Housing and Planning Bill

Lord Flight Excerpts

Tuesday 9th February 2016 Lords Chamber

[Lord Beecham]

My Lords, I may not be visible, but I rise to move Amendment 18 and speak to Amendment 27 in this group. Amendment 18 is about local authorities operating an accreditation and licensing scheme for private landlords and it would require local authorities to do it. A number already make this part of their work. In Leeds it has been particularly successful, with 332 landlords accredited, providing nearly 15,000 bed spaces. In a parallel scheme with the universities, some 20,000 bed spaces are covered by an accreditation scheme—so near enough 35,000 people are covered by such schemes. There is expense involved in running them and, in the present financial climate, it would be difficult for local authorities to progress the proposal in this amendment, unless there were government backing in the form of some funding. As I have already indicated, some funding is currently available. My own authority has benefited from it and, no doubt, others have too. Perhaps the Minister can clarify the position but I suspect that this has so far been something of an experiment to see how effective such investment might be. If these schemes are proving successful, I hope the Government will look at extending the programme elsewhere.

Amendment 27 is of a different kind. It would create a register of all private landlords and privately rented properties, to be maintained by local authorities. It simply registers where properties are so that local authorities know which properties are rented out and who the owners are. They can then use that information to inform landlords of their duties under housing legislation and under the recent, rather difficult requirements of immigration legislation, which, I suspect, is a considerable burden on landlords. It is also good property management practice.

The noble Baroness and I have not exactly crossed swords, but we have occasionally discussed the progress of the duty on owners to provide carbon monoxide alarms in their properties. I speak with some feeling about this, since my own carbon monoxide alarm has fallen down three times in the last couple of weeks and I cannot persuade it to stay in position. Better organised people no doubt can—and they certainly should when they are letting out properties. The programme that the Government launched in the summer was done without very much publicity or very much time. I understand that the Government intend to review matters only several months into the current year. If the Government —or, more specifically, local authorities—knew which were rented properties, they could direct the publicity to known landlords, rather than in general terms through the media. They could do this potentially in other contexts. It would be a very useful tool in assisting the good management of properties by responsible landlords. Otherwise, they may simply not come across the publicity around carbon monoxide or smoke alarms, for example. There is the potential here for the Government to create a situation in which councils and landlords can work together in the interests of tenants and, ultimately, landlords. It is not much use to a landlord having a property that has been exposed to fire or other damage, let alone the dreadful consequences of carbon monoxide poisoning.

I hope that the noble Baroness will look sympathetically at both these suggestions. They are designed to make sure that standards are maintained and to assist good owners to carry on responsibly the business in which they are engaged and thereby to protect their tenants. Ultimately, of course, it also protects their own property interests. It is in everybody’s interest that progress along the lines of these two amendments should be made. I beg to move.

[Lord Flight (Con)]

My Lords, I declare my interests as set out in the register, and will speak to Amendment 21, whose objectives I trust will command broad support. These are, in essence, to provide practical and low-cost measures to enforce existing laws to protect tenants from criminal landlords. If measures along the lines of this proposed new clause are adopted, I also believe they would avoid the need for new regulations.

The private rented sector has already become larger than the social rented sector, and PricewaterhouseCoopers estimate that, by 2025, 25% of UK households will be private rented homes. Such large increases argue strongly for greater scrutiny of how the sector operates. One of the main reasons for a lack of effective enforcement of existing laws is that there is no clear and systemic way of identifying the landlord of a property and how they can be contacted. This needs to be readily available, if both the enforcement of existing regulations and the taxation of landlords are to be effective.

There are also a number of other government policies which will work only if there is a way of knowing how to contact landlords. For example, the Government’s right- to-rent scheme—making landlords legally responsible for checking the immigration status of their tenants—needs the name and contact details of the landlord to be readily available for the Home Office to tell a landlord if a tenant is in the country illegally.

Within the Housing and Planning Bill, how can government expect their proposed rogue landlord database to work if there is no systemic way of identifying such landlords? How can HMRC seek to claim tax for which a landlord may be liable if there is no ready way of finding him?

The case for a clear and systematic way of identifying landlords is, I suggest, compelling. A national register of landlords has been suggested as a solution to this issue. The problem is that it would be only the good landlords who readily identified themselves. What landlord, flouting his legal obligations, would voluntarily come forward to make himself known?

In 2014, a report on the regulation of private rented housing was produced by Michael Ball, professor of urban and property economics at Reading University. He noted that such registration schemes fall back on the threat of penalties for those who fail to register to try to ensure that higher numbers do so, but that such threats are unlikely to impress the worst landlords because of the more draconian penalties they would be likely to face if their poor practices were found out. They are thus unlikely to co-operate.

Ministers have claimed that the Bill already includes measures that will allow local authorities to access information held by tenancy deposit schemes to assist with the enforcement of regulation. This is certainly a welcome move to better use the data which are already available. However, councils will be expected to pay to access such information, which may deter many authorities. Also, the measure would not help local authorities find landlords who do not abide by their legal obligations as they relate to tenancy deposit schemes. Recent research has found almost 300,000 landlords still not complying with deposit protection rules.

The solution is, in essence, to ask the tenant. That is what this amendment is about. Something similar was promoted by Dame Angela Watkinson MP, in the other place. The amendment would make it compulsory for local authorities to ask tenants to provide on their council tax registration forms details of the property’s landlord or managing agent. Thus collected, the information should then assist local authorities to enforce all regulations pertaining to the private rented sector as well as support other government policies, such as the right to rent and the rogue landlords database, which require knowing where landlords can be contacted. Local authorities would also have an up-to-date picture of the size of the private rented market in their area, enabling better evidence-based policy. It could also be used as an invaluable tool to communicate with landlords.

--- Later in debate ---

[Baroness Hollis of Heigham]

I am grateful to the noble Lord for giving way. I understood that Amendments 24 and 25 were in the 11th group, but perhaps I missed some earlier realignment of amendments.

[Lord Flight]

The noble Baroness is entirely correct. That is why I asked the indulgence of the Committee quickly to address them now. That is for two reasons: first, they relate to Amendment 21 and, secondly, as I have given notice, I may not be able to be here when they are called later, for some particular personal reasons.

[Baroness Evans of Bowes Park]

No, I fear we must stick with the group of amendments that we have.

[Baroness Hollis of Heigham]

I am sorry to be a misery on this, but it is rather difficult because, when we get to that point in the debate, we will not be able to debate the amendments. They are quite some distance away; they would have needed to be grouped.

[Lord Flight]

I am bound by that judgment, but I did ask the Whips’ Office and was given permission so to do.

[Lord Campbell-Savours]

My Lords, I am not sure that the Whips’ Office has jurisdiction in these matters. The amendment in the name of the noble Lord, Lord Flight, deals with a local authority’s arrangements for gathering council tax payments and business rates. However, there is another very important form of taxation when discussing these matters, which is taxes raised by the Inland Revenue—that is my explicit interest in Amendment 16, as spoken to by the noble Baroness. We now have a booming rental market in the United Kingdom, with programmes on television promoting buy to rent and organisations issuing leaflets and sending them to people’s homes explaining the benefits of buy-to-rent arrangements. A lot of people should be paying taxes on rental income.

Take a flat in London with two bedrooms, costing £500 a week or £25,000 a year. There will be many examples in London of people gathering in very substantial rents, even on just one property, who through some means or another are simply not declaring it to the Inland Revenue. Any system, including the system promoted by the noble Lord, Lord Flight, would be helpful in itself, but the system proposed by my noble friend, of a mandatory register of all private landlords, would certainly be very helpful in enabling the HMRC— which I keep referring to as the Inland Revenue, being a bit old-fashioned about these matters—to identify those people who should be paying tax on their rental income. The Inland Revenue are missing a trick here, because I suspect that there are probably billions in unpaid taxes on rentals which are not declared to the Revenue.

[Lord Greaves]

My Lords, I have Amendment 33A in this group. I do not want to say too much but give general support to the two amendments spoken to by the noble Lord, Lord Beecham, which tackle the question of the register from opposite ends but which are mutually complementary, as far as I can see—there are two different purposes but both would be desirable. There are two points in this amendment.

First, it is our view that wherever possible, local authorities should have discretion over what they do, and therefore this question of whether a local register of private landlords should be set up and collected should be a matter for the local authority concerned. For all the reasons put forward by the noble Lord, Lord Beecham, and indeed to a degree by the noble Lord, Lord Flight—as well as those in the very interesting contribution from the noble Lord, Lord Campbell-Savours, which bring in a different dimension altogether—I suspect that most authorities would want to do it, because of the value there would be. However, the real reason we would like to see it is for local housing purposes, to enable a local authority to maintain proper scrutiny over the private rented sector in its area and to more easily take action when action is required. My amendment is a statement against “one size fits all”-ism to some extent, but if the Government were minded to set up the kind of register that the noble Lord, Lord Beecham, is proposing, and it were compulsory for all local authorities, I do not think we would squeal too much.

Secondly, it seems to us that a register ought to pay for itself. An ordinary register would not be terribly expensive to run, and it ought to pay for itself rather than requiring further contributions from local authorities. Those are the two reasons for my amendment.

I listened carefully to the contribution of the noble Lord, Lord Flight. I am not sure that the council tax register as such would be a particularly efficient way to do this, since as I understand it, people only really register for council tax in the sort of sense he is talking about when they are new residents in a property. Over a period of time, they might well provide the information he wants, but in the short run I do not think they would, because people simply pay the bills they get each year rather than filling a form in to register again afresh each year. No doubt these are details which could be discussed.

[Lord Flight]

I think I need to respond to that. Yes, it is correct that this would essentially be when a new residence starts, but there could be a simple form that went out with regular council tax demands.

[Lord Greaves]

Indeed, but it would not be compulsory to send it back—or perhaps it would if the legislation said that it was. Equally, it might be more efficient to do it with the electoral register. I do not know, but I am sure it could be done. However, there is a growing consensus on this, and sooner or later Parliament will have to legislate on the Government’s behalf. Registers of private landlords are going to be required for a number of varied purposes, which have been discussed around the Committee today.