Private Rented Sector

Lilian Greenwood Excerpts

Wednesday 25th June 2014 Commons Chamber

[Dr Huppert]

I do not claim to be an expert on the situation in Leeds, but my hon. Friend makes a good point. They should be doing such things. In Cambridge we charged higher council tax for empty properties instead of giving a discount, as was previously the case. People paid less if they brought a property back into use. It is hard for people who are desperately looking for a house to know that there are empty properties around.

I will not go through everything I spoke about in my speech on Second Reading of my private Member’s Bill. I went into more detail about the need for an ombudsman and for accreditation schemes. I prefer accreditation schemes to a national register because they would be cheaper, more effective and less bureaucratic and would avoid problems with letting property on a more occasional basis. We are agreed that we need a better system, and accreditation could work.

The hon. Member for Southampton, Test (Dr Whitehead) spoke about houses in multiple occupation. There are some good examples of HMOs, but others are a serious problem and do not comply with basic health and safety regulations. They are an essential part of the housing mix in a place like Cambridge. We rely on them to house people, and they do a good job. Yet Labour councillors have proposed to cap the number of HMOs and change the definition to any house with three people from two unrelated groups. Driving younger people out of HMOs would simply slash the supply and make it even harder to house people in my constituency.

[Lilian Greenwood (Nottingham South) (Lab)]

Like me, the hon. Gentleman represents a university city with a great number of HMOs. Does he share my concern that the definition of HMO—that it has to have at least five rooms and more than three storeys—means that many properties are not licensed? The standards in many of them are very poor, and that is precisely why councils such as Nottingham City council have introduced additional licensing schemes that cover a wider range of HMOs than those covered by the basic legislation.

[Dr Huppert]

I am happy to accept that some places should be looked at more, and I am about to talk about some of the safety issues. The question is whether the council should introduce some sort of accreditation scheme, as Cambridge has, to make sure that HMOs are safe, or ban them. I hope that the hon. Lady would not suggest capping the number of HMOs in her constituency because she knows as well as I do the problems that that would cause for people looking for somewhere to live.

We have problems with safety in the private rented sector. There are far too many unsafe properties. In particular, we have problems with electric fires. There are about 17,000 electric fires in the private rented sector and it seems bizarre that there are no requirements for them to be safety checked. We should introduce such a requirement; it is not excessive red tape, it is a simple safety measure.

We want a fair deal for tenants. One group that we also need to consider is people who rent from private landlords and pay their rent using the local housing allowance. This was touched on earlier. There have been shocking cases of people being told that they cannot rent because they are on benefits. That simply should not be tolerated. We should not let landlords exclude a large number of people who need to find housing.

We have a particular problem in Cambridge. The local housing allowance was introduced by the previous Government with broad rental market areas. One of the problems was that the rent levels for Cambridge were set by averaging places as far afield as Haverhill and Littleport, which are both much further out and have lower rents. It became impossible for anyone to find anything to rent in Cambridge on the LHA amount. My predecessor fought strongly against this when it was set up. It was highlighted by the Work and Pensions Committee, which emphasised the specific problems in Cambridge and Blackpool. Those problems were not fixed. The message that the Labour Government sent to people in Cambridge on benefits was, “You can’t afford to live in Cambridge. Go somewhere else.” They made Cambridge unaffordable and increased rents in places such as Littleport and Haverhill. It was a poor scheme and I am pleased that the Government have finally, after much effort, launched an independent review of the adequacy of LHA levels and increased the levels in Cambridge by 4%—well above inflation. That is a start.

There is agreement across the House that we should make it easier for people to have longer tenancies. The stability is worth while. Some time ago in our policy paper, we in the Liberal Democrats proposed mini-leases, with new fixed-term leases of at least three years after a probationary period.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

Millions of people across the country are struggling to cope in a sector that is clearly not fit for purpose, leaving tenants and responsible landlords fending for themselves in an unregulated lettings market. That experience is all too familiar to many people in Nottingham, which has a large and growing private rented sector. There are now more privately renting households in the city than there are households renting from the local authority or housing associations.

In Nottingham, the growth in private renting has been seen across all age groups, but most markedly among the young. Over the past 10 years, home ownership among 16 to 34-year-olds has fallen significantly. Back in 2001, 39% of the city’s homeowners were in that age group, but by 2011 that had declined to 27%, and those figures exclude students. People renting privately in my constituency tell me that they desperately need security so that they can build their lives in one place, become part of a community and live without the threat of eviction if they make a complaint about conditions or the management of their home.

In Nottingham, substantially fewer homes have been developed since this Government came to power, despite new affordable homes being built by our councils arm’s length management organisation, Nottingham City Homes. According to the Department for Communities and Local Government’s own figures, in the last three full years 630 homes have been built in Nottingham by a mixture of private and housing association builders. That compares with 1,520 in the preceding three years and 3,680 in the three years before that.

Demand for housing in the city is increasing, but Ministers are doing nothing to address local supply, and the banks continue to withhold finance from the smaller construction companies that know the market and could make a huge difference. The Government seem to be passively reliant on developers to bring forward planning proposals, even in inappropriate locations, when too many brownfield sites lie empty. It beggars belief that for all the talk of localism, under this Government a developer is able to ride roughshod over the views of many hundreds of local residents in Wollaton and the local authority, who all oppose plans to build new houses on local allotments.

[Jack Dromey]

My hon. Friend made a very compelling point about the banks not lending to small and medium-sized builders. Does she share my concern that two thirds of homes used to be built by small and medium-sized builders, but that has declined to one third? That is at the heart of a chronic problem of capacity in the industry. If we are to build on the scale at which we intend to build—200,000 homes a year—their role will be key, and that includes the banks lending to them.

[Lilian Greenwood]

My hon. Friend is exactly right. We do of course need to unlock the ability for small and medium-sized enterprises to get access to finance and to be building the houses that we want.

Many of my constituents, particularly those under the age of 35, would love to buy their own home, but they simply cannot get a foot on the property ladder. Young people who manage to buy often do so only with help from their parents, but in cities such as mine most parents simply do not have the level of savings that would be needed to help their children in that way. The Government’s failure on housing means that an entire generation in Nottingham could be locked out of home ownership entirely, left to cope with the insecurity offered by the private rented sector and facing rents that are expected to soar by an average of 39% by 2020. The Opposition are clear: if the private rented sector continues to make up an ever-increasing proportion of the market, we must ensure that it is fit for purpose, provides good quality, affordable homes and offers tenants the security they so desperately need.

[Frank Dobson]

In a great university city such as Nottingham, large numbers of people are graduating with phenomenal debts because of the massive increase in fees, and in many cases they have very little chance of getting what might be described as a graduate job. That adds to their problems in raising the money either to rent or buy and provide services to the people of Nottingham.

[Lilian Greenwood]

I agree entirely with my right hon. Friend. One of the things that we would like to do in our city is ensure that more graduates stay in Nottingham and do graduate-level jobs, but their ability to buy a home is a really important part of that offer. Ministers should come to Nottingham and see for themselves the misery that is being caused by the status quo before attacking Labour’s plans to take action and tackle the issue head-on.

There are excellent professional landlords in Nottingham who take pride in the standard of accommodation they offer, but some do not, and it is important to stress that the management of the private rented sector is not simply a good landlord versus bad landlord issue. The sector is complex, and landlords come in many guises. In particular, there is an emerging need to target so-called “accidental” or “amateur” landlords who are new to the sector—those renting out an inherited family home, letting a property whose owners are in long-term care, or who have bought a house for a family member to live in with others. According to Rightmove, home owners letting out their property as a result of circumstance make up as much as 30% of all landlords, and many are casualties of the recession. Those landlords are often inexperienced and can be naive about the standards and management needed to provide quality, well-managed accommodation. With better advice, guidance and—yes—better regulation, we can help those people become responsible landlords who provide decent accommodation for their tenants.

Nottingham city council recently completed a review of property conditions in the city’s private rented sector and assessed the effectiveness of voluntary accreditation as a way of driving up standards. I agree that there should be greater national recognition of accredited landlords and the superior management and service they provide, but our local review concluded that although accreditation is an effective tool in driving up standards, on its own it will always leave a significant part of the market unprotected.

My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) spoke about the way accreditation has been used in her city, particularly for students, and that is also the case in Nottingham. For other parts of the market, however, accreditation does not seem to work as well, and it remains a challenge to get landlords to join such schemes. That is why in Nottingham we have introduced an additional licensing scheme under an article 4 direction to manage the private rented sector better, especially in parts of the city with a high concentration of homes of multiple occupation.

Nottingham is a young city with almost a third of its residents aged 18 to 29. That high rate of young people can in part be attributed to the large number of students studying at our popular universities and colleges. The city’s growing student population has been the predominant driver behind the private rented sector’s wish to convert properties into HMOs, particularly in the Dunkirk and Lenton area of my constituency, but also in Radford, the Park, Wollaton Park and Lenton Abbey, which are close to the main campuses of the university of Nottingham. Uncontrolled development of HMOs has put pressure on the number of affordable rented properties suitable for families, and HMOs in high concentration have had an enormous impact on the resilience, balance, stability and sustainability of the neighbourhoods in which they sit.

People in my constituency who have campaigned on HMO-related issues believe that article 4 directions are still enabling HMO creation to take place, but in a controlled manner that benefits tenants as well as other residents in the neighbourhood. Accreditation and licensing are not mutually exclusive—they are complementary tools to improve standards.

The Nottingham experience indicates that the private rented sector, while needing to provide a professional service, is still not professional enough in its approach to rented accommodation, especially for students and other under-35s. In Nottingham that has contributed to the issues our city faces, but Labour’s plans would seek to address such concerns by providing more certainty, more stability, and greater protection for tenants and landlords alike.

Too many tenants and potential tenants face rip-off fees from letting agents. Landlords are being charged for services provided by the agent, and tenants are charged again for the same services. Despite facing fees averaging £355 every time they move, tenants continue to report difficulties in contacting their agents, and serious delays in getting repairs and maintenance completed. It is simply not good enough.

We need better management of the private rented sector, an end to rip-off agents’ fees, action to make three-year tenancies the norm, predictable rent rises, and more homes built to tackle the crisis in supply. Labour’s proposals have the potential to transform life for individual tenants and parts of my constituency that are suffering from the worst effects of the Government’s policies. It is astonishing that Ministers continue to oppose those proposals. Have they simply forgotten the thousands of people in Nottingham who are experiencing the greatest housing crisis in a generation? Well, we have not, and we will not.