Renters’ Rights Bill [HL]

Lord Best Excerpts

Committee: 1st sitting (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I extend strong support to my noble friend Lady Grender for this amendment and for her Bill as a whole. This amendment really matters, given the current state of housing supply. It was reported this week that in the last five years, local government spent £3.5 billion on temporary accommodation for homeless people. I declare my interest as vice-president of the Local Government Association. The main reason for that spending is the cost of accommodation. One of the contributors to it for individuals is the up-front costs they have to pay, which in very many cases have become too high. This creates a barrier to people moving into a home.

As my noble friend pointed out, because tenants in the private rented sector tend to move more frequently than in the public social housing sector, the costs can be more frequent and become increasingly unaffordable. Removing the up-front cost from the tenant is the right thing to do and I hope that whatever happens to this Private Member’s Bill, the Government will take on board how serious this issue has become. I understand there is to be a housing supply White Paper some time after the Autumn Statement next week. Whether that comes in December or January—perhaps the Minister can help us with that—who funds what in the private rented sector has to be addressed, and for that reason my noble friend Lady Grender has our full support.

[Lord Best (CB)]

My Lords, I thank the noble Baroness, Lady Grender, for her work on the Bill, which highlights a number of key issues affecting the private rented sector. She introduced her amendment with one or two rather broader points about the private rented sector, which enables me as well to say something of a slightly broader nature.

At present, there is a real fear that as shorthold assured tenancies within the private rented sector, to which the noble Baroness referred, gradually terminate, tenants in receipt of housing benefit or universal credit will be rejected by landlords who will find a gap between the amount the tenant can pay using their housing benefit or universal credit and the market rent which the landlord can easily obtain. While that gap exists, landlords will want to see tenants currently in receipt of housing benefit or who in future will be on universal credit out of their accommodation. This is not simply cruelty; this is the market. It will be unwise for a landlord to continue to let to people who have a big shortfall between the amount they receive to pay their rent and the actual rent they are being asked to pay. Even generous landlords who are prepared to go half way will still find that they are in a very uncomfortable position if they know that the people from whom they are asking the rent do not have the money to pay it. They know that there will be trouble over time, so how much better to take a couple, both working, who can afford the rent?

I see a position in which, gradually over a period, virtually all those in high-pressure areas such as London who are currently letting to tenants on housing benefit will wish to see those assured shorthold tenancies terminated, so those tenants will be outside the private rented sector. Sadly, I fear that the social housing sector will find it very difficult to cope with the pressure that that will bring as all those tenants are shed. We are sure to see homelessness grow. I am indulging in some broader comments before addressing some aspects of Amendment 1.

I declare my interest as chair of the Property Ombudsman Council as well as my other interests as set out in the register. I fear that chairing the ombudsman service, which looks after complaints about agents and therefore about fees and the transparency issue that is being debated, prohibits me from using this platform to comment today.

I shall draw attention to one way in which this issue may be taken forward, if the Government feel unable to accept Amendment 1 today. I am leaning on the precedent created by the noble Baroness, Lady Hayter, who, during the passage of the Housing and Planning Bill pressed for an amendment that would place a requirement on managing and letting agents to take out client money protection insurance—this being a proxy for being a respectable body in many cases. Her amendment to place a requirement on agents was not accepted in the context of the Housing and Planning Act 2016, but the Government agreed to take the issue away and create a working group to look in depth at the issue. I suggest that if the Government feel unable to accept Amendment 1, they might think that that excellent precedent, which has now been brought to fruition with DCLG civil servants hard at work looking at these issues under the chairmanship of the noble Baroness, Lady Hayter, might be repeated in this context—in which case I hope very much that the noble Baroness, Lady Grender, could play a leading role in such a working group and I ask the Minister to consider it.