Property Guardians

Lord Beecham Excerpts

Monday 15th October 2018 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I refer to my local government interests as an honorary vice-president of the Local Government Association and a councillor in Newcastle. I join the noble Lord, Lord Shipley, in congratulating the noble Baroness, Lady Jones, on bringing this important issue to the attention of the House—such as it is composed of this evening. She is initiating a debate that will go rather wider than the small number of Members here tonight.

I first came across the concept of property guardians, as the noble Lord, Lord Shipley, indicated, in February 2016 during the passage through the House of the ill-fated Housing and Planning Bill. At that time, it was estimated that some 4,000 people were living as property guardians, often at high prices and, increasingly, in unsuitable living conditions. The properties involved were frequently disused former commercial buildings, often awaiting sale or major alterations. A Durham University academic, in the course of looking into the issue at the time, found one space formerly occupied by three people that was then occupied by 15. Properties used for this purpose, ostensibly to ensure that they were not vandalised, often had limited kitchen and sanitary provision and their owners paid no business rates.

I urged the then Minister, the noble Baroness, Lady Williams, who confessed to not being briefed on the issue, to bring forward an amendment to the Bill. She wrote to me and confirmed that,

“property guardianship schemes have a range of drawbacks”,

adding that buildings,

“may be in unsafe condition with inadequate physical security”,

and that guardians can be,

“required to leave at short notice”.

However, all that the Government proposed to do was to,

“publish a short factsheet on its website which explains that the Government does not endorse the schemes, that buildings may frequently be unsuitable to be used as accommodation and that an occupier of such buildings has very few rights”.

In Committee she said:

“The Government do not support the schemes”,—[Official Report, 9/2/16; col. 2223.]


but did not believe it was appropriate to apply the relevant parts of the Landlord and Tenant Act to guardianship agreements.

The noble and learned Lord, Lord Mackay of Clashfern, expressed sympathy with my view and wondered,

“whether it is possible to build something satisfactory on a foundation so unsatisfactory as a guardianship scheme for residential property”.—[Official Report, 11/4/16; col. 111.]

Alas, he still voted with the Government and my amendment to apply the Landlord and Tenant Act provision for human habitation and repairing obligations was defeated.

We now have between 5,000 and 7,000 people living as property guardians, mainly in London, as we have heard, no longer just young people looking for a cheap place to live and work for short periods but now up to 60 years of age and older and apparently staying for much longer than used to be the case—and still without the protection afforded by an assured shorthold tenancy.

The London Assembly’s housing committee report, published last February and referred to by both noble Lords, identifies many concerns, not least in relation to the condition of the properties: 22% relating to repairs and maintenance and 37% cited mould and condensation. The guardians are either unaware of or too worried to seek support from the local authority’s powers to address those issues. They even have to pay for fire safety equipment. For this far from satisfactory provision, York University has discovered that guardians pay an average of 37% of their income, which, in turn, averages £24,800 a year—the latter being significantly lower than the average for tenants of private rented property in London.

The Assembly report identifies a problem in that, where a commercial building is used for guardians, they have to pay commercial rents for utilities, phones and internet access, which can be much higher than for residential properties. In addition to regular costs of that kind, they may face difficulties in securing the return of deposits and, in addition, fork out an average of £148 for references, fire safety checks and criminal record checks.

It is also disturbing that some licensing agreements bar guardians from raising concerns about the property even with the owner, let alone the local council or, tellingly, local media. The report recommends that the mayor and the department should provide guidance about the legal rights of guardians and where they can access help. It would be even better if they could obtain legal aid and advice, although of course this is effectively limited in housing cases to eviction and repossession cases. Of course, any such recommendations would apply also to places other than London.

It is not just guardians who are affected by the system. The London report points out that guardianship can save owners up to £2,000 per week compared to engaging professionals, as well as reducing insurance costs. Of course, owners of properties with resident guardians will save the cost of council tax and empty business rates—up to as much as 90% for the latter. This is an issue which the Government should also look into.

The report makes a number of recommendations for the oversight and improvement of the sector in the context of a better system of regulation, citing the examples of the Netherlands—already been referred to by the noble Lord, Lord Shipley—and France. Crucially, the London report calls for clarification of what the Housing Act 2004 applies to property guardian premises and, if not, for the Government to bring forward the necessary legislation. Will the Minister undertake to look into these and other issues raised tonight and report back?

It is only fair to say that some businesses in this growing industry are adopting a responsible approach, as referred to by the noble Baroness in moving her Motion. Seven leading companies in the field, which provide 5,000 places—some 80% of the sector—have formed the Property Guardian Providers’ Association, aiming to promote, monitor and ensure safety standards and regulations are adhered to or exceeded by its members, securing temporarily vacant properties and providing safe and viable low-cost accommodation. In addition, it is issuing a set of benchmark standards, including: a redress scheme, under which a guardian can take a complaint to a redress panel; security payment protection, requiring members to prove that they have set up separate guardian accounts for payments and comply with rules for handling the accounts; and prescribing transparency of fees. I suggest that the Government should consult the association about developing a common standard for the whole sector and make this a condition of a licence to provide property guardianship schemes.

Guardianship should be limited to the type of property originally exemplified, where the notion of guardianship implies a temporary usage pending redevelopment for a non-housing use, and not extend to ordinary residential properties, for which of course, lamentably, there is already large unsatisfied demand. Those properties ought still to be available for either owner occupation or rent; as opposed to what was originally thought to be temporary occupation, where guardianship relates to non-residential buildings left vacant until such time as they came into use again.