Private Rented Sector

Debate between Meg Hillier and Frank Dobson

Wednesday 25th June 2014 Commons Chamber

[Frank Dobson (Holborn and St Pancras) (Lab)]

We last debated private rents on 24 March, and at that time I and other London Members pointed out that ordinary Londoners were being priced out of the city. I do not mean the City where they play with money; I mean the great London conurbation. That is because there has been a total failure in the housing market, be it buying or renting. Increasingly, ordinary people can no longer afford either to buy or to rent in London, and the situation is still changing for the worse. Prices and rents are still going up and, if the Evening Standard is to be believed, according to a recent headline rents in London are rising eight times faster than wages. Rents are continuing to outstrip wages.

[Meg Hillier]

Nowhere is that truer than in my constituency of Hackney South and Shoreditch, where private rents are out of the reach of many people, who are unable to live in the borough. Does my right hon. Friend agree that the resulting higher population churn causes real damage to the strength of our local communities?

[Frank Dobson]

I entirely agree with my hon. Friend.

Things generally have been getting worse, but there has been one enormous change for the better: the Labour party’s commitment to regulating rents and providing security of tenure in a way not proposed for a very long time. I am delighted to welcome this development, although personally I would go rather further. However, it is the right thing to do, it is popular, certainly with Londoners, and it is an approach that works.

We had the “less than GCSE” economics lecture a few minutes ago on the merits of encouraging investment in the private sector, and how it would be damaged by regulation. That ignores all the European evidence. Germany and Switzerland have a heavily regulated private sector, including rent regulation, and they have the highest proportion of people living in the private rented sector. They live, generally speaking, in rather good quality private sector flats and houses, certainly better than the average here. People in the Netherlands, where the first rent that anyone can charge is set, are better housed than most people in Britain. We simply cannot go on with the current situation—ruinously high rents—under this Lib Dem-Tory coalition.

Last year, the average weekly rent in London was 51% of average weekly pay. It is now 55%, which is clearly ruinous for tenants.