Private Rented Sector

Jeremy Corbyn Excerpts

Wednesday 25th June 2014 Commons Chamber

[Emma Reynolds]

I have seen that report. Citizens advice bureaux are not the only ones making that point—the Office of Fair Trading has said that there is a substantial level of complaints about the letting agent industry. I say to the Government: ensuring transparency is not enough. If I am a tenant, knowing that I am going to be ripped off by £400 or £500 will not make it any easier, or any cheaper.

[Jeremy Corbyn (Islington North) (Lab)]

I am pleased that my friend has moved on to the administration of the agencies. Is she concerned that there is some suggestion by “Panorama” and others of racial profiling of tenants by some agencies and that many agencies refuse to even accept an application from anyone who is on benefit, which completely discriminates against people who need to be rehoused urgently?

[Emma Reynolds]

Such practice is criminal and should not be happening. At the tail end of last year, I saw reports, following some mystery shopping, that letting agents were sometimes instructed by landlords not to take on people from the black and minority ethnic communities and that letting agents were sometimes doing that themselves. That is appalling, and I am sure that there is cross-party agreement on the issue. Such practice is already criminal. This is a matter of enforcement. The law is already in place, which should stop that; but unfortunately, it seems to be happening in the capital.

--- Later in debate ---

[Nick Boles]

Our approach in government, unlike that of the last Government, is to consult the industry and tenants before we produce things. Therefore, I am happy to tell the hon. Lady that some time this summer she will see this model tenancy agreement. That is also why we have published the well-received “How to rent” guide that will empower would-be tenants and why we are developing a code of practice to drive up standards in the industry.

[Jeremy Corbyn]

The Minister will have heard my intervention on my Opposition Front-Bench friend. Can he confirm that the Government are prepared to take action to prevent racist discrimination by agencies and to stop agencies simply banning anyone in receipt of any state benefit even applying for a tenancy?

[Nick Boles]

I am grateful for that intervention because I entirely share the hon. Gentleman’s outrage at the suggestion that these practices are taking place. As the hon. Member for Wolverhampton North East (Emma Reynolds) said, there are already powers to deal with that, but it is important that they are used and enforced, and I hope very much that local authorities and police forces around the country will look closely at any evidence presented to them by “Panorama” or anyone else.

--- Later in debate ---

[Jeremy Corbyn (Islington North) (Lab)]

I am pleased that we are debating the private rented sector. I suspect there will be many more such debates between now and the general election, because the situation requires urgent intervention, and in many respects a change in the law.

Like some of my colleagues who have already spoken, I represent an inner-London constituency, and we are facing the most acute housing crisis that I can remember, both in my time as an MP and before that as a councillor in a neighbouring borough. When I hold a constituency advice surgery—as we all do—I am frequently there for five or six hours, and 90% of the cases are about housing. Such cases are desperately sad: it is frightening to hear about what people are going through and the trauma of families being upheaved and forced to move out of the borough from one private rented property to another and another and another, with all the disruption that causes to their children’s education, their health and family relationships, and the damage it does to the community as a whole.

The ward where I live has a population turnover of almost 30% per year, which makes any kind of community cohesion much more difficult and voluntary organisations less well populated, and affects all the social infrastructure that is so important in our societies. We must consider the desperate housing need, not just in inner-city areas but in the country overall.

[Frank Dobson]

Does my hon. Friend agree that one of the biggest problems is that these constant moves often involve children? It is clear from the research that a child having to shift from one school to another—sometimes two or three schools in one year—is about as damaging to their educational opportunities as can be imagined.

[Jeremy Corbyn]

My right hon. Friend makes a strong point with which I absolutely concur and which I understand well. It works like this: a family is in receipt of local housing allowance, and the landlord puts the rent up way beyond what the allowance enables them to pay; they do not have enough other income—either from a low-paid job or from other benefits—to make up the difference, so they have to move. There is no possibility of their getting another private rented property in the same community, so the council is forced to do its best by hassling various agents all over the place to try to find somewhere for them to live—my council does that all the time, and Camden council does much the same thing. The family is perhaps found somewhere to live in Enfield, Barking or wherever. They are there for six months, they have the temerity to complain about the conditions, the tenancy ends, and they get moved again. The children either have to be uprooted from one school to another in another borough, or make a long journey to return to their original borough—such as Camden or Islington—and try to maintain themselves at the same school. What kind of life is it for a seven or eight-year-old child to be dragged on a bus or train for an hour every morning to get to primary school and having to change time and again? Ask the teachers how the kids suffer because of that.

My borough is doing its best to provide as much council housing as it can. My hon. Friend the Member for Wolverhampton North East (Emma Reynolds) kindly visited our borough last week, and she will have seen the excellent quality of our new build. Indeed, it is rather better quality than the current private sector new build: larger rooms, better accommodation, and more energy efficient—very good quality stuff. It is difficult to find land to build it on and expensive to do, but the social investment is enormous, as is the return for the whole community.

The message from the Government is that we should increase council rents to 80% of market value. That would be totally unaffordable for people who live in our existing council properties, and would mean that they could not accept them even if they were offered them. We must maintain the social rented model and address the problems of housing in this country, essentially by building a lot more council houses.

Some 200,000 or more new households are created every year, and the number of new properties being developed in the country is around 100,000 per year. We are all into the science of managing shortages. Councils are doing that, as is everybody else, and the only safety valve is the private rented sector. The only safety valve in that is ever-increasing rents and the huge profitability that exists within that sector. We therefore need to do two things; the first is to support local authorities to build council housing.

I do not support the sale of council houses or big discounts on their sale, particularly in areas with enormous housing shortages, not because it makes a lot of difference to residents, if they remain living in them, but because later the properties might be sold on or rented in the private rented sector. The highest rent I have come across so far—there might be more in the pipeline—for a former council flat is £660 per week. For the person living next door in an identical council flat—possibly even in better conditions, because the council tends to look after things quite well—the rent would be about £100 to £120 per week. How can anyone possibly justify that discrepancy?

I support the Opposition Front-Bench team’s proposal for the regulation of letting agents and for the enforcement of much better conditions and much longer tenancies. In areas of very high housing demand—in London and other cities such as Oxford and York and in the centres of other cities—rent rises are huge. I have no idea where the Residential Landlords Association gets its figures from, but it claims that in the 12 months to March 2014, the rent increase in London was 1.4%. I tried this figure out on people in my community, but I only got as far as “1.4” before they started laughing. They said, “That must have been last week’s increase.” I have no idea where these figures come from, but these things are very important.

We seem to be presiding over a cowboy mentality among some, although not all, letting agents who think it okay to stick some scruffy piece of paper in a window saying, “No DSS allowed here”—they are a bit out of date: the Department of Social Security was abolished a long time ago and is now the Department for Work and Pensions; perhaps they should be educated about that. However, should anyone be allowed to say, “If you’re on benefits, you’re a second-class citizen and you cannot even apply”? Also, the “Panorama” programme has exposed the racial profiling that goes on, presumably under pressure from landlords saying they do not want any Muslims, blacks, Jews—or any other group they care to identify. To his credit, the Minister correctly agreed with me that this is criminal activity, completely wrong and has to be outlawed. I hope there will be serious prosecutions where it can be proved, as a lesson to others that we will not accept race discrimination in the housing market.

I hope that the House will support the motion. I do not know whether the Government will support it—I seriously doubt it—but I hope we can have not just the regulations outlined by my hon. Friend the Member for Wolverhampton North East but even longer tenancies. I also think there is a case for rent controls, particularly in areas of very high housing demand such as London. If we do not manage the private rented sector, control rents and build more housing in London, it will become a totally divided city: a city divided between those lucky enough to get social housing through councils or housing associations, those rich enough to buy and become owner-occupiers, and the rest, who will be spending all their earnings and savings on excessive rents. It will lead to labour shortages and economic decline in our big cities. We need regulation and a determination that we, as a nation, will solve the housing crisis and give all our kids somewhere decent and safe to live.