Letting Agents

Lilian Greenwood Excerpts

Wednesday 27th February 2013 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

I am pleased to have the opportunity to speak in the debate. I congratulate my hon. Friend the Member for Rotherham (Sarah Champion) on securing the chance to raise issues that affect increasing numbers of our constituents living in rented accommodation and on setting out the arguments so thoroughly and eloquently.

Like many hon. Members present, I was confronted with something of a dilemma over whether to speak in this debate or the debate in the main Chamber on the bedroom tax. Unfortunately, that highlights the fact that those who are not in a position to own their own home face increasingly serious problems, which this Government seem unwilling to address, because they have failed to build more affordable housing and left tenants and landlords to fend for themselves in an unregulated lettings market. Unfortunately, the Government are willing to make the situation even worse through their unfair and unworkable changes to housing benefit. With more than 6,000 households in Nottingham affected by the bedroom tax, more and more families on low incomes will be forced out of their council or housing association homes and into the private rented sector.

As we have heard, 8.5 million people—16.5% of households in England—live in the private rented sector, and two thirds of those households have children. The numbers are rising. Many of those people do not want to rent privately. Every week, I meet people in Nottingham who would love to buy their own home, but who cannot get a foot on the property ladder, and there are more than 10,000 people in Nottingham waiting for a council home. But the Government are not building enough of those desperately needed affordable homes. If we accept that many households, especially those on low incomes, are going to need the private rented sector, we must ensure that the sector is fit for purpose and that it offers renters the security they need.

[Steve Reed]

Does my hon. Friend agree that it is unacceptable that in Croydon, where there are nearly 8,000 people on the housing waiting list, last year only 420 new social homes were built in the entire borough?

[Lilian Greenwood]

My hon. Friend is right, and that is why it is so disappointing that the Government are so far behind their targets for affordable rented housing.

As we have heard, there is no legislation covering letting agent practices. It is still possible to set up as a letting agent with no qualifications. There are no requirements as to conduct or for the safeguarding of consumers as there are for estate agents, and no obligation to register with a redress scheme. Letting agents simply operate outside any legislation. Agents can voluntarily join a regulation scheme, but it is estimated that fewer than 60% do so. There is no shortage of evidence that supports the need for action. As my hon. Friends have said, an investigation by the Office of Fair Trading found that the lettings market generates a high level of complaints, and the main areas of concern for tenants set out in its report published earlier this month included surprising and high charges, confusion about holding deposits, misleading advertising, repairs not being carried out on the property and non-refund of security deposits. Crisis, the charity for homeless single people, reported similar areas of concern. The property ombudsman reported a 26% increase in enquiries or complaints about letting agents between 2010 and 2011 and, as we have heard, Citizens Advice found that 73% of tenants whom it surveyed were dissatisfied with the service.

Experience from my constituency, consistent with those findings, highlights the need for action by the Government to regulate the private rented sector and, specifically, letting agents. Like my hon. Friend the Member for Sheffield Central (Paul Blomfield) I represent a constituency with many students. Some neighbourhoods, particularly Dunkirk, Lenton, Radford, the Park, Wollaton Park and Lenton Abbey, which are close to the campuses of the university of Nottingham, have high concentrations of private rented sector accommodation and especially homes in multiple occupation. Some years ago residents established the Nottingham Action Group on HMOs, because they shared a concern about the way their neighbourhood was being affected by the changing use of local housing. The group has vast experience of the impact of the private rented sector in the city. When I asked for views on letting agents I was told that the most common complaint is agents failing to sort out repairs or carry out regular maintenance. Of course that does not affect only the tenants of the property in question; it often affects neighbours and the wider community, either directly or indirectly, because the local environment becomes run down, the street looks uncared for and further problems flow from that.

However, NAG also had regular reports of other problems, such as agents sending prospective tenants round to view a property without making an appointment, or simply telling them to call round on the off chance. When the current tenants complain they are told to put up with it because the sooner the property is let the sooner people will stop dropping round unexpectedly. There are also reports of agents failing to give prospective tenants sufficient time to look at the property, and pressuring them to sign tenancy agreements and property inventories on the spot. It has been found that agents do not return deposits readily. There is evidence of agents who do not know, or wilfully disregard, legislation. One recent example of that in Nottingham was an agent who has now been fined twice for letting HMOs that required a licence but did not have one. NAG also raised concerns about agents hiring contractors to put up “to let” boards without overseeing the work. Boards have been fastened to fences belonging to neighbours’ properties, and to trees. Thanks to the persistence of NAG, working alongside Nottingham city council, and with the support of landlords and tenants, there are now local controls on the use of letting boards. However, some agents are still acting inappropriately and using every means that they can to circumvent the controls.

The university of Nottingham student union echoed similar themes when it submitted evidence to the Select Committee on Communities and Local Government inquiry into the private rented sector. It said:

“We believe that there need to be mechanisms in place to encourage landlords and letting agents to continually improve the standard of their housing stock. Having worked alongside UNIPOL”—

a voluntary accreditation scheme—

“for many years, we have seen the benefit of accreditation schemes. However, we have concerns that voluntary codes will never catch those landlords who continue to provide low quality housing. We believe that additional licensing in addition to properly supported and valued accreditations schemes would result in improved standards”.

On the regulation of landlords and letting agents the student union was equally clear:

“We believe that registration would improve management of properties by landlords and letting agents. To be registered would indicate that a landlord or letting agent were ‘fit and proper’ to manage properties…working to minimum management standards, and exclude those few landlords whose informal practices leave their tenants in a vulnerable situation”.

I recently heard from Ben, a student in Lenton, who provided a detailed account of the problems he and his housemates had faced. He says:

“Neither us nor our neighbours who are also with the same letting agency received an inventory until quite recently, despite the fact that we were pestering the agency since September. We send e-mails to the landlord and property manager often with complaints and he responds by saying he or one of his agents will come and inspect the property and sort the problems. When and if they come they say things will be sorted and leave and the problems persist with nothing being done. Often they don’t come at all. Our concerns are ignored and disregarded and there seems to be no simple and easy way in which we can launch a complaint and get our issues resolved.”

The Government need to act now to protect tenants like Ben and their neighbours, landlords and the reputations of responsible agents. They need to put an end to confusing and inconsistent fees and charges, so that people understand what they are paying for at the outset and can compare different agents. They should introduce measures to promote longer-term tenancies and predictable rents and should introduce a national register of landlords and give local councils the powers they need to raise standards and tackle rogue landlords. The need for action is clear. It is time for the Government to get on with it.