Private Rented Sector

Lindsay Hoyle Excerpts

Wednesday 25th June 2014 Commons Chamber

[Mr Prisk]

There is a case for registers in individual local authorities but, as the Select Committee agreed, a national register applied on a rigid basis is not the answer.

On standards in the sector as a whole, there is a case for a more professional rented sector. As several hon. Members have said, a minority of landlords and letting agents provide what is, at best, a shoddy service; in some cases, they flout the law and in others they have a wanton disregard for tenants’ safety. More can be done, and I encourage the Minister to focus on houses in multiple occupation. That subsector is the source of some of the worst practices, as hon. Members may know from their constituents, and often people on the lowest incomes and students are caught in it. We have legal powers in place to deal with this, but perhaps a little elbow grease from Ministers, a little Whitehall direction, and a little support and encouragement from local councils could make a real difference. Let me highlight one aspect of this issue. We need to look not just at the urban, larger HMOs in places such as Headingley in Leeds, but at some of the smaller HMOs—the two-storey houses. I am talking about the ones where, as I have discovered in the fens, HMOs are serving seasonal workers and are very often the source of dreadful practices and wider criminality.

On the letting agents issue, which the Opposition have flagged up in their motion, I am proud that it is this Government who are giving tenants proper powers of redress. The ombudsman scheme, backed by a clear code of practice, is long overdue and it will enable us to start to drive up standards of service. Let me remind the House that when in government the Labour party spoke against and voted against those redress measures for tenants. This House needs to remind not only itself but tenants whom we serve that that is where the Labour party stood for 13 years—it refused to support additional redress for tenants—and the party should be ashamed of that record.

Labour’s proposals on banning fees are well intentioned, because we have seen some dreadful practices, but the measures do not deal with the root cause of the practice among letting agents; what they would do is help to tackle one symptom. As questioning from my hon. Friend the Member for Enfield North (Nick de Bois) highlighted, Labour’s proposals contain nothing to prevent agents from then charging the landlords instead, which will lead to higher rents. So, by the back door, a well-intentioned piece of legislation would lead to an unintended consequence that costs tenants more. It is a very familiar story with the Labour party. What we need is a sector-wide agreement, one that sets higher standards for the quality of the homes provided, the type of leases offered and the level of customer service that tenants can expect. That is the way forward. We want a comprehensive approach and not a quick fix.

We have a great opportunity to put in place permanently a genuine and stable private rented market. For too long, this House has tended to divide blue and red on the issue of tenure. It is, “Home ownership is perfect” or “Social housing is perfect.” We need to move on and recognise that we need more homes to rent, more subsidised homes to rent and more homes to own. Unless we focus on supply and play the game in terms of ensuring that the whole market works, we will fail. A modern economy needs a dynamic, open and competitive private rented sector, and it needs tenants who can rely on what is a professional standard. It should be a market in which the customer, and not the provider, leads.

We are, as a Government, making good progress. The policy direction is right, but I say to Members on both Front Benches that there is more that can be done.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Just before I bring in the next speaker, may I say that if a Member is declaring an interest in the subject, they should say what the relevant interest is rather than saying it just in passing? I say that to help Members in the future.

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[Dr Huppert]

That still seems to be a recipe for letting agents wilfully to turn people down on the basis of their credit checks, or to be very difficult in order to make money. That is the problem I have with that proposal. Letting fees should be limited and capped, but I am happy to talk further to the hon. Lady about that. I expect that 15 seconds is not quite long enough to resolve the disagreement on that.

We should get rid of letting fees. Studies in Scotland by Shelter which have been mentioned found that the increases in rent that one might expect did not take place.

Transparency, to which the Government are committed, is welcome. I support that. There is such an imbalance in power between the tenant and the landlord—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Time is up. I call John McDonnell.

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[John Stevenson (Carlisle) (Con)]

I remind the House of my declaration in the Register of Members’ Financial Interests. I would like to start—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I mentioned earlier that Members should declare interests that are relevant to the debate, so we need to know the details.

[John Stevenson]

I am a landlord, Mr Deputy Speaker.

I will start with two general points on housing policy. First, the United Kingdom has three distinctive housing sectors: home ownership, social housing and the private rented sector. In many respects we have Government policies for each sector. I acknowledge that they are different, but they are often seen in isolation, rather than as part of an overall housing strategy with policies that help all three sectors and create greater consistency and overlap between them.

Secondly, we have housing policies for the whole country. I accept that we need a national framework, but I believe that we need greater flexibility so that different parts of the country can adopt slightly different policies to reflect their particular circumstances. The reality is that we have many different local housing markets, and not just in the private rented sector, but in the social housing sector and, indeed, in home ownership. Compare my constituency of Carlisle with London, for example. Even within Cumbria, the lake district market is incredibly different from that of Carlisle. Prices in London and Carlisle are so different. The social housing requirements in Carlisle are very different from those of Manchester, and the same is true of the private rented sector.

I will turn now to the private rented sector. The Communities and Local Government Committee’s report on the private rented sector states:

“The market is a developing one which we need to help edge its way towards maturity. This requires a careful balancing act which does not upset the market developing naturally.”

It is a balanced report that drew support from both sides of the House. It was endorsed by Opposition and Government Members. It recognised that the market is relatively young and effectively immature, but that it has been and is developing. It acknowledged the rapid growth there has been in the market and the creation of a large number of accidental landlords, which brings its own problems. I commend the report to the House. I am delighted that the Government’s response accepted many of its recommendations.