Housing: Rhondda

Esther McVey Excerpts

Wednesday 21st June 2023 Westminster Hall

[Esther McVey (in the Chair)]

I will call Sir Chris Bryant to move the motion and then the Minister to respond. As is the convention in 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Sir Chris Bryant (Rhondda) (Lab)]

I beg to move,

That this House has considered the availability and support for housing in Rhondda constituency.

It is a great delight to serve under your chairmanship for the first time, Ms McVey; we were both in the National Youth Theatre, although you are obviously much younger than I, and so were a youth much later than I was—and remain one.

[Esther McVey (in the Chair)]

You flatter me, sir.

[Sir Chris Bryant]

I do not know whether many hon. Members present have visited, but they will know the stereotypical view of the Rhondda: lots of terraced houses up the mountains and down the valleys—many identical houses, but painted with different colours, and many of them mini palaces inside. They were built as miners’ cottages in the 19th century and early 20th century. One of the ironies is that in all my time as a Member of Parliament, which is now 22 years, I have never known us to have a housing crisis. Yes, a few people have faced financial problems and lost their homes, but despite the deprivation levels 66% of people in my constituency own their own home. That is very high compared with many other areas with similar levels of deprivation.

We also have very little social housing—just 12%. Compare that with other parts of the country: Cardiff, 17%; Neath Port Talbot, another next-door county, 19.2%; Birmingham, 23.5%; and Lambeth, just across the river from here, 33.5%. We have very few council houses or former council houses. There are estates such as Penrhys and Trebanog, which are now in the hands of various housing associations, but there are really very few. The commercial rented sector is therefore a very important part of ensuring that people have affordable homes to live in.

It is exceptional to me, as MP for the Rhondda, that we now for first the first time ever have a perfect storm of a housing crisis in the Rhondda. It worries me deeply. Several different elements have led to it. One is the bedroom tax. That came in in 2013, but some of the effects are still being felt today; it is pushing people out of some social housing into other commercial properties. Another is the housing benefit cap, which has now been in place for so many years that it simply has not kept up with rental rates, even in areas such as the Rhondda, where rent is much lower than in London or many other constituencies in the land.

Changes to the buy-to-let taxation system have also had an effect on many commercial landlords in the Rhondda. Those landlords would have bought only two properties at most, because they thought of them as their retirement income. They bought them on buy-to-let mortgages and expected to be able to deduct against tax a significant part of the mortgage interest. Now they find that they cannot. It is more difficult for them to afford to keep their buy-to-let properties, and many of them are selling up. That is even before we consider the effect that mortgage interest rates are having on buy-to-let mortgages. Commercial landlords can deduct less mortgage interest than they could before, and they are finding that the sums simply do not add up. I have heard about commercial landlords saying, “I cannot sell the property, but my mortgage is costing me more than the rent I can charge.”

The Welsh housing quality standard 2023, which was introduced by the Welsh Government, has added another burden to commercial landlords who have to meet that standard. Of course we are all in favour of properties meeting proper standards, but one problem is that many of our houses were built in the 19th century, long before the standards that we would expect today. The bedrooms are tiny or relatively small and do not meet those standards. They are difficult to insulate and heat, because of how they were built in the 19th century. That has posed another set of challenges for commercial landlords, who say, “How am I going to find £5,000 or £10,000? Even if I did find the £5,000 or £10,000, would I ever be able to bring that property up to the new housing quality standards?”

Then we have interest rates. If 65% of people living in the Rhondda own their own homes, that is an awful lot of people with mortgages. Many of them might be on long-term fixed-rate mortgages, but we do not tend to do 16 or 20-year fixed-rate mortgages in the UK—it is more like two, three, four or five. People are seeing significant increases in the amount that they have to pay when at the same time inflation is running at 8.7%. That poses a lot of challenges in the whole market.

There is another element. Again, it is something that was introduced by the Welsh Government, which changed the priority need basis whereby local authorities had to determine whether they had a statutory duty to provide accommodation, so it is different in Wales from in England. I fully understand the rationale behind that. I do not want anybody to be homeless. I want local authorities to be there to help whenever they can, but that has added to the situation as well.

The situation has resulted in dozens of landlords selling up. As I have said, most of them have only two properties. The idea that the landlords have vast portfolios of 30 or 50 properties is not what we have in the Rhondda. People mostly have just two. Letting agencies have said to me, “We would normally let three, four or five properties a month—maybe a bit more at some times of the year. Some of us have not managed to let a single property this year because there is no commercial property to let.”

Between 2018-19 and 2022-23, there was a 65% increase in the number of families forced to leave private rented accommodation because of no-fault evictions, which are normally under a section 21 notice. Every week my office has people ringing up in absolute despair. The local authority now recommends that people stay until they are forcibly evicted, because it knows that, try as hard as it can, it simply cannot meet the need.

Between 2019-20 and 2022-23, there was a 69% increase in temporary accommodation placements. Across the whole of Rhondda Cynon Taf, the local authority, that has risen from 598 a year to 861. In addition, the total number of days that people have spent in temporary accommodation is now running at 44,251 because more people than ever before, particularly families with children, are in temporary accommodation and they are staying longer—considerably longer in many instances.

The cost to Rhondda Cynon Taf, because of the temporary accommodation factor, has changed out of all proportion. In 2019, the cost stood at £514,000. Last year it was £1,633,000. In just those few years the cost has more than trebled so there is a significant additional cost. In the end, of course, temporary accommodation is not high quality. It is not the best option, especially for people who have children, a physical disability or other special needs. It ends up being more costly than providing proper social housing and leads to other social problems further down the line.

We also have another problem. Some commercial landlords are now so nervous about having people who might be in receipt of housing benefit, which has been capped, or people who have financial problems because of the cost of living crisis, that they now often insist on substantial deposits beforehand. We have heard of landlords demanding 12 months’ rent in advance. There is no way the vast majority of ordinary people could possibly afford that. If they could, they might as well buy a home, because they would have enough for a deposit to do so. The good news in the Rhondda is that people can buy properties that are relatively cheap compared with many other places in the country, but only if they have managed to build up a significant deposit. Of course, many people who are in this horrific cycle of being shunted from one commercial rented property or one temporary accommodation to another simply do not have those kinds of financial resources.

There is another problem. I am delighted that RCT is able, through the Welsh Government scheme, to offer £25,000 grants for people to take property that is not being lived in and make it habitable again, but that must now meet all the new standards. It is simply not possible to smash a two-up, two-down property with small rooms into the kind of property that meets present-day standards. That is yet another problem facing the whole market.

The demand for social housing is increasing dramatically for all the reasons that I have highlighted—people being forcibly evicted, people not being able to find the big deposits that are needed, and people whose landlords are selling their properties. We now have a situation where RCT, which is doing its level best to provide accommodation for people, is finding that it has not just a few applications for every property that becomes available through its scheme, but hundreds. It is not unheard of to have 250 applications for a single property the moment it comes into the system.

In the last three years, the numbers of people applying for a one-bed flat in Maerdy have quadrupled, and they have trebled for a three-bed house in Penygraig. There was a time when certain parts of the Rhondda or RCT were more popular than others, but now every single social housing property that becomes available is massively oversubscribed, and there is no way on God’s earth that RCT, try as it might, and as inventive as it tries to be, can meet the housing need.

As I said, there are now effectively no commercial rented properties available. This is not one of those debates where I want to shout at the Government, “You’ve done terrible things—look how you’ve completely let my constituents down.” All I am trying to do is reveal to both the Government here and the Government in Cardiff Bay—because some of these issues relate to decisions made in the Welsh Government, and some of them relate to decisions made in Westminster—how an area such as the Rhondda, which has beautiful mountains, lovely valleys and some amazing housing stock—albeit that much of it is old and difficult to heat, insulate and keep up to modern housing standards—is really struggling at a time when the commercial rented sector is falling on its face.

What are the answers? We need to do something about the housing benefit cap, which has been frozen for far too long and is now completely out of kilter with reality for most ordinary properties in the Rhondda. We need to change some of the taxation for buy-to-let properties, because otherwise we will simply lose the commercial rented sector in its totality in constituencies such as mine and perhaps in many other parts of the country, and that is problematic. And of course we need to build more social housing, but I know that that solution will not come on board quickly.

The Welsh Government need to think about the priorities they have set for councils such as Rhondda Cynon Taff, because at the moment it is simply unachievable, with all the will in the world, for RCT to meet its full statutory duties. The Welsh Government also have to think about the housing standards and how they apply in valleys communities. Some people might look at a two-up, two-down terraced property from the outside and think, “I don’t know what that’s going to look like inside,” but many of them are palaces indoors, because people take phenomenal pride in them. In a community where most people own their own home, there is that pride in the street where you live and the house you live in. That builds a sense of community and a sense of communal ownership of the whole terrace, the street and the town.

I want to say to the Welsh Government that I fully understand why they do not want commercial landlords to be ripping off tenants. I argued at the beginning of my time as an MP that we do not want commercial landlords simply coming along, buying up a house, spending 50p on it and then putting somebody in because they know they will be able to get vast amounts of housing benefit over the years because the tenant will be in there. That is the Government effectively subsidising bad commercial landlords. Yet we now have the flip side of that problem, which is that housing benefit is too low, so it is difficult for commercial landlords to make any kind of money from renting their properties, and we need roughly 20% of the housing stock in the Rhondda to be in the commercial rented sector.

I passionately believe in social housing. I would love Rhondda Cynon Taf to be allowed to build more properties. As it happens, the first local authority in the country to introduce the idea of a person buying their own council property was Newport, under Labour control. However, the key then was that if someone bought their property, the local authority was able to invest that money in building more social housing. One of the our problems is that we have not invested enough in social housing across the whole of the country for many years.

I am sure the Minister will be able to respond to all my problems, but if there is anything else she needs, I will send her a little report I have done, entitled “The New Housing Crisis in the Rhondda”; it is available on my website as well. I care passionately about making sure that people have a decent home. That is one of the great things that, historically, people in the Rhondda have been able to afford, but at the moment, we have a real challenge. I hope the Minister can help.