Letting Agents

Graham P Jones Excerpts

Wednesday 27th February 2013 Westminster Hall

[The Minister for Housing (Mr Mark Prisk)]

May I start by congratulating the hon. Member for Rotherham (Sarah Champion)? I think that this is the first time that she and I have been in a debate together; she is a new Member of the House. Not only was she able to secure an important debate, but she set out her argument. We will not always agree on the outcomes, but I think that we do agree on the challenge that faces this particular market. There is a strong element of market failure, as I have discussed in debate with the hon. Member for Birmingham, Erdington (Jack Dromey), who speaks for the Opposition on this matter.

This has been a useful debate, because there is a substantial question and substantial interest from a much wider group. Of course, the number of complaints may have risen because the market is substantially larger than it was, but it would be foolish to assume that that is the only reason and that is certainly not an assumption that I make or any other member of the Government makes, although I did particularly enjoy the idea that the only reason why the Labour Government did not do anything was that the Opposition spokesman did not make a strong enough argument. That is an entertaining argument. It does not quite wash. Nevertheless, I understand and I have a lot of time for the right hon. Member for Wentworth and Dearne (John Healey), which may be very damaging from the point of view of his own personal political future, but there we go.

Before I turn to the specific issues, I would like to set out briefly the context of the Government’s overall approach to the private rented sector, because people naturally have wanted to look beyond just the question of agents. People have talked about the question of supply, the interaction with the housing benefit elements and so on, but let me just look at the private rented sector particularly. As I said in the debate that we had only last month, we are very committed as a Government to ensuring that this is a bigger sector, but also a better sector—one that provides tenants with a genuinely good choice of decent, reasonably priced accommodation. We stand first and foremost on the basis that many—not all—of the problems that we have discussed today, including the difficulties that individual families and tenants have, are a consequence of years of under-supply.

The right hon. Member for Tottenham (Mr Lammy) gave us an interesting historical perspective, but I do not necessarily wish to go back to Dickens; we will stick with the past 25 years. What we have seen in the past 25 years—something on which we have agreed over many years—is that demand has substantially outstripped supply. As a result, the supply available to tenants, and the quality and standards of accommodation, have simply failed to keep up. That has inevitably led to a worsening of the way in which some letting agents operate.

Expanding the supply of rented homes lies at the heart of our strategy. That is why we have taken the radical step of establishing a debt guarantee scheme of up to £10 billion to encourage institutional investment in the sector.

[Graham Jones (Hyndburn) (Lab)]

Will the Minister give way?

[Mr Prisk]

The hon. Gentleman has not spoken in the debate. Others have and they want a response. If he will bear with me, I will give way in a moment.

We have also put in place a £200 million build-to-rent fund to kick-start innovative quality projects.

[Graham Jones]

The Minister makes the case that there needs to be an increase in supply in the private rented sector. In my constituency in Hyndburn, we have nearly 3,000 empty properties, nearly all in the private rented sector. There is a complete over-supply, yet letting agents run rampant. His argument does not succeed in my constituency and in many constituencies like mine, where over-supply is not the answer.

[Mr Prisk]

We have a long-standing issue with long-term empty homes, of which there are 278,000. I am pleased to say that we saw a drop of 22,000 in the past full year, which is encouraging. We have put specific funds into our programme to bring those empty homes back into use. With respect, if I may say, it is a programme that we had to put in place, because it was not there when we came into office. The hon. Gentleman is right to highlight empty homes, but we are taking steps to change that.

Boosting supply is not only about financial support. We need to be careful to avoid excessive regulation that can deter the investment in supply that we all agree we need. If supply is stifled and if we go back to the bad old days of rent controls, we would actually see a stifling of investment and a shrinking of supply. The net result would be that tenants would have fewer properties to choose from and higher rents as well.