Deregulation Bill

Karen Buck Excerpts

Tuesday 10th March 2015 Commons Chamber

[Tom Brake]

I do not know whether the right hon. Gentleman was paraphrasing me. What I should have said is that I am hearing the concerns about London expressed in this debate, but there are no restrictions of such a nature and I am not aware of its causing a significant issue outside London. I will come on to explain why the Government support the proposals and why we believe that the safeguards, which I am sure he wants, are sufficient to deal with any concerns of London MPs.

At present, Londoners would be in breach of section 25 of the Greater London Council (General Powers) Act 1974 were they to use their residential premises as temporary sleeping accommodation without planning permission, because the Act stipulates that letting a residential property for less than 90 consecutive nights is a material change of use and thus requires planning permission. Not obtaining such permission means risking a fine of £20,000.

The Government published a policy paper on the short-term use of residential property on 9 February. It takes into account the representations we received following the publication last year of the discussion document on property conditions in the private rented sector, as well as our discussions with London local authorities, the industry and Members of both Houses.

Following that, the Government tabled a number of amendments in the other place to update the existing legislation and ensure that we provide appropriate freedom for London residents, broadly in line with that enjoyed by residents across the rest of the country. Alongside the new freedoms, we have sought to provide important safeguards to prevent the abuse of the reforms and, crucially, to prevent any opportunity for commercial letting on an ongoing or permanent basis, about which I am sure Labour Members are concerned.

[Ms Karen Buck (Westminster North) (Lab)]

I, too, hope to catch your eye in this debate, Madam Deputy Speaker. The Minister is a London MP, so he knows the pressures on the residential housing stock in London. Have not London local authorities, across the parties, made representations to stress that fact? For example, Westminster alone loses about 500 residential units every year to short-term lettings, because it is impossible to distinguish, in the way the Minister claims to do, between the holiday let and the extension of what is effectively the hospitality industry.

[Tom Brake]

The Government are clear that the proposals are not about facilitating a process that will allow more commercial letting on an ongoing or permanent basis; they are about restricting lets by individuals to a maximum of 90 days. I do not know whether the hon. Lady has ever used Airbnb or something of that nature in other parts of the country, where people let out their properties on a short-term basis at the time of particular events, such as the Liberal Democrat conference in Glasgow. There is no suggestion that people are letting out properties permanently. The Government do not want that to happen, which is why the restriction of 90 days has been put in place. I will come on to the other safeguards in a moment.

[Ms Buck]

I will not intervene again, but may I ask about that particular point? The Minister is saying that there is not a problem, but Westminster alone has had to take 7,362 cases against quasi-commercial short-term lettings in the past 15 years even under the existing regulations. The key point is that such enforcement will be far harder when the Government relax the rules, as they intend to do.

[Tom Brake]

The hon. Lady will hear what I have to say about enforcement notices, and she may want to pick that up among the points she will make should she catch your eye, Madam Deputy Speaker.

The internet has created new opportunities for residents who want to enter into what has become known as the sharing economy, a catch-all term encompassing all asset owners who wish to share their asset with others in exchange for a fee. As a result, it is now easier than ever for residents to rent out their property to supplement their incomes and offer consumers new experiences. A cursory look at some of the websites facilitating such lettings reveals that thousands of London properties and rooms are available for short-term use, all of which potentially violate the current section 25.

Lords amendments 27 to 30 add additional safeguards in relation to the short-term use of London properties without planning permission in three ways. First, they stipulate that a property can be used as temporary sleeping accommodation only for a maximum of 90 nights per calendar year. That will ensure that the reforms provide residents with greater flexibility, but it will not create opportunities for the short-term letting of properties on a permanent basis. Secondly, they provide that the person providing the temporary sleeping accommodation must be liable for council tax. That requirement means that a property is used as a residence, because a property used as a hotel or hostel would be liable for business rates. Combined with the 90-night per calendar year limit, we believe that this provides an appropriate safeguard against short-term letting on an ongoing or permanent basis. Thirdly, they allow either the Secretary of State or the relevant planning authority with the Secretary of State’s consent to direct, where there is a strong amenity case for doing so, that the relaxation of section 25 does not apply to certain properties in certain areas. I hope that addresses the hon. Lady’s concerns.

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[Ms Buck]

I, too, rise to speak strongly in support of amendments (a) to (k) to Lords amendment 27, tabled by my hon. Friends on the Front Bench, and to reinforce the message we have just heard from the hon. Member for Cities of London and Westminster (Mark Field). I concur with every word.

I shall be relatively brief, because we have rehearsed these arguments on Report. I was also able to have a debate in Westminster Hall on exactly the same subject, and of course there were debates in the other place. However, let me reinforce a few points. The central point is that the spirit behind the amendments represents cross-party consensus in inner London. Obviously, we are now seeing cross-party consensus from the representatives of the London borough of Westminster, but the local authorities that have responded to the Government’s consultation include Haringey, Enfield, Camden, Westminster, Newham, Redbridge, Lambeth and the City of London, which all opposed the proposal. I know that hon. Members and peers with support from other local authorities have also spoken in favour of strong safeguards.

Those local authorities, their representatives and Members of Parliament from all parties feel a clear sense of the loss of protection for residential communities that this deregulation will involve. It is critical that a good Government should respond to the needs of localism and understand that central London in particular, like rural communities and the seaside towns, has distinctive needs and requirements that must be protected. We are arguing today that there are pockets in communities in central London in particular—and no doubt in other areas, such as the constituency of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)—where the pressure from the commercial letting sector is becoming so intense that it is seriously impairing the quality of life of a number of residents.

As the hon. Member for Cities of London and Westminster has said, we are concerned about the loss of residential stock. Westminster city council has produced very strong evidence to support its argument. It has dealt with more than 7,000 enforcement cases so far and it is very important to stress that those are not enforcements against people letting out a room in their home for Wimbledon fortnight. If those were the types of enforcements taking place, the Minister would be able to point to evidence of an innocent homeowner being enforced and fined for a casual holiday letting, but the Minister is not able to do that because I do not think for a second that that is what local authorities are doing.

What we are seeing is the sustained movement of the commercial letting sector into residential communities. Westminster city council estimates that about 500 units of accommodation a year are lost to the housing supply. In fact, it has so far lost the equivalent of about seven years’ worth of its target housing supply at a time of acute housing shortage. It has also produced evidence that demonstrates that the kinds of rents that are being charged for properties ranging from rooms to whole houses are so much more than the going rate for a shorthold private tenancy, let alone that for a social letting, that it would not be sensible financially for a homeowner not to get into the sector. If we look at the websites advertising those short-term lets, we will see that variance for ourselves. Westminster city council last did a sustained piece of work on this issue a few years ago—I suspect that the outcome would be far starker today—and it found an average difference of 273% between short-term let rents and longer-term rentals.

The irony of Westminster city council making representations on the impact of market rents and the loss of affordable housing units is not entirely lost on me. None the less, I am happy to get together with it on the critical issue of the loss of residential housing stock, which must be addressed. The Minister has previously spoken in the same debates as me and professed concern about affordable housing and the housing supply in London. I do not understand why the Government are turning their face against the cross-party consensus that the hospitality industry is, in effect, leaching into the residential housing stock in London.

The hon. Member for Cities of London and Westminster and I have also previously raised the issue of the impact on residents. I will not rehearse all the arguments, but last summer I conducted a survey of people’s perceptions of the impact of short lets on Maida Vale, Bayswater, Queensway, north Marylebone and parts of St John’s Wood, which are the front-line areas. There were a litany of concerns and complaints about the lack of security in residential blocks with a high level of short-term lets, the impossibility of knowing who is coming and going, and serious problems of management.

Short-term visitors tend, not necessarily through any fault of their own, to treat their accommodation like hotels, but hotels spend a lot of money on looking after their properties whereas that is not necessarily the case with short lets. There are reports of damage to security systems, much greater wear and tear on communal areas and a higher level of anti-social behaviour. That is not necessarily because the people are themselves anti-social, but they come to London to enjoy themselves and to party and have a good time, so there is more rubbish and noise nuisance.

That is having a negative impact on those neighbours who in some cases find themselves stranded in residential blocks that are now almost entirely turned over to short let; it is also a cost to the public purse. Local authorities have to spend a considerable amount of time and effort enforcing against antisocial behaviour and higher levels of rubbish and noise nuisance. One of the Westminster wards has had to spend its budget on additional enforcement officers at a time when the local authority has cut more than £500,000 from its children’s services budget—that happened only last week—and plans to, in effect, halve its youth service. I know what I would rather spend public money on. I do not want it spent on chasing the hospitality industry for nuisance in a residential block; I would rather spend it on protecting our children and youth services. The impact on residential communities is a real problem.

That is all happening: as I have said, there have been more than 7,000 enforcements. Local authorities are having to chase a moving target as it is. The Government’s relaxation of the rules will make that significantly worse. At the moment, the local authority simply has to prove, should it choose to do so, that the property is being let on a short-term let basis without permission. In future, it will have to demonstrate that the property has been let for more than 90 days without permission, which will be a far harder thing for it to do. We have already seen—Camden, I think, is the council that has monitored this most closely—an explosion of lettings on the main websites since the Government announced their intention to deregulate. That is no accident and we can expect it to happen elsewhere.

We need to make it possible for local authorities to act to enforce. Personally, I would like the length of time for which someone can let out their home to be reduced significantly to 30 days, which would be reasonable in London. I certainly support the argument that the property should be the principal residence of the person who is letting it. Above all, I strongly feel that local authorities should have a right to be notified when such lettings take place. It is only through notification that a local authority will be able to enforce action.

Fundamentally, this comes down to the right of a local authority to determine what is in the best interests of its own community. We do not need to worry about whether London local authorities are concerned with boosting the tourism industry or economic growth: they are very much concerned with them, but they know very well that a balance has to be struck between those agendas and the protection of the people who live in London and their amenity and access to housing. Westminster city council—which, I repeat, is not known for failing to advocate a deregulatory agenda—is at the forefront of making that case, with which I totally agree.

Even at this last hurdle, if the Government support the measures proposed by my colleagues on the Labour Front Bench to allow local authorities to have the right to determine what is in the interests of their own communities, that would be very strongly welcomed by all parties in local government and in this Chamber, and the many thousands of people who live in the residential neighbourhoods most affected in London would breathe an enormous sigh of relief.

[Philip Davies]

I begin by drawing the House’s attention to my entry in the Register of Members’ Financial Interests. As I have previously made clear in these debates, I am a tenant in two properties: my home in Shipley and where I stay when I am working in Parliament. I am also the landlord of one other property that I rent out. I therefore like to think that I have a good perspective on these matters and I want to see a situation in which we reward good landlords and good tenants. That is the basis for my amendments to Lords amendment 18.

In the interests of time, Madam Deputy Speaker, and in order to be helpful, I intend to speak only to my amendments, because other Members have already ably put forward their cases on the others. From what I have heard, the shadow Minister might want to press one of his amendments to a Division, so I will not seek to divide the House on mine, in order to protect time for Members across the House and facilitate debate. I am being as helpful as you know I always am on these occasions, Madam Deputy Speaker.

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[Tom Brake]

The honest answer is that we do not yet have such details, but they will be set out in regulations. I assume that a local authority would have to provide examples, such as a consistent pattern of noise nuisance or antisocial behaviour in an area, in a letter or submission for the Secretary of State to consider. The exemption will apply to a locality; Westminster could not apply for an exemption for the whole of the area covered by the council.

The hon. Member for Westminster North (Ms Buck) spoke about the proposal to make people report it to the local authority every time they let property on a short-term basis. I want to understand better the purpose behind that and how it would work in practice. What enforcement would there be if people did not report it? An individual who was going to rent out their property for a week would be very unlikely to do so. How would she ensure that it was done? What action would be taken against people who did not comply, given that short-term lets are already happening on a large scale in London and people are not taking notice of the existing law?

[Ms Buck]

The Minister has just conceded that he does not know how the system will work and that we will have to wait for the regulations. We will look at the exact operation at that time. Westminster city council has looked at this matter closely and is confident that it could have a simple online reporting system that would allow people to notify the local authority that they intended to have a short-term let, and that that could be matched up with the data on properties that were being advertised. That would enable the local authority to target enforcement against the properties that we are all saying we are concerned about—not the one-off short holiday lets, but the extensive commercial lettings that are permeating our residential neighbourhoods.

[Tom Brake]

I thank the hon. Lady for expanding on how the proposal would work. However efficient Westminster city council is, there will be huge difficulties in identifying the people who are advertising short-term lets on websites and making a link with the local authority register where those who are doing it properly have registered.

The hon. Lady asked whether the Government’s proposals will remove the ability of local authorities to take enforcement action against illegal short-term letting. Clearly, if there is a breach, people will be at risk of planning enforcement action by their local authority. Although we want the legislation to remain light touch, we want to send the strong signal that in order to let property on a short-term basis legally, people must remain within the 90-night limit, otherwise local authorities will take enforcement action against them.

[Ms Buck]

How?