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Westminster Hall

Tuesday 24 June 2008

[Mr. Joe Benton in the Chair]

Private Rented Sector

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Watts.]

9.30 am

Mr. Andrew Smith (Oxford, East) (Lab): It is a pleasure to open the debate under your chairmanship, Mr. Benton. When I go door to door, talking with local residents, as I do every week, few issues are raised with me as often as the pressures and problems caused throughout my constituency by houses in multiple occupation and flat conversions in residential areas. The problems are all too often noise, poor refuse disposal, unkempt gardens and parking nuisance, and sometimes poor living conditions, too. If one house in a street is like that, it is a problem for neighbours. If there are half a dozen, that corrodes people’s quality of life to the point at which they start thinking about selling, and if they do sell, the chances are that it will be to another landlord seeking to let HMOs. As the problems compound, areas can be locked into a vicious circle, with a downward spiral in local amenity.

The private rented sector accounts for 26 per cent. of dwellings in Oxford—about twice the national average—and the pressures and problems of multiple occupation are having a major impact on residential amenity and even on the sense of community in parts of the city. Multiple occupation, which used to be concentrated in one or two areas, is spreading throughout the city, with an unacceptable impact on the quality of life not only for neighbours but for many of those who reside in HMOs.

One of the first things that I did in the House 20 years ago was to introduce a private Member’s Bill on fire safety standards in multiply occupied houses—the Fire Safety Information Bill—which was killed off by the Conservative Government. It is scandalous that council inspectors still find that as many as 17 per cent. of properties lack smoke alarms or basic fire safety precautions.

The immediate catalyst for my seeking today’s debate was the fact that the Department for Communities and Local Government is considering an application from Oxford city council for the extension of HMO licensing across the city. I should like to concentrate on the case for such licensing, some thoughts that I have on enforcement and how it should be paid for, and the need for much tighter planning control over HMOs—a matter pressed last year by my hon. Friend the Member for Southampton, Test (Dr. Whitehead) in his excellent ten-minute Bill.

I do not suggest that all the problems in my area can be solved by tougher control and regulation. They arise partly from what I often describe as the pressure cooker effect in Oxford of an artificially tight green belt constraining the supply of housing, alongside a very successful economy, two universities stimulating huge demand for single-person housing, and large-scale inward commuting. We need
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urgently to release more land for housing on the edge of Oxford to meet the need for that accommodation as well as for family housing.

I stress that I do recognise the positive contribution of good landlords as well as the problems caused by bad ones. Most of what I suggest would, I think, be supported by responsible landlords. Indeed, one letting agent in my constituency has written in support of the Oxford city bid, pointing out that a robust licensing scheme, along with the accreditation of letting agents—which I also support—would prevent the good landlords being undercut by the bad.

Let me focus on licensing. I welcome the Government’s introduction of licensing through the Housing Act 2004. I welcome the current review of the private rented sector, looking generally at standards of accommodation and the rights and responsibilities of landlords and tenants, and I welcome the more recently announced specific review of HMOs, which will feed into the wider private sector review. I also welcome the progress being made with the scheme to protect tenancy deposits. Important and positive steps have been taken, but we still, certainly in Oxford, need to go further.

The Oxford experience is that where licence applications are required and have been made, that is making a difference. Mandatory licensing has resulted in improvements to more than 70 per cent. of the houses for which applications have been received. However, the mandatory scheme applies only to houses of three or more storeys and with five or more occupants. The city council has applied to the DCLG for general city-wide licensing of HMOs, and I strongly support that proposal. It is the only way in which we will have a scheme that is readily understood by the public, tenants and landlords alike. If approved, it will provide valuable experience of a model that will certainly be applicable elsewhere.

There is already evidence—we always have to be alert to perverse consequences—of some landlords adjusting the number of tenants in their HMOs to avoid mandatory licensing. If additional licensing were introduced only in specific areas of the city, there would be a real risk of that displacing unlicensed HMOs to the other parts of the city. That happened under an earlier registration scheme.

Ms Celia Barlow (Hove) (Lab): I congratulate my right hon. Friend on securing this important debate. I wonder whether he has seen in Oxford a situation similar to the one that I have seen in Hove and Portslade, which has the highest number of HMOs outside London. Tenants can move into an area, but the issue is not specifically the number of tenants in a house; it is the number of occupants. If there is a large number of such HMOs in an area that was made up of family streets, that can drive families out of the area.

Mr. Smith: I agree. I am sure that my hon. Friend’s experience in her constituency is similar to what we are encountering in Oxford. She is right. I referred to the vicious circle effect as the growth of multiple occupation compounds itself, often greatly to the detriment of community life and general and residential amenity.

There is a further advantage to a general licensing scheme in Oxford. Although councils do currently have responsive powers, tenants in HMOs are often vulnerable, unable to complain, or concerned that doing so will
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prompt an eviction. There is a wider issue in that respect, which I will come back to, but for HMOs proactive licensing by the council would be an enormous help. I have heard that Ministers are cautious about designations that cover whole local authority areas. I urge my hon. Friend the Minister to take a close look at that—

Chris Ruane (Vale of Clwyd) (Lab): Throw caution to the wind.

Mr. Smith: That sedentary intervention might have come from the direction of the Parliamentary Private Secretary. I greatly welcome his support in this matter. Care and effectiveness, rather than caution, is what we need. Residents are understandably looking to us as Members of Parliament and to the Government to get a grip on the issue. I put it to the Minister that that will not be done on a piecemeal basis in areas such as mine, where all parts of the city are to some extent affected.

A related issue that I would urge the Minister and those undertaking the current reviews to take a close look at is the operation of planning law with regard both to those HMOs that do not currently require planning consent, and to the guidance on what is acceptable in terms of planning approvals where those are required. The present position is unacceptable, both because many conversions of family houses to HMOs do not require planning permission and because, even where they do, local authorities are often apprehensive about decisions being overturned on appeal.

In a ten-minute Bill last year, my hon. Friend the Member for Southampton, Test proposed that the Housing Act 2004 definition of a family be brought into planning law so that all relevant conversions to non-family housing involving more than four tenants would require planning consent. I urge the Minister to revisit that proposal, or indeed to look at any other practical means of bringing such conversions within the scope of planning control if he is not convinced that my hon. Friend’s proposal is the way forward.

Dr. Alan Whitehead (Southampton, Test) (Lab): Does my right hon. Friend accept that the problem that he has outlined relates to the fact not only that there are different definitions of a household in planning and housing law but that the numbers of households covered by planning and housing law are very different? What most people would regard as HMOs will therefore escape any regulation unless the two definitions are aligned. Indeed, about 11,500 of the 12,000 HMOs in Southampton effectively escape the registration system because of the difference in the definitions.

Mr. Smith: Indeed. My hon. Friend makes a good point. We all acknowledge his expertise, the attention that he has given to this issue and the good ideas that he has come up with. As he says, it cannot be good for people’s understanding of the rules or their compliance with them if they do not know where they stand in relation to the housing legislation on the one hand or the planning legislation on the other. That is bound to be a recipe for confusion and deep frustration among local communities and their elected representatives. People see that there is a problem and that the change sweeping
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through their communities is producing enormous pressure, but they can regulate, and they have the power to shape, only a small number of developments, while the rest just carry on. That makes people feel powerless and, in some cases, angry that the system is not more responsive to their needs.

If family houses were being converted for some other business purpose, planning consent would be required. I could take the Minister to streets in my constituency—I am sure that my hon. Friends the Members for Southampton, Test and for Hove (Ms Barlow) could too—where one house after another is being converted from family to multiply occupied use. That totally changes the area’s character, but there is next to no planning control.

Lembit Öpik (Montgomeryshire) (LD): The right hon. Gentleman might be aware that the aspect and character of large parts of Manchester were completely changed in the early part of the 20th century, when houses went from being owned by fairly wealthy families to multiple occupancy. It looks as if that is a one-way street and that those houses and areas will now never be anything other than multiple occupancy.

Mr. Smith: Indeed, and it is that apparently irrevocable change in the character of areas that leaves people so concerned. Hon. Members should not, however, get me wrong on this, because I of course accept that those who live in multiple occupation need somewhere to live. In university cities, we certainly want to keep up the pressure on the universities to provide as much purpose-built accommodation for students as they can on their own land. However, changing demographic patterns in society, such as smaller households, mean that a whole variety of people need accommodation, and they are also entitled to the decent standards that a properly licensed and regulated system can provide.

Bob Spink (Castle Point) (UKIP): I welcome the responsible manner in which the right hon. Gentleman is approaching this real problem, but we must take great care to avoid regulation that removes low-cost housing, because the tenants who need it are often very vulnerable. However, the root cause of the problem has been the massive demand for low-cost housing over recent years, and the biggest factor driving that is not demographic change but uncontrolled immigration from certain countries in the European Union. I do not wish to be provocative, but we must address that because it is a valid area of public concern and public policy.

Mr. Smith: The hon. Gentleman advances a familiar argument. Of course, migration is part of this. In Oxford, it certainly plays a small part, alongside pressure from students and changes in the nature of households. The hon. Gentleman will perhaps call a debate on immigration, but I should point out that the Government are introducing the points-based immigration system. Furthermore, when he speaks of migrants—certainly in the context of Oxford—he should look at who does much of the essential caring work in our hospitals and care homes. If he does, he will see the benefits that migrants bring to our community. I celebrated Filipino independence day the other Saturday at a huge event at the John Radcliffe hospital. That hospital would not be able to function to the high standard that it does if it were not for the
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contribution of members of the Filipino and other communities, and those people are entitled to somewhere decent to live.

A bone of contention in areas of multiple occupation where the houses are occupied by students is that no council tax is paid. The Minister can point to the adjustments in revenue support grant, which are supposed to compensate for that, but I am sceptical about whether those adjustments fully reimburse local communities for the direct and indirect costs of concentrations of multiple occupation by students. I proposed to the Lyons review of local government finance that owners of multiply occupied properties should pay a supplementary council tax or charge, which would be dedicated to meeting the costs of a fully enforceable licensing scheme, including the knock-on effects on parking and the nature of the streets and the additional cost of refuse collection. I urge the Minister and his colleagues to look again at that.

One argument that is sometimes made against such proposals, and indeed against licensing in general, is that the cost would be passed on to tenants. In a competitive rental market, however, the cost might not be passed on—at least not in total. In any event, the extra safety and security and the improvement to the living environment that such a scheme would provide would be excellent value for tenants.

I also press the Minister to look at the problem of retaliatory eviction, which is of wider relevance in the private rented sector. Fast-track eviction is used against tenants who try to secure their statutory rights to repairs or improvements on health and safety grounds. It cannot be right that people go in fear of eviction just for raising repair and safety issues, but evidence from the English housing survey shows that although 21 per cent. of private tenants were dissatisfied with their landlords’ repairs and maintenance of the property, only a quarter tried to enforce their rights. The fear of eviction was a significant factor in explaining why people did not raise such issues with their landlords.

As the Minister will be aware, Citizens Advice, together with the Child Poverty Action Group, Shelter, the Chartered Institute of Environmental Health and others, are campaigning against this abuse of section 21 of the Housing Act 1988. It is important to note that they are saying not that section 21 should be abolished but that its use should be restricted where a reasonable request for repairs has been made by a tenant but has not been addressed by the landlord. Other mandatory and discretionary grounds for eviction would continue to apply. I very much hope that the Minister can give an assurance that the matter is being looked at and that he will add it to the list of issues that I am asking him to ensure that the Rugg and Rhodes review covers. As I am sure he is aware, it is important to deal with the issue if we are to guarantee the reasonable rights of tenants and ensure that standards in private rented accommodation are raised, as we all want them to be.

Given the growth in student numbers, changing demographic patterns—for example, the increase in single households—the crisis of affordability in the south-east and particularly in Oxford, and the acute shortage of social housing, it is clear that the regulation of private rented housing is a challenge of growing importance. Our legal framework and our planning and enforcement procedures must be urgently updated to meet that challenge.

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In closing, I want to underline the fact that the matters I have raised are pressing. They demand a response from the Government that will assure residents in areas under stress—tenants and their neighbours alike—that their concerns are not only understood but being acted on. If the Minister would like to visit my constituency to see at first hand the problems and the need for action, I should be pleased to welcome him.

9.50 am

Sir George Young (North-West Hampshire) (Con): I congratulate the right hon. Member for Oxford, East (Mr. Smith) on his good fortune in securing the debate, on his choice of subject, and on the reasoned and persuasive way in which he presented his case. A long time ago I spent three years in the city that he has the privilege of representing. Whether the college that I occupied was a house in multiple occupation I am not quite sure; however, the issues that he has mentioned, of poor-quality accommodation outside the colleges, are as live now as they were then.

Housing is nearing the top of the political agenda at the moment, having spent quite a long time in the relegation zone. The Government’s ambitious target of 3 million homes by 2020 is looking increasingly ambitious. One could argue that of the three main housing sectors—owner-occupation, social renting and private renting—the one that we are debating is the only one operating effectively at the moment. Supply is way behind demand for social renting—below the levels of the 1990s. In the owner-occupation sector, builders have stopped buying land and are closing building sites, and mortgage finance is scarce and expensive. One could argue that the sector that is broadly in balance is private renting, with some 2.6 million homes being rented from more than 500,000 private landlords. Of course we need more good-quality rented accommodation, and since the market for private renting was liberalised in the 1980s there has been a continuing and steady expansion in supply. Indeed, I see from The Independent of 9 June:

In a debate about the private rented sector, of course one needs to consider the issues of regulation that the right hon. Gentleman has touched on, but one should also look at the broader issues of the role of the private rented sector, to see what more might be done to encourage responsible supply.

I confess that when I saw that there was to be a debate about the regulation of the private rented sector a frisson ran through me, because we must not go back to the bad old days of statutory rent control and lifetime security of tenure, often lasting through two generations. There may be some who want to turn back the clock to regulation of that kind. I am delighted that the right hon. Gentleman did not make that case. With the housing market in the fragile state that it is now in, and with the need to reinforce measures to increase the supply of housing, we should not deter potential investors with unnecessary bureaucratic controls and regulations. Let us indeed have a sharp look at the abuses, some of which the right hon. Gentleman mentioned; but I need to be persuaded that the universal and rather bureaucratic registration scheme advocated by some is the right way forward, not least because I suspect that the costs would filter through to the tenants. In parallel with the issue of regulation that the right hon. Gentleman has raised, we
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should debate measures to promote the continued healthy growth and expansion of the private rented sector. It provides flexibility and choice and helps people in housing need. Indeed, with rents underpinned by housing benefit, the private rented sector has a key role to play in helping local authorities to meet their statutory obligations on homelessness.

The report of the Select Committee on Communities and Local Government, “The Supply of Rented Housing”, provides a helpful background to the debate. I found it a good and balanced report. I should have liked a little more on pages 96 to 98 about what more could be done to encourage the private rented sector, to balance the slightly longer section on how we might regulate it. However, in paragraph 308 the Committee says:

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