Cost of Living: Private rented sector

Lloyd Russell-Moyle Excerpts

Tuesday 18th July 2023 Westminster Hall

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

My hon. Friend is making an excellent speech. Does he acknowledge that we have more houses now per head than we did in the 1950s? It is not just a crisis of the number of units but, as he has just said, it is the tenure of those units that is vitally important. If we do not get that mix right, the crisis will not be solved.

[Andrew Western]

My hon. Friend is right and, like him, I look forward to a Labour Government ensuring that social rent is returned to the second highest form of tenure. We retain a significant shortage of homes overall. We are nowhere near where we should be, compared with the European average. He is correct, and I agree, that we are in desperate need of a significant increase in social homes, up and down this country.

Conservatives seem to have given up on building, as demonstrated by their capitulation on housing targets, which will leave house building at its lowest since the second world war. Only last week, we learned that, under this Government, we are in a situation where, despite the UK being short of approximately 4 million homes, the Department that is meant to build those homes is handing back £1.9 billion to the Treasury after failing to find housing projects to spend it on. I am pretty sure that, had the Minister sought advice or support from Members in this room and beyond, that money could have been well spent.

Thankfully, Labour has not given up on house building. Reforming planning rules, reintroducing house building targets, building on parts of the green belt that are in fact far from green, and, as I have just discussed with my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), restoring social housing to the second largest form of tenure will be key drivers in our mission to achieve the fastest growth in the G7.

I congratulate the shadow Minister, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), on all his work to raise this issue and to promote house building but, as he knows, I would go further still. Our 76-year-old planning system needs to be scrapped so that we can shift away from a discretionary system at the mercy of nimbyism towards one that is rules-based, underpinned by a flexible zoning code and determined nationally for local implementation. Only then will we be sure that we can build the number of homes, and the types and tenures of property, that we require.

[Lloyd Russell-Moyle]

Does my hon. Friend welcome the Labour party’s proposal to empower local councils to set up development bodies, which would not only be reactive in the planning policy debate, but would be proactive, in the sense that they could buy up land at the current land-value cost rather than inflated future costs, and develop it themselves or with partners?

[Andrew Western]

My hon. Friend makes an important point. I welcome the Labour party’s commitment not only to end the hope value that exists in the sale of land at present but, as he says, to introduce the vehicles that empower local authorities to build. As a formal local authority leader, I know how challenging it is, particularly without a housing revenue account, to build those homes, and therefore to influence the place-shaping of communities. It is imperative that local authorities can do that to ensure that we get the homes that our local neighbourhoods require.

--- Later in debate ---

[Sir Christopher Chope (Christchurch) (Con)]

It is a pleasure to speak under your chairmanship, Dr Huq.

I had not intended to participate in this debate, but having listened to what the hon. Member for Stretford and Urmston (Andrew Western) said in introducing his debate, I wondered where the issue of supply comes into this equation. The crisis in the rented housing sector is largely one of a lack of supply. When I had the privilege of being a junior housing Minister in the 1980s, we transformed the supply of rented housing by introducing the Housing Act 1988, which freed up tenancies and introduced shorthold tenancies. It enabled those with surplus accommodation to let it out through agreements under which they realised that, if they wanted to recover possession, they could do so at a time of their choosing and by agreement with the tenants. As a result of the 1988 Act, the supply of private rented housing in this country soared, and the sector was completely transformed for the better.

[Lloyd Russell-Moyle]

Does the hon. Member recognise that 50% of former council houses that have been sold off are now just rented out, rather than providing stable homes? The reforms that he talks about have led to an increase in private rents above and beyond the inflation in the housing market, less home ownership, less stability in the housing market and more insecurity. They have partly caused the crisis that we are in now.

[Sir Christopher Chope]

Obviously, I do not accept that analysis, and I certainly do not accept the hon. Gentleman’s proposition that, just because somebody lets out a property that used to be a council property, that somehow means it is a meaningless value to the person renting it. If a former council tenant buys a house and ultimately chooses to let it out, that property is available in the private rented sector. On supply, a lot of people in that sort of situation are now withdrawing their properties from the rental market, thereby reducing the supply and forcing up pressure on costs and rents.

[Lloyd Russell-Moyle]

Does the hon. Gentleman agree with the chief executive of the National Residential Landlords Association that it is a myth that landlords are leaving the market, that in fact the private rented sector is growing, despite further regulation, and that there is no evidence that the private rented sector is being vacated? Some people are leaving, but more people are joining.

[Sir Christopher Chope]

I do not accept that, because I have looked in vain at the impact assessment that accompanies the Renters (Reform) Bill—I looked at the latest iteration a couple of weeks back—and the Regulatory Policy Committee condemned that impact assessment as totally inadequate in dealing with the consequences of the reforms for the supply of housing from the private rented sector. The Government’s own impact assessment does not answer the question as to the quantity and quality of private rented accommodation that would be available were those reforms to be implemented. One can only assume that the Government either do not know the answer to that question or do not wish to disclose it.

As somebody who believes in the market, my instinct is that, if we put pressure on potential suppliers of a product through regulation, the likely consequence is that the potential suppliers will withdraw some of that product from the marketplace. That is exactly what is happening at the moment. One of the figures used by the hon. Member for Stretford and Urmston in introducing the debate was the large increase in section 21 evictions. My understanding—admittedly, it is only anecdotal—is that that is because private landlords now feel that they are going to be squeezed by both a nominally Conservative Government and the prospect of a real socialist Government, both of whom are basically anti-private landlord and are determined

The Renters (Reform) Bill has only been printed and had its First Reading—it has yet to receive a Second Reading, which is a complaint from the Opposition—but I hope the Government withdraw that legislation, because the mere fact that it has been printed in the form of a Bill is driving a large number of people away from renting out their private homes and causing them to bring property back under their control, with a view to selling it. A lot of the property that is available for sale at the moment is property that was formerly rented.