Private Renting: Homeless and Vulnerable People

Debate between Siobhain McDonagh and Lord Benyon

Wednesday 8th February 2017 Westminster Hall

[Richard Benyon (Newbury) (Con)]

I beg to move,

That this House has considered private renting solutions for homeless and vulnerable people.

It is a pleasure to serve under your chairmanship, Sir Alan. I refer hon. Members to my entry in the Register of Members’ Financial Interests. I will talk about the housing problems around the country, but of course every area is different, and I concede that some of the ideas and statistics that I apply to my arguments may help the situation differently in different parts of the country.

The private rented sector is an increasingly important route out of homelessness. When renting works for homeless people, it can be life changing. It is often a huge step towards finding a job, reconnecting with family and rebuilding lives.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is the hon. Gentleman aware that the single biggest reason for homelessness in the UK, particularly in London, is eviction from assured shorthold tenancies in the private rented sector?

[Richard Benyon]

I am well aware that the hon. Lady and her colleagues frequently deal with cases in which people were made homeless for precisely that reason, which is an increasing problem. I will come on to talk about some of those issues, and I hope that the Minister can add some flesh to the bones of the White Paper that was published yesterday and the work that he is doing on tenure with the private rented sector.

Finding a home in the private rented sector can be difficult, and we all know that despite the Government’s welcome move to ban letting agent fees, up-front costs often act as a barrier for people trying to access the private rented sector. Research by Crisis shows that 16% of landlords report increasing the deposit when renting to homeless people, 12% increase the rent required in advance and 15% increase the contractual rent.

By way of example, I want to pay tribute to a constituent of mine, Adrian Smith, who runs Swift Logistics in Newbury. He discovered that one of his temporary agency workers had collapsed due to epilepsy, because he was finding it difficult to manage his medication as he was homeless and living in a tent. Adrian stepped in, gave him a clean uniform, offered him a permanent position and talked to him about his situation—things that I am sure he would do for any of his employees who were going through a rough patch. Adrian then started to look for accommodation for that employee. There was very little affordable accommodation in Newbury that suited that individual, and anything that Adrian found was made impossible because once the landlord or his agent discovered that the prospective tenant had debt problems—he had a county court judgment against him—they demanded six months’ rent up front. We can see the vicious circle here. I see some of the ideas put forward by organisations such as Crisis, which I will come on to talk about, as possible solutions to such cases.

--- Later in debate ---

[Richard Benyon]

I am glad that the right hon. Gentleman, whom I respect greatly for his understanding of this problem, says that it exists among a minority of private rented sector landlords. One could have got the impression from yesterday’s statement that nearly every private landlord was a rougue who managed substandard accommodation. As he says, that is far from the truth. I entirely accept that in many cases, local solutions are better suited, but the Government should be given credit for really trying to move things on through a variety of measures, which are sometimes extremely burdensome to landlords but seek to raise the standard of accommodation and improve the way that landlords treat their tenants.

Evidence shows that when a vulnerable person is in secure and safe rented accommodation, they can leave their homelessness behind them and make a fresh start. That also makes good economic sense, which I hope will be a theme of the debate. If we get this right, there will be an entirely virtuous circle. Both the Residential Landlords Association and the National Landlords Association believe that, with the right support, financial risks can be reduced and letting to vulnerable people can be a viable business model. Even if hon. Members forget everything else that I say today, I hope that that will resonate with them. By changing perceptions, we can truly make the private rented sector work for all.

[Siobhain McDonagh]

How does the hon. Gentleman feel that the private rented sector will become a viable alternative for vulnerable tenants when rental claims under universal credit are taking an estimated nine weeks—in reality, it is three months in my part of south London—to be assessed?

[Richard Benyon]

I recognise that that is a problem. If the hon. Lady will allow me, I will come on to talk about that. If I do not, I am sure she will intervene again. I very much want to talk about the variety of different factors that influence homelessness.

I want to tell the Minister about two potential solutions that may be of help. A lot of work on this has been done by the homelessness charity Crisis, which I cannot praise enough. It is totally focused on outcomes, working with us, whatever side of the House we sit on, to try to find solutions that work. There is nothing particularly new in the two schemes I am proposing, and they will be familiar to some. The first is a help to rent scheme and the second is a national rent deposit guarantee scheme.

WPI Economics developed a model to assess the cost-benefits of the services over a three-year period and identified that £31 million would be required per annum over that period. That would be made up of £6.7 million for the rent deposit guarantee scheme and £24.1 million for a help to rent project. In a time of cash-strapped Treasury forecasts, I want to show—if the Treasury is listening—that this makes economic sense, because it will reduce the cost of the burden of homelessness that sits on the taxpayer.

From 2010 to 2014, Crisis, with funding from the Department for Communities and Local Government, ran the private rented sector access development programme, which funded specific help to rent schemes across the country, which helped homeless and vulnerable people access affordable and secure accommodation in the private rented sector. I have seen that work in my constituency in a different scheme run by the Two Saints hostel in Newbury, which moves people from the wayfarer beds and being the huddled figures in the doorway I described earlier through to supported accommodation and then on to independent living. That works only because all the complex problems that we know exist in homelessness, particularly in rough sleeping—mental illness, relationship breakdown and alcohol and drug abuse—are dealt with throughout the process, which allows a sustainable solution to each individual’s problems.