Private Rented Sector

Debate between Tanmanjeet Singh Dhesi and Clive Betts

Thursday 29th November 2018 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

I beg to move,

That this House has considered the Fourth Report of the Housing, Communities and Local Government Committee, Private rented sector, HC 440, and the Government response, Cm 9639.

It is always a pleasure to serve under your chairmanship, Mr Rosindell. The Select Committee chose to have the inquiry because of the increasing importance of the private rented sector, which has doubled in size over 15 years. Clearly, more families are living in the sector than ever before, and more people see it as their long-term form of accommodation, whether by choice or because it is the only form available to them.

The Committee heard that 82% of people were satisfied with their accommodation, although when people answer such surveys, I sometimes question whether expectations are as high as they might be. If we look at other figures, we see that while non-decent accommodation in the sector fell from 47% to 27% over 10 years, the actual number of non-decent properties has stayed the same—it is a lower percentage of a larger number. Citizens Advice also produced figures showing that 41% of tenants in the sector had waited longer than they thought reasonable for repairs to be carried out, and 800,000 properties had a category 1 hazard.

There are therefore problems, but while many properties might have some problems, other properties are clearly in a really bad state of repair, with some landlords doing little about it—indeed, they almost run a business in properties of that type.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I thank my hon. Friend for securing the debate and for his excellent speech. Does he agree that we need to give local authorities the power to tackle and crack down on rogue landlords through private sector licensing, rather than having to get permission first from central Government?

[Mr Betts]

We made a number of recommendations in our report and—my hon. Friend is right—that was one of them. We recognised that the Government had made some changes to the rules on selective licensing, in line with the recommendation on widening the criteria used to bring about selective licensing schemes in the Committee’s previous report back in 2013. They are also changing the legislation about the definition of properties included in licensing for housing in multiple occupation, which we welcome.

Nevertheless, in essence, our recommendation is that licensing ought to be a local matter, depending on local circumstances. It should be a local decision, subject to the Secretary of State’s intervention only when councils have not followed the proper procedures. As I understand it, the Government are now reviewing selective licensing. One of my questions will be about the state of that review and when it is likely to report.

In our report, we tried to focus on those landlords who are not doing the job that we would expect them to do. To divide landlords up, there are the bad ones, who are not good at getting around to doing things in a timely way—they are inefficient, or incompetent to some extent, and are sometimes accidental landlords. There are then the so-called rogue landlords, who have more systematic failings, leaving a large number of properties in an unacceptable condition. Then there are the really hardcore landlords—we ought to call them criminals, because that is what they are. The criminal landlords run a business to exploit vulnerable tenants in unsafe and unhealthy conditions. They are robbing not merely the tenants but the taxpayer, because they are getting money in and yet not providing homes that are fit to live in. We tried to concentrate on how to deal with those landlords, but our report also recognised actions the Government have taken in a number of respects. Quite reasonably, we highlighted actions that they have taken in response to our previous report on the private rented sector. We are pleased with that as a Committee.

Right at the beginning of the report, we refer to the imbalance of power between tenants and landlords, and to how that needs addressing. However, I will not go through all our recommendations. Instead, I will focus on where the Government have said they will do something—whether that is to consult, review or consider in some way—and ask the Minister where that has got to and what we can expect.

On the Deregulation Act 2015, we call for a review of the retaliatory eviction legislation and guidance on how it has worked. The Government did not seem totally enthusiastic about that at first, but they have now said that they will review the Act, looking at its effectiveness in terms of retaliatory eviction and perhaps at bringing in more formal requirements to have longer-term tenancies. The Government have gone a bit quiet on that since their announcement, so where is that review up to, and when can we expect some announcement?

--- Later in debate ---

[Mr Betts]

My right hon. Friend raises a good point. Newham is a trailblazer—I think 50% of the prosecutions in the country happen there. We looked at two main issues in the report: the first is resources. I am sure it is not true that Newham has too much money and does not know how to spend it on other things; I am sure it has many challenges. The second is political will: is there the political will in the council to address these issues? Clearly there was, and still is, in Newham, but in more than half the councils in the country there are no prosecutions at all.

Councils will say, “We adopt a softly, softly approach and try to persuade.” Often that goes on with landlords who are in the inefficient and incompetent but reasonable category. Officers say to them, “You need to put this right,” and they do, but it does not work with the rogues and the criminals. Tougher action is needed. At the end of the day, it is about political will. Clearly, resources are under pressure; there is pressure on care services—the Committee will look at children’s services shortly—and that does mean there is less money for important things such as private sector housing enforcement.

We looked at how easy the powers were to use. I said that the rating system is complicated. Is there a case for bringing in a simpler minimum standard? By and large, the professional officers do not want to change. Landlords and tenants gave evidence that, although the rating system may be understood by most professionals working in the service, it is understood by very few landlords and virtually no tenants. Is a system that is so complicated that no one outside the professional sphere understands it fit for purpose? The Government have done some events, where they have talked to professional officers. There is a division of opinion among them—perhaps the majority still want to keep the rating system—but at least the Government have now acknowledged that there is general support for updating the system, in terms of both the evidence base and the guidance, which is very out of date. Will the Minister tell us how far we have got with that?

One of the landlords organisations that gave evidence told us that private sector housing legislation was based on 150 different pieces of legislation. Everything the Government do—however worthwhile—is built on top of this higgledy-piggledy structure, with no real coherence. Will the Government ask the Law Commission to do an overall review? We made that recommendation in our 2013-14 report. At some point, someone must do a comprehensive review, not necessarily to change the intention of the legislation, but to pull it together as a coherent whole. The Government responded that they will have discussions with the Law Commission. Will the Minister tell us where those discussions have got to?

We raised the issue of fees and penalty notices. The Government say they are at an appropriate level, but the Committee wants them to be raised because, for some of the really bad landlords, the fines levied are a business cost that they write off against the business. Courts should give back the cost to local authorities who take a case. Local authorities’ resources are under pressure; if authorities spend a lot of money prosecuting a landlord and they get the prosecution, the court does not give them back the cost involved. That can be really discouraging. Has the Minister had discussions with her colleagues in the Ministry of Justice on that recommendation?

We recommend the creation of a benchmark system, whereby the different approaches of local authorities could be compared, including the number of prosecutions they take out. We asked the Government to work with the Local Government Association on that. They said they would have talks with the LGA. How far have those talks gone?

The Committee supported the Government’s decision to bring in banning orders. The Guardian and ITV News have publicised the fact that the banning orders are not public. That is not to say that that will not happen, but under the Housing and Planning Act 2016 they are available only to local authorities to tackle problems in the private rented sector. They cannot be made public as the legislation stands. The Prime Minister has committed to change that, but I understand that that needs primary legislation. Will the Minister say whether the Government intend to bring in primary legislation to do that?

Although a local authority may know that someone is banned in another local authority area, knowing whether a landlord is operating in an area and the properties they have is very difficult, because of the lack of information. To make public that a landlord has been banned would cause other people to come forward and say, “That landlord is banned, but he is renting a property down our road.” It would be very helpful if that could be done.

I went to a meeting of the Chartered Institute of Environmental Health in Leeds to talk about our report and the general support for it. Interestingly, Mark Baxter, an environmental officer in Scarborough Borough Council said, “If the Government change legislation, could they go further and insist that when a landlord is banned in court, they have to give the court, for the public record, a list of all the properties they own, manage or have an interest in?” That is an incredibly simple but effective way forward. Once publicity shines a spotlight on these bad landlords, they should be made to help by giving that information, and it should be an offence not to give all the information at that stage. That would be very helpful to get a proper grip on this issue.

[Mr Dhesi]

My hon. Friend is very generous to give way again. Does he agree that deposits should be capped at three weeks’ rent rather than the current six weeks proposed by the Government? That would mean an average saving of £575 for tenants across England, based on the latest English housing survey data.

[Mr Betts]

That came up in the Tenant Fees Bill, and the Committee recommended a compromise of five weeks. The Government did not accept it, but we support that recommendation, so as Chair of the Committee I cannot completely agree with my hon. Friend. If I remember correctly, the Government have held a consultation on alternatives to deposits, which is a helpful response to one of our recommendations.

We all agree that we must be as tough as we can be, and tougher still, on bad landlords. I hope the Minister will revisit our recommendation. The really bad, criminal landlords may be banned and have management orders against them, but in the end some of them will find ways around that because it is really profitable for them to do so. They have broken the law once, so they will carry on by ignoring banning orders if they can. Why do we not take the properties off them? Why have the Government resisted that recommendation? The proceeds of crime operate in other spheres. Let us get tough on the bad landlords.