Private Rented Sector

Debate between Ian Mearns and Stephen McPartland

Wednesday 25th June 2014 Commons Chamber

[Stephen McPartland]

I am grateful to the hon. Gentleman for making that point, but Library figures show that it has taken almost 30 years for the figure to increase to 16.5%. His point that there was no demand then but that, all of a sudden, there is now probably does not hold water.

An estimated 89% of landlords are private individuals with one or two properties, which are, in effect, their pension funds. They are, in the main, responsible and proactive people, such as my hon. Friend the Member for Carlisle (John Stevenson), who will keep his tenant in place for as long as he pays the rent on time, as has happened for a number of years.

[Ian Mearns]

The hon. Gentleman has given the interesting statistic that 89% of landlords are private individuals, but they do not cover 89% of the market. Would he care to inform the House what proportion of the market the other 11% control?

[Stephen McPartland]

The hon. Gentleman will be delighted to know that I am not someone who has all the statistics at his fingertips, but I am very happy to discuss that matter with him once I have had the opportunity to google it.

Moving swiftly on, the point I was trying to make is that a huge number of people in this country are among the 89% of landlords who are private individuals, and many of them have been encouraged to invest their family’s future and their family’s finances in what are, in effect, pensions. Those people are very important to our economy and their local communities, which we need to support. We should not attack them just because they have been able to purchase a property and give another family a home to live in. For me, those landlords often provide stability for their tenants. Landlords cannot afford to have any voids, because that might result in their losing their ability to repay their mortgage; many of them are buy-to-let landlords, whose numbers have risen—mostly under the previous Government—during the past 15 to 20 years.

The problem with three-year tenancy agreements is that many families want flexibility, and as a result the reality is that such tenancies will never be standard. There has to be a balance between flexibility and security, which the hon. Member for Birmingham, Erdington (Jack Dromey) spoke about, but rogue landlords will provide flexibility by encouraging everybody to sign up for six months, while the 89% of landlords will provide security for three years, as do they already. For me, such agreements are not the answer, and the issue is not about regulation.

In addition, particularly for the 89% with just one or two properties, landlords whose tenants are not paying the rent or are damaging the property can get possession of the property only at the end of a tenancy. Other forms of recourse are often incredibly expensive. What that boils down to is that somebody with a buy-to-let mortgage whose tenant just refuses to pay the rent for two or three months is more than likely to have their house repossessed. In effect, they will lose their pension for their family’s future. If somebody does not pay their rent for eight or nine months of a three-year tenancy, that will lead to huge legal bills and create huge problems, which is a balancing factor.

My hon. Friend the Member for Carlisle made the point that tenancies are often ended by the tenant, rather than the landlord. Figures I have been given suggest that only 9% of tenancies in this country are ended by the landlord. Landlords have come to my constituency surgeries very disappointed and upset because they cannot get possession of a property where somebody is just sitting in it and refusing to pay rent to go to their mortgage. Stevenage borough council informs such tenants not to let themselves be evicted because they will make themselves intentionally homeless, so the council will not house them. As a result, landlords have to take such tenants to court and go through the whole repossession process, which families often cannot afford. People who own just one or two properties therefore have a huge problem, and protections against that problem should be built into the system. I make that point because, for a huge number of people in all our communities, three-year tenancies without such protections might cause a huge problem for their family’s future and finances.

A ceiling on rent increases sounds attractive and is no doubt incredibly populist, but one little detail that I heard earlier is that rents might increase every year during the three years.