Unscrupulous Landlords

Lord Stunell Excerpts

Wednesday 8th September 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

I congratulate the hon. Member for Dagenham and Rainham (Jon Cruddas) on securing the debate and other colleagues on their potent interventions. In particular, let me mention my new colleague, my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert), and thank him for bringing to the attention of the House some of the specific and horrific examples that he described.

I think that everyone present understands the importance of the private rented sector in delivering affordable and suitable accommodation for households. As has been reported, there are 3 million private tenants in this country. In the area represented by my hon. Friend and in London, a much higher percentage—as many as one in five—are in private rented accommodation. The sector provides a lot of choice and flexibility at all levels of the housing market.

[Graham Jones (Hyndburn) (Lab)]

The Minister makes the point that there is quality provision in the private rented sector, but I should like to point out the situation in my constituency and the east Lancashire corridor, which probably reflects that in many areas of the country. In my area, 40% of properties do not meet the decent homes standard and 11% are unfit for human habitation; and within those statistics, it is predominantly the private rented sector that features. How can he say that there is adequate provision and no need for regulation when such squalid conditions exist? Urgent action is needed on rogue private landlords. The hon. Member for St Austell and Newquay (Stephen Gilbert) made the good point that environmental health officers are really struggling. The sector does need regulation, because such landlords are able to evade legislation. They are able to work round—

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[John Robertson (in the Chair)]

Order. The hon. Gentleman should not be making a speech.

[Andrew Stunell]

Indeed. I am getting a bit cramped for making my own speech, if I may say so, Mr Robertson. I shall just challenge the hon. Member for Hyndburn (Graham Jones) on one point. He says that 40% of the homes in his constituency are below the decent homes standard—a figure that I fully accept. I do not know what proportion of them are in the private rented sector—he did not say—but of course a lot of homes below the decent homes standard are not in the private rented sector, and I do not want him to get away with the idea that the coalition Government believe that there should be no regulation. On the contrary, I shall outline in a moment, I hope, what we think is there and should be there and what should be done to enhance the situation that we face.

The hon. Member for Dagenham and Rainham, in introducing the debate, was, I think, criticising my right hon. Friend the Minister for Housing and Local Government for saying that the vast majority of private tenants are satisfied with the service that they receive. Well, 75% of them say that, which I think is somewhat near to being a vast majority, but I certainly recognise that there is poor practice.

[Graham Jones]

Will the Minister give way on that point?

[Andrew Stunell]

I think that it would be a courtesy to the House if I continued with my speech at this point. Perhaps there will be a space at the end of the debate.

There is bad practice; a minority of landlords clearly behave in an unacceptable way; and the management of the poorest-quality stock is an issue. Those properties are often the ones that are occupied by the most vulnerable tenants, too. That causes real problems, as my hon. Friend the Member for St Austell and Newquay pointed out.

The Minister for Housing and Local Government is well aware of the position that some people face. He is also well aware of the Shelter campaign. I can tell hon. Members that he will attend a public meeting with Shelter in a couple of weeks’ time, when he visits the Liberal Democrat conference, so I am sure that if he is in any doubt, he will be able to understand the position fully there.

What can we do to tackle the problem? Local authorities already have significant powers. Some hon. Members talked about illegal action that has taken place. Illegal action can be confronted by local authorities, whether by environmental health or by rent officers. Indeed, in Liverpool, there is an interesting situation in which such action is being confronted by the primary care trust, which is also involved in local health issues. It is certainly our intention to work with those who have an enforcement role, to ensure that the barriers to them using their powers effectively are lifted. Of course, those are mostly powers that are given to local authorities, which is exactly as it should be. Where landlords fail to maintain their properties, local authorities can use the housing health and safety rating system to make a risk assessment.

[Graham Jones]

The health and safety rating system involves very minimum standards. Does the Minister not agree that it involves appallingly low standards and does not come anywhere near meeting the decent homes standard? When environmental health officers are asked to go round and look at properties, they have no power at all to make the house reach a decent standard, as has been pointed out by the hon. Member for St Austell and Newquay.

[Andrew Stunell]

I am not quite sure what the hon. Gentleman is asking me to do. If he thinks that there should be a legal requirement for private landlords not to let if their home is not of a decent standard, I think that that will give a number of social housing landlords problems as well. I fully accept his point that standards in some places are low and need to be brought up to standard. I was trying to illustrate the fact that local authorities have powers at their disposal to achieve that.

There is an extensive enforcement framework. Where high levels of hazard are identified—categories 1 and 2—the local authority can compel private landlords to make the necessary improvements. It can issue improvement notices and require property to be closed down. Failure to comply carries a fine of £5,000.

One of the points that the hon. Member for Dagenham and Rainham made was that there are repeat offences, and one of his questions to me was what the Government will do about repeat offenders. Repeat offenders go to the courts, and the courts will take the decision based on the facts of the case. I strongly support the hon. Gentleman in thinking that the courts should take those breaches very seriously.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Given that the legislation in place to pursue rogue landlords is not strong, and even if we take the Minister at his word that the current legislation is strong enough, is it not the case that when local authorities are being asked to make cuts of 25% to 40%, the ability to pursue those landlords will be curtailed?

[Andrew Stunell]

The reality that we face means that there will be less public money to spend. The policy of the Department for Communities and Local Government and of the Government is to devolve the priority-setting process to local councils. If local councils share the hon. Gentleman’s view that increased enforcement is an essential core activity that they must build up, they will have much more freedom to do that. They will have to set priorities, just as the Government have to set priorities.

Conditions in the private rented sector have improved. Since the early 1990s, the gap in the level of decency between owner-occupied and privately rented homes has narrowed. Indeed, on average, the private rented sector has become more energy efficient than the owner-occupied sector. I fully understand that averages disguise highs and lows, but we should not demonise one sector of the housing market without taking better account of the evidence.

Local authorities have powers in respect of management standards. Under the houses in multiple occupation regime, there are statutory requirements for HMOs of three or more storeys occupied by five or more people who form more than one household. It is a bit of a rigmarole to say that, but we know what we mean. There is also the power for local authorities to have discretionary licensing schemes in their areas, covering smaller HMOs that do not meet the mandatory licensing criteria where they have identified problems with management and property condition. Hon. Members will know that there is a selective licensing scheme to cover all privately rented property in areas that suffer from low housing demand and persistent antisocial behaviour.

As part of the previous Government’s localism agenda, local authorities were granted, from April of this year, a general consent to introduce discretionary licensing schemes without reference to the Secretary of State. It is right for local decisions to be made by those who are directly accountable to local communities. We certainly have no plans to repeal that power.

Licensing schemes mean that local authorities can impose conditions on licences, such as a specified maximum number of occupants and that adequate amenities are in place. Private landlords have to be identified as “fit and proper” in terms of their suitability to manage the property. That perhaps deals with the repeat offenders point from a different direction. A breach of a licence condition is an offence. Letting or managing a property that requires a licence without one could result in a maximum fine of £20,000. Given all that, the Minister for Housing and Local Government came to the view that there was no need for more regulation at present. We do not want to introduce new burdens for landlords that will discourage them from letting homes to those who really need them.

Several comments were made about the tenancy deposit protection scheme. Of course, that is statutory. It helps to ensure good practice in deposit handling, so that when a tenant pays a deposit and is entitled to get it back, they can be assured that that will happen.

Perhaps in the last second of the debate, I can say that when it comes to raising tenants’ awareness, I am entirely with the hon. Member for Dagenham and Rainham. I believe that it is of absolute importance that at national and local level, and by us as MPs, the point is made to tenants—