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24 Jun 2008 : Column 13WH—continued
The Government have done good work in improving standards in social housing, but they have almost entirely disregarded the private sector. Once again, we return to the difficulty of a two-tier scheme. The difficulty could have been resolved during proceedings on the Housing and Regeneration Bill, but it was not. The issue is writ
large in the energy efficiency situation, because private tenants are now least likely to have double glazing, central heating, insulation or draught-proofing. It is also difficult for private landlords to invest in improving their properties in that way, because although most landlords would prefer to provide a decent home to their tenants, the necessary repairs can be uneconomic.
In order to help the private sector to deal with that situation, will the Government consider cutting the VAT that is paid on repairs to homes, potentially making the improvements needed affordable for landlords? We would also encourage elderly or disabled tenants to invest their winter fuel payments in energy efficiency products. Will the Government do anything to support the same kind of thing?
The wider social repercussions of encouraging good landlording can be significant. In dealing with antisocial behaviour, for instance, the Government have tended to focus on monitoring the behaviour of the tenant. I have argued that the promotion of good standards of housing would also lead to a reduction in antisocial behaviour by helping to create a climate of responsibility that encouraged responsible tenants and owners. My final question to the Minister therefore is whether he would be willing to enter a serious dialogue about the opportunities for creating sustainable communities.
I am very sceptical about whether antisocial behaviour orders are doing much good. Indeed, they are a badge of honour in many places. Considerate construction—bearing in mind the human need for association—and natural flow lines have created successful local communities and done much more to reduce antisocial behaviour than any investment in policing and in suppressing the opportunity to be a bad tenant or neighbour. Is the Minister willing to enter a sensible and, I hope, cross-party dialogue to see whether we can establish what, in terms of the built environment, differentiates successful from unsuccessful communities? That would be very important for the private sector, because, assuming we hit upon some general guidelines, we could require such good practice to be built into it. We do need to build more social housing, of course, but we do not have to depend on the majority of it being built in the public sector. Similarly, we do not have to run away from the benefits of the HMO sector simply because, currently, it is difficult for some people to achieve the standards that they wish.
I am glad that we are having the debate and very pleased to have had the opportunity to ask the Minister those half-dozen or so questions. I hope that he will engage in dialogue rather than sidestep them or say that we cannot reopen the issue and that he is fundamentally opposed to regulating the private rented sector. If he must take that line, he will need to explain why. Conversely, if he sees some merit in ensuring that the same standards apply to the private rented sector as they do to the public rented sector, notwithstanding the fact that we have missed the opportunity with the Housing and Regeneration Bill, I hope that we can find another way to ensure that those standards are improved. No one can doubt that multiple occupancy will continue and that we will continue to depend on the private rented sector for a significant proportion of housing, but no one can doubt either that unless there is some regulation, there will still be the lamentable differential between the private and public sectors in terms of the risk of fire
and in terms of quality of life. I do not believe that a Labour Government can, with any conscience, allow such a differential to persist.
10.29 am
Mr. Stewart Jackson (Peterborough) (Con): It is a pleasure to serve under your chairmanship for the first time, Mr. Benton. I concur with the remarks of the hon. Member for Montgomeryshire (Lembit Öpik) about his pleasure in taking part in a debate headed up by the Minister. Such debates are a regular occurrence, but I fear that the hon. Gentleman might be on his own if he hosts a debate in the dog days of August. I sometimes think that the Government would collapse without the Minister’s Herculean efforts. He seems to be here representing the Government more or less every day of the week.
Mr. Jackson: And the hon. Gentleman, indeed.
I congratulate the right hon. Member for Oxford, East (Mr. Smith) on his well-presented, well-researched and passionate contribution, which was based on his unique experiences representing a seat in the city of Oxford that faces the problems that he mentioned. He focused substantially on houses in multiple occupation, which resonated with me. I shall focus more on the wider sector, but I shall speak about HMOs later.
The private rented sector accounts for about 10 per cent. of all homes in the UK and has the potential to play a much fuller and more effective part in meeting future housing needs. Private landlords could play an important role in bringing under-utilised or empty properties into occupation. The sector is diverse and based on flexibility, and it offers tenants choice.
There is some consensus between the parties about the Housing Act 2004, and we concede that we agree with a lot of things in it. Current legislation empowers local authorities through health and safety rating systems, HMO regulation, licensing and voluntary accreditation schemes, and there is broad support for that from organisations such as the National Landlords Association and the Association of Residential Letting Agents.
We welcome the current review of both HMOs and the private rented sector, under the auspices of the university of York—the Rugg and Rhodes review. It is important that we restrict any moves towards regulations or legislation until we have the full results of that review. Its first two terms of reference are important, stating that it must consider:
“What is the composition of the private rented sector and the regional characteristics? Who lives in the sector and who are the providers?
Given demographic and social change, what impact might this have on future demand and supply pressures in the sector and how should key players respond to this?”
The right hon. Gentleman rather body-swerved the important point made by my erstwhile hon. Friend, the Member for Castle Point (Bob Spink). It is important that there are significant pressures on the delivery of public services, including housing, in a number of hotspots. There has been a particular impact on the private
rented sector. The review might assist in informing the Government much more coherently of where those pressures are, without there necessarily being a need for further regulation and legislation.
Lembit Öpik: It seems to be a characteristic of these housing debates that I must always point out my intimate knowledge of some immigrants in this country. [Laughter.] I am grateful to the Minister for his response to that. I may wish to have a look at how it is reported in Hansard.
Surely the hon. Member for Peterborough (Mr. Jackson) accepts that there are two different matters: the country’s immigration policy, and the regulation of the private sector. I understand his point, but who lives in the houses is secondary to the extent to which we regulate them to ensure a level playing field between the private and public rented sectors.
Mr. Jackson: The hon. Gentleman makes a fair point. I cannot compete with his in-depth knowledge of eastern European migrants, and I shall be interested to see what comments are picked up in the official record. Local authorities have finite resources to deal with specific demographic and social changes of an unprecedented level and time scale—in this case, since May 2004. If the review can inform the use of those resources with empirical rather than anecdotal evidence, that will help to deal with the problems associated with some houses in multiple occupation.
My right hon. Friend the Member for North-West Hampshire (Sir George Young) mentioned the Communities and Local Government Committee’s report, published on 21 May, “The Supply of Rented Housing”, and it would serve us well to consider the issues that it touched on. I agree that it was fair and balanced. It stated:
“A good basis exists in existing regulation, local authority accreditation schemes and the activity of trade bodies to introduce a system of accreditation similar to that which exists for estate agents,”
to be overseen by Oftenant. It stated that the York university study should consider
“the establishment of a new regulatory system based on a carrot-and-stick approach which rewards responsible landlords with fewer repetitive regulatory hurdles and greater financial incentives”,
for instance for investment in and the maintenance of property, and for energy efficiency. I shall return to that matter.
Mr. Andrew Smith: The hon. Gentleman mentions investment incentives and encouraging good landlords. We all want to do that, but does he understand, as residents in the areas most affected certainly do, that there must be some reciprocity? There will be huge resentment if people are seen to benefit from tax breaks and incentives. People can do the sums—how many tenants they have jammed in the house, how much they are paying every week, what a mortgage costs, how much profit they are making—but must there not be some reciprocity whereby they also have responsibilities for the upkeep of the property, for keeping it tidy and for ensuring behaviour that is reasonable in its impact on neighbours?
Mr. Jackson:
Far be it from me to dispute fiscal policy with a former Chief Secretary to the Treasury, but we must use the regulatory system and fiscal policy
to drive up standards and deliver what we all want—better homes for people who have made their own choice that they do not want to be housed in social housing or become owner-occupiers. We cannot pursue solely a stick policy, although, as I shall argue later, it is important to concentrate in regulations and legislation on clamping down on rogue landlords.
The recent position paper by the Royal Institution of Chartered Surveyors urged the Government to consider capacity, quality and choice in the private rented sector as part of the role in creating sustainable communities, a point that the hon. Member for Montgomeryshire mentioned. It also pointed out that the sector’s benefits to tenants, such as the
“freedom and flexibility to move around and the opportunity to leave the family nest without the burden of home ownership”,
are an important factor in its viability. In that respect, it offers
“benefits in terms of mobility of labour”.
The RICS cautioned against radical moves to regulate the sector further, which may reduce profits and choke off investment in it. It is as well to mention that the buy-to-let sector has so far sustained relatively little damage from the credit crunch and associated economic problems.
This issue is not just about propping up profits; it is about recognising the fact that if profits are hit and investment dries up, that will have an impact on housing supply and rents for some of the most vulnerable people in the private sector, as we have conceded. The focus needs to be on the lower end of the private rented sector to improve standards.
Returning to the issue of energy efficiency—a point raised by the hon. Gentleman—I suspect that the Minister will not fully concur with the typically well thought out Liberal Democrat policy on energy efficiency.
Mr. Jackson: However, I think that there is a broad consensus across the House that there needs to be further incentives. We welcome the landlords energy saving allowance, which dates from 2004, but perhaps it has not been as well-publicised as it needs to be, and we need to expand the publicity for it.
Overall, we need to get the balance of rights and responsibilities between landlords and tenants right; the same is true of the balance between enforced self-regulation and further legislation. We must be careful not to target good landlords with burdensome regulation while letting unscrupulous landlords operate with impunity. Further regulation will pile on time and cost pressures in a market that is already potentially precarious.
I agree with hon. Members who have referred to the tenancy deposit scheme. Again, the Conservative party believes that that scheme is a sensible way forward and should be expanded. The fact is that the worst case scenarios envisaged in and informing the Housing Act 2004 have not come to fruition, and self-regulation and self-accreditation have been successful.
An important point raised by all hon. Members—I mentioned it earlier myself—is the resources for local authorities. It is extremely important and pertinent to understand that often local authorities do not have the resources to deal with the commensurate pressure on
the private rented sector by means of houses in multiple occupation; that includes my own local authority in Peterborough, for instance, where we have had 15,000 to 20,000 new EU migrants coming into the Greater Peterborough area in the last four years. Local authorities do not have the staff and they certainly do not have the money to deal with these huge pressures.
Again, the hon. Gentleman, who is the Liberal Democrat spokesman, is quite right on this question: it is about not just absolute numbers but cultural issues. The hon. Member for Hove (Ms Barlow) also touched on it in her brief intervention earlier. It is something that the Government need to look at, following on from their review of houses in multiple occupation and the university of York review.
If the housing market was stronger, I do not think there would be such an imperative to examine this area, but there is such an imperative. The Residential Landlords Association has made the point that we need to develop more comprehensive self-regulation, so that local authorities can then focus more time and energy, through environmental health officers, selective licensing schemes and so on, on those rogue landlords who are mistreating and abusing tenants, often illegally.
It is also as well to concede the very important point that my right hon. Friend the Member for North-West Hampshire made: it seems unbelievable that, after 11 years of a Labour Government, we have not moved on in developing more innovative schemes to free up the market, using market mechanisms. In particular, he referred to real estate investment trusts and institutional investment, which have gone nowhere since the Barker report was published two years ago. He also referred, quite rightly, to the dialogue between local authorities and local landlords and the potential development of the housing association management scheme.
I would also like to mention the importance of leaving in place, at least until the review, and in my opinion beyond that, section 21 of the Housing Act 1988, because that measure is the centre of the legislative framework for the private rented sector. I believe that we do not need to amend the 1988 Act, because if we did it would send a significantly negative message and have a negative impact on the market, particularly on investment in the private rented sector.
In conclusion, we await the university of York review and hope that it will properly inform a debate on the future of the private rented sector. Until then, we should reserve judgment on further legislation and regulation.
10.45 am
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): Unlike the hon. Member for Peterborough (Mr. Jackson), this is not the first time that I have served under your chairmanship, Mr. Benton. Given that the right hon. Member for North-West Hampshire (Sir George Young) and the hon. Member for Montgomeryshire (Lembit Öpik) are also here today, this debate very much feels like a reunion of the Housing and Regeneration Public Bill Committee, which was so excellently chaired by your good self.
I would like to begin by congratulating my right hon. Friend the Member for Oxford, East (Mr. Smith) on securing this very important debate. His excellent
contribution this morning set the tone for the rest of the debate, given that it was considered, measured and reasoned. All the contributions this morning have demonstrated those traits.
As a Government, we want to ensure that people have access to the right sort of homes, and the private rented sector makes a real contribution to that aim. The sector is by no means a homogenous market: nearly two thirds of households in the private rented sector are categorised as economically active; and more than three quarters of tenants in the sector are under the age of 35. For these people, who are often in the first stages of their career, the attraction of private renting is its flexibility. However, as has already been mentioned, the sector also provides housing for vulnerable people; just under a fifth of all tenants in the private rented sector are on housing benefit.
The introduction of the new local housing allowance is giving those tenants greater choice about where they live, as it will allow them to see in advance the properties that they can afford. It was particularly apt that my right hon. Friend secured this debate, because I cannot really think of anywhere else that has as diverse a range of housing supply as Oxford, particularly within the private rented sector. In Oxford, there are the universities, there are affluent professionals, who may be working in the City or commuting to work elsewhere in London, and there is also a range of vulnerable people. So it is incredibly appropriate that he was able to secure this debate.
One point that has been mentioned is the importance of landlords being able to secure a return on their investment. It is important to stress that we recognise that private landlords are running a business and therefore expect to secure that return. However, what I am clear about, and it is a point that has been touched on already in this debate, is that that should not be at the expense of adopting a professional approach to letting, and offering a quality product to the tenant.
In an important part of his contribution to the debate, my right hon. Friend mentioned the issue of retaliatory eviction. I am very aware of the possibility of landlords evicting tenants who seek to enforce their rights, and also that some tenants may be reluctant to complain about poor conditions for fear that their landlord may then seek to end the tenancy. That situation seems to be an unintended consequence of section 21 of the 1988 Act. I have such a situation in my own constituency, with constituents coming to me in my surgeries and telling me about such problems.
The practice of retaliatory eviction should be stopped. However, I think that all hon. Members will also be aware of the fine balance between landlord and tenant rights. I am very keen to see an end to the practice of retaliatory eviction. Equally, however, I want to ensure that landlords do not face problems with tenants failing to pay the rent and committing antisocial behaviour.
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