Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

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.


  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.


  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.


  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.


  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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