Examination of Witnesses (Questions 478
- 479)
THURSDAY 19 APRIL 2007
YVETTE COOPER
MP, MS TERRIE
ALAFAT AND
MR PETER
RUBACK
Q478 Chair: Minister,
can I welcome you to this session. As you know, this is the final
evidence session in our inquiry on rented housing and we are proposing
to start off with some questions on the private rented sector,
then move on to a short number of questions about shared ownership
and finally move to the social rented sector. Can I start off
on the private rental sector to ask for an indication, briefly,
from you of the Government's latest thinking on the importance,
or otherwise, of the private rented sector and, given it has increased,
whether the Government thinks there are further reforms required
to enable further investment?
Yvette Cooper: Thank you, Chair.
May I say briefly that we strongly welcome the Committee's inquiry
into this issue, given we have said that social housing has got
to be a priority for the Spending Review, and we obviously have
the work on the Hills Review as well underway at the moment; so
we are very pleased with the timing of your inquiry. Specifically
on the private rented sector, the private rented sector has grown
from 9% of households to 12% of households over the last 15 to
20 years and we do, clearly, see the private sector as extremely
important for not simply providing much needed housing but also
facilitating a flexible labour market, for helping people to move
rapidly and easily from one part of the country to another for
work. The private rented sector is particularly important for
younger people, for those under 30, and often for students as
well in terms of providing accommodation. You will be aware, obviously,
of the reforms that we introduced as part of the Housing Act around
the HMOs, around selective licensing, but also, more recently,
the Tenancy Deposit Scheme being introduced, and our current programme
of work really is around the implementation of those reforms to
the private rented sector, as opposed to seeing an additional
new substantial phase of reforms around the private rented sector.
We do also, obviously, have the REITs and other kinds of investment
vehicles being developed as well. So, this is an area we are monitoring,
but at the moment, in terms of the work around the Spending Review
and the work in response to the Hills Review, we are concentrating
particularly around social housing and shared ownership housing
rather than on a major programme of further reforms to the private
rented sector.
Q479 Chair: Before
bringing in Mr Hands, can I ask a specific question. There seems
to be something coming through from some of the evidence given
to us that some buy-to-let investors are buying properties and
leaving them vacant. This obviously affects house prices but it
does not actually add to the housing stock. Does the Department
have clear evidence of this occurring, other than anecdotal evidence,
and, if so, can we have it, either now or subsequently in documentary
evidence?
Yvette Cooper: Like you, we also,
obviously, are aware of anecdotes and people raising concerns
about this, and I have to say I am very concerned about the idea
of buy-to-leave. Buy-to-let, a lot of people will be investing
in the property market and providing much needed rented accommodation,
but buy-to-leave, where properties are simply invested in on a
speculative basis and then left empty, seems to be a cause of
quite considerable concern. We have been doing some further investigation
into it and there is some work that has been done by the GLA,
which I think that we can forward to you, which found very little
evidence that properties were being left empty. Certainly there
was a high level of new build properties that were being bought
for the private rented sector but no evidence of the new build
homes being left vacant. However, we also have some evidence about
Leeds, the construction and development of the flats in the city
centre, currently how city centre apartments have an overall vacancy
rate of 30% compared with the city average of 4.3%, and that causes
us some considerable concern. There is obviously further investigation
needed to be clear precisely why that is happening, whether that
is simply a cyclical issue or a timing issue, whether it is to
do with over-supply of particular kinds of properties or whether
there are deliberate decisions being made by investors. There
is also some concern about property investment clubs in Leeds
as well. We are looking into this issue further. We are very happy
to give you the evidence that we have, but you will be aware,
of course, also that local authorities do have new powers to address
long-term empty dwellings as well, and we would certainly urge
local authorities to make sure that they are taking seriously
empty dwellings in their area left empty for a long term when
we have such pressures on housing demand.
Chair: It would be very helpful if we
could have that. Mr Hands.
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