| Previous Section | Index | Home Page |
4.57 pm
Dr. Lynne Jones (Birmingham, Selly Oak): Groups ranging from the Young Homelessness Group to the Government's Social Security Advisory Committee, the Small Landlord's Association and the National Association of Estate Agents oppose the regulations. The Minister said that the regulations are designed to deal with abuses, yet he cannot give any real explanation of those abuses and how they will be dealt with. In its report "Housing in England, 1994-95", which was published in April, the Central Statistical Office found no evidence of such abuse by young people under 25.
The Government seem to think that housing benefit encourages young people to leave the family home and set up in luxurious apartments. There is no evidence for that. On the contrary, most young people who are forced into leaving home are not in a position to provide for themselves and they do not live in accommodation much different from that of others in their age group. As my hon. Friend the Member for Manchester, Withington(Mr. Bradley) said, thousands of under-25s buy their homes, and they have been encouraged to do so by the Government and by a system under which it is better to get mortgage interest tax relief than no benefit. They are to be penalised.
There is no evidence of the kind of abuse that the Government say the regulations are designed to tackle. The real issue, which was admitted by the Minister, is tackling the rising cost of housing benefit. Who is responsible for that rise? The blame must be laid fairly and squarely at the door of the Government and Conservative Members. When the Government repealed the Rent Acts that regulated private rents, they knew that people would not be able to afford market rents.
In 1988, the then Secretary of State for the Environment, Nicholas Ridley, said that housing benefit would be available to help tenants who could not afford the full market rent. He said that that was the key component of the Government's policy, and that it would ensure that deregulation did not price lower-income households out of the market.
As a result of the regulations, the housing benefit bill for the private rented sector will be about £4 billion a year and will accommodate a small fraction of the population. However, the bill for council housing will be £5.5 billion for a sector that is occupied by nearly a third of the population. The reason for the rise in housing benefit is clearly that private rents are high and because private landlords are able to demand them, but the public sector can produce housing at much lower cost.
Mr. Bernard Jenkin (Colchester, North):
The question seems simple. To hold down rents, we either have artificial rent controls and controls on what landlords can charge, or we set limits on what people should pay. The hon. Lady advocates state control of rents, but we simply say that we should limit what people should be expected to pay. If we do not do that, rents will continue to be forced up by the unlimited availability of housing benefit to pay the reference rent in particular areas. Reference levels have drifted up and up because they are underwritten by the state. Surely that must stop.
Dr. Jones:
That is correct, but the people who rely on housing benefit are not in a bargaining position. There is a shortage, despite what the Government say about the increase in houses available in the private rented sector. The number has increased, but largely as a result of the collapse in the home ownership market because of falling prices. There is still a shortage in relation to demand, and I predict that, if the home ownership market picks up, which the Government hope will happen, there will be a further collapse in the availability of rented houses, particularly for students. I could give much evidence of that in my constituency.
Rents have been deregulated and gone up, councils are not able to build new homes, and vulnerable people are forced into the private sector. They have little bargaining power and they have to pay the rents that are demanded of them. Responsible local authorities have attempted to intervene in the market and to develop good relationships with the private sector. That has happened in Birmingham. In a debate last year, the Under-Secretary of State for the Environment said:
These proposals follow those that were implemented in January and which limit rents to local reference rents. For those under the age of 25, there is no top-up allowance for the difference between the average rent in an area and that which the rent officer deems reasonable. Rents are being held down and will have to be paid in advance. I shall give an example of what that will mean to our scheme.
At the moment, our market-based rents are about £45 to £50 a week for a bed-sit and £65 to £80 a week for a one-bedroomed, self-contained flat. The rent officer has now restricted the rent for such properties to £32 and £45 a week. That means that landlords will no longer be willing to take on tenants. I have given the rents for reasonable accommodation that can be let, but people on low incomes will increasingly be forced into poor standard accommodation. At a stroke, the Government will undermine the good work that we have been doing and which has been commended by them.
The proposals are a crude device and do not offer adequate protection to vulnerable young people who cannot live with their families. I do not know why we think it so desirable that young people should continue to live with their families for as long as possible. I left home at the age of 18 when I went to university; I suspect that most Conservative Members also left home at an early age and were probably able to afford reasonable accommodation and may have been able to buy houses. When I was 22, like many of my colleagues, I was able to buy a house. Many people under the age of 25 want to live in reasonable accommodation. It is a good idea that, at the age of about 18, they should start to live in some kind of furnished accommodation, perhaps even in bed-sits if good quality ones are available.
I checked today on the rents for student accommodation that is offered in halls of residence in Birmingham. The rent for accommodation in a four-unit bed-sit is £30 to £50 a week. That is the kind of supportive environment in which we might want under-25s to live. However, quality bed-sit accommodation is not available. The Department of the Environment's consultation document on houses in multiple occupation states that 44 per cent. of HMOs were unfit.
Mr. Jenkin:
It is always risky to talk in this place about our own experiences, but I shall join the hon. Lady in taking that risk. When I came back from university and started my first job, I lived at home for more than a year and then rented a room in a house. It was furnished
Dr. Jones:
It is reasonable for young people to progress from some kind of supported accommodation when they first leave home--that might not necessarily be the case--but I would expect it to be of reasonable quality. Rents for bed-sits of reasonable quality in Birmingham are between £45 and £50 a week, but much of the stock is inadequate and nobody wants to move into it; 44 per cent. of it is unfit and much of it is a fire risk. The Government, through these regulations, are encouraging the supply of substandard accommodation.
The combination of the one-room principle, the local reference rent and the demand for rents in advance has undermined the efforts to provide reasonable accommodation for young people. Most young people stay at home and, perhaps, do not want to leave, but many of the people we are talking about do not have a choice. They are forced out of their homes for reasons beyond their control.
I was fortunate in that I went to university, but if I had not I would not have been able to stay in the family home. Indeed, I was not able to do so during the vacation. I did not have the luxury of going back to what I would imagine in the case of the hon. Member for Colchester, North (Mr. Jenkin) was a pleasant, large family home. I lived in a two-bedroomed council flat, which I shared with my sister, and had a mentally ill father. Those are the circumstances in which many young people live today.
In Birmingham, it is estimated that 4,000 to 5,000 people will be affected by these cuts. Young people who move into average accommodation today, where the full rent will be met, are likely to experience a cut of £15 to £20 per week in their benefit when it is reviewed in October. Let us also consider the young people who are currently working and, perhaps, renting a one-bedroomed flat. If they lose their job and fall on hard times, or if their income is cut and they are forced to rely on housing benefit, they will be given 13 weeks in which to find somewhere else to live. They will be forced to move out of their accommodation by these regulations. I do not know whether the hon. Member for Colchester, North thinks that that is a good thing.
As my hon. Friend the Member for Withington said, there is also a disincentive for people who are currently in receipt of housing benefit, and who live in reasonable accommodation, to get work because they are worried that, if they fall on hard times, they will be forced out of their accommodation. They have little bargaining power. If they are on income support or are in work, they are expected to live on £37.90. That is what the benefits system assumes they need if they are on a low income and need housing benefit to top up their wages. That is £10 less than the figure for the over-25s. As a result of the regulations, young people will be under pressure to go down market into unsafe, unsuitable accommodation, and they will boost the market for cheap and poorly maintained properties.
Whether young people are in self-contained accommodation prior to January, or in supported schemes which are exempt, it will become impossible for them to move on while still on benefit without accepting a lower standard of accommodation. Places in supported schemes will then become blocked, making it impossible to provide appropriate accommodation for newly homeless youngsters escaping abuse or overcrowding.
"In particular, we are keen to expand the role played by the private rented sector in offering accommodation to people in housing need. It is a mistake to assume that private rented accommodation will, by definition, be inadequate . . .
Private landlords are reluctant in normal circumstances to house people who are poor and in need, and that is why local authority interventions have been necessary. The Minister continued:
Local authorities themselves have also done a great deal. A number have introduced imaginative schemes to encourage local landlords to co-operate with them in housing families and others in need."
"One approach that is achieving impressive results is the introduction of rent and deposit guarantee schemes. They give landlords the reassurances that they may require to house low-income tenants and can dramatically increase the chances of such households gaining access to rented accommodation."--[Official Report, 8 March 1995; Vol. 256, c. 315.]
5 Jun 1996 : Column 632
That was a recognition by a Minister last year, which was recognised again by the Minister today, that people in housing need and on benefit need a leg up in getting private landlords to take them on, but while commending such schemes, the Government are undermining them.
I am the chair of the Birmingham bond scheme. We have arrangements with landlords on our approved lists, and we give rent deposits only to landlords who offer reasonable accommodation. That includes bed-sits. They are happy to co-operate with us because they know that the rent deposit will be guaranteed and because we have a good relationship with housing benefit agencies and can help to iron out any problems with bureaucracy. The effect of the regulations on rent, and the demand for payment of rent in advance, would undermine that scheme at a stroke.
| Next Section
| Index | Home Page |