Memorandum by Oona King MP (DHB 13)
I welcome the ODPM Select Committee's inquiry
into the draft Housing Bill, and the opportunity to contribute
to pre-legislative scrutiny. The main focus of the Bill is on
modernising the private rented sector, and I strongly support
the introduction of the new Housing Health and Safety Rating System
(HHSRS), the licensing regime for houses in multiple occupation
(HMOs) and the selective licensing of private landlords in areas
of low demand. These measures should guarantee improved conditions
for many tenants in the worst parts of the private rented sector.
It is clear, however, that examples of poor
conditions and management are also found in areas of high demand.
Powers to enforce minimum standards amongst private landlords
must be made available to local authorities in these areas too.
There is also a strong case for including legislation to protect
rent deposits paid by tenants in the private rented sector. Very
few landlords have participated in the pilot Tenancy Deposit Scheme,
therefore legislation is the only way to ensure that deposits
are not unreasonably withheld.
RIGHT TO
BUY
The Bill also makes important changes to both
the qualification period and the discount repayment criteria of
the Right to Buy. These changes are designed to discourage some
of the speculative activities of property companies abusing the
Right to Buy, and help retain lettings for homeless households
and overcrowded families. They complement the recent reduction
in the maximum Right to Buy discount in the 41 local authorities
identified as experiencing severe housing pressure. Colleagues
may recall that my previous submission to the ODPM Select Committee
inquiry into Affordable Housing, initiated whilst I was on the
Committee, outlined how abuse of RTB had crippled regeneration
programmes in Tower Hamlets. The Committee was correct to press
the Government for changes in this area, and proposed changes
must be fully enacted.
QUALIFICATION PERIOD
I strongly support the extension of the qualification
period to five years. High property values across London and the
South East mean that, in practice, many tenants are now eligible
for a full £38,000 discount after just two years. Even if
the lower maximum discount recently introduced in forty-one local
authority areas is extended to others with similar problems, the
vast majority of tenants in southern England will still benefit
from a maximum discount just two years after signing for the tenancy.
As well as helping to retain lettings for those in housing need,
the longer qualifying period would help ensure that those who
exercise their Right to Buy after being a tenant and paying rent
for many years are better rewarded than those who have only recently
become a tenant.
DISCOUNT REPAYMENT
PERIOD
I also support the introduction of a mechanism
relating the amount of discount repayable to a proportion of the
property's resale value, rather than the amount of discount actually
received on the initial purchase. This will enable the taxpayer
to share in any windfall profits arising from a booming property
market. In my view, however, there is a strong case to extend
the period during which a proportion of the discount must be repaid
to seven or even 10 years rather than the five years currently
envisaged in the draft Bill.
There is growing evidence that a number of private
companies are offering tenants a cash incentive to exercise their
Right to Buy with an interest-free loan and then sign over the
lease so the property can be let out on the open market. The property
is then formally sold on to the company to be let or sold on the
open market after the three-year period has expired, so that none
of the discount has to be repaid. These companies are deliberately
targeting tenants who intend to give up their tenancy, and whose
property might therefore have been let to another family in housing
need. For example, Alliance & Mutual Investment Ltd recently
put out a leaflet on estates in east London with the headline
"Are you a council tenant thinking of giving up your tenancy?
Don't! If you have been a council tenant for over two years .
. . you could receive between £5,000 and £15,000 when
you leave".
While these companies are less likely to want
to get involved in under-lease arrangements if the property cannot
be formally sold on to them for more than five years, this measure
would be even more effective with a longer seven or even 10 year
period. Although a 10 year period may create some complications,
for instance when the original leaseholder dies and leaves the
property as an inheritance, it would almost certainly put an end
to the exploitation of the Right to Buy by property companies.
The longer period also offers leaseholders an incentive not to
leave the communities they currently live in, helping to bring
greater stability to deprived communities.
I hope therefore that the committee will recommend
a further extension of the discount repayment period.
HOUSEHOLD OVERCROWDING
The Homelessness Act 2002 has greatly strengthened
the safety net for homeless households in priority need. I believe
that the draft Housing Bill provides an ideal opportunity to improve
the protection for other groups in housing need, particularly
families living in overcrowded accommodation. The Survey of English
Housing estimates that around half a million households are one
or more bedrooms below the bedroom standard.[2]
The adverse effects of overcrowding on the health and welfare,
and education and employment prospects of residents are well-documented.
The Bill updates the legislation governing overcrowding
in houses in multiple occupation and the new HHSRS enables local
authorities to assess and tackle hazards resulting from overcrowding
and lack of space in other types of housing. However, the HHSRS
will have very little real benefit for those in overcrowded accommodation
unless the statutory overcrowding standards are updated at the
same time. These standards date back to 1935, and are in urgent
need of modernisation. Housing Ministers have acknowledged that
our understanding of the need for space and privacy has come a
long way since then, and yet the Bill does nothing to improve
the situation.
For example, the way children between the ages
of one and 10 are counted and babies are not counted at all, means
that families with children can live in severely overcrowded conditions
without actually reaching the statutory threshold. Technically,
four children under the age of 10 could share a room (which could
be a living room) without statutory overcrowding occurring. Similarly,
a couple sharing one room with their twin babies are not deemed
to be statutorily overcrowded until the children reach the age
of 12 months.
In addition, no offence has occurred if the
standards are breached because of "natural overcrowding"
for example, a child reaches the age of one or 10 (when they become
either half or one person). Most importantly, there would still
be no statutory overcrowding if the household had applied to the
local authority for alternative accommodation. In practice, this
means a family applying for alternative accommodation effectively
exempts itself from being recognised as statutorily overcrowded.
In my view, it is no longer appropriate to require
living rooms and kitchens to be taken into account in determining
whether a dwelling is overcrowded. Overcrowding should be determined
on the basis of the number and size of the bedrooms available,
and the needs of all occupiers—adults, children and infants
alike—should be taken into account in deciding how many
bedrooms are required. I hope therefore that Ministers will be
persuaded to address the issue of overcrowding along the lines
outlined in Andy Love MP's recent private members bill.
The Housing (Overcrowding) Bill proposed a new
statutory definition based on the "bedroom standard"
used in the Survey of English Housing. This was accompanied by
a requirement that local authorities undertake a survey of overcrowding
in their area and estimate the number of dwellings required to
abate the overcrowding. The Housing (Overcrowding) Bill also includes
a duty on the Secretary of State to take any such reports into
account in determining the overall allocation of funding for investment
in new affordable housing and the refurbishment of existing accommodation.
I hope the committee will make a specific recommendation
in support of these proposals.
2 1. "Bedroom standard" is used as an indicator
of occupation density. A standard number of bedrooms is allocated
to each household in accordance with its age/sex/marital status
composition and the relationship of the members to one another.
A separate bedroom is allocated to each married or cohabiting
couple, any other person aged 21 or over, each pair of adolescents
aged 10-20 of the same sex, and each pair of children under 10.
Any unpaired person aged 10-20 is paired, if possible with a child
under 10 of the same sex, or, if that is not possible, he or she
is given a separate bedroom, as is any unpaired child under 10.
This standard is then compared with the actual number of bedrooms
(including bed-sitters) available for the sole use of the household,
and differences are tabulated. Bedrooms converted to other uses
are not counted as available unless they have been denoted as
bedrooms by the informants; bedrooms not actually in use are counted
unless uninhabitable. Back
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