Private Rented Sector

Grahame Morris Excerpts

Wednesday 23rd January 2013 Commons Chamber

[Mr Prisk]

It is a mixed picture. I appreciate that in the hon. Gentleman’s part of north London the pressures might be different from those in the rest of the country. If we look at the official Valuation Office Agency numbers, we find that the figures are recorded as static. It is, as I say, a varied picture across the country, and we need to be alert to that important point.

[Grahame M. Morris (Easington) (Lab)]

The Minister points out that some people do not wish to buy and are happy to rent. Does he recognise the term “generation rent”, whereby 1 million families want to have their own home but cannot because they are trapped in a rented property?

[Mr Prisk]

I recognise that we have had a dysfunctional housing market, whether it be owner occupied or rented, for 15 or 20 years. Indeed, we saw the rate of house building drop substantially under the last Administration. This is something that has crossed Governments of both political persuasions; it then shows itself when some people are unable to transfer from one part of the market to the other. I take the point, but we need to recognise that this is a long-term challenge.

I said we wanted this to be a bigger sector, but we also want it to be a better sector, providing tenants with a good choice of decent, reasonably priced accommodation. It is true that the majority of privately rented homes fit that bill today, but it is not true of all of them. As constituency Members of Parliament, I am sure that we will all have come across individual, sometimes appalling, cases involving unfair charges, poor quality accommodation or, frankly, just shoddy service. I think we can agree on the need to improve the sector; the question is how.

As a Government, we believe that many of the current problems are a consequence of years of under-supply. Over the last 15 years, that gap between supply and demand has grown, especially after the crash of 2008. In some areas, as I said to the hon. Member for Easington (Grahame M. Morris), rates will have risen because there are not enough homes to meet the demand. The quality of accommodation, let alone the service, will have suffered when landlords who face little competition rent out their properties. 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 specifically to encourage institutional investment in the sector. Alongside that, we are putting in place a £200 million build to rent fund to kick-start innovative projects.

The new investment will not only boost supply but bring a different type of institutional landlord into the marketplace. This will bring much greater choice for tenants with regard to the type of property and facilities and indeed the terms of the tenancy. These institutional landlords will also bring a longer-term perspective, often of 25 or 30 years. That brings the opportunity for greater stability for tenants, and it also means that we as policy makers need to ensure that what we set is clear and consistent over that time frame.

--- Later in debate ---

[Grahame M. Morris (Easington) (Lab)]

I should like to declare an interest—not a financial one as a lobbyist for private landlords but as secretary of the all-party group for housing in the north. In that regard, I was rather disappointed that the Minister and his colleagues could not attend an excellent event held in the Commons last night. I should like to use the little time that I have to take up some of the points that were made then.

There is a chronic shortage of decent, affordable housing in the UK. In the past two years, the number of housing starts has fallen. Indeed, it has been lower in every quarter since Labour left office, as indeed has been the number of housing completions. Last night, an excellent report was published. There is at least one good thing to come out of Sheffield Hallam—the university, and the centre for regional economic and social research, which produced a terrific report on the economic impact of housing organisations in the north. It has quantified the benefits of the social housing sector. My hon. Friends the Members for Hyndburn (Graham Jones), for Islington North (Jeremy Corbyn), and for Nottingham South (Lilian Greenwood) have highlighted the difference in costs between the social rented sector and the private rented sector.

That has been brought home to me forcefully by the case of a constituent who was worried about losing her home in April because of a loss of housing benefit as a result of what has been referred to as the bedroom tax. She had an income from jobseeker’s allowance of £72 a week, but she had to find an extra £9.60. The alternative suggested to her was to move out of her two-bedroom housing association property, which she had occupied for a number of years, into a one-bedroom private sector property—in my area, such properties just do not exist. Bizarrely, the cost of the one-bedroom private sector rental—at least the allowance paid by the local authority—was more than the rental of the two-bedroom housing association property.

I am trying to make a point about opportunity cost and how we might address the problem of a shortage of affordable housing to rent by investing in the social rented sector through housing association homes and council housing. There is a virtuous circle: in the four regions that make up the north, those organisations directly employ 41,000 people, and support 75,000 jobs—more than the automotive and call centre sectors put together. They make a huge contribution to the north-east economy: here is an engine for economic growth that offers a real opportunity for the Government not only to address the housing shortage and the housing crisis but to create employment and economic activity.

Building new social housing should be a priority. Demand has increased year on year, as has the need for investment in our communities and local economies. That would offer a huge opportunity to provide apprenticeships offering practical skills to young people. If the Government will not do anything to help “generation rent”, I sincerely hope and believe that the Opposition and the next Labour Government will.