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23 Apr 2008 : Column 479WH—continued
London’s need for housing has been well explained during the debate. It is an extremely successful city—
arguably the best—and is growing fast. The London plan estimates that the population will increase from around 7.5 million in 2006 to 8.19 million in 2016 and 8.71 million in 2020. The number of households is expected to increase by around 720,000 by 2026. We have discussed the imbalance of supply and demand, and that has an impact on prices, which has an impact on affordability. It is genuinely shocking that the average house price in London, when adjusted for the mix, is now £339,000. Anyone who suggests that someone with an income of £60,000, £70,000 or £80,000 is normal does not move in the circles in which my hon. Friends and I move in our constituencies. That shows a level of elitism that I do not want in housing policy, and we must address that.
We have been building more homes in London in recent years. In 2006-07, more than 31,000 homes were completed, but the Greater London authority estimates that London will require about 353,000 new homes over the next 10 years to meet the backlog and future demand.
My hon. Friend the Member for Regent's Park and Kensington, North raised many issues. She wrote to my right hon. Friend the Minister for Housing in February, and I replied on my right hon. Friend’s behalf yesterday—I hope that she received that. I shall reiterate some of the themes concerning temporary accommodation, overcrowding, homelessness and rough sleeping because they are important. I will be happy, with my hon. Friend’s permission, to share that reply with hon. Members who have contributed to the debate.
I want to respond to the important point that my hon. Friend the Member for Hendon made about Barnet and the patchiness of affordable housing in the capital. He was right to say that last year the proportion was about 10 per cent. We need a lot more, but I want to consider the matter with a three-year trajectory because that gives an idea of direction and how local authorities are committed to ensuring that they provide affordable housing.
The three-year average for Barnet is 23 per cent., which is one of the lowest in the capital and is matched only by Liberal Democrat Richmond with 20 per cent., Liberal Democrat Sutton with 17 per cent., Conservative Wandsworth with 18 per cent. and Conservative Kensington and Chelsea with 21 per cent. I do not want to be party political, so I shall mention the Labour-run London borough of Greenwich, which has a three-year average of 19 per cent., but it is important to point out that last year it showed 38 per cent. affordable housing in its total new build, so it is moving in the right direction. In 2004-05, the figure was 17 per cent. That is important, because local authorities have a key role in securing affordable housing and that shows how committed they are to addressing people’s needs and to obtaining affordable housing in their areas.
Mr. Dismore: My hon. Friend would have noticed, as I did, that the hon. Member for Welwyn Hatfield (Grant Shapps) did not answer the question about the 50 per cent. rule—one can only assume that he does not agree with it. His contribution suggested that he wanted to let rip the open market in London. His solution seems to be to build more houses without any reference to social housing. Is that my hon. Friend’s understanding of where the Conservatives are coming from, and what would that mean in Barnet?
Mr. Wright: As I said, the hon. Member for Welwyn Hatfield is slightly embarrassed by the stance of the Conservative mayoral candidate.
Mr. Wright: Well, he should be, frankly.
Grant Shapps: Will the Minister accept that what is important is not the percentage of affordable housing that is built, but the absolute numbers that are built? Some of the councils that he has mentioned have exceeded the Mayor’s own building target. Does the Minister not accept that that is a good thing?
Mr. Wright: Targets are the right way to drive through improvements in performance, particularly the 50 per cent. target on affordable housing. Yes, let us build more homes, but some people, such as those within the circles in which certain hon. Members move, think that having houses worth £300,000, £400,000 or £500,000 is somehow acceptable and that they are quite cheap. I do not think that that is acceptable. We need to address in a strong manner the needs of the people on the ground whom we represent, which is something that the Conservative party does not do. This is a key dividing line in terms of how we ensure—
Mr. Christopher Chope (in the Chair): Order. We must move on to the next debate—
4 pm
Sitting suspended for a Division in the House.
Private Sector Rented Housing
4.15 pm
Ms Sally Keeble (Northampton, North) (Lab): I am very glad to be able to have a debate this afternoon on private rented housing. I am also very grateful for the information that has been provided to me for the debate by a number of external organisations. Clearly, there is wider concern on the issue among both housing industry professional organisations and the organisations that support tenants and homeless people. I hope that my comments will feed into the current Government review of private sector rented housing, which my hon. Friend the Minister is leading. I hope that he will say more about that review when he winds up and that he will give assurances about how the points that I raise will feed into the review and be reflected in the results.
My concern is especially with the use of private rented accommodation as an alternative to social rented housing for people on low incomes and particularly homeless people. I want to raise four issues that I hope my hon. Friend will include in his review and I would like three particular recommendations to come out of it. First, however, it is important to recognise the role that private sector rented housing plays in the overall housing mix. It accounts for 12 per cent. of England’s total housing stock, catering for people at all income levels. Of course, much of it operates perfectly well. Indeed, I understand that, overall, tenant satisfaction is higher in the private rented sector than it is in relation to housing associations or among council tenants.
However, underlying that overall position are many private sector tenants who are among the most vulnerable people in society and there is evidence that that group is growing in number. One of the drivers of that is the Government’s housing options approach, which has encouraged tenants who apply for social housing to consider private rented accommodation. It would be helpful if my hon. Friend, either now or later, could clarify the Government’s intention on the way in which housing options interviews are conducted. My understanding is that the needs assessment should come first and the discussion about housing options and how those needs are met should come second. The person inquiring about housing should not be plunged into talking about options before their needs have been assessed.
Unfortunately, the expansion of the private rented sector has not been accompanied by the rationalisation of it. A very large number of small-scale landlords make their money out of renting small numbers of properties—in many cases, renting to tenants funded by the public sector—and although many of those landlords are entirely reputable, a significant minority are not.
The use of the private sector for what are basically public sector tenants can work well. Last year, I went to an excellent seminar run by Shelter, at which a number of local authorities spoke about the constructive working relations they had with private landlords in their areas, which worked in the interest of housing homeless people. The private sector was a partner in active planning for housing homeless people and assessing needs in an area. However, I know from my constituency that if the local authority—in this case, Northampton borough council—is poor, the process of considering housing options can too easily become a process that pressurises
tenants into moving into private sector tenancies that are insecure, unaffordable, unregulated and, sometimes, in disrepair. That can cause real hardship for some of the most vulnerable people, who rightly turn to local authorities for support.
The biggest problem facing tenants in private sector rented accommodation is the chronic lack of security. Six-month shorthold tenancies do not provide a stable home for vulnerable families. The National Association of Citizens Advice Bureaux found that the United Kingdom provides the least security of tenure for private-sector tenants of the six European countries that it studied. In Germany, 51 per cent. of people live in privately rented properties, mostly with unlimited contracts; in Spain, where 10 per cent. of properties are privately rented, tenants have the right annually to extend contracts for up to five years. We are the only country with six-month shorthold tenancies.
For vulnerable families, the consequences are desperate. A recent study of homelessness in Northamptonshire found that, in 2006, no fewer than 17 per cent., almost one in five, of homeless families housed by the local authority were made homeless because their shorthold tenancies had come to an end and had not been renewed. Councils have to pick up the pieces when that happens, as people are almost being evicted from private rented homes.
A Shelter report, due to be published shortly, cites the survey of English housing for 2005-06, which found that 38 per cent. or just over a third of people in private rented housing had been in their homes for less than a year. That is four times the level for social tenants, and a staggering seven times that for owner-occupiers. Only 5 per cent. of owner-occupiers had moved within the past year compared with 38 per cent. of tenants in privately rented property. There is massively greater insecurity for private tenants than for any other group.
Behind those figures lies deep misery for many families. They are forced to live a nomadic existence in private rented housing. As a result, the children suffer constant disruption in their schooling and the parents sometimes have problems in keeping their jobs, and there is the social disruption of having constantly to move home.
A young couple in my constituency who came to me for help were typical; they were under real pressure. They were teenage parents; the father was in work and the mother was a former care leaver. They had to move home three times in 18 months, from one privately rented home to another. They had been forced into private accommodation as a result of a housing options interview. On the third time of moving, the mother was pregnant with a second child. The young man’s mother was very supportive of them and desperate to find a better solution for her son and his family, but they still had to move from place to place. Unfortunately, I was not able to maintain contact with them. Packing up and moving home every six months is something that I could not cope with, let alone with two young children in tow.
There was a time when security of tenure acted as a deterrent to owners renting their properties, but I believe that the pendulum has swung too far the other way and that changes are needed to redress the balance in favour of tenants.
Secondly, the cost of private rented housing can be a real problem, especially for those on housing benefit. According to figures provided by the Department for Communities and Local Government, 19 per cent. of the sector’s tenants were receiving housing benefit in 2005-06. That is a total of just under 500,000 households. However, about 30 per cent. of those people suffer benefit shortfalls, and need to top up their housing benefit from other benefits to pay the rent. A third have to top up their rents from money that only just covers their living costs and, as a result, they may be in debt or arrears. That can result in eviction, which puts them back into the revolving doors of homelessness.
Another constituent who asked me for help and advice was sharing a one-bedroomed flat with her daughter. She was paying £625 a month for the property. As a result of economic pressures, she was facing a reduction in her working hours. For the first time, she was having to think about claiming benefits. However, she discovered that she would get only £525 a month in housing benefit, leaving a shortfall of £100 a month, which had to be made up from her other benefits and a reduced wage—a near impossible task.
I know of the Government scheme to help private sector tenants with their deposits, but the experience of my constituents is that, for whatever reason, many do not seem to be able to gain access to that help. They have real difficulty in raising money for a deposit; and if they have to leave a tenancy, they find it difficult to get the deposit money back again. I would not argue for a return to the days when the Government had to underwrite whatever rents landlords chose to charge though housing benefit, but the review needs to consider what can be done about the high cost of private sector rented housing; we must ensure that landlords do not charge whatever they can from housing benefit and whatever more they think they can get from the tenants’ other benefits.
Thirdly, there are significant problems with the maintenance and repair of many properties. Although housing conditions in the private sector are improving, the Shelter study cites Government figures from 2005 showing that almost half of all homes in the private rented sector were classified as not being decent to live in. The major problems listed included inadequate heating, difficulties with water and even sanitation, structural problems, damp and poorly fitted electrical fixtures. There is also considerable evidence of the tenants’ inability to get private sector landlords to carry out repairs. The National Association of Citizens Advice Bureaux detailed a catalogue of what it calls “retaliatory evictions”, with landlords evicting tenants for trying to force them to carry out repairs. NACAB calls for Government action to stop such evictions and points to measures taken by other European Governments.
A constituent came to see me saying that she had been unable to get her private sector landlord to carry out basic repairs, and when she repeatedly complained to her landlord, she found that her tenancy was not renewed. Other constituents have complained about being unable to get landlords to carry out such basic repairs as replacing broken windows; one constituent complained of having to live for several months with the ground floor windows boarded up. Council tenants, of course, have problems of disrepair, but at least they
have access to the council, whereas private sector tenants often have difficulty in getting a response from their landlords.
Fourthly, tenants have complained about the problem of getting action taken on antisocial behaviour. Local authorities are in a lead position for getting antisocial behaviour orders to combat problems on their estates, especially those linked to their own tenants. However, tenants in private accommodation do not have the same access to justice. One constituent told me of a neighbour involved in drug taking, but the landlord of the block of flats was unwilling to act; her shorthold tenancy was not renewed. I do not know whether that can be called an eviction, but the landlord has the option every six months to decide on renewal.
I recognise the importance of an active private sector in providing rented accommodation, and believe that it should be actively developed in the UK. I spent a long time living in the private rented sector when abroad. My experience of rented accommodation outside the UK is very different; that is due mainly to the lack of institutional investment in the sector here.
I hope that the Government review will help to stimulate, as well as regulate, the private rented sector by doing two things. First, they should encourage institutional investment in the sector. The buy-to-let market has until now been active, but it is patchy and fickle, with a large number of smaller-scale landlords. I have noticed that they tend to follow the market when deciding what to do with their properties. At one stage, landlords in Northampton were not letting so much to homeless families but to asylum seekers—they could get close on £100 a week for a room instead of £100 a week for the property. When the market peaked, a good number sold out completely, leaving their tenants homeless.
The Royal Institution of Chartered Surveyors gives support for institutional investment as one of its priorities. It says that there is a need for greater Government support to increase the provision of rented accommodation by larger companies as opposed to single landlords as that would offer a greater level of accountability and greater chances of ensuring better- quality stable housing. The institution has set out a number of proposals that would boost institutional investment in private rented accommodation, including using planning policy, changing the stamp duty and VAT regimes, and changing the real estate investment trust regime to encourage its use as a tool for investing in property for rent.
There is a pressing need to provide more security of tenure for tenants, especially by increasing the length of tenancies and providing an effective appeal against eviction. There is a pressing need to end the continual instability that plagues the lives of many of the poorest people. There needs to be some halfway house between the misery merry-go-round of six months shorthold tenancies and the long-term, secure tenancies enjoyed by council tenants. I was pleased that the Royal Institution of Chartered Surveyors has also supported proposals such as that for a new type of housing tenancy. Thirdly, there is a need for a comprehensive and joined-up system of national regulation that penalises the worst landlords and promotes good practice in the sector with a common code for all.
In many of our areas, council homes were a step up for people who were escaping the slum housing of the early 1990s. I know that huge problems with large-scale
private sector landlords have caused real misery for many households on low incomes in my hon. Friend the Minister’s constituency. Now, for some of our most vulnerable people in constituencies such as mine, a move into the private sector is a move back into substandard and insecure housing, where they are at the mercy of landlords who charge high rents for inferior accommodation, without security of tenure, which people who turn to the state for help rightly expect. If we are to ensure that the private sector provides a realistic housing option for people on lower incomes, we need to ensure that we increase the supply, improve the quality and reduce the insecurity.
I hope that the measures that I have set out, and those put forward by Shelter, NACAB and the Royal Institution of Chartered Surveyors will be looked at seriously and adopted by the Government to ensure that their ambition for everybody to have a decent home extends to people in private rented housing.
4.32 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): I congratulate my hon. Friend the Member for Northampton, North (Ms Keeble) on securing this debate. She is a real champion of housing and was gracious enough to allow me to visit her constituency in the past couple of months; I greatly enjoyed the visit and hope to go back soon.
A decent home can be a major indicator of life chances, educational attainments and life expectancy. Having a home that one can be proud of is of major importance. Aspirations and expectations of home ownership and tenants’ rights have risen dramatically in the past few decades, and rightly so. Whether people buy or rent, their right to a decent home of their choice that is suitable for their needs is the same. That right underpins the priority that the Government attach to delivering housing in all sectors. Our plans for 3 million new homes between now and 2020 are absolutely essential if aspirations for greater quality and choice are to be met. Greater housing supply is vitally important, but the issue is also about giving people access to the right sort of home. As my hon. Friend said, the private rented sector can make a vital contribution.
We talk about a private rented sector as if it is a single entity, but it is actually not a homogenous market at all—quite the reverse; there are different sectors and different types of market within it. For example, nearly two thirds of households in the private rented sector are categorised as economically active, and more than three quarters of tenants in the private rented sector are under 35. For those people, who are often in the first throes of their careers, attempting to secure a professional qualification and so on, the attraction of private renting is its flexibility. Students who have moved away from home for the first time almost invariably rent, which again shows a degree a dynamism within the market.
However, it is fair to say, as my hon. Friend did, that the sector also provides housing for vulnerable people. A little under a fifth of tenants in the private rented sector are on housing benefit. The introduction of the new local housing allowance should give those tenants greater choice about where they live because it will allow them to see in advance the properties that they can afford.
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