Private Rented Sector

Jim Cunningham Excerpts

Wednesday 25th June 2014 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

I very much welcome the fact that the Opposition have called this debate today. It is high time that those who form Generation Rent were given the high place on the political agenda that they have long asked for. I tabled an amendment because although the motion goes in exactly the right direction, I want a more ambitious response to the crisis and to the deep and growing unfairness and inequality faced by people in the private rented sector.

There are 9 million people in the sector, and the figure is expanding because of 30 years of housing policy failure. People on low incomes and young families—and, indeed, people on average incomes—have no chance of getting on the housing ladder, and most have only a slim chance or none of getting a council house or of getting to the top of a housing association list.

The cost of housing in my constituency is eye-watering. Prices have increased at an alarming rate, and a typical home in Brighton and Hove now costs about £350,000, if not more, which is about twice the British average. As a result, the private rented sector—about a third of homes—is about double the national average, and it is expanding. I frequently hear from constituents who are spending between 70% and 80% of their income on their rent, and many people have simply been forced out of the city altogether. Many of those constituents come to my surgeries in desperation as they struggle with housing costs and fuel poverty. Many are living in damp, leaky, poorly maintained homes.

Generation Rent spans all ages and backgrounds. It includes the single mum from Hollingdean, who told me:

“I am not sure what to do when I am qualified. I will be a nurse living in Brighton who can’t afford to live here. If we were able to get a council house this would change our lives.”

It includes the family who are worried about taking their children out of Elm Grove primary school because of an unexpected rent increase of £50 a month, which means that they can no longer afford to live in their present home. It also includes the student whose friends have warned him about the “Brighton paint job”, where landlords or agents paint over the penetrating damp before viewings, then retain the deposit at the end of the tenancy on the ground that the tenant has not properly ventilated the property.

Generation Rent also includes the young couple who felt enormous relief at finding somewhere to live, despite paying more than 70% of their income in rent, and then had to find an additional £480 in letting agent’s fees. To add insult to injury, on top of extremely high rents and large deposits there is the scandal of fees. These unwarranted fees reflect how the private rented sector is, in large part, out of control. Letting fees are a scandal; they are sometimes over £300, which is a huge amount to find on top of a deposit. That is why I agree that they should be banned.

I do not agree with the argument that the fees would just be passed on to landlords who would pass them back to tenants in higher rents. Agents would not be able to get away with hiking up fees to landlords in the same way as they do with tenants, as landlords are in a more powerful position. The landlord would just go to a better agent who was not trying to rip them off, because they had a property for rent, which is in very high demand, in Brighton at least. Tenants do not have that choice because of the huge demand for properties.

[Mr Jim Cunningham (Coventry South) (Lab)]

I do not know whether the hon. Lady saw the programme on benefits the other night. It showed families who could not afford to pay their private landlord and could not get council accommodation. They ended up living in temporary accommodation in caravans. Does she agree that that is a disgrace in this modern age?

[Caroline Lucas]

I completely agree with the hon. Gentleman. I also want to add my support to the many other hon. Members who have talked about the scandal of agents not allowing people on benefits to rent properties. That is absolutely despicable.

We need a national register of landlords so that we can better protect tenants. That would also be good for the landlords out there who are not ripping people off. There are good landlords, and their efforts are tainted by those rogue landlords who are using the housing crisis as a way to make a fast buck. A national register would also help us to implement the minimum energy efficiency standard for private rented homes, which is essential to protect our most vulnerable citizens.

Hon. Members will be aware of early-day motion 95, which reminds the House that the Energy Act 2011 placed a duty on the Government to introduce a minimum energy efficiency standard for the private rented sector by April 2018. The regulations have been significantly delayed, which is totally unacceptable and shows the lack of priority being given to this issue. Ministers must also ensure that the regulations are made clear and enforceable by specifying band E as the minimum standard in all cases and by keeping exemptions to an absolute minimum. People looking for somewhere to rent need to know who they can trust and to be guaranteed minimum standards to ensure that properties are of high quality, safe and efficient.

It must be made easier for families and individuals to get secure longer-term five-year and 10-year tenancies. The norm of short-term contracts leaves private rented sector tenants without security in their homes, and at risk of eviction and unfair rent increases. That volatility is particularly harmful for families with children, who often have to move schools as a result. Shelter has done some excellent research in this area. Longer-term renting could work better for both renters and landlords, as the latter could reduce void periods and expensive re-letting costs. It really is high time that the Government took steps to ensure that people can get five-year stable rental contracts, if that is what they want.

One local resident told me of her heartbreak at being given one month’s notice to leave the flat she had hoped to stay in for a few years, even though being given notice in that way was technically against the law. She had spent time planting strawberries in hanging baskets on the fire escape, re-grouting the old tiles in the bathroom and hanging pictures. She wanted that place to be her home, and I think she deserves better. That is why I have tabled an amendment to today’s motion to give good tenants the choice of a five-year stable rental contract as standard. Five years as standard is what Shelter and the campaign group Generation Rent are rightly calling for, and I share their view on that.

One of the reasons why the private rented sector is expanding and rents are soaring is the decimation of our social housing stock through the right-to-buy programme. Enormous, unjustified discounts and the failure to replace the stock that was flogged off cheap have a large part to play in our current housing crisis. To begin to make a dent in our long-term housing crisis we must address the lack of affordable homes, too. One of the biggest cuts in Government funding during this Parliament has been the 60% cut in funds for social housing, which has pushed even more people into expensive, insecure places in the private rented sector.

This is a problem caused by successive Governments, who have simply not built enough houses, particularly affordable ones. A recent House of Commons Library note shows a long-term steep decline in house building in England in the past 35 years. Nearly 307,000 homes were built across all tenures in England in 1969-70, but the number fell to just over 107,000 in 2012-13. There was a minor increase in housing association building over that period, although it amounted to less than 15,000 dwellings. What is most striking is that the steepest decline was in the building of council houses, which fell from 135,000 to 1,360 over the same period.

My amendment seeks to remedy this scandalous missed opportunity with a call to start building council homes again. Done well, council housing works. It gives affordability and security of tenure. In 1980, under the Thatcher right-to-buy legislation, council housing stock was decimated and we were left with the scandalous situation of landlords receiving huge pay-outs in housing benefit for properties that were sold off cheap at the taxpayers’ expense. I want a real central Government commitment to build council housing, so that individuals and families can stay in Brighton and Hove without being at the mercy of rip-off landlords, and so that they can put down roots and not be forced to move their children from school to school.

We need fully to lift the cap on local authority borrowing to allow councils to build new council houses. Councils are bound by prudential borrowing rules anyway, so the cap is unnecessary; it is just stifling the building of local authority homes. This measure needs to be bolstered by direct capital investment to allow for a mass programme of sustainable, warm council housing. We urgently need a commitment from the Government to replace all affordable homes lost through right-to-buy policies. Such a commitment was another candidate for inclusion in the housing Bill that was so conspicuously absent from this Government’s programme, which is in large part sleepwalking us towards the general election.

Updating our housing infrastructure and giving people a way out of the cripplingly expensive private rented sector could also be a win-win. No one is suggesting that that is a silver bullet, but if we lifted the restrictions and allowed councils to borrow to build homes, and if they started to build on the necessary scale, we could start to pull people out of housing emergency. We could stop the expensive and distressing knock-on problems that bad housing creates, while at the same time creating a major boost to the provision of skilled jobs.

Generation Rent is getting bigger and being squeezed harder. That is why I support the call for smart rent controls, which would mean that rents could not increase by more than the rate of inflation. I am also calling in my amendment for a living rent commission. Excellent work has been done by the living wage commission, albeit not under the initiative of the Government. The Government need to follow that lead and do some work to determine what a living rent would really look like. We must have an official benchmark for fair rent levels and, to get that, we need major official but independent research into what a living rent would be and how it could be achieved. A commission would look at whether there were ways to bring rent levels into line with the basic cost of living, and take into account the impact on, for example, landlords’ ability to pay their mortgages.