Mark Prisk
Main Page: Mark Prisk (Conservative - Hertford and Stortford)Private Rented Sector
Mark Prisk Excerpts(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Minister for Housing (Mr Mark Prisk)
That final comment was slightly laboured. I did table a probing amendment—as all good Opposition spokesmen do—but will the hon. Gentleman explain why the Labour Government refused to act on it?
Jack Dromey
I welcome the hon. Member’s support, which I presume will read across into supporting the Opposition motion before the House today.
Regulating letting agents would protect tenants and landlords, and raise the reputation of an industry that Which? recently ranked second from bottom across 50 consumer markets. The Opposition hope that the Government will support the proposals and back our motion today, not least because the proposals have the support of the entire sector—the Association of Residential Letting Agents, the National Landlords Association and the British Property Federation. We also hope that the Government will recognise that the private rented sector simply does not provide the 1 million families with children, and other tenants in the sector, with the stability and security they need.
The Minister for Housing (Mr Mark Prisk)
I beg to move an amendment, to leave out from “recognises” to the end of the Question and add:
“the importance of a vibrant private rented sector in providing a diverse range of quality accommodation to those who do not want or currently cannot buy their own home; supports action to be taken against the small minority of rogue landlords, without burdening the whole sector with unnecessary costs; warns that excessive red tape would force up rents, reduce choice for tenants and undermine future investment; believes that the Government should work with councils to promote their wide range of existing legal powers; welcomes the Government’s action against ‘beds in sheds’ criminal landlords and steps to tackle social housing fraud; and supports the Government’s new £200 million ‘build to rent’ fund and the £10 billion in debt guarantees for investment in the long-term rental market.”.
I very much welcome this debate, and I note your opening remarks about needing to be brief, Mr Deputy Speaker. I shall do my best to ensure that all Back Benchers can participate with their own contributions. This is an important debate because, as the hon. Member for Birmingham, Erdington (Jack Dromey) rightly said, it is about a part of the housing market that is of growing importance and concern to Members across the House. We have tabled an amendment to the motion, because we believe it is flawed. However, some of the aspirations behind the debate are shared across the House, so I would like to try to take a constructive approach to what I hope will be a positive debate.
Mark Pawsey
The Minister and the shadow Minister will both be aware that this subject is about to come under investigation by the Select Committee, which will take evidence from many of the bodies to which the shadow Minister referred and will be coming forward with recommendations within the next two to three months. Does the Minister agree that this debate would be more appropriately held after we have heard that evidence and come forward with some proposals?
Mr Prisk
I hope the Opposition have listened to my hon. Friend’s eminently wise advice about timing, but we are where we are. I will certainly want to look at what the Select Committee has to say.
As a Government, we recognise the growing importance of the private rented sector in meeting our constituents’ housing needs. Indeed, as we have heard, some 8 million people now rent privately. Home ownership, of course, remains a goal for most families, and we strongly support that ambition. Let us be clear, however, that home ownership is not for everybody. Many younger people need the flexibility that the rented sector offers. Even those who want to buy will rent while they are saving for their deposit, so a bigger private rented sector is very much here to stay.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Does the Minister accept that rents are rising—both in London and across the country—and that this is causing considerable difficulty for people in the private rented sector?
Mr Prisk
It is a mixed picture. I appreciate that in the hon. Gentleman’s part of north London the pressures might be different from those in the rest of the country. If we look at the official Valuation Office Agency numbers, we find that the figures are recorded as static. It is, as I say, a varied picture across the country, and we need to be alert to that important point.
Grahame M. Morris (Easington) (Lab)
The Minister points out that some people do not wish to buy and are happy to rent. Does he recognise the term “generation rent”, whereby 1 million families want to have their own home but cannot because they are trapped in a rented property?
Mr Prisk
I recognise that we have had a dysfunctional housing market, whether it be owner occupied or rented, for 15 or 20 years. Indeed, we saw the rate of house building drop substantially under the last Administration. This is something that has crossed Governments of both political persuasions; it then shows itself when some people are unable to transfer from one part of the market to the other. I take the point, but we need to recognise that this is a long-term challenge.
I said we wanted this to be a bigger sector, but we also want it to be a better sector, providing tenants with a good choice of decent, reasonably priced accommodation. It is true that the majority of privately rented homes fit that bill today, but it is not true of all of them. As constituency Members of Parliament, I am sure that we will all have come across individual, sometimes appalling, cases involving unfair charges, poor quality accommodation or, frankly, just shoddy service. I think we can agree on the need to improve the sector; the question is how.
As a Government, we believe that many of the current problems are a consequence of years of under-supply. Over the last 15 years, that gap between supply and demand has grown, especially after the crash of 2008. In some areas, as I said to the hon. Member for Easington (Grahame M. Morris), rates will have risen because there are not enough homes to meet the demand. The quality of accommodation, let alone the service, will have suffered when landlords who face little competition rent out their properties. Expanding the supply of rented homes lies at the heart of our strategy. That is why we have taken the radical step of establishing a debt guarantee scheme of up to £10 billion specifically to encourage institutional investment in the sector. Alongside that, we are putting in place a £200 million build to rent fund to kick-start innovative projects.
The new investment will not only boost supply but bring a different type of institutional landlord into the marketplace. This will bring much greater choice for tenants with regard to the type of property and facilities and indeed the terms of the tenancy. These institutional landlords will also bring a longer-term perspective, often of 25 or 30 years. That brings the opportunity for greater stability for tenants, and it also means that we as policy makers need to ensure that what we set is clear and consistent over that time frame.
Graham Jones (Hyndburn) (Lab)
Will the Minister applaud Labour-controlled Hyndburn borough council, which has brought in an institutional investor—a pension company—to refurbish some 200 properties in the Woodnook area in Accrington? It has featured extensively in the housing press, and was on “The One Show” last night.
Sir Peter Bottomley
My hon. Friend rightly mentioned longer time scales. Will he inquire whether it would be possible—not today, but in future—for the Ministry of Justice and his Department to examine cases dealt with by the Leasehold Valuation Tribunal involving Mr Joseph Gurvitz, the Peverel company and the Tchenguiz family businesses, and to establish what lessons can be learned from them?
Mr Prisk
I will look into those cases very carefully—I am aware of them—but I think that it would be wiser for me to take no further steps. My hon. Friend has made his point, however, and it is a good one.
We recognise that competitive pressures alone will not eradicate bad practice among landlords or, indeed, among letting and management agents. Private tenants include many of society’s most vulnerable groups, people who may not be able to negotiate and who may not even be aware of their rights. There will always be an important role for regulation in the protection of tenants: sensible, well-balanced regulation to ensure that homes are safe to live in, tenants’ deposits are protected, and tenants are not misled when signing a lease. For that matter—to be fair, the hon. Member for Birmingham, Erdington made this point himself—regulation is also needed to protect landlords from rogue agents, or from tenants who routinely do not pay their rent.
Graham Stringer
I am grateful to the Minister. He is making a great deal of sense, but there is a third category of people who often need protection: neighbours. In many instances, landlords are in cahoots with appalling tenants, and use the antisocial behaviour of those tenants to drive other people out of, in particular, terraced houses, so that they can buy up the whole terrace. Does the Minister agree that, although the Housing Act 2004 and the licences that resulted from it were an advantage, local authorities need to be able to take immediate and direct action in such instances?
Mr Prisk
If the hon. Gentleman will give me some of the details of an individual case, I will double-check, but I am fairly sure that the necessary powers are already available to local authorities. However, he is right to raise the issue of antisocial behaviour. I shall not be referring to it specifically in my speech, but I believe that it causes genuine misery to decent tenants.
I have mentioned the need for regulation, but it must be said that much of it is already in place. Let me give some examples. The Consumer Protection from Unfair Trading Regulations 2008 give tenants specific protection from letting agents who mislead or engage in aggressive business practices. Tower Hamlets took advantage of those regulations recently. The Unfair Terms in Consumer Contracts Regulations 1999 protect tenants from unfair conditions, such as unfair restrictions on ways in which they can use a property. If a landlord unfairly withholds a tenant’s deposit, the tenant can already seek redress through a Government-sponsored tenancy deposit protection scheme which covers about 2.5 million tenancies. The worst abuses—harassment and illegal evictions—are already criminal offences.
We have seen that trading standards can and will prosecute letting agents. There is a good example in West Bromwich, where a letting agent, Mr Dhuga, was taken to court by Sandwell council’s trading standards team, He had been falsely claiming that his business was a member of the Property Ombudsman scheme, and a member of this and that. Sandwell won, and as a result Mr Dhuga will have to pay more than £6,000 in fines and costs. I congratulate Sandwell on bringing the prosecution and on publicising the case in order to deter others.
However, more can be done. Last year, for example, we became aware of a number of landlords in parts of London with tenants in outbuildings, or “beds in sheds”. The hon. Member for Birmingham, Erdington gave an example in Newham. These are complex situations. Often, alongside the housing issue are illegal immigration, tax evasion and other criminal activities. We recognised that to root out those rogue landlords, the enforcement agencies needed to work differently and much more closely together. My predecessor developed a new, collaborative approach that can tackle complex problems on the ground. We then provided an additional £1.8 million to help local teams, particularly those in nine areas; even on one of the early raids 39 people were found to be in appalling conditions, and that has put a stop to it. Of course, the “beds in sheds” case is slightly unusual, but it has shown that we can, and should, make much better use of existing law to tackle the minority of rogue agents and landlords.
The Opposition’s motion contains a number of ideas that were recently trailed in a speech by the Leader of the Opposition. Some of the ideas are more statements of hope than detailed policies. I was hoping, perhaps naively, that we were going to get the detail from the hon. Member for Birmingham, Erdington. We did not get that, but we should none the less explore what the Labour party is proposing. First, the hon. Gentleman has said that he wants the introduction of a national register of landlords, which he says will help local authorities to root out rogue landlords. However, he has not said what form of additional powers local authorities would have, what would happen to the existing voluntary schemes or what the costs would be.
What is clear is that for the majority of law-abiding landlords, such a register— whether or not it includes the right hon. Member for Leeds Central (Hilary Benn), who registered his interest for this debate—would mean that those who are doing the right thing and are already accredited will have a new, additional burden placed on them. When Labour, in office, last proposed a register it said that the register would cost £300 million, and that was without the extra powers that the hon. Gentleman seems to allude to. We must also bear in mind the fact that higher costs for landlords mean higher rents for tenants. In addition, many of the worst landlords—the rogues he rightly highlights—would continue to operate, under the radar. If they do not sign on, what guarantee is there that local authorities would be able to take action? Let me cite an example and then if he wants to intervene, I will be happy to let him do so.
As we have seen in Scotland, after five years—
Jack Dromey
The Minister is citing the impact study produced at the time we made those proposals, but he fails to talk about the benefits that would accrue to the sector, which the study asserted would be up to £1 billion.
On the nature of the sector, the overwhelming majority of landlords are small landlords, and it would take them a matter of minutes to register who they are and the properties they own. Such a register would enable Government and local government to communicate with landlords about changes to the law or entitlements. Crucially, it would enable tenants to check that their landlord was registered and it would help local enforcement. With a licensing scheme or environmental health enforcement, if action is taken against a landlord who is found guilty of serious criminal behaviour, that landlord would no longer be registered, and rightly so.
Mr Prisk
We heard some details there, the most interesting of which was the admission that there would be a new cost of at least £300 million—all hon. Members will note that. Instead of having a national register that has the danger of being both toothless and highly expensive, we believe that enforcement can be closely focused and robustly applied using existing laws. We have heard about how local authorities have a number of powers to tackle these landlords, and I will give the hon. Gentleman a couple of examples.
In Southwark, 12 people were crammed into a flat above a café that had no fire protection and where the cooker was at the top of the only staircase out. Southwark council has used its powers, issued an emergency prohibition order, stopped the use of the flat as residential accommodation and brought in social services. In a similar case in Epsom and Ewell, someone was getting six tenants into an unsafe property, where he did not have the appropriate arrangements. He got a £20,000 fine and rightly so. I say to the hon. Gentleman that a national register sounds easy and simple, but he baulked at the thought last time around when in government—or his colleagues did. If we are really going to crack down on the rogues, we need to use the laws we have before trying to pass new legislation.
Graham Jones
Does the Minister think that every rented property should have double-glazing? As I understand it no legislation can enforce double-glazing in properties; if they are single-glazed, that is just the way it is.
Mr Prisk
For the Minister to decide at the Dispatch Box that every home owner and letting agent should now have to have double-glazing would be very unwise, as I am sure the hon. Gentleman understands. We want to ensure that a national register is identified as costly and, to be blunt, probably highly ineffective because the rogues will flout it, much as they do the current law. Enforcement is the key.
Mr Prisk
I want to move on to the second issue, because I want to ensure that we deal with the crucial question of agents.
That second issue is the question of fees. The hon. Member for Birmingham, Erdington has told us that he wants to end confusing or inconsistent fees and charges that can be levied by some letting and management agents. I agree. I have seen clear evidence of bad practices in the letting sector, especially in the Which? report, which identifies that there are practices that need to be ended.
Our goal is that landlords and tenants should understand in advance the fees and charges that agents will levy. They will then be in a position to make informed decisions about whether to use their services. Frankly, that is not the case at present, and the hon. Gentleman is right to highlight that. There is widespread agreement that we need to drive up standards across the lettings sector and drive out the rogues. In practice, that means that we should be making better use of the existing consumer protection legislation, which already outlaws many of the practices that affront our constituents.
Good self-regulation is expanding across the sector. A clear majority of letting agents are now part of a self-regulatory scheme and more than 8,000 are now part of the Property Ombudsman, or TPO, scheme, ensuring that both landlords and tenants have access to redress when things go wrong. We are determined to extend that further, but the Government recognise that this is a complex area that needs careful consideration. Indeed, that was the discussion I had with the then Minister, Ian McCartney, in the debate to which the hon. Gentleman referred. I can tell the House that the Office of Fair Trading will shortly report on the lettings sector and I and my colleague, the Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster), will be keen not only to read but to consider its recommendations and see what more can be done.
Understandably, the hon. Member for Birmingham, Erdington talked about the need to give families who rent greater security and
“remove the barriers that stand in the way of longer term tenancies”.
We did not quite get the admission that that might involve compulsion of landlords. I think he started to veer that way, but saw sense at the end as the practicalities are very challenging.
I think it is right to strike a careful balance. We can all understand that families with children will want greater stability, especially if the youngsters are at school, but we also know that many people prefer shorter tenancies and do not want to commit for the long term. We need to be careful not to reduce the flexibility of the framework, given the wide and diverse range of renters in the market today. The latest evidence shows that most tenants in the sector stay for at least a year, not the six months that the hon. Gentleman mentioned. Indeed, in 2010-11 more than 40% of private tenants had been in their home for more than two years, and 20% for more than five years.
It is worth correcting the record by stating that only 9% of tenancies are terminated by the landlord. In the large majority of cases, it is the tenant who terminates the tenancy. That is not surprising if we stop and think about it for a moment, as for many tenants the key advantage of renting is that flexibility. Only a couple of weeks ago, I went to south Newham, to Canning Town, to meet young workers who rent at the new Fizzy Living scheme. The hon. Member for West Ham (Lyn Brown), who represents that constituency, was here a moment ago but has now left. Those workers made it very clear to me that a six-month deal is exactly what they are looking for and that they do not want greater rigidity and inflexibility. We must recognise that the people who rent now are a far more diverse range than they were five, 10 or 15 years ago and that the flexibility in the system must reflect that reality.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Will the Minister give way?
Mr Prisk
No, I will not, because I have been on my feet for long enough and other Members wish to contribute.
One of the features we would expect from the reforms I mentioned earlier is that institutional investors would positively welcome longer-term tenancies that gave them a steady income stream, as the hon. Member for Birmingham, Erdington said. We are therefore working to enable the market to develop a fuller range of lease terms that match what tenants and landlords want. The key point is flexibility, not prescriptive regulation.
Mr Prisk
No, I am going to conclude. I am sorry, but I am aware that many Members wish to speak.
The private rented sector represents an increasingly important part of the housing market. The Government want a bigger and better rental market, and that means taking radical steps to attract new investment, and so give tenants greater choice. It means having an effective regulatory framework for the long term, and cracking down on rogue landlords and letting agents—the minority—while promoting best practice among the majority. Good progress has been made, but there is much more to do. I welcome the debate and commend the Government amendment to the House.