, Sweden and Switzerland. Although some critics say that landlords would flee the sector, that has not happened in those countries, nor has it affected the development of large and functioning private sectors. Rent stability is needed to provide people with stability. That is logical, fair and overdue.

Although rents are rising, the same cannot be said about the standard of rental property. According to Shelter, private rented homes are in worse physical condition than homes in all other tenures. My postbag shows an increasing number of families whose physical and mental health is being severely affected by living in overcrowded, damp and unsafe accommodation for which they are paying inflated rent. The lack of regulation means that vulnerable tenants in substandard living conditions can be exploited. We need a fair system of checks and balances, and a national system of landlord accreditation to offer much-needed regulation.

Private properties should be assessed by local authorities to determine whether they are fit for human habitation before they are rented. The Law Commission has called for every tenancy to include the implied term that the dwelling should be fit for human habitation. I support that call. We must grant greater powers to local authorities to root out and strike off rogue landlords. There are many good and reputable professional landlords, but the rogue element shames the whole sector.

Instituting a system requiring landlords to conform to certain standards or face penalties would not only improve the quality of private rented properties, but give private renters the security they are currently denied. It is clear that there is an imbalance of power between tenants and landlords. Tenants will not ask for conditions to be improved because they fear retaliatory eviction, which occurs when a landlord attempts to evict a tenant in response to a reasonable request, such as having health and safety issues addressed. A survey by The Tenants’ Voice in 2013 found that 61% of tenants were worried about complaining to their landlords about anything. It also found that 71% of tenants had paid for repairs themselves rather than asking their landlords.

Legislation protects landlords but not tenants. Section 21 of the Housing Act 1988 provides landlords with a mandatory ground for eviction. They do not have to give any reason and the only requirement is that notice has been served correctly. It is clear that the conditions under which a section 21 notice can be issued should be reviewed urgently.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Does my hon. Friend agree that a growing phenomenon is the number of people who are homeless because of eviction in the private rented sector? That is extremely worrying and one of the main drivers of the increase in homelessness in London and elsewhere.

[Teresa Pearce]

I completely agree. In my constituency, the people who present to me as homeless have always spent time in private rented accommodation, and they do not want to go back into it because of the insecurities that it creates, particularly for their children and their children’s schooling.

I understand that housing in London is a complex problem, but it must be confronted. We are facing the biggest housing crisis in a generation. For too long, some private landlords have taken the money without accepting the responsibility, while the rest of us have picked up the costs of unstable communities, marriage breakdowns and children who do not have a secure home life. Given that the private rented sector is likely to keep expanding, we must create a reputable industry that protects the vulnerable and ensures that renters are not at the mercy of unscrupulous landlords. Stable homes make stable communities, which is surely is in the interests of society as a whole.

I have eight questions that I would like to ask the Minister. First, does he agree that the private rented sector needs greater regulation and management? Secondly, I understand that the Department for Communities and Local Government has been considering the need for family-friendly tenancies in the private sector. How many families have benefited from increased security of tenure in the private rented sector since the Secretary of State’s announcement on 1 October 2013 of a package of measures to persuade landlords to offer greater security? Thirdly, does the Minister agree that rents have reached the limit of affordability for most ordinary families across the capital? Fourthly, does he support the Law Commission’s call for every tenancy to include an implied term that the dwelling should be fit for human habitation?

Fifthly, the Government promised some movement on a review of conditions in the private rented sector by the end of January 2014, but we have had no news on that. Will the Minister tell us when we might see that review? Sixthly, what new rights does the Secretary of State’s tenants’ charter give to tenants who face retaliatory eviction after making a complaint about their landlord because of dangerous conditions in their home? Seventhly, does the Minister agree that local authorities should declare to Her Majesty’s Revenue and Customs the payment of housing benefit to landlords? There are people who profit from the tax and benefit system without paying into it. Eighthly, are all local authorities required by statute to have a published housing strategy as well as a tenancy strategy?

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[Emma Reynolds (Wolverhampton North East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing this important debate. She spoke eloquently about the problems faced by tenants in the private rented sector.

There is a housing crisis across England, but it is clear that it is particularly acute here in London. We have heard both passion and anger from Opposition Members about that acute shortage of housing and of affordable homes in London. It is no surprise that four out of five Londoners think that the capital is in the grip of a full-scale housing crisis. Earlier this week the economic forecaster Ernst and Young warned, very worryingly, of “bubble-like” conditions in the London housing market. The average house price in the capital is £437,000 and is predicted to rise to an eye-watering £600,000 by 2018. That is simply unaffordable, not only for people on low incomes in London but for people on middle incomes and decent salaries as well. Many of my hon. Friends have made that point.

Moreover, as many of my hon. Friends have underlined, there are massive problems in the private rented sector. As my hon. Friend the Member for Erith and Thamesmead highlighted, whereas 10 years ago one in 10 Londoners was renting, now it is one in four, and that number is growing rapidly. Rents are at record highs, are rising much faster than wages and consume more than 50% of average family incomes in London.

Homelessness and rough sleeping have both risen sharply since 2010, and the number of families in temporary bed-and-breakfast accommodation is, tragically, at a 10-year high. My hon. Friend the Member for Westminster North (Ms Buck) spoke eloquently about the shocking circumstances in which those people have to live. The housing benefit bill is rising and the problem is compounded by the cruel and unfair bedroom tax, which a Labour Government would scrap.

Those facts are symptoms of a wider failure to supply the number of houses that we need. In England we are not building even half the number of homes we need to keep up with demand; in London, we are building barely a third. The Mayor of London does not seem to understand the problem. He keeps talking about numbers, but he is not delivering on any of the targets that he sets himself.

[Ms Abbott]

Does my hon. Friend agree that supply on its own will not solve the London problem because of the relentless upward pressure on market prices?

[Emma Reynolds]

My hon. Friend pre-empts the next section of my speech. The problem is not just about numbers but about affordability. All of my hon. Friends have talked about the distorted notion of affordability that the Government have introduced. The idea that 80% of market rent in London is affordable is plainly ludicrous. It is plain stupid—it just is not the case.

I will give the Minister some figures. In Westminster, to be able to pay 80% of market rent for a three-bedroom home tenants would have to earn an annual income of £109,000. In Southwark, renting a two-bed flat at 80% of market rent would require an income of £44,000. The severe shortage of affordable housing is accelerating what many of my hon. Friends have been talking about, which is social segregation here in the capital and, if we are not careful, a hollowing out not only of central London but of London more generally. My hon. Friends have talked about midwives, nurses, teachers, policemen and firefighters not being able to afford to live in the communities where they work. That was not the case 10 or 20 years ago.

[Emily Thornberry]

My hon. Friend is making an excellent and passionate speech. Does she agree that we have yet to have an answer from the Mayor or from the Conservative party as to how it can be that affordable rents can be 80% of market rent, yet, for example, in Islington the local housing allowance, which is the amount someone is allowed to get in housing benefit, is a maximum of £370, and the market rent for a three-bedroom flat might be £600? Should the two not be aligned if we really mean to have affordable rents?

[Emma Reynolds]

The truth is that the housing benefit bill is going up. The Government should try to shift Government subsidy away from benefits to bricks, but when we take into account the bedroom tax and the cap, in London in particular, on the amount of money that families can receive in housing benefit, we see that things are being pushed in the wrong direction and that the housing benefit bill is going up, not coming down.

[Meg Hillier]

My hon. Friend may be too young to remember this, but when the Parliamentary Secretary to the Treasury, the right hon. Member for North West Hampshire (Sir George Young), was Housing Minister he said that

“housing benefit will take the strain.”

It would be useful to hear this Minister’s view on housing benefit now that the problem has escalated.

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[Emma Reynolds]

I look forward to the Minister’s response.

I want to mention overseas investment, an issue that many of my hon. Friends talked about. My hon. Friend the Member for Westminster North talked about the housing market in London being more accurately described as an investment market, not a residential one. That is truly shocking and scandalous. As my hon. Friends the Members for Islington South and Finsbury (Emily Thornberry), for Islington North (Jeremy Corbyn) and for Hackney North and Stoke Newington (Ms Abbott) all said, foreign buyers are coming to London and using property here as a sophisticated piggy bank to store their money. That is leading to a huge distortion of the market, with Londoners forced further and further out in London and beyond.

I have set out a number of measures that a Labour Government would take. We would ban the marketing of property overseas first, to give first call to Londoners. That is incredibly important, but it will not solve the whole problem. It is wrong that people living in the UK are denied the chance to buy homes because they are being sold exclusively to overseas buyers.

A Labour Government would also clamp down on empty home loopholes. At the moment, to prove that a home is empty all someone needs to do is provide a table and chair. Councils have to spend two years looking at whether homes are empty before they can increase council tax. Why wait two years? I have said that local councils should be able to charge 50% or more extra council tax after a home has been left empty for less than two years.

I am passionate about the private rented sector. It is an issue in my own constituency in Wolverhampton, but I know what a big issue it is here in London. The difference between Wolverhampton and London is that in Wolverhampton it is an issue for people on low incomes and the most vulnerable, but in London it is an issue for low and middle-income earners.

We are seeing incredibly poor standards in the private rented sector. The Government have talked about a tenants charter. That sounds like a nice idea but seems utterly meaningless. We need longer-term tenancies, so that families can have the long-term stability that they need, and we need to enable councils to introduce licensing schemes. This afternoon I am going to Newham—by taxi, not by tube—to see the licensing scheme that has been introduced there, which is driving up standards in the private rented sector. The problem in London is not low housing demand, which is one of the qualifications for the licensing schemes, but high housing demand. That is what is leading to low standards.

[Jeremy Corbyn]

Will my hon. Friend give way?

[Emma Reynolds]

I will not, I am afraid, as I do not have much time left.

The Government really need to get a grip on standards in the private rented sector. I am glad to say that Labour councils are outbuilding Tory councils in terms of affordable homes, but the Government also need to do more centrally to lead the way.

In conclusion, the Government and the Conservative Mayor have not understood the scale of the housing crisis that we face, both here in the capital and across England. My right hon. Friend the Leader of the Opposition has announced that a Labour Government would boost house building and build at least 200,000 homes a year by 2020. We know that there are significant problems in the land market and in towns that are constrained because of the amount of land available—that is true for London, as well, given the amount of land available on which to build the number of homes Londoners need.

The housing crisis needs urgent action. The Minister needs to get a grip on the private rented sector and the lack of affordable homes in London, as well as the disastrous standards of some private rented homes. The Government need to take a long, hard look at what is happening with international investors, an example being the situation on The Bishops avenue, which was uncovered by The Guardian over the weekend and which has already been mentioned. That is scandalous. It distorts a market that is already failing to produce the affordable homes that Londoners need.

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[Meg Hillier]

Will the Minister give way?

[Emma Reynolds]

Will the Minister give way?

[Nick Boles]

I have very little time, and hon. Members all made good speeches, so I hope they will understand if I do not give way further.

I want to remind the House that the number of housing starts in London from 2007 to 2010 was 70,000 units, which was around 15,000 units a year. We all agree that London’s housing need, at a time when the population was expanding quickly, was dramatically higher than that—we might say that it was 40,000 or 60,000 a year. Under the Labour Government, 15,000 units of housing a year, of all tenures and price ranges, were being built. Let us have a little recognition of the previous Government’s responsibility.

Someone listening to the speeches made by Opposition Members would have heard not only anger about the situation, which is totally justifiable, but the implication that there were some easy answers that could make things better. The first such answer one heard, in a number of different forms, was the suggestion that we should have some form of rent control or rent stabilisation. I would point out that rent controls and rent stabilisation were removed altogether by the Housing Act 1988 and were never reintroduced in the 13 years of the previous Government.