Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 640-659)



  640. I am talking about anywhere where a regeneration initiative is announced, everyone thinks, that is a really good idea, I will get my discount and use the government subsidy. Instead of it going to improving housing for the community I will get a discount as an individual, sell it in two years' time and the housing stock has not improved.
  (Ms Keeble) I have to say that the one area where that particular issue has been raised has been the Ocean Estate. I have not had that one raised elsewhere.


  641. Oona King wants a solution to the Ocean Estate, which the Committee had a look at and were appalled by it.
  (Ms Keeble) I understand that. We are not looking again at the right-to-buy. We would have to look with Tower Hamlets at what the other options would be for renewing that estate. We are not looking at suspending the right-to-buy.

Ms King

  642. Choice based lettings, is the result that the most difficult tenants become concentrated in the worst areas?
  (Ms Keeble) No, I would not have thought so. The entire aim of choice based lettings is to make sure that all people, all housing tenants in the social sector have more choice about where they live. That would mean that it is not just the people who can wait longest to see what is on offer, that should also apply to people who are coming up through the homelessness procedure.

  643. Do you think the policies, powers and funding streams currently available to you are sufficiently flexible to take account of volatile housing markets where things rapidly change? You spoke about a housing market rapidly collapsing, what do you think should be done to identify neighbourhoods on the brink of that collapse to stop them slipping into decline?
  (Ms Keeble) There has been some work done in particular areas to find ways of making very fast intervention. On the wider question, have we got all of the mechanisms in place, I think the one issue that we need to really deal with is the one of the Market Renewal Fund.


  644. When you talk about the fast intervention what in government terms is fast?
  (Ms Keeble) That is really about seeing when one property in a street has been empty for period of time and making sure that there is tenant in it quickly before that spreads.

  645. What do you mean by quickly, a couple of weeks or a couple of months?
  (Ms Keeble) I would put it in months.

  646. How many months then?
  (Ms Keeble) I do not want to be drawn into months. If you are talking about letting a property you have to repair the property, bring it back to—

  647. The reason I am pressing you is there are some evidence that suddenly the skids go under a neighbourhood and it goes down very quickly and therefore you need rapid intervention. What I was looking for from you was some assurance that when you were talking about fast a local authority could get action within two or to months otherwise it is going to take too long and the problem just gets bigger and bigger.
  (Ms Keeble) Yes. I would say months. Can I just say on that, if you are talking about skids going under a particular neighbourhood and it going into decline, there are quite a lot of measures which are in place now, or which are coming into place, which would help deal with that and should help stop that very quick deterioration. For example, once we get the licensing for private sector landlords I am sure that that will help. I think also the arrangements for the neighbourhood wardens, street wardens will also help, because they act as an early warning system for problems in the area and they deal also with some of the dereliction, which is the first sign of an area going seriously into decline. We have also produced guidance for fast tracking and the eviction of problem tenants. There are quite a few extra mechanisms that local authorities can actually use to help to manage estates more effectively and help to stop that very sudden collapse that you can see in an area. I take your point that no one might see it coming, but I would also argue that in some instances the early warning signs are there.

Christine Russell

  648. Can I continue on this theme and ask you whether in the main you feel the problem is problem landlords or problem tenants?
  (Ms Keeble) I think it is both. The reason why the problem landlords are problem landlords is because by and large what they are doing is they are buying up houses which have virtually no capital value, they are buying them up for a few thousand pounds, and they are buying because of their housing benefit value—I think the term is benefit harvesting—they are simply using the income stream from the housing benefit and they are letting to people who have sometimes been evicted from council properties for anti-social behaviour. You have bad landlords who do not manage their properties letting to very difficult tenants, that is when you get the real disasters.

  649. Do you feel then that the Rent Service is culpable because after all it is the Rent Service that allowed these high rents to be accepted for housing benefit purposes in slump properties in many cases?
  (Ms Keeble) I have to say I would not blame the Rent Service for that. If you are looking at somebody who has bought a house, and you have probably heard the information as much as I have, for a few thousand pounds the amount of money that they get in for housing benefit is going to cover the cost.

  650. We heard that, you go down the pub, you buy it and you recoup that value within six months.
  (Ms Keeble) I do not think that is a Rent Service problem. That is entirely a problem of people spotting an easy way to make money, which is that you buy up cheap properties and you let them to people who then get housing benefit.


  651. Surely if you buy a house for £4,000 you should not be able to claim that the economic rent for that property is £80 a week and the Rent Service approve it, should you?
  (Ms Keeble) For the kind of prices that people are buying properties for they can let at virtually any price. I do not think that you can shift the problem off on to the Rent Service. The problem seems to me to lie fair and square with people who are using a loophole to make a very lucrative living. The way to deal with it is through the licensing of private sector landlords, which is what we consulted about and what we are hoping to legislate for, because that would link the payment of housing benefit, and this is one of the issues that is raised in the consultation document, the payment of housing benefit to the type of management services and to the way that the landlord manages property, so if they do not manage the property properly and they are completely irresponsible as landlords they would not be able to get housing benefit.

Mr Wiggin

  652. I was just curious about the difficult tenants, if you come down too hard on landlords where will these difficult tenants live?
  (Ms Keeble) Of course there is an issue about where people live but the point is that the landlords should not simply be putting people with profound difficulties into a particular area and then leaving them without any support or any form of management at all. Of course people have to live somewhere but the properties also have to be managed and the landlord has to take some responsibility for the way in which he organises and supports a whole range of properties.

  653. That is not quite right, the problem is you can have a problem family that will begin the whole process of decline in an area. At least in this case that we discussed now the landlords are responsible for the ownership of the area, so they are fulfilling quite a useful function, I am sure you accept that.
  (Ms Keeble) I do not think in the cases where you see the decline of areas because of this type of landlordism, it is not the case that you have a road and one person in it and everyone else is an owner-occupier. What you have are streets where people are moving out, for all of the reasons we have talked about because of low demand, and then you have whole streets being bought up or large numbers of properties and then quite substantial numbers of anti-social tenants being placed into those properties. I think it is a fairly well recognised cycle of decline that is affecting particular areas of the North. I have to say that I think the real route into it is through private landlord licensing and the link with that through then to housing benefit.


  654. When will that happen?
  (Ms Keeble) The consultation is out now.

  655. When will it happen?
  (Ms Keeble) We would hope to be able to get something in the Queen's speech, obviously we cannot make a commitment on that.

  656. If it was in the Queen's speech next year it could be implemented in another 12 months after that?
  (Ms Keeble) Yes.

  657. Policy Action Team segment came up with this idea that in low demand areas local authorities should have a development strategy, was one of these strategies one that was on the bonfire yesterday?
  (Ms Keeble) Local authorities are expected to have quite a number of different strategies, one is a community strategy. We are now asking them specifically about empty properties.

  658. This is strategy that is to stay. Are you happy that the Council of Mortgage Lenders, the Housing Regeneration Companies and the Urban Regeneration Companies are all tied into this strategy?
  (Ms Keeble) If you mean are they working together properly, I am sure you can point to areas where they are not but I would say that increasingly in the areas that we have seen the different measures that the government is making to ensure that they are working together are working and it is happening.

  659. Do you have the Home Office on board? There is some evidence that in placing asylum seekers there is distorting in the market in some of these low demand areas?
  (Ms Keeble) We are working closely with the Home Office in quite a number of different areas.

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