Tenancies (Reform) Bill

Teresa Pearce Excerpts

Friday 28th November 2014 Commons Chamber

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I congratulate the hon. Member for Brent Central (Sarah Teather) on promoting this Bill.

I support the Bill because, in all contracts and business arrangements we enter into, we expect goods that are fit for purpose. We expect the product to do what it says and to get what we pay for. How come, therefore, that when a landlord enters into a contractual arrangement with a tenant and says, “I promise you a dwelling that’s fit for purpose and you’ll pay me to use it,” the law does not afford tenants those basic rights? How is it that if a landlord enters into a contract with a tenant and provides a substandard, unsafe property and the tenant challenges that product’s fitness, they can be thrown out on to the street in an act of revenge?

This is an ever-growing problem. The number of people renting properties in the private sector is growing. I am a London MP and over the past 10 years in London alone, the proportion of families renting has increased from one in 10 to one in four. If we take into account population growth, we will see that that is a 119% increase in the number of families in rented accommodation.

In my constituency of Erith and Thamesmead, almost a fifth of all families live in private rented accommodation. That is a lot of people and a lot of landlords. A lot of the landlords in my constituency are good, reputable landlords who provide secure premises for families to bring up their children, but I have to say that a lot of other landlords are not like that at all. I met a constituent yesterday who is living in a house of multiple occupancy where no one can use the cooker because they get an electric shock every time they touch it, and no one will report the landlord because they are in a house of multiple occupancy—it is temporary accommodation—and they are afraid. It is my job to speak up for those people and that is what I am doing today.

[Mr Chope]

The hon. Lady raises a serious issue, but surely it is possible for her to refer it to the local authority to deal with under its statutory duties.

[Teresa Pearce]

Of course, that is entirely proper and it is exactly what I did yesterday. However, both of the local authorities that my constituency covers have had massive cuts to their budgets and the team of officers who usually carry out inspections is now very small. The number of complaints outweighs the facility available to deal with them. That is an issue for another discussion on another day.

I am very concerned about the private rented sector. I held a Westminster Hall debate on housing in London, in which I explained why it is a crucial issue for London and my constituency. As I have said, there are many good landlords who offer their properties in a safe and satisfactory condition, understand their responsibilities and have good relations with their tenants. It is almost because we need to protect the reputation of landlords in general that we need the proposed laws to be introduced.

I have seen at first hand how unscrupulous landlords charge extortionate rates for substandard properties, and families have to uproot more regularly, with no long-term security, which is not good for anybody. I have met families with children under 10 who are in their third primary school because they have had to move consistently. I have spoken to teachers who say that the constant churn in primary schools is making it very difficult for children and classes to achieve their potential. It is not surprising. As Shelter has said, renters are 11 times more likely to move than somebody in a secure property with a mortgage. Frequent moves can have a negative impact on children’s education. Government researchers found that frequent movers are significantly less likely to obtain five A* to C GCSE grades, or be registered with a GP. Children from the poorest backgrounds are being failed.

Secure homes make for secure communities and better citizens. In the end we all pay for the consequences. We all pay for the consequences of those whose education is impaired by their overcrowded and chaotic living conditions. We all pay for the health care costs of treating illness from damp and cold properties. We all pay for the consequences of families living in uncertainty and substandard housing.

I have today written to the Chancellor and HMRC to ask for current figures on another way that we all pay for this problem. The most recent figures I could find are from 2012, and they show that HMRC estimates that £550 million of tax on rental income is not declared or paid. That is an enormous tax gap and, for the reputable landlords who do their accounts and pay their tax, it is totally unfair that such people are bringing the whole market down.

The hon. Lady discussed the operation of section 21. The Bill will not restrict the rights of landlords to evict tenants who are in rent arrears. Citizens Advice data point to a consistent correlation between inquiries from private tenants not in arrears about possession action or threatened homelessness and inquiries about repairs and maintenance. We should not be swayed by arguments that tenants who seek repairs or better standards are troublesome tenants. These people are just trying to protect their own health and safety and that of their family. They are not the stereotypical tenant who does not pay their rent.

In the past year, Citizens Advice has seen a 38% increase in inquiries about eviction problems in cases where people were up to date on their rent—it was the property that was the source of the problem. Tenants can be helpless if served with a section 21 notice. When tenants seek advice from Citizens Advice about a landlord’s failure to address maintenance problems in a property, their advisers inform the tenant that if the landlord responds by serving a possession notice they will be within their rights to do so. Many tenants at this stage choose not to pursue their complaint and continue to live in a place that is not fit for purpose. Many of these people are in work—although some are not—and claiming housing benefit, which is our money. That means that taxpayers’ money is being paid to disreputable landlords to house people in conditions that affect their health and the education of their children. We then hear from HMRC that the landlords are not paying tax on their rental income. Many landlords in my constituency insist on the rent being paid in cash. That cannot be right, and it is that behaviour that the Bill seeks to tackle.

The Bill contains protection for landlords. It cannot be used as a last-minute delay to eviction. If challenging an eviction notice, the tenant will have to prove that they made a complaint about conditions before the notice was issued. They will lose their ability to challenge the eviction notice if they do not do so within a two-month period. The Bill specifically prohibits renters from raising issues that are their own responsibility. Environmental health officers are well trained in assessing whether a defect is longstanding and genuine, or exaggerated and manufactured. The Bill does not add a discretionary element to section 21 possession cases. Renters will not be able to use spurious complaints to slow down court proceedings. If an improvement or hazard awareness notice is served, the eviction notice is invalidated. If it is not, then the landlord is free to proceed.

It is unacceptable that private renters are being forced to pay huge rents for properties that are in poor or dangerous conditions. It is worse still that they are reluctant to raise their concerns with their landlords because of the fear of eviction. We have a situation in which many people feel they have to choose between living in unsafe or uncomfortable conditions and losing their home. That cannot continue. The word “home” should mean more than just the roof over our head: it should mean security, a place of safety and a sense of belonging. But for a large percentage of people now living in insecure and unsafe private rented accommodation, their home provides none of those things. The Bill would go some way to redress the imbalance.

There is so much more to be done. We should legislate for longer term three-year stable tenancies; predictable rent increases through the life of the stable tenancies; a ban on letting agents’ fees; and local authority reporting of landlords in receipt of housing benefit to ensure that HMRC can close the tax gap. I support the Bill as a step in that direction.