Renters (Reform) Bill

Debate between Matthew Pennycook and Anthony Mangnall

Report stage
Wednesday 24th April 2024 Commons Chamber

[Anthony Mangnall]

I thank my hon. Friend for making that point. It is one that I will come on to, in terms of both the impact that the Bill will have on the attractiveness of short-term lets and the bureaucracy and hassle that will arise from this legislation.

From the outset of the Bill’s arrival in Parliament, I have worked to ensure that it strikes the right balance between tenant and landlord—a balance that ensures that the rights of tenants are respected and enshrined in legislation while the rights of landlords, property ownership and contract law are maintained and safeguarded. I believe that a failure to strike that balance would have a disastrous impact on the private rental market in the United Kingdom. Complicating the rental market with onerous requests, bureaucratic measures, additional costs and an inability for people to operate their personal property as they wish would only result in large swathes of the private rented sector throwing up their hands and selling their properties, just as a failure to support tenants would only embolden rogue landlords, diminish standards and increase unfair treatment.

From the start, it has been my mission to find a level playing field that ensures that tenants and landlords can co-operate together in a fair market that has a healthy supply of rental properties, with rights and standards enshrined, costs low and bureaucracy minimal, in a system that respects the rule of law and, perhaps most importantly, has a structure and a court system that is effective and that delivers. All of this has been done because we are in the midst of a supply crisis in the private rented sector, on which we have yet to touch.

On average, 25 prospective tenants inquire about every available rental property, up from eight in 2019, according to Rightmove. Hamptons estimates that between 2016 and the end of 2023, individual landlords sold almost 300,000 more homes than they bought. Last year, the Bank of England warned that demand for rental properties continued to outstrip supply as the number of landlords choosing to exit the market increased. It is therefore vital that responsible landlords have confidence that pragmatic changes are being made to the Bill. Failure to do so would only deepen the crisis.

I have said previously that the failure to have a sensible rental period at the start of a tenancy would likely result in the flourishing of long-term rental properties being used as short-term lets. Given the substantial price difference between short-term lets and long-term lets in constituencies like mine and the constituencies of the hon. Members for North Shropshire (Helen Morgan) and for Westmorland and Lonsdale (Tim Farron), there would be a very real likelihood of people exploiting that loophole.

Landlords incur costs and expenses when entering into a tenancy, and they need the certainty of a minimum period. Many buy-to-let mortgage lenders also require a minimum six-month tenancy agreement when lending to residential landlords. As a result, I tabled amendment 6 with the support of 58 colleagues to ensure that tenants cannot give two months’ notice to leave a property until they have resided in it for four months. I believe that this is in line with the recommendations of the Levelling Up, Housing and Communities Committee. I therefore welcome that the Government have accepted this argument and tabled new clause 15, which mirrors amendment 6. I will therefore not press my amendment.

[Matthew Pennycook]

I wonder whether I can tease out the hon. Gentleman’s reasoning in thinking that the possibility of rental properties being used as short-term lets is so serious. It is an entirely hypothetical problem. Renters who take out a tenancy agreement will have to provide a five-week deposit—they will probably be charged the maximum—and they have to go through a lengthy process to try to get that deposit back. What evidence does he have to suggest that, en masse, tenants will try to game the system in the way he expects?

[Anthony Mangnall]

With the greatest of respect, I am saying that that is one of the reasons why I fear not having a minimum notice period. My constituency has the highest number of second homes and short-term lets of almost anywhere in the country. There is a significant price differential, and a significant amount of hassle is being heaped on landlords by this Bill, which might push them in that direction. This may be one of the foreseeable consequences. I have raised it on Second Reading and in private conversations with the hon. Gentleman.

New clause 2, on rent repayment orders, would enable local housing authorities to impose financial penalties on certain individuals where they believe that a housing offence has been committed by a body corporate. Last year, the Supreme Court delivered a landmark ruling in which it said that, where a rent-to-rent company takes over the running of a property, it cannot pass its legal liabilities on to the property’s landlord. The Government have amended the Bill to reverse that decision, which will mean that landlords can be fined even in cases where a rent-to-rent company or similar has, without the landlord’s knowledge, been asked by a tenant to illegally sub-let a property. According to data from Direct Line, one in 10 renters admits to sub-letting part of the home in which they live, of whom 48% did not disclose it to their landlord and three quarters did not review their existing lease agreement to determine whether sub-letting was permitted. The amendment would deal with the main concern associated with the use of rent-to-rent companies. It would address the problem of landlords and others who willingly hide behind such companies to let properties while avoiding liability for rent repayment orders, without penalising those who are innocent victims of such companies. I welcome and recognise the fact that the Government have seen sense and tabled their own amendment, mirroring my proposed new clause 2, in the form of proposed Government new clause 34. I therefore withdraw proposed new clause 2.

Short-term Holiday Lets: Planning

Debate between Matthew Pennycook and Anthony Mangnall

Tuesday 23rd May 2023 Westminster Hall

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

It is a pleasure to serve with you in the Chair, Dame Caroline. I congratulate the hon. Member for Torbay (Kevin Foster) on securing this important debate and commend him for the focused and thoughtful remarks he made in opening it. I also thank all other hon. Members who have participated in the debate. In particular, I praise the contributions of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) and the hon. Member for Westmorland and Lonsdale (Tim Farron). Both have long called for bold action in this area, and both brought home the need for urgency in taking the measures still required to tackle it.

It is not in dispute that holiday homes and self-catering apartments have an important role to play in catering to the needs of tourists, as well as those who require short-term accommodation for work or other purposes. All hon. Members who have spoken clearly recognise the contribution of short-term holiday lets, and the visitor economy more generally, to the prosperity of individual homeowners and local economies in their constituencies. When we respond to the issue, it is absolutely right, as the hon. Members for East Devon (Simon Jupp) and for Totnes (Anthony Mangnall) mentioned, that we should get the balance right.

As we have heard repeatedly throughout the debate, the issue is that the surge in the numbers of homes marketed for short-term holiday lets over recent years has generated a number of significant challenges for communities across the country. Those challenges range from the immediate impact on residents, neighbourhoods and local services of high visitor turnover, particularly when short-term lets are abused by the minority of antisocial or disruptive guests, to the longer-term negative impact on entire communities with respect to the affordability and availability of homes for local people—and, indeed, those who work in the visitor economy—to both buy and rent.

As noted several times in the debate, those challenges are obviously most acute in areas of the country, be they rural, coastal or urban, where the concentration of short-term holiday lets is extremely high. It is worth noting that they are also particularly evident in London, owing to the fact that the Cameron Government decided, by means of the Deregulation Act 2015, to loosen requirements on short-term letting in the capital, allowing properties to be let for a maximum of 90 days a year without requiring planning permission. The Government were warned at the time about the harmful consequences that would flow from the relevant provisions in that Act, not least given that few, if any, London boroughs have the means to monitor and enforce the 90-day limit, but those warnings went unheeded, and short-term let abuse is now rife in many parts of the capital as a result. I feel duty bound, as the only London MP in the debate, to mention that particular problem.

It has been abundantly clear for some time that the deregulated nature of the short-term letting sector is deeply problematic. There is a pressing need to overhaul the sector’s regulatory framework to account for the significant changes that have taken place over the past 10 to 15 years, but also, we would argue, a watertight case for giving local authorities that are struggling to cope with high concentrations of short-term holiday lets the powers they need to protect the sustainability and cohesion of their communities. It is true, as the hon. Member for Totnes mentioned, that measures have been enacted on the business rates loophole and neighbourhood plans to try to tackle the problem, but we argue that they are clearly insufficient, not least because we would not be debating the issue today if they went a long way to solving the problem.

Having opposed for years the very notion that robust regulatory intervention was required to address the negative impact of short-term holiday lets on communities and local housing markets, the Government were finally forced to act in June 2021.

[Anthony Mangnall]

The hon. Member has criticised the Government for introducing policies, but I wonder what Labour’s position is on what the correct level of short-term lets in communities is.

[Matthew Pennycook]

If the hon. Member gives me the opportunity, I will go on to make clear where we differ from the Government, in what they have and have not proposed.

As I was saying, when the Government finally acted in June 2021, they did so only in the most limited fashion, agreeing to have the Department for Culture, Media and Sport consult on a tourism accommodation registration scheme in England. After consistently resisting various attempts to amend the Levelling-up and Regeneration Bill in Committee, so that it might provide local communities with more effective means of redress, the Government were forced to go further late last year. The concession they made on Report, on 13 December, was to agree only in principle to introduce a discretionary registration scheme in England, and only by means of legislation that might come into force as late as autumn next year.

Subsequently urged to go further still by the Opposition—as well as, it must be said, many Government Members—Ministers have now committed, as we have heard, to consult on the introduction of a new planning use class for short-term lets. Let me be clear—here I address the point made by the hon. Member for Totnes—that the package currently on offer from the Government still falls short of the comprehensive suite of measures that we would like to see enacted at pace to tackle this problem. The Government remain opposed to, for example, the introduction of a discretionary licensing scheme of the kind we have proposed on numerous occasions, which we think would be the solution in many parts of the country dealing with particularly high concentrations.

None the less, we welcome the consultation on the new planning use class, just as we welcome the commitment to introduce a new discretionary registration scheme. However, as so often with this Government, where they propose to give with one hand, they plan to take away with the other. Because that new consultation, as the hon. Member mentioned at the outset, also invites views on introducing new permitted development rights that would make it easier to convert dwelling houses into short-term lets, with proposed article 4 direction protections applicable, according to the consultation, only in

“the smallest geographical area possible”.

I encourage hon. Members to go and see what investors are saying about that part of the consultation. They say they are happy with the consultation overall, because the inclusion of that provision makes it light touch, and will make it incredibly attractive and easy for investors to convert properties into short-term lets. I caution the Government about going down that route, not least because the consultation makes clear that what they propose in that expansion of permitted development rights would not be subject to any limitations or conditions, and would apply in national parks and areas of outstanding natural beauty. I want to put on record the Opposition’s serious concerns about the implications of expanding permitted development rights in that way and our intention to scrutinise extremely carefully any measures that the Government might ultimately decide to bring forward in this area.

The more fundamental issue is the frankly glacial pace of the Government’s overall response to the challenges posed to communities across the country by the surge in short-term holiday lets. For many English communities, particularly those with extremely high concentrations of such lets, it is not hyperbole to argue that those challenges are existential, entailing as they do the loss of a significant proportion of the permanent population, as a result of local people simply being unable to find affordable local homes in which to live, and diminished local services and amenities, whether that be local schools, transport links or local small businesses, for those who manage to hang on.

It is not good enough for Ministers to tell those communities that they may be able to establish a registration scheme to gather information about short-term lets at some point next year, if and when the Levelling-up and Regeneration Bill receives Royal Assent, or that they may be able to control the numbers of such properties by means of a new planning use class, at some point in the coming years, if appropriate regulations emerge from the current consultation. Those communities need a response commensurate with the scale of the challenge they face, and they need it urgently.

We urge the Government, not only to rethink the potential further expansion of permitted development rights, as set out in the consultation now under way, but to accelerate the introduction of the discretionary registration scheme, to which they are committed, to legislate for the introduction of a new planning use class for short-term lets without delay, and to give serious consideration to other measures, whether on taxation or licensing, that will almost certainly still be required, so that the communities we have been discussing today will finally have the prospect of securing the full suite of planning and non-planning tools that they need to appropriately regulate the numbers of short-term holiday lets in their areas and manage their day-to-day impact. That is what a Labour Government would do, and it is what we need this Government to do.

Neighbourhood Plans

Debate between Matthew Pennycook and Anthony Mangnall

Tuesday 7th June 2022 Westminster Hall

[Anthony Mangnall]

Does the hon. Gentleman recognise that clause 88 of the Levelling-up and Regeneration Bill makes the point that neighbourhood plans will take into consideration climate change and environmental aspects?

[Matthew Pennycook]

I do recognise that and I will come to the Bill specifically later in my remarks. It does provide some useful clarity about neighbourhood plans, although there are far more serious defects when it comes to them, but I will come to that shortly.

As I was saying, I do not think it is clear, as things stand, what role neighbourhood plans play in national planning policy. They are explicitly addressed in the national planning policy framework, but only in terms of process and—as people will see if they read the relevant sections—in such a convoluted manner that I would not be surprised if even professional planners struggle with what the guidance means in practice. On one hand, the stated rationale of neighbourhood plans is that they give communities the power to develop a shared vision for their area, and because they are legally part of development plans, they do provide for a statutory say in what goes where. On the other hand, they must conform to local plan housing allocations and have regard to national planning policy and they can be overturned when they are in conflict with either. The resulting tension, the root of which is ultimately the question of who decides—communities or Ministers—remains largely unresolved.

What I would argue is lacking but is sorely needed is greater clarity about the precise remit of neighbourhood plans. More fundamentally, we need a better sense of the function of neighbourhood planning within the wider planning system. Ultimately, we will have to move toward a planning system based on a clear and easily understood settlement—one that ensures that communities that wish to proactively shape development in their area cannot stymie the meeting of local housing need, while also preventing central Government from unduly stipulating how that need is met on the ground in any given area. That balance is critical, and it is balance that is required, but we believe that that balance has still not properly been struck. That is largely because the default reaction of successive Conservative Governments when confronting the tension that exists between local planning and national planning has been to seek to disempower communities and further horde control at the centre.

Several hon. Members spoke about the great play that earlier Conservative-led Governments made of neighbourhood planning, and it is absolutely true that the coalition Government made great play of it and of localism more generally in their early years. However, since that Administration, successive Conservative Administrations have spent much of the past 10 years ineptly tinkering with the planning system in ways that have systematically undermined the scope for effective local and neighbourhood planning. Far from seeking to remedy that error or to take forward a localism agenda—as the hon. Member for Bosworth, who introduced the debate, argued—the Levelling-up and Regeneration Bill doubles down on it.

The hon. Gentleman did not explicitly mention this, although the hon. Member for Totnes did, but the new national development managing policies that the Bill provides for will take precedence over both local and neighbourhood plans where there is a conflict between them “to any extent”—the Bill is very clear about that. In addition, the requirements to consult on any new NDMP are entirely at the discretion of the Secretary of State and, unlike with national policy statements, there is no parliamentary approval process.

I just ask Members to consider for a moment what that would mean in practice if the Bill goes through unamended. Those powers would allow a Minister of whatever political allegiance to develop an NDMP encompassing literally any policy designated by them as relating to development or use of land in England, to determine not to consult on that policy and then to use it to overrule any local development plan in conflict with it at the stroke of a pen. Is it any wonder that organisations such as the Campaign to Protect Rural England are warning that if this power is enacted it will stifle local innovation on issues such as affordable housing, energy efficiency and nature conservation, undercut local democratic engagement in and scrutiny of the planning process, and lead to significant delays where conflict between local plans and national policies is contested?

The hon. Member for Totnes was absolutely right when he spoke about the Levelling-up and Regeneration Bill as an opportunity. We have an opportunity to reform planning policy in England in a way that empowers local communities. Instead, my fear is that the Bill as drafted is likely only to further erode the legitimacy of the planning system in the public’s eyes by downgrading the status and the scope of local planning. The Government must amend the Bill to ensure that communities are still able to participate effectively in every aspect of development plan formulation, and to make it crystal clear—I think this is the point that the hon. Gentleman was making earlier—that NDMPs can only be used to overrule local and neighbourhood plans in relation to nationally significant issues.

When the Minister responds, I hope we hear from him that he appreciates the concerns that have been expressed about the ways in which the Bill undermines localism in the planning system, and that he is willing to think again about those clauses in the Bill that would undermine local and neighbourhood plans specifically. More widely, I look forward to hearing his thoughts about how the Government might provide greater clarity about the future remit and function of neighbourhood plans and in particular—this point was well made earlier—about what can be done to encourage their uptake by communities, particularly those facing the greatest social, economic or environmental challenges?