Housing and Planning Bill

Jim Fitzpatrick Excerpts

Tuesday 12th January 2016 Commons Chamber

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

My hon. Friend is making a very strong case for the Government to take electrical safety checks more seriously. May I suggest, given the pressure on housing and the increasing number of buy-to-lets, HMOs and Airbnbs, and the different ways in which people are renting property, that this is an issue that will not go away? In fact, it could get worse. As my hon. Friend says, most decent landlords are already carrying out these checks and this is very much about encouraging those who do not to follow good practice.

[Teresa Pearce]

I thank my hon. Friend for that intervention, and that is exactly right. Across the private rented sector, many good landlords do all the things we would wish of them. It is for the minority that we need to legislate. As I mentioned, the Minister said in Committee that the Government were considering this and I know that there have been conversations with the sector, so I would be pleased to hear how far they have gone and whether something will be introduced in future.

New clause 54 would remove the three-storey condition for HMOs. That would require mandatory HMO licences for all buildings that meet all the other requirements of an HMO but are not three storeys high. HMOs come in a variety of forms and the current definition does not fit the actuality on the ground.

I know that the Government are consulting on extending mandatory licensing of HMOs and I shall be interested to hear where the Minister thinks that consultation might go. HMOs make up one of the main forms of private sector housing for students, young professionals and single people on low incomes and the three-storey threshold means that many actual HMOs do not require a licence. Indeed, down my road there is a bungalow—it clearly does not have three storeys—that has over the previous year had as many as 10 unrelated people living in it. Clearly, it would be classed as an HMO in any other regard apart from the fact that it is not three storeys high.

Private rented housing is an important part of the housing sector and with the reduction of housing benefit for the under-35s allowing only shared occupancy, more and more properties are in effect HMOs apart from the fact that they do not meet the three-storey provision. The new clause and wider Government consultation provide an opportunity to evaluate the purpose of HMO licensing simply to provide for a more robust, secure and safe private rented sector through the licensing of houses in multiple occupancy that operate with shared facilities.

Amendment 154 would lead to the retention of sections 225 and 226 of the Housing Act 2004, under which every local authority must, when carrying out a review under section 8 of the Housing Act 1985, carry out an assessment of the accommodation needs of Gypsies and Travellers who reside in the area, and provide for the Secretary of State to issue guidance on how local housing authorities can meet those needs. Clearly there has been and continues to be a need to recognise the differing housing needs of Gypsies and Travellers. Anyone with an understanding of the community will appreciate that they have different housing needs and the Government’s impact assessment for the Bill recognises a perception of differential treatment of Gypsies and Travellers. In Committee there was a great deal of written and oral evidence of the devastating impact that the withdrawal of sections 225 and 226 could have on Gypsy and Traveller communities. This amendment would retain those sections.

The Joseph Rowntree Foundation noted that the former Commission for Racial Equality concluded in 2006 that Gypsies and Irish Travellers were the most excluded groups in Britain. Concern was expressed that the existing provisions weakened the understanding of those groups’ specific accommodation needs. As the Department for Communities and Local Government’s “Gypsy and Traveller accommodation needs assessments: guidance” of 2007 states:

“In the past, the accommodation needs of Gypsies and Travellers . . . have not routinely formed part of the process by which local authorities assess people’s housing needs. The consequences of this have been that the current and projected accommodation needs of Gypsies and Travellers have often not been well understood.”

If the requirement specifically to assess their accommodation needs is removed, there will be an even higher rate of homelessness, even fewer sites to meet their assessed need will be delivered, and even less land will be allocated in local plans to meet their need.

As a result of the shortage of authorised sites, Gypsies and Travellers will have no alternative but to camp in an unauthorised manner, which impacts not only on their community but on the settled communities around them. Without authorised sites they will have difficulty accessing running water, toilets, refuse collection, schools and employment opportunities. Local authorities already spend millions of pounds each year on unauthorised encampments in legal costs, evictions, blocking off land from encampments and clear-up costs, so this is a lose-lose situation. Where Gypsies and Travellers’ needs are not assessed or met, local communities are impacted upon as a consequence. The Community Law Partnership is concerned that as a result of the clause Gypsy and Traveller accommodation needs will be buried within general housing need. CLP highlights the fact that this community consists of traditionally hard to reach groups, and calls for focused guidance for local authorities to assess their needs.

Gypsies and Travellers already experience some of the poorest social outcomes of any group in our society, and accommodation is a key determinant of those wider inequalities. We have seen written evidence from the Showmen’s Guild of Great Britain, the main representative body for travelling show people, which shared extreme concern about these clauses and the impact on its work. I would be grateful if the Minister outlined the impact on travelling show people and provided reassurance to the guild and show people that the clauses will not affect them.

The policy in this area is different across the nations. The Welsh Government are taking a different approach, introducing a statutory duty on local authorities to facilitate site provision. Why does the Minister think Gypsies and Travellers should face such a postcode lottery? We believe the amendment is necessary to continue support for Traveller and Gypsy communities, which are some of the most excluded groups in Britain.

There are legal concerns, too. The public sector equality duty recognises Romany Gypsies and Irish Travellers as ethnic minorities, and the European Court of Human Rights has held that the UK has an obligation to facilitate the traditional way of life of Gypsies and Travellers. Will the Minister clarify whether the removal of the clause would go against that?

Our amendment would retain sections 225 and 226 of the Housing Act 2004, which would ensure that the housing needs of Gypsies and Travellers were assessed by local authorities. This would make sure that safe sites could continue to be identified and would avoid the lose-lose situation set out in the Bill, where an under-represented group faces the prospect of its housing needs being swallowed up within the general housing need. As the clause stands, it would lead to many unintended consequences—a shortage of authorised sites for Gypsies and Travellers, a rise in unauthorised sites, worse safety standards, and greater pressure on local authorities and on local communities. I hope the Government will consider the amendment.

Amendment 99 to clause 92 would ensure that those with an entry on the database of rogue landlords and letting agents would not be granted a licence to run an HMO. Although those subject to a banning order would not be able to receive an HMO licence as they would be in breach of the banning order, there may be others on the rogue landlord and letting agents database who could still apply and receive an HMO licence. As the House is aware, a local housing authority may include other persons on the database, rather than applying for a banning order in a case where a person’s offences are slightly less serious and the local authority considers that monitoring the person is more appropriate than seeking a banning order. This amendment seeks assurance that those people would not be considered for an HMO licence. It would have the added bonus of ensuring that the local housing authority checked with the rogue landlords and letting agents database to ensure that the application was allowed and that nobody subject to a banning order could slip through. If in future the database of rogue landlords and letting agents were expanded, that would provide further protection for tenants against such landlords.

As was mentioned in earlier debates, including in Committee, we support measures to tackle rogue landlords to ensure security and safety for tenants in the sector and to penalise criminal landlords. However, we would like this further measure to be added, to ensure that in no circumstances can rogue landlords be granted an HMO licence. The amendment would help drive up standards across the sector and protect tenants in HMOs from rogue landlords.

Amendment 67 relates to clause 93, which would change the Housing Act 2004

“to allow financial penalties to be imposed as an alternative to prosecution for certain offences.”

Our amendment would ensure that financial penalties could be sought “in addition” to prosecution rather than as an alternative. Although we support the measures that tackle rogue landlords, we believe that the Bill could go further to penalise criminal landlords, to make it harder for them to get away with housing-related offences and deter them from committing the crimes and from returning to the sector, as well as providing an adequate punishment for their offence.

At present, the Bill would allow for a financial penalty to be sought instead of a criminal prosecution in cases ranging from failure to comply with improvement notices to letting an unlicensed HMO, among other offences. Clearly there will be cases in which a financial penalty is more appropriate, just as a prosecution route will be in others. However, there may well be further situations where both routes would be appropriate. Our amendment would allow that to happen.

The amendment would also help in situations where the impact of the offence was unclear. A local authority may deem a financial penalty appropriate, but for repeat offenders, or if the impact of the original offence escalates, it may also wish to use an additional prosecution route. Making provision for both routes will allow greater flexibility: local authorities could choose to fine, prosecute or do both. The amendment would increase the options available to local authorities. In that way, we hope to ensure further security and safety for tenants in the sector and to help drive up standards.

If the Government do not agree to it, we will divide the House on new clause 52. Amendments 79, 76 and 77, tabled by the hon. Member for Bromley and Chislehurst (Robert Neill), among others, seek to test the House’s will on the compulsory purchase order provisions. We believe that those amendments would water down those provisions, so the Opposition will oppose them in a vote.

--- Later in debate ---

[Jim Fitzpatrick]

I am pleased to follow the hon. Member for St Albans (Mrs Main), who, apart from her other duties in this place, very ably leads the all-party parliamentary group on Bangladesh, on which I am pleased to be one of her vice-chairs.

I want to speak on new clauses 3 and 4, which stand in my name. I express my appreciation to Mr Glenn McKee in the Public Bill Office for his expert assistance in drafting them. I thank the Leasehold Knowledge Partnership for its encouragement in making sure that we have new clause 3 on leasehold reform. Poplar and Limehouse has the second highest number of leasehold properties in the country, so this is a matter of great constituency significance. In relation to new clause 4 on tenants’ rights, 50% of the properties are social-rented, so that is also a big issue locally.

I am pleased that the Government have recognised the scale of the leasehold reform issue. The hon. Member for Worthing West (Sir Peter Bottomley) has led on the issue, having campaigned on leasehold reform for many years. I am pleased to support him, backed up by the Leasehold Knowledge Partnership, which is organised by Martin Boyd and Sebastian O’Kelly. The hon. Gentleman and I have arranged a number of open forums here at Westminster for parties interested in leasehold reform. They have been attended by professional bodies, individual leaseholders and others who have raised these matters with the civil service and with Government. I am grateful to the Minister for affording us a number of opportunities to meet him and civil servants at DCLG to explore these issues and try to identify a way forward.

One of the major successes that we have had in the past 12 months is that although the Government initially estimated that there were between 2 million and 2.25 million leaseholders, it has now been recognised that there are now at least 4.5 million. That demonstrates that this is a bigger problem than perhaps the Government thought it was before. Of course, that does not take into account the nearly 2 million leaseholders of former council properties who exercised right to buy or who subsequently bought those properties, so we are talking about nearly 6 million households, which means that a significant number of our citizens are affected by leasehold regulation.

The issue affects my constituents, among whom are not only very wealthy professionals who live in smart and very expensive properties in Canary Wharf, but a number of pensioners in the east end who exercised right to buy and who own former council properties. They clearly do not have access to the resources, assets or finances available to some of my constituents. The issue also affects retirement homes. Leaseholders are represented in every strata of society, from the poorest right the way to the richest, so nobody is excluded from being exposed to the vulnerability of living in a leasehold property.

I use the word “vulnerable” because the lack of protection and the informal dispute resolution procedure, which is abused by unscrupulous freeholders who employ high-powered barristers, affects ordinary leaseholders, whether they be professionals, rich or poor. I see that Conservative Members are smiling because they are either vulnerable leaseholders or freeholders. I will not say that they are unscrupulous, because that certainly does not apply to the hon. Member for Bromley and Chislehurst (Robert Neill), who I know, as a fellow West Ham United supporter, would never be unscrupulous when it comes to his properties. There are major anomalies and weaknesses in leasehold regulation, including the amount paid in service charges, as well as insurance, ground rent and forfeiture charges, all of which mean that leaseholders are vulnerable to unscrupulous freeholders. Sadly, there are too many such freeholders, even though they are in the minority.

It is appropriate to recognise that the sector has been attempting to improve its performance and raise its game with a new voluntary code. Significant progress has been made, but leasehold reform should be on the Government’s radar, especially given that leasehold has been increasingly used over many years. Six major statutes, a number of statutory instruments and dozens of sections of other Acts of Parliament have dealt with the issue. Previous Conservative Administrations—notably in 1985, 1987 and 1993—and Labour’s Commonhold and Leasehold Reform Act 2002 all tried to address that which is recognised collectively as an area that needs attention, but we have signally failed to protect leaseholders. I would be interested to hear the Minister’s response.

New clause 3 proposes to abolish leasehold by 2020. I hope—I am sure that other colleagues do, too—that it will galvanise the Government into asking why nothing has happened in respect of commonhold. I understand that the Government have been having key discussions on moving responsibility for commonhold legislation, which still falls under the Ministry of Justice, to the Department for Communities and Local Government and the housing department. It would make sense to place such responsibility for housing in that Department. At the end of the previous Administration, with the general election approaching, all three main political parties supported moving that responsibility to DCLG, but there has been no movement. I would be grateful to hear the Minister’s response.

New clause 4 is far less complex, but I am disappointed that there has been no movement on the issue, because it is very much one of localism and community empowerment. One of the few existing protections for leaseholders—it is, however, very difficult to implement—is the right to sack property management companies responsible for the upkeep of residents’ homes. There is provision within legislation for ballots to take place, and a simple majority allows residents to look for a new property management company to manage their properties. However, as I have said, it can very seldom be used.

In recent decades, many thousands of tenants in my constituency have voted in stock transfer ballots to move responsibility for their homes from the council to housing associations. That was one of the mechanisms that the Labour Government between 1997 and 2010 used to deal with the 2 million homes we inherited that were perceived as being below the decency threshold. That led to upgrades of nearly 1.5 million of those properties by 2010, including new kitchens and bathrooms, double glazing, new security and all the rest of it.

Most such schemes were successful. However, in a small minority of transfers, the offer provided by the housing associations when seeking the support of local tenants was not delivered. There is no provision for those tenants to express their disappointment and to sack their registered social landlord. This is a basic element of consumer protection. For any product that one buys on the open market, there are protections in consumer law—the ability to return the product, and to seek a refund, redress or compensation—but for a home, and a council tenant who has voted to move to a new registered social landlord, there is nowhere else to go once they have been transferred. A leaseholder at least has such a provision, even though it is rarely used.

With my new clause 4, I am trying to introduce an provision—with, I suggest, a five-yearly review—to give council tenants an opportunity to say to the housing association or their registered social landlord that is supposed to deliver the services for which tenants are paying, “You are not doing a good enough job. If you don’t up your game, we will have a ballot in five years’ time. We can then sack you and move to a new housing association, go back to the council or set up a tenant management organisation.” That would basically give tenants the right to hold their housing association to account.

The current protections are to complain to the Housing Ombudsman Service, the Homes and Communities Agency or the regulator. It is very difficult to go to such lengths, however, and the regulator is very reluctant to transfer ownership and responsibility from one housing association to another. New clause 4 suggests that tenants should have the right, when the registered social landlord or housing association is not delivering, to say, “You’re not doing a good enough job. We want somebody else to manage our property.”

On new clauses 3 and 4, one of which is very complex and the other relatively straightforward, I am very disappointed that the Government have not seen it to be in their interest to introduce such provisions. I am sure that there will be some interest in them when the Bill makes progress in the other place. I will be very interested to hear the Minister’s response to the points I have made in supporting my new clauses.

[Robert Neill (Bromley and Chislehurst) (Con)]

It is always a particular pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). As a fellow officer of the all-party group for the advancement of West Ham United—happily, they are doing rather well at the moment—it is always a pleasure to speak after him and to recognise his very real commitment and expertise in housing, particularly in the area of leasehold.

I ought to refer to my entries in the Register of Members’ Financial Interests. One of them includes being a leaseholder in the hon. Gentleman’s constituency. My experience of stock transfer has been rather more positive, but his serious and important points need to be addressed. For any London MP, dealing with leaseholders is particularly important, because leasehold is such a critical part of the capital’s housing stock.

I was reminded of some of the remarks made to me in the past by my good friend, who has now left the House, Jacqui Lait, the former Member for Parliament for Beckenham. Many hon. Members will recall that she was a very doughty and active advocate of leasehold reform and of improvement in that area of the law. It is time that we paid tribute to her for her work.

I will turn to new clause 47 and amendments 79, 76 and 77 on compulsory purchase, which stand in my name. My smile at the hon. Member for Poplar and Limehouse related not so much to being a leaseholder, but to his reference to high-powered barristers. It never quite seemed like that in the Bow county court—that is all I can say.