Private Rented Sector

Debate between Ian Mearns and John Stevenson

Wednesday 25th June 2014 Commons Chamber

[John Stevenson]

I completely agree with my hon. Friend that that was the Committee’s conclusion. We recommended model tenancy agreements—I am delighted that the Government will be introducing them over the summer, after a consultation—a redress scheme and transparency in letting fees.

Addressing the specific issues raised in the motion is remarkably easy. I believe that the Opposition are misguided in their approach to that market. In fact, their motion does not even mention the critical issue: the need for more housing of all types. It mentions stability and certainty, but there is actually a remarkable amount of certainty, combined with a large degree of flexibility. Leases can be for six months, which is the default position, but we often forget that they can be for any length thereafter. It could be five years, 10 years or 18 months; it depends on the relationship between the landlord and tenant and the requirements of both. Indeed, many tenants do not want a three-year tenancy. They might want six months because they are moving into an area to see whether it is the right place for them to live or because they are looking to buy a property or to rent long term.

The same applies to the landlord. The accidental landlord might not want to grant a three-year tenancy. They might want a six-month tenancy, with a view to putting the property on the market afterwards. The existing arrangements create a great deal of flexibility. It is also interesting to note that a large number of tenancies are brought to an end by the tenant, not the landlord.

[Ian Mearns]

As a member of the Education Committee, I often hear head teachers and governors talk about churn, mobility and turbulence in their school populations. A big factor in that churn and turbulence is undoubtedly the existence of a great many short-term, six-month tenancies in the private rented sector, but they are used as a matter of course in many neighbourhoods.

[John Stevenson]

I accept that six-month tenancies are used as a matter of course, and that is a cultural issue that I will touch on in a minute.

The English housing survey notes that the average length of residence for a tenant is 3.8 years and that 66% of tenants are in a property for more than a year. We have heard a lot about rapidly rising rents, but I must confess that I am slightly perplexed. Figures from the Office for National Statistics for the period 2005 to 2014 show that the consumer prices index has risen by 13.3% and rents have risen by 9.5%—12.5% in London. Indeed, tenants who remain in a property often see their rent increase more slowly. I will give a personal example. I mentioned in my declaration of interests that I am a landlord. I have rented out a property to the same tenant for over five years, and during that time the rent has never been increased. Yet the tenancy was not for three years; it has varied from six months initially to a year and then was renewed each year. With regard to letting agents, transparency is the key, not regulation. It is quite right that landlords will look to see their costs being met in a different way. It is transparency we need, not further regulation.

Ultimately, what we want is a vibrant, flexible and competitive private rented sector with quality housing. Therefore, I remind the House of the Select Committee’s key conclusions. First, the present market is broadly working and will continue to develop. Yes, we need a cultural change on the length of tenancies. I think that having six-month tenancies is partly a habit developed by letting agents and landlords, but it has also been influenced by mortgagees, who are reluctant to see tenancies go beyond a year. Secondly, we clearly need much more housing of all types. Thirdly, to improve standards we need proper enforcement by local authorities of the existing laws. We need to allow the market to develop within the existing laws and the recent Government proposals. I believe that that, rather than further regulation and state interference, will lead to a successful private sector market.