Housing and Planning Act 2016 (Database of Rogue Landlords and Property Agents) Regulations 2018

Lord Thurlow Excerpts

Tuesday 17th April 2018 Lords Chamber

This is not about impatience on these Benches or on this side of the House; it is about tenants who today, two years after the Government changed their mind on banning lettings fees, are still waiting. This means that they are still being charged arbitrary amounts by agencies, as evidenced in the Government’s own research; they are still in danger of tipping into homelessness by moving to a lower rent with a high up-front fee; and they are still waiting for mandatory electrical checks. What is now the fast-track solution to the open register so that they can empower themselves and see for themselves whether or not to trust a landlord? The delay impacts on people who rent on a daily basis. So how are we going to move this forward at pace, given that it should have happened two years ago?

[Lord Thurlow (CB)]

I thank the noble Lord, Lord Kennedy of Southwark, for bringing forward this regret Motion, in effect completing the unfinished business of this part of the Housing and Planning Act 2016. Although they are not toothless, I feel that the proposals as they stand are somewhat pointless. There is no direct access to the rogues’ register for the public or for potential victims, and I see victims as an important part of this—those whom the register is really designed to protect.

I should declare my interests. I am the landlord of two residential flats. I am myself a tenant and I have, for 35 years, practised as a chartered surveyor in a firm that both rented out and managed properties. I feel very much in the cross-hairs of this debate, but I am pleased to report that to the best of my knowledge my firm did not deal with residential property. That said, I feel reasonably well qualified to comment.

Thinking about this regret Motion caused me to seek out reasons why one would not want to support it. I thank the House of Lords Library for its helpful and timely response to my question. I followed up its extensive leads and could find no good reasons to object to the Motion. I found not a soul arguing against transparency and openness of this data. The Act of Parliament is clearly not doing the job as intended.

There is a perceived misconception, I believe, about tenants. I am referring not to the privileged rich but to the average social or private residential tenant. There is an assumption that supply and demand applies in the usual way, but it just does not. Availability and quality do not balance the price of accommodation. There is a gross imbalance of supply, in favour of the landlord, as I am sure most of us know. Stories abound of instant queues for viewings of rented accommodation as soon as it becomes available. There is tender pricing and rental gazumping. All the cards are with the landlord and the landlord’s agent. Who is going to check with the local authority register at seven o’clock in the evening, out of hours? The potential tenant has time pressure to perform. The local authority is underresourced. Will it have an out-of-hours service? That is extremely unlikely, bearing in mind the fragile state of finances. If the bidder does not bid straightaway and make a very determined application to rent the flat concerned, the likelihood is that it will not be available in a day or two’s time.

Having managed to secure agreement on the terms, the next day the bidder might apply to the local authority. If they are lucky enough to get a quick response and discover that they are dealing with a rogue landlord, what do they do? Rightly, they withdraw. However, the next time they try to rent a property that happens to be with the same firm of agents, or conceivably with the same landlord—many are owners of very large numbers of residential properties, particularly in urban areas—they will find that they are blackballed because they are trouble-makers. No one has to say why they turn down a residential tenant. References are notoriously spurious. So perhaps there is more to it than just trying to encourage applicants to make contact with their local authority. I think that that simply makes the applicant’s predicament worse.

What about landlords? I have mentioned that some control a large number of properties, and the same applies to agents. I have also mentioned the all-powerful blacklist. We should bear in mind too that, although there are organisations such as the Residential Landlords Association, the RICS and others that try to set standards of behaviour and probity in the industry, there are no barriers to entry for those wishing to become a residential letting agent. Any one of us could start tomorrow. All you need is a telephone and, preferably, a suit. It is easily done. There is no policing and no comeback unless one breaks the law. Of course, good landlords have nothing to fear. If this measure really had teeth and really worked, and the register was transparent, they might even win more market share.

What are the solutions? The noble Lord, Lord Kennedy of Southwark, referred to the helpful letter from the Minister of 6 April, but this is unfinished business—it is not clear. What is needed is unequivocal access to the list by individuals. That is supported by ARLA, the Residential Landlords Association, the Mayor of London and the London Landlord Database, but direct government action is needed—unequivocal, impartial and expeditious transparency. We heard about expeditiousness from the noble Baroness, Lady Grender.

In conclusion, I have heard that the prosecution procedure can be long and arduous, and it is expensive for local authorities, which have limited budgets. I have heard that more escape prosecution than not—that for every prosecution, 20 more avoid it. Why? Luck, lies and leniency were the reasons given, and those come from a former practitioner in that space. At the end of the day, if people do get convicted, they receive a 12-month ban or a fine. To deter rogue landlords and agents, much longer bans and bigger fines are needed, as well as much longer exposure on the rogue landlords and agents list. I support the Motion.

[Lord Beecham (Lab)]

My Lords, I refer to my interests as a Newcastle City councillor and as a vice-president of the Local Government Association.

I have just checked the definition of a rogue landlord, which was given by the noble Baroness, Lady Williams, during a debate on the Housing and Planning Bill. The definition she gave was:

“renting out unsafe and substandard accommodation”.—[Official Report, 9/2/16; col. 2136.]

Up to a point, that seems to be reasonable, but that definition would not, for example, extend to the mistreatment or abuse of a tenant by a landlord. I wonder whether the term “rogue landlord” is sufficiently descriptive of the kind of problems that many people face as tenants of properties that might be not just in poor disrepair but where other aspects are making their life a misery.

I have encountered aspects of this recently in the ward I represent in Newcastle. I have twice had to call on the local authority to contact the landlord owners of properties where a large accumulation of rubbish was left undisposed by the owners for some considerable time—these were rented properties. In one property—it was a tenanted property and therefore, I suppose, in a sense the tenant must also bear some responsibility—there was a significant problem of rats for the very elderly lady living in the rented property next door owned by the same landlord I have mentioned, who lived across the street. This lady paid Rentokil £900 to dispose of the vermin in the adjoining property. That is an extraordinary situation, and I am not sure that those conditions would necessarily invoke any of the sanctions that are sought to be imposed on the “rogue landlord”. This is not an offence in that sense. Therefore, we need to look at what the terminology purports to cover.

I want to take the matter a little further. There is a process under which authorities can have a great deal more influence on what happens in the private rented sector, through what are known as selective licensing schemes. But these are difficult to prepare. In my own ward, having asked for action to be taken, I am told that apparently it takes between two and three years to convince the department that a scheme is necessary. In some areas—I believe Newham is one and I think there are one or two other authorities—the concept has been extended across the whole local authority. That seems to me much the best approach in dealing with this issue. I hope that the Government will look again at the practice and authorise and then encourage local authorities to apply for schemes across the whole area if it deems that to be the right approach. At the moment, as I said, it is a cumbersome and difficult process.

If we are to tackle the variety of problems caused by bad landlords—whether they are rogue in the sense that the noble Baroness defined it or in a broader sense because of failure to look after their property and tenants in a proper manner—the matter should not be confined in the way that is implied by the definition that was given to this House during the passage of the Bill. I hope that, in replying to the debate, the Minister will give an indication that the Government will look again at selective licensing and will facilitate and encourage it where local authorities deem it appropriate to deal with all manner of problems caused by the inadequacy, or worse, of some landlords who seem intent only on extracting the maximum amount of money for the minimum provision.