Private Rented Sector

Heather Wheeler Excerpts

Thursday 29th November 2018 Westminster Hall

[Bob Blackman]

I thank the Chair of the Select Committee for that intervention. That is particularly true in the Edgware ward of the London Borough of Harrow, where I asked the council a series of questions about how many registered houses in multiple occupation they had on their books. I was astonished when they told me they had 89 for the borough. I can take Members to roads in Edgware where there are 89 in the road. One problem is the local authority’s resources to deal with these issues, but, more importantly, people just ignore their responsibilities. That has to be dealt with.

I come now to the report itself. I will not deal with the recommendations that the Government have taken on board, because they are fine and we all agree with them. I am delighted that they have been taken on. I worry about some aspects that the Government are not addressing so far. When the Minister replies, will she update us? The Government response was some five months ago and I hope that things have moved on. I will go through the report, looking at the questions that I would like the Minister to answer.

In the Government’s response, the housing health and safety rating system recommendation is partly accepted, but the view is that the Government will review the position in due course. Can the Minister update us on where that review is? The Chair of the Select Committee mentioned the reality of carbon monoxide poisoning and other safety measures in homes. The hon. Member for Dulwich and West Norwood (Helen Hayes), who is no longer in her place, raised a desperate situation in her constituency. The issue is ensuring that tenants’ safety is paramount. Over the time I have served on the Select Committee, we have considered various different aspects of safety, and my concern is that building regulations and safety regulations do not seem to be being updated as they should, both to protect tenants and to point out to landlords their responsibilities. I would like to understand the Government’s position in that area.

Equally, where the Government and Law Commission are reviewing what legislation could be enacted, the Government say they are having discussions with the Law Commission. That is always helpful, but could we be updated with the results? As I have said, if we introduce legislation we must be careful that we do not put off good landlords from renting out their properties and maintaining good order at the same time as squeezing out the criminal behaviours that are clearly unacceptable.

I turn now to section 21 notices; we will have a debate on that subject next Thursday, I think, and I do not want to rehearse the discussions we will have there, because no doubt the Minister will be answering that debate too if it proceeds as expected.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

My Thursdays are your Thursdays.

[Bob Blackman]

That is welcome.

Let me take up the issue, because we made recommendations on this and the Government have not accepted them, but they agree to keep the issue under review. We have a delicate balance to strike, because the sad reality is that if landlords are in a position where they cannot evict bad tenants, there is a serious problem and they will say that it is not worth being a landlord and letting out the properties.

As the author, promoter and sponsor of the Homelessness Reduction Act 2017 on section 21 notices, I know them in infinite detail. They are deemed to be no-fault evictions, and clearly we need to preserve the position whereby a landlord can get their property back, but at the same time, some landlords seem routinely to issue section 21 notices on six-month tenancies as protection for getting the property back at the end. One solution is to have longer tenancies, with protection for the tenant and for the landlord, with the potential for break clauses on both sides. That seems to have gone very quiet in Government thinking, and I hope my hon. Friend the Minister can update us on where we are going with longer tenancies and protection of tenancies.

There seems to be a suggestion from the Government that retaliatory eviction is a relatively rare occurrence. For those people who gave evidence to us having suffered it, it might have been a rare occurrence but it was a life-changing experience and we must condemn it. Landlords have a duty to keep their homes up to a reasonable and safe standard, and if tenants complain that the property is not kept up to that standard, it is quite right that the landlord should then put it right. If the result is that the landlord evicts the person or the tenants, that is an outrage and we need to ensure that action is taken. At the moment there is not enough protection for the tenants. The Chair of the Select Committee mentioned the specialist housing court, which would be warmly welcomed by both landlords and tenants. If we could have an update on the status of the Government review, that would be terribly helpful and informative to the Committee.

I will say two last things before I sit down. First, we made a recommendation on the local housing allowance, particularly regarding studio accommodation. In London, this is becoming a big issue. Properties are subdivided into small units and put out to rent and the tenants are therefore being exploited. There is a case, which we have made in the report, for taking action in this area, and I would welcome the Minister’s taking some action. I accept that this situation is not necessarily true across the country, but in London it is a serious issue that must be addressed.

Secondly, on penalties for bad landlords and the protection of tenants, although I do not normally read The Guardian, it has provided a very helpful brief in its coverage on rogue landlords and what has happened. The sad reality is that if landlords fail the fit and proper person test and are banned, all their tenants should know about it. That just makes sense. To have a position where a landlord can be banned in one borough but carry on renting in others just does not make sense at all. One thing we need to see is urgent action to introduce a position where landlords are banned and action is taken.

I agree that in the most serious cases, a fine just becomes part of doing business, so having the ability to confiscate the property and protect the tenants from the behaviours of rogue or criminal landlords must be the final resort. On that point I will sit down, but I look forward to the Minister’s response and to working with colleagues to improve the position for both tenants and the good landlords in this country.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank hon. Members from across the House for their considered speeches. I congratulate my friend, the hon. Member for Sheffield South East (Mr Betts), on securing this debate. I thank him and all the members of the Housing, Communities and Local Government Committee for their inquiry into the private rented sector and for working with the Government to improve the lives of those living in it.

The private rented sector plays a vital role in providing homes across the country and is an integral element of the Government’s approach to making the housing market work for everyone. As we outlined in our response to the Committee’s inquiry, the sector has changed dramatically over the past decade. Not only has it grown to become the second largest tenure, but it also houses an increasingly diverse range of tenants. It is of great credit to those who deliver and support the private rented sector that it has managed to react to such change, and continues to drive forward improvements in quality, standards and safety.

I want to use this speech to reflect on the Committee’s report and outline some of the work the Government are delivering to ensure that everyone living in the private rented sector is able to build the life they desire. We agree with the vast majority of the Committee’s recommendations; where differences arise, they are of degree, not kind. Although I cannot cover everything in such a short time, I hope that hon. Members will see how the Government are pursuing a package of measures that will work together to improve the private rented sector. As the Committee cautioned in its report, the Government recognise that they cannot take a piecemeal approach to the sector—they must take a holistic approach to reform.

Successive Governments have shared the opinion that the rights and responsibilities that govern the private rented sector must be placed on a statutory footing. In its report, the Committee raised concerns that the volume of legislation covering the private rented sector could be creating a complex and challenging landscape to navigate, as we have heard again today.

Although the Government share the Committee’s desire for greater understanding, we do not feel that the legislation is in need of the type of root-and-branch reform that the Committee—or, indeed, the Labour party—suggests. Instead, we believe that the challenge for the Government is to help everyone understand the legislative foundations of the sector, to ensure that people can make the best use of these important protections. That is why we are structuring our work to address the key challenges that flow from our overarching objective, which is to rebalance the relationship between landlords and tenants, to deliver a high-quality, fairer and more affordable private rented sector.

To achieve that aim, we need to address a number of interconnected challenges, which the Committee also highlighted in its report: affordability, property standards, enforcement, and the rights and responsibilities of landlords, agents and tenants. I want to use this debate to set out some of the work under way to drive improvements in the sector, how this work links together and the progress made since we responded to the Committee’s inquiry.

A lack of affordable rental property can mean that tenants are forced to accept substandard or unsafe accommodation. That is not a choice that we want anyone to face, so we are working hard to improve the private rented sector to ensure that no tenant faces that choice in the future. We believe that the key to improving choice and affordability for tenants is to build more homes for rent.

To answer the question raised by my hon. Friend the Member for Hertford and Stortford (Mr Prisk), we want to build more homes. We want build to rent to continue to grow and make a significant contribution to housing supply. That is why the Government introduced the £1 billion build-to-rent fund and the £3.5 billion private rented sector guarantee scheme, to support thousands of extra homes built specifically for private rent. However, we also recognise that house building takes time. That is why we are working to improve affordability and conditions for tenants now.

We introduced the Tenant Fees Bill to protect tenants by capping tenancy deposits and banning unfair fees at the outset, renewal and termination of a tenancy. As well as helping tenants, the Bill will strengthen the hand of good landlords and agents across the UK by levelling the playing field, driving out rogue operators and ensuring that reputable landlords and are no longer undercut by those who overcharge.

[Alison Thewliss]

Christopher Mullins-Silverstein, who works in our Whips Office, brought it to my attention that there are quite often disputes around leaving a tenancy. For example, he had to pay for cleaners before he was allowed to leave. The landlord then disputed the fact that the cleaners had been in and done a good job, and is withholding the deposit. He has to pay for additional cleaners plus the deposit, plus an exit fee. Those fees mount up and make it more and more difficult for people to move on to other tenancies, given all the debt that they accumulate.

[Mrs Wheeler]

Indeed, such stories are legion. That is why we brought in the Bill. Finishing a tenancy is very important and should be done incredibly carefully on both sides, so that that matter does not arise.

It is testament to the work of hon. Members from across the House that the Bill has been so well received and supported throughout its parliamentary journey. I thank the hon. Member for Sheffield South East and the other members of Housing, Communities and Local Government Committee for their detailed prelegislative scrutiny, which served to strengthen the Bill. Although our commitment to improving affordability runs throughout our work, I know the Committee shares our commitment to improving property standards and safety.

I thank the hon. Member for Westminster North (Ms Buck) for all her work in developing and progressing the Homes (Fitness for Human Habitation) Bill. It is an excellent example of cross-party work, which will lead to meaningful progress and strengthen the private rented sector in the future. Under the provisions of the Bill, landlords will have to ensure that any dwelling they rent out is free of hazards, from which a risk of harm may arise to the health or safety of the tenant or another occupier of the property. Where a landlord fails to meet that requirement, their tenant will have the right to take action in the courts. The Bill will give the courts the power to order non-compliant landlords to take action to reduce or remove a hazard, and tenants will be able to seek compensation when landlords refuse to do so.

I will move on, because time is running out and there were so many questions from hon. Members for me to answer. I will do my very best, but if I do not manage to answer them today, I am sure I will be able to write to hon. Members later.

When it comes to the housing health and safety rating scheme—I can never say the acronym HHSRS, which I hate—the Government are explicit that one person in an unsafe home is one too many. We understand the scale of the challenge. We are taking steps to ensure that central Government set out the appropriate standards and that local authorities have the tools they need to enforce these standards. The housing health and safety rating scheme has been around since 2004, and everybody has said that it is very complicated, so we recommend a review. It is the right time to look at it, so we need to put that into practice to see how it needs to be updated. That fits nicely with the Homes (Fitness for Human Habitation) Bill, which I hope will finish its progress and become an Act shortly.

We are also acting to improve safety. In line with the Committee’s recommendations, we have announced the introduction of mandatory five-yearly checks on electrical installations in the private rented sector. We will introduce legislation for those mandatory checks as soon as parliamentary time allows. We will also give the Government response to the consultation before Christmas. We expect the outcomes of the scoping review for the HHSRS next spring—[Interruption.] I know, I got it that time. The second stage, which will also be set out in the scoping review, will follow. We expect the outcome of the review on carbon monoxide shortly, then we expect to consult on the proposed changes. An announcement on the next steps will also be made shortly.

On lockdown properties, it is absolutely unacceptable that a minority of rogue landlords exploit the housing system by converting their properties into tiny, unsuitable self-contained units so they can get a higher rate of housing benefit or rent and try to avoid the HMO licensing requirements. The Ministry of Housing, Communities and Local Government and the Department for Work and Pensions are analysing evidence of the relationship between housing benefit, housing tenure and quality. We are committed to working together to understand how we can make best use of our financial levers and existing powers to support tenants and improve the quality of housing, while ensuring value for money.

Many hon. Members have talked about the housing court, which we are very interested in taking forward. Both landlords and tenants have raised concerns about it. Effective and efficient access to the courts is vital for landlords and tenants who wish to challenge bad practice. When all the other options have been exhausted, landlords should be able to recover their properties when they have reason to do so and tenants should live in the knowledge that the court system should protect and support them where needed and not leave them lost in a sea of legal confusion.

We hope the Committee welcomes our recently launched call for evidence, which will gather views on user experience of the courts and how it could be improved. Building on the Committee’s recommendations, our proposals explore whether a specialist housing court would make it easier for all users to resolve disputes, reduce delays and secure justice for landlords and tenants in housing cases. That work not only speaks to the court experience, but cuts across the Committee’s concerns about retaliatory eviction and is a key consideration in our work on longer tenancies.

To be specific, the call for evidence on the housing court was launched on 13 November and closes on 22 January, so it is a work in progress. It is designed to understand the correct use and experience of the courts, so I am looking forward to seeing the evidence put before us when it closes.

On retaliatory eviction and section 21, our position is clear. No tenant with a genuine complaint about the condition of their property should be fearful of retaliatory eviction, which is why we have already taken steps on the matter by legislating to protect tenants from retaliatory eviction through the Deregulation Act 2015. We are also aware that the vast majority of landlords provide well-maintained properties and that, thankfully, only a small number of tenants encounter the threat of retaliatory eviction.

As set out in our recent letter to the hon. Member for Sheffield South East, despite the rarity of the practice, our commitment to protecting tenants against retaliatory eviction is undimmed—what a great word; well done to my officials for writing that. We share the Committee’s position that the Government must ensure that tenants are properly protected from that, which is why we have included the consideration of retaliatory eviction in our consultation on the barriers to longer tenancies, to ensure that we have the most up-to-date information to inform our thinking.

The consultation on longer tenancies closed at the end of August—not that long ago—and stakeholder events were held in September. We are analysing the responses and we will respond shortly. We had a large number of responses—more than 8,000—and it is important to consider them fully, and align them with the workload of our experience in the courts. Considering the volume of responses is no small feat. We are working to provide the Government response to the consultation in due course.

I will move on—I appreciate that I have to leave two minutes for my good friend, the hon. Member for Sheffield South East, to close the debate. Local authority capacity and enforcement has been a key point of the debate. From my experience in local government, I know the vital role that local authorities play in the private rented sector, particularly in enforcement. The Committee called on the Government to support local authorities to make best use of the powers available to them, and to go further, and that is what we are going to do. We have designed our enforcement tools to allow local authorities to retain the financial penalties they raise and drive them back into their teams to fund future enforcement activity, exactly as Torbay has done. Torbay has been extremely successful in enforcement work and receiving fines—indeed, it has employed another officer on the back of the fines that it has already received.

Committee members will clearly also be pleased to hear that we have launched a £2 million fund to support local authorities with their enforcement work. That upfront boost will allow local authorities to grow and refine their approach. The funding came as a direct response to my Department’s engagement with local authorities across the country at our roadshow events throughout the summer. In response, we are creating a compendium of enforcement guidance that will bring all the relevant guidance into one place, along with templates. That will form part of our national training offer to local authorities. Equipped with effective powers and armed with guidance and support, local authorities will become ever more effective in targeting their work to remove bad landlords and protect tenants.

I am running out of time, so I thank all hon. Members for an excellent debate. The way parliamentary time works means that, in effect, it has been six months since the work, and it is great that other stuff has been able to come to fruition in that time. I hope my remarks demonstrate the Government’s commitment to building a private rented sector that works for everyone, that supports good landlords to deliver the homes the nation needs and that provides safe, secure and affordable homes for tenants.

We do not shy away from the challenges facing us and we are aware that we need to support the entire private rented sector if we are going to achieve these goals—taking on Airbnb, if necessary. It is in that spirit that I thank hon. Members for their speeches and questions. I look forward to working with the hon. Member for Sheffield South East and the other members of the Housing, Communities and Local Government Committee in the weeks and months to come.