Cost of Living: Private rented sector

Matthew Pennycook Excerpts

Tuesday 18th July 2023 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

As ever, Dr Huq, it is a pleasure to serve with you in the Chair.

I start by congratulating my hon. Friend the Member for Stretford and Urmston (Andrew Western) on securing this incredibly important debate and on his powerful opening remarks. He has served in this place only for a relatively short time, but he has already made a considerable impact. His commitment to advocating for all those at the sharp end of the acute housing crisis has helped and will continue to help to ensure that it remains a prominent consideration for the House.

I also thank all those other hon. Members who have participated in this afternoon’s debate. I particularly commend the compelling contributions of my hon. Friends the Members for Barnsley East (Stephanie Peacock), for Pontypridd (Alex Davies-Jones), for Birmingham, Erdington (Mrs Hamilton), and for Cynon Valley (Beth Winter)—I hope that I pronounced that last constituency correctly.

I also want to take the opportunity at the outset to express the Opposition’s thanks to all those organisations that have done so much to keep the issue of renters’ reform on the political agenda, particularly the 20 organisations that form the Renters’ Reform Coalition.

The cost of living crisis remains the most pressing issue facing households across the country. Against the backdrop of static inflation and rising core inflation, prices in some areas are easing, but remain high by historical standards. Pay is now rising, despite a cooling labour market, but continues to fall in real terms. Direct cost of living support for households is being scaled back, and the Government have overseen one of the biggest tax rises in a generation. As a result, families are continuing to feel the squeeze, and many are cutting back on essentials, withdrawing savings and racking up debts.

All the evidence suggests that private renters are particularly hard hit. Data released by the Office for National Statistics only on Friday, made clear that renters are nearly five times as likely to be financially vulnerable compared with mortgage holders or outright homeowners. According to that analysis, as many as four in 10 renters are finding it difficult to pay their rent. Renters are more likely than mortgage holders to cut spending on groceries and other essentials, to run out of food, and to be behind on energy payments.

The pressure on private renters reflects, at least in part, the sharp increase in rents over the recent period, owing to the mortgage crisis this Conservative Government presided over, as well as the general shortage of lettings, an issue rightly highlighted by my hon. Friend the Member for Stretford and Urmston in his comments relating to overall supply. According to the ONS, private property rental prices across the country rose 5% in the 12 months to May 2023, the biggest increase since the national data series began in 2016, with rent rises most acute in London.

We have heard several statistics in the debate, and other analysis suggests that the situation could be even more dire, with property website Rightmove suggesting that rents have risen nationwide by 9.4% in the past year, and by an eye-watering 14% in Greater London. The combination of all those pressures means that the situation for many renters is nothing short of dire. According to Shelter, almost 2.5 million are either behind or constantly struggling to pay their rent, an increase of 45% since April 2022. An analysis produced by the debt advice charity, StepChange, suggests that private renters are twice as likely as the general population to be in problem debt.

With renters across the country at breaking point, and many falling into arrears and at risk of eviction, they urgently need the long-term security and better rights and conditions they have been promised by this Government. After so many years of waiting, the Government finally published the Renters (Reform) Bill on 17 May. Yet, two months on, the Bill has not had its Second Reading and will not have it before the summer recess. That means, as my hon. Friend the Member for Pontypridd mentioned, we will not get a chance to consider it before September.

The Government’s justification for the delay, as suggested by the Secretary of State at departmental questions last week, is that a “fit-for-purpose impact assessment” was required to be available before progressing the legislation. No one disputes the need for a fit-for-purpose impact assessment to accompany the Bill, as we subject it to detailed scrutiny. We welcome the fact that the regulatory policy committee declared it green rated as of 3 July. However, it is frankly laughable for a Government that published the impact assessment for the Levelling-up and Regeneration Bill the day before Third Reading to suggest the absence of a fit-for-purpose one is the sole reason that Second Reading of the Renters (Reform) Bill was delayed.

Whatever the reason for the delay, with a green-rated impact assessment now available, there is no reason whatsoever that we cannot begin to progress this long overdue and desperately needed piece of legislation. Will the Minister confirm to the House, and all those renters following our proceedings today, that the Renters (Reform) Bill will finally have Second Reading in the weeks immediately following the House’s return after the summer recess? Can she also reaffirm the commitment she made in response to a question from journalist Vicky Spratt at the Renters’ Reform rally on 21 March, to the effect that the Government will ensure that the abolition of section 21, and presumably therefore the passage of the Bill in its entirety, will be completed this autumn?

As the Minister will know, the Opposition were supportive of the proposals published in the “A fairer private rented sector” White Paper last year, on the basis that they provide a solid foundation for overhauling the private rental market, and we welcome much of what is in the Bill. However, we do have some concerns. We were troubled, for example, that the proposed legally binding decent homes standard for the private rented sector, and the ban on landlords refusing to rent to those in receipt of benefits or with children, commonly known as “no DSS” practices, are not in the Bill.

The explanatory notes accompanying the Bill state:

“The Government is carefully considering how to implement these policies and intends to bring forward legislation at the earliest opportunity within this Parliament.”

The Minister confirmed to the Levelling Up, Housing and Communities Committee last Monday that separate legislation was not required, but that the Government intended to introduce both measures, along with stronger enforcement powers for councils, through the Renters (Reform) Bill. Can she confirm today that that is indeed the case? Will she provide the House with an assurance that the changes will be considered and scrutinised in Committee, rather than tabled as detailed amendments just prior to Report, thereby allowing for only limited scrutiny, as her Department has done with other pieces of recent legislation?

Lastly, the Minister will know that the Opposition regret the fact that important elements of the White Paper are missing from the Bill as published, including powers to limit the amount of advance rent that landlords can ask for and measures to expand rent repayment orders to cover repayment for non-decent homes. Can she tell us whether the Government are open in principle to amending the Bill to include those measures and to address its other well-known and well-understood deficiencies and loopholes, not least the inadequate means of redress provided for challenging extortionate within-tenancy rent hikes, or is it the Government’s intention to resist such attempts to strengthen this important piece of legislation?

Private renters have waited long enough to secure a fair deal. The case for transforming how the rental sector is regulated, and for finally levelling the playing field between tenant and landlord, is indisputable. The case for reform existed before the cost of living crisis, which has now made it an urgent imperative. The Government must act, and must act boldly. I look forward to listening carefully to the Minister’s response.