Regulation of the Private Rented Sector

Jeremy Corbyn Excerpts

Tuesday 15th October 2013 Commons Chamber

[Jeremy Corbyn (Islington North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to provide for the regulation of letting agents; to protect tenants’ deposits; to require the enforcement of environmental and energy-efficiency standards in private-sector rented accommodation; to amend the law on secure tenancies; to provide for fair rent to be applicable to all rented accommodation; to require landlords not to discriminate against people in receipt of state benefits; to require local authorities to establish a private rented sector office; and for connected purposes.

I first introduced this Bill earlier this year on 26 February. Since then, the debate about the regulation of the private rented sector has gathered pace. It is now much more commonplace for all of us to be invited to endless seminars on the private rented sector and stories abound about the way in which people are treated in the sector. This matter ought to be part of the mainstream political debate on housing in this country.

There are essentially three elements to housing in this country: owner-occupation, housing provided by local authorities or housing associations, and the private rented sector. I will take them in turn. Owner-occupation has been the cornerstone of the housing policies of successive Governments for a long time. However, the rate of owner-occupation is steadily and steeply in decline, to the extent that it is well below the high point of 70%. There is every sign that it will continue to drop over the decades, as mortgages become more expensive and more difficult to secure for people on average incomes or below, despite the Government’s home-ownership objectives.

The second area is council housing and housing association properties. Council housing provides good quality, secure accommodation, but it is in desperately short supply, particularly in London and the south-east. I am the first to admit that the solution to our housing problems lies in the much more rapid development of much more council housing all over the country. That would provide a good quality way out of housing desperation for many people. I hope that that policy is increasingly accepted and developed.

Although I recognise that housing associations were founded to bring in good quality housing on a similar basis to council housing, I am becoming increasingly concerned about their behaviour and conduct. Increasingly, they act like housing companies, not social landlords, and see themselves as being in the property market, rather than in the provision of housing for people who are in desperate need. That area is in need of tight regulation.

The third area is the private rented sector, which has traditionally been very small in this country. It has now started to rise rapidly. Nationally, it makes up 17% of the housing stock. That is predicted to rise to 22% by 2025. It is an extremely different story in some parts of the country. In the borough of Islington, which I am happy to represent with my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), who is here to indicate her approval of the Bill, the make-up is very different. Owner-occupation now makes up less than 30% of housing stock across the borough and is declining fast. Social housing—housing association and council housing—is about 40% of the stock and rising, as the local authority, to its great credit, manages to undertake some building programmes to ensure that people have a decent roof over their head. However, the private rented sector makes up well over 30% of the housing in the borough.

Some who rent in the private sector in London are very wealthy, can afford to pay any price that is offered and do not particularly care about it. There are also those on middle incomes—young, professional people who move into London and pay an extraordinarily high proportion of what ought to be a decent wage on private rents. Then there are people on very low incomes who cannot get anywhere near the housing ladder but cannot get anywhere near getting a council property either. They are stuck in expensive private rented accommodation, often paying half their take-home pay just to keep an inadequate, expensive roof over their head.

There are also people who are placed in private rented accommodation by the local authority, and they are the ones who suffer the most. They are often in inadequate, badly maintained accommodation with landlords who know that the tenants are in no position to complain about anything.

The one thing that unites all those groups is insecurity about their housing. I guess that most Members are owner-occupiers and do not feel any great insecurity about their housing situation. It is not so for a large number of people in this country. We therefore need effective regulation of all private rented accommodation, so that there are decent environmental standards and not excessive energy bills. We need strict regulation of what letting agents do, because currently anyone can set up as a letting agent straight away. At the very least, we need Criminal Records Bureau checks, and we need anti-discrimination legislation to be enforced on letting agencies—not just when there is discrimination against people on housing benefit, but when there is discrimination against people of minority ethnic communities, which is absolutely disgraceful and is illegal under general anti-discrimination law.

We also need the guaranteed return of deposits and much longer tenancies. Traditionally, assured shorthold tenancies last for six months in this country. Sometimes they are repeated and sometimes they are not, but they are almost never repeated if the tenant complains about conditions or requires the landlord to make some repairs during the first six months. The tenant finds that their tenancy is simply terminated. We therefore also need tenancies of at least five years, to reduce the level of insecurity.

When the Government tell me that the cost of private rented accommodation is one of the main drivers of this country’s large housing allowance bill, I absolutely agree with them. However, the way to deal with it is not by restricting the level of housing benefit paid to tenants but by controlling the level of rent that is paid. Other countries seem to manage that well, and I feel deeply angry when I meet people in my advice bureau every week who tell me that they are, in effect, being socially cleansed out of an area they have lived in for a long time because the housing benefit is inadequate for the level of rent that is charged. They are being forced to scatter all over London and all over the country.

Some colleagues tell me that regulation of the private rented sector and rent levels is not a problem in their constituency, and I understand that. There is a vast discrepancy in rent levels across the country, from £300 to £400 a week in London to £100 a week, or in some cases even slightly less, in other parts of the country. However, if the House does not pass strict regulation of the private rented sector now, starting in London and the south-east, the problem will spread across the country as the sector gets bigger and bigger.

My Bill would bring about better security, such as there is in Germany, where tenancies last almost a lifetime. It would bring about better conditions for tenants and much more stable communities. In some wards in my constituency, population turnover is 30% a year, almost all occasioned by the insecurity of the private rented sector. What does that do to the stability of a community? Where does it get its community activists, school governors and movers and shakers from if there is no security and no investment in that community?

Finally, the Bill would bring about rent regulation. Some people are not keen on that—some landlords do not like it, but some recognise that the stability provided by a fair rent formula of the sort we used to have in this country would be a useful step forward. My Bill seeks to establish local authority-run, fair-rent regulation authorities, the first of which would cover the whole of Greater London. We would start with the principle that rent should bear some resemblance to the cost of a property—often it bears none whatsoever—and ensure that we gain the security of tenure required to bring about a much better and fairer society.

I hope the House will support this Bill today to end the insecurity and injustice, and recognise that some local authorities such as Newham and Oxford have made enormous steps forward to try and bring about some degree of regulation and stability in the private rented sector. The Bill is not a threat to good landlords who seek to do the right thing and look after their tenants; it is a threat to the cowboys, bad landlords, discriminators and those who refuse to repair their properties or return deposits at the end of a tenure. I hope the House will support the Bill.

Question put and agreed to.

Ordered,

That Jeremy Corbyn, Mark Durkan, Sir Bob Russell, Mr Elfyn Llwyd, Caroline Lucas, John Healey, John McDonnell, Katy Clark, Grahame M. Morris, Ms Diane Abbott, Mr David Lammy and Mr David Ward present the Bill.

Jeremy Corbyn accordingly presented the Bill.

Bill read the First time; to be read a Second time on 28 February 2014, and to be printed (Bill 114).