Private Rented Sector

Luciana Berger Excerpts

Wednesday 23rd January 2013 Commons Chamber

[Jack Dromey]

I will come later to the precise point of how to move to longer-term tenancies by linking them, for example, to indexed rents.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Will my hon. Friend give way?

[Jack Dromey]

I would like to make some progress.

On the problems facing both landlords and tenants, a landlord from Yorkshire who wrote to me about his letting agent told me that the agent planned to charge his tenants—a young couple—£400 just to renew their tenancy agreement, and planned to charge him £100. That is £500 for a 15-minute job. The landlord said that the tenants could not afford to renew and he was in danger of losing the tenancy. As he put it, this is an example

“of the rip off charges that these agencies charge and the further pressure that this then puts on the housing market in these tough economic times.”

This is not just about the fees that letting agents charge; many of them are entirely unregulated and provide no protections to their customers, whether they be tenants or landlords. More than 4,000 managing and letting agents are entirely unregulated. It is possible to set up a letting agency with no qualifications whatsoever. There are no requirements on their conduct or safeguards for the consumer and, unlike estate agents, there is no need to register with a redress scheme whereby awards can be made against agents for financial loss to clients. In other words, letting agents operate in the property market’s “wild west”, as the Royal Institute of Chartered Surveyors puts it so well.

The RICS are not the only chartered surveyors who back the regulation of letting and management agents. The Minister for Housing tabled an amendment to a Bill in 2007 on behalf of the then Conservative Opposition, to regulate what he called

“an industry that now handles over £12 billion of people’s money annually and yet, ironically, it is an industry that is without…redress”.

He argued that, as a Conservative, he was

“instinctively cautious about arguing for more regulation. However, as a chartered surveyor and a constituency Member of Parliament, I know that we need to put lettings on the same regulatory footing as sales.”––[Official Report, Consumers, Estate Agents and Redress Public Bill Committee, 24 April 2007; c. 190-192.]

I agree with him. Does he agree with himself, or does he agree with his predecessor, the right hon. Member for Welwyn Hatfield, who scrapped such proposals? Surely multiple identities are not a prerequisite for the position of Housing Minister.

--- Later in debate ---

[Jack Dromey]

My hon. Friend is exactly right. The evidence is that in excess of 40% of people in Newham might soon be living in the private rented sector. I commend Newham council and the admirable leadership by its mayor, Sir Robin Wales, for introducing a licensing scheme, initially in Little Ilford and then borough-wide, and, as a consequence of effective local enforcement action and the licensing arrangements, uncovering, exposing and tackling problems of appalling abuse.

[Luciana Berger]

I thank my hon. Friend for kindly giving way; he is being very generous with his time. He is rightly highlighting some of the terrible conditions in the private rented sector in which some of our constituents live. He will know that the private rented sector has some of the most energy inefficient properties. and that people who rent spend the most on their electricity and gas bills, paying for heat that escapes out of their properties rather than keeping them warm. Does he therefore share my disappointment that the Government did not take the opportunity, in the Energy Act 2011, to introduce a minimum efficiency standard in the private rented sector? Instead, from 2018, they are insisting that landlords must introduce a green deal package, but that will not necessarily lift the property above an F or G rating.

[Jack Dromey]

My hon. Friend is right. What we need is a decent homes standard that extends across all homes for rent, public and private, and includes energy efficiency.

A survey carried out by Shelter found that complaints against landlords increased by 27% in the past three years, rising to more than 85,000 last year. These are not minor matters: 62% of those complaints are related to serious and life-threatening hazards, such as dangerous gas and electrics, and severe damp.