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Westminster Hall

Wednesday 21 October 2009

[Mr. Clive Betts in the Chair]

Private Landlords (Local Regulation)

Motion made, and Question proposed, That the sitting be now adjourned.-(Mr. Ian Austin.)

9.30 am

Graham Stringer (Manchester, Blackley) (Lab): Private landlords have been a feature of big cities for as long as big cities have existed in this country and other countries. People such as Peter Rachman are part of the vocabulary and folk memory of urban working-class communities. Virtually all working-class people from the inner cities have tales to tell of bad landlords and of what has happened to their families. However, what happened in the mid-1990s in Manchester and other northern cities-it was primarily northern cities-was a particularly malevolent variation on the theme of bad landlords exploiting poorer communities.

During the recession of the early and mid-1990s, the price of houses dropped, and that was particularly true for terraced houses in small towns and larger cities. Many drug dealers then used their excess disposable income to invest-if that is the right word-in terraced housing. Many of them had a business plan, which went something like this. They would buy one property in a row of terraced houses in what had previously been a decent and often long-established neighbourhood. They would then put in friends or tenants of a particularly rowdy and antisocial nature. Sometimes, those tenants would form shebeens, although they were often just deliberately and knowingly antisocial, and that drove other people out of those streets. As the value of houses dropped in the recession, more poor tenants came into the area. Eventually, these landlords ended up owning most of the street, and their income would be paid out of the benefits system. They did not look after the houses or the area-there were lots of complaints to local councillors and MPs-so there was a real possibility that the public purse would again have to pay for those houses when compulsory purchases came along.

When I was first elected to the House in 1997, this blight was affecting north Manchester-my hon. Friend the Member for Manchester, Central (Tony Lloyd) is also here, and he will know that the same was true in east Manchester. At the time, I believed that we required the regulation of private landlords, but before I get on to selective licensing and regulation, let me make an aside. To understand the problems of urban regeneration and of supporting private housing, council housing and registered social landlords, we have to understand some of the drivers that have led people to leave long-established areas. If the Government do not understand such crucial factors, they could waste money trying to regenerate areas.

Having been elected, I was keen to pursue proposals to register every private landlord. Private landlords had the ability to make people's lives absolutely miserable and to destroy whole neighbourhoods, and the evidence showed that they had done that in certain areas. If we
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insisted on licensing people who sold alcohol-I can think of many other licenses as well-I could see no reason why we should not license people who rented property to others to make them responsible for the way in which they did that.

Interestingly, in the past 12 months, Rugg and Rhodes have proposed a similar solution to the problem of private landlords in their report "The private rented sector: its contribution and potential". They have proposed light-touch regulation that encompasses the whole private rented sector, and having experienced selective licensing schemes, the problems associated with them and the resources required to maintain them-I will come to those later-I think that improving the system introduced in the Housing Act 2004 is probably a better way forward than regulating the whole private housing sector.

I was bound to say at some stage in my contribution that although there are bad private landlords, there are, of course, also good ones, and I want to focus on improving the regulation of private landlords to deal with the problems that have been created.

Bob Spink (Castle Point) (Ind): There are good landlords in Castle Point, but the problems in the private sector there are quite different. Landlords are reluctant to take on people on housing benefit as tenants, and Julie Rugg found that there were problems in that segment of the housing market. The issue of housing benefit and tenants is very complex and will need careful handling. Will the hon. Gentleman ask the Minister to set out what the Government will do to resolve the problems that he has eloquently annunciated and the problem of private landlords who refuse housing benefit tenants, as in Castle Point?

Graham Stringer: The hon. Gentleman makes an interesting point. When I started trying to persuade the Government to regulate private landlords, although I did not use quite those words, the then Housing Minister wrote to me to say that the Government were not prepared to regulate private housing, because that would damage the private rented sector in London and the south-east and lead to homelessness. I found that answer unsatisfactory. Although I would not deny that those are the facts-and the hon. Gentleman makes the point about his constituency-I did not see why the Government should not deal with the problems of many northern cities and smaller ex-industrial towns because the south-east had a different economy and different problems.

I carried on trying to persuade the Government. When Lord Falconer of Thoroton became the Housing Minister, I showed him around some particularly difficult areas in my constituency. That led to the provisions in the 2004 Act. Interestingly, it took seven years, from when the Labour Government were first asked for it-although the problem had existed since the early 1990s-to get legislation saying that someone should be a fit and proper person to be a private landlord, and to give tenants in the relevant areas certain rights. It was another two years before, in April 2006, certain provisions came into force and could be used for selective licensing. In fact, a further two years later, in late 2008, because of complications and difficulties that I shall come to, only seven authorities in the United Kingdom had taken up the scheme. I do not believe that was because the schemes are bad. It is because of the mechanisms to implement the scheme.

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The Housing Act 2004 was welcomed across the board, because it was sensitively and well thought out. The one group of people to oppose it was the Residential Landlords Association, which said that

That opposition completely misunderstood the Government's response, which was a recognition of the fact that certain areas were being dragged down by private landlords who put antisocial tenants in them at a cost to the public purse, and that there was no remedy available to the local authority to deal with it. Selective licensing schemes were the only mechanism or tool given to them.

Tony Lloyd (Manchester, Central) (Lab): My hon. Friend is making very thoughtful comments. The real issue in the areas that he and the private landlords' representatives talked about is not even the cost to the public purse, but the cost to the good residents whose lives are made intolerable by the behaviour of a small minority of bad tenants, and the landlords who fail to deal with that. The stabilising of an area for the many good residents is fundamental, and the approach that my hon. Friend describes is vital to the re-establishment of people's ambition to live and settle in those areas.

Graham Stringer: My hon. Friend's observation is accurate, but the annoying thing is that although the real destruction and cost, which are difficult to quantify, are inflicted on people, that happens at a cost to the taxpayer, which must be wrong.

When the 2004 Act came into force the Government did not publish the statutory guidelines, so Manchester, which was one of the first authorities to try to implement the scheme, had to consult using Cabinet Office guidelines. They are fine; there is nothing wrong with Cabinet Office guidelines on consultation, but no guidelines were provided by the relevant Department-I cannot remember what it would have been at that time, because the name changes so often. Manchester city council consulted, and the very first area was in the constituency of my hon. Friend the Member for Manchester, Central. There was also consultation in two wards in my constituency. Statistics from the responses to the consultation included the fact that 71 per cent. of people wanted intervention and 90 per cent. wanted landlords to intervene when their tenants were bad, which is one of the responsibilities that the registration scheme gives landlords.

Mr. Andrew Turner (Isle of Wight) (Con): The hon. Gentleman makes a good point, but my concern is that even when landlords wish to get rid of a useless tenant it takes months to do so, which makes things more difficult for the landlords.

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Graham Stringer: The hon. Gentleman makes a fair point, and the burden of most of what I am saying will be the time that the process takes: setting up and implementing selective licensing schemes, finding private landlords-whether they are good, bad or indifferent-getting them registered and monitoring the schemes. It is a complicated proposal.

There are 10,708 properties in the area in my constituency that has a selective licensing scheme, the Harpurhey and Lightbowne area, and it is estimated that 16 per cent. of them are owned and let by private landlords. At the start of the scheme it was possible to make contact with only 84 per cent. of those landlords, and at that point 68 per cent. were easily given licences, but it is difficult to find out where properties are let to tenants by a private landlord if that landlord does not want to tell anyone. Often it is necessary to rely on the information given by local residents associations when there are problems. In the area I mentioned, the excellent Trinity residents association works closely with the council and the registration and enforcement teams, to deal with particular properties. I am not bringing case work here-I am too long in the tooth to want to bring case work before hon. Members-but they find properties where the tenants have caused a nuisance and the council goes through the lengthy procedures to try to get the landlords to conform and deal with the tenants, or, if they will not do so, to fine them. Extensive fines are available to the council if it is proved that the landlord is not complying with the legislation.

I want to finish by talking about the time factor. I have, I hope, a reputation as a localist. The schemes that have been set up are working. There are five and a half posts in Manchester in which people are employed to carry out the schemes, and they are improving the life of local residents, albeit slowly. It took nine years to arrive at the schemes, and it takes a long time to set them up. The Department says that it takes six weeks, but the evidence from Manchester city council is that from consulting and trying to initiate a scheme it takes the Department twice as long as that-13 weeks-to respond. My real question to the Minister is what the Department knows that is not known in Manchester, Sheffield, Salford, Burnley or wherever else the schemes are working. What is it adding to the process? Now that the schemes are up and running, and working well, why are they not completely delegated to the local authority? That would speed up the process and would be very helpful. However, there is some dispute; I put that point to the Minister for Housing, my right hon. Friend the Member for Wentworth (John Healey), and he acknowledged the fact.

I put a second point to my right hon. Friend at a meeting last week. It is simply this. The officials at Manchester City council say that the legislation makes it clear that selective licensing areas are to come to an end after five years. My right hon. Friend said he would consider delegating such decisions to local authorities, particularly those that had experience of the scheme and showed that it was working well and could be extended.

Many who participate in the residents associations of Manchester are deeply concerned that the selective licensing areas are to last only two or two and a half years more, and that private landlords are still trying to evade them. It takes time to do the interviews and to identify people,
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and the belief among residents is that some of the worst landlords are trying to hold out until the scheme finishes once the five years are up.

My right hon. Friend the Minister for Housing said that the scheme could be extended. I would be most grateful if my hon. Friend the Minister would confirm that today. It would put the minds of many of my constituents, and those of my hon. Friend the Member for Manchester, Central, at ease if that was so. The worst thing they fear, given the effort they have put into identifying the bad landlords, is that they will be laughing down their sleeves and saying, "Well, you might have stopped me being a nuisance now, but we can soon go back to how we were before." Without selective licensing areas there is no legal means of compelling landlords to manage their properties satisfactorily or to take action against nuisance tenants. That is the crux of the matter.

I hope that I have explained properly that, because it is intense, the selective licensing scheme works better than a national scheme, but it needs to be delegated to local authorities. The case is made that, where problems continue, the areas should be allowed to continue with the selective licensing scheme until those problems are solved-not just for the five-year period-and it is no longer necessary. That is the answer to the Residential Landlords Association. The scheme is not stigmatising areas; it is trying to improve them. I look forward to my hon. Friend's reply.

9.53 am

Bob Spink (Castle Point) (Ind): I am delighted to follow the hon. Member for Manchester, Blackley (Graham Stringer)-I think I should call him my hon. Friend. In bringing this important subject to the House and dealing with it as he has, he shows that he is in touch with the needs of his constituents, and has been for many years. He shows how caring he is as an assiduous constituency Member.

Helping people on housing benefit to get decent homes so that they can move on and become more self-reliant-it is possible for some; for others, it is not-is also a problem in my constituency in Essex, although the market there is quite different from that in Manchester, as the hon. Gentleman said. Over recent years, there have been specific problems. The private rented sector is growing. On one hand, people cannot sell their houses: there has been a bottleneck for a number of years, which is now starting to work its way through, and house sales are starting to increase in my constituency and in others. At the same time, people are having difficulty finding mortgages. They have to be earning enormous sums to afford mortgages on the loan-to-value rates being demanded by the various mortgage companies. As a result, more people are renting, and there is a greater supply of rented property. The problem is one that the Government need to consider carefully.

There are a number of matters to consider. First, I congratulate the Government on their action over the last year to bring forward more social housing. My constituency needs at least another 200 social housing units, but where they are to come from I do not know. The private sector is reluctant to let to those on housing benefit. That is a great shame, as it pushes such people into specific areas where, as in Manchester, problems start to arise of antisocial behaviour, bad neighbours and suchlike. I have such areas in my constituency,
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particularly on Canvey island, and I deal with them weekly with the help of the council and the police. Indeed, I am visiting people in one of those areas on Friday.

I thank the Government for trying to bring forward more social housing, but I want them to go even further. I want councils to be more able to build social housing and let it themselves. Coming from this side of the Chamber, that comment may seem strange, but I have been consistent on the subject in my time as a Member.

One problem with rented private accommodation is safety. The Electrical Safety Council recently issued a warning about the risk of electrical wiring systems. My early-day motion 2105, which is on periodic electrical testing and inspection, calls on the Government to make inspection "compulsory for rented accommodation", particularly in private rented accommodation.

I am not a regulator. We have to get the balance right. We do not want to turn people away from becoming private landlords, or to make the hurdles that they have to jump higher. Nevertheless, the landlords themselves have a part to play. If they maintained the houses that they rent in good condition and did the necessary work quickly and properly, I would not be making this call, but unfortunately they do not. I therefore call on private landlords to accept their responsibility to ensure that their properties are maintained in a safe condition. The responsibility must first lie with them, but if they do not accept it the Government will have to move to ensure that private rented accommodation is safe.

You will be aware, Mr. Betts, that I was not intending to speak this morning, but I was tempted to my feet to make a couple of points. I imagine that most MPs received an e-mail from David Knight of Channel 4 yesterday, inviting them to take part in a documentary. We are being asked to live on a council estate in social housing for seven or eight days. It seems a long time, and my constituents may not want me to be away from the tiller for that long. Channel 4 seems to think that it would be a good way to engage the public, and to gain an insight into tenants' lives-how they deal with the problems of poverty and antisocial behaviour, a lack of mobility, unemployment and disability, and how they face the fact that they may become trapped in an environment where they are afraid.

People on one of the estates on Canvey island have come to me year after year. I had to deal with the same problem tenants in 2006 and in 2007, and I wrote to the council again in 2008, asking for them to be moved away. They are still there. We know what they are doing, and how they do it, but the police cannot act without evidence. We have asked for CCTV, but tenants are wary of being named because they will be targeted and will come under even more pressure from the bad tenants, who never seem to be moved on.

Channel 4 may be on to something really important. Perhaps it can do a great service for those who are trapped in the revolving door of poverty, antisocial behaviour and poor housing. Highlighting the problem will be a good thing. I am sure that all Members here and their families have themselves lived through difficult times. Over many years, we, as Members of Parliament, have experienced the difficulties of our constituents, so we do not need to learn what is happening; we know what is happening. We need to find solutions, and I look to the Minister to provide some.

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