Tenant Fees Bill

Tim Farron Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

I rise not only to endorse the changes made by the Government, but to support the amendments tabled by my hon. Friend the Member for Great Grimsby (Melanie Onn) and to welcome the Bill. The Housing, Communities and Local Government Committee heard wise evidence and counsel from various groups, including landlords’ organisations and local authorities, and it is quite clear that there has been a bit of a wild west for many years in certain parts of country. I am proud to say that I have some excellent, responsible agents in my constituency, but there are the less scrupulous exceptions for whom greater regulation is really needed, so the Bill is timely. I have lived and rented in France, where it was evident just how much tighter and more balanced the legislation was.

To echo the point made by my hon. Friend the Member for Great Grimsby, this is really about rebalancing the relationship between landlord, agent and tenant to make it much more transparent and much fairer. For many years tenants have felt disempowered in that relationship, and over the past 20 years we have seen significant growth in the proportion of people renting privately. That proportion has doubled, and in some parts of the country, such as the north-east, it has increased by 200%. It is important that we get to grips with this, and the Bill moves us a long way in doing that.

In the past week I spoke to a student in my constituency who is facing tenant fees of £595 for one year. In some cases we are witnessing extortion, particularly in sectors with high churn, typically with one-year tenancies. We could have gone further, but I welcome the main part of the Bill.

As has been said in the Chamber, and also by organisations such as Shelter, Citizens Advice and Which?, the default fees could have been more clearly and more extensively defined. As the hon. Member for Harrow East (Bob Blackman) said, what is reasonable is open to interpretation. We have seen extreme cases involving replacement key costs, for example. I support amendment 3, which was tabled by my hon. Friend the Member for Great Grimsby, in those circumstances.

The level of the deposit cap was widely raised with the Select Committee by landlords and others. I would have preferred a four-week maximum, but I understand how we got to where we are. Deposit caps are a particular issue for high-churn tenancies. The idea of passporting, as proposed by the Minister, is a welcome move.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The hon. Gentleman makes a good point. Does he agree with the observation, which has also been made by bodies such as Shelter, that an impact of high deposits is increased homelessness? Homelessness has tripled in my area of the south lakes in the past year, despite our building more council houses. A six-week limit would mean an average deposit of £1,100, which would make a rental property unaffordable for many people.

[Matt Western]

The hon. Gentleman makes a valid and pertinent point. High deposits are very much part of the cause of homelessness in many areas, because people feel financially and socially excluded from the private rented sector. As I alluded to at the beginning of my speech, high deposits have made renting privately much more difficult. In the same period we have seen a 20% reduction in social rented properties, which are critical.

I will move on because of time. On the issue of compliance, the Select Committee heard how few authorities, whether it be because of less appetite or because they just do not have the enforcement officers, follow through on enforcement. As we have heard, 93% of authorities have not taken enforcement action against rogue landlords. Of course the shining exception is Newham, which, as the Select Committee heard, accounts for half those enforcement cases.

I urge the Minister to reconsider Labour amendments 1 and 2. If £30,000 is seen as too high a maximum, there should be flexibility for authorities to introduce a more appropriate figure, as my hon. Friend the Member for Great Grimsby said—the hon. Member for Harrow East mentioned that £5,000 is a cost of doing business. That is how this was all done in the past, and we have to break that for the future because of the growth and importance of the private rental sector.

I support and welcome the Bill, but I would just ask for tighter regulation of default fees.