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"the court must have regard to-(a) the circumstances of the tenant",
Clause 1 of my Bill would prevent RTL tenants from becoming homeless without representation in court and provide a period of up to two months during which they can search for alternative accommodation. Clause 2 covers the notice of execution of a possession order, while clause 3 interprets the various terms used in the Bill. Clause 4 is about commencement and extent. I am assured that the Bill conforms with the European convention on human rights.
I want to thank the staff of the Department for Communities and Local Government for all the assistance that they have given me in putting this Bill together, and for their advice on what is rather complicated housing legislation. I also thank my researcher, Gemma Reay, who has done most of the work for me behind the scenes.
I congratulate the hon. Member for Bolton, South-East (Dr. Iddon) on bringing this Bill to the House. It is particularly good that he has worked closely with the Government to give us the confidence that all the details are right. He mentioned its application under the European convention on human rights. When the Government introduce a Bill, we usually see a regulatory impact assessment. I cannot imagine that this Bill would involve an awful lot of costs, but I would be grateful if the Minister could say whether a regulatory impact assessment has been taken forward.
James Duddridge: I thank the hon. Gentleman for that. Earlier today, I went to the Vote Office and asked for all the papers relating to the Bill, but I was not given one of those. Perhaps I should have probed further and asked to be assisted with all the documents rather than just the primary ones.
Peter Bottomley: I do not want to intrude on the debate, but it might be a sensible innovation, or adaptation, if the Vote Office had a list of the documents that had been deposited in the Library. That would help hon. Members.
James Duddridge: That is an excellent suggestion, particularly on private Members' Bill Fridays, when we are never quite sure how far we are going to get and Members may find themselves debating Bills further down the Order Paper for which they are not fully prepared.
The issue underlying the Bill is a big one for my constituents. Southend has a large number of properties in multiple occupation and, particularly in times of recession, people often find themselves forced to rent out property. They may end up in the invidious position of having made mortgage commitments, and then, having lost their job, finding that they cannot afford the payments. They do not want to make things worse by going back to their lender and explaining that they are having to rent out the property-perhaps because the family has moved in with friends-in the full knowledge that the lender will have to charge them more under a buy-to-let arrangement. The fear of repossession is so great that they knowingly enter into a rental agreement that is forbidden under their tenancy. That is not specifically covered by this Bill, but perhaps it is something that the Government should be discussing with mortgage lenders. If someone is having problems with their mortgage, it should be possible to smooth the transition period by allowing them to rent out the accommodation over the shorter term instead of just letting it remain vacant.
I am particularly concerned about data protection issues that make it difficult to find the names of tenants at properties. Having rented out properties in the past, I know the problem of the big pile of mail. Anything that I saw addressed to "The Occupier" would have gone straight in the bin. It was usually from an estate agent wanting to sell the property. However, in a number of cases it is difficult for the mortgage lender to know who the tenants are, and that would be problematic in the cases in question.
Philip Davies: My hon. Friend raises a legitimate concern. Does he agree that there is also a legitimate data protection concern if a lender is asked to write to a tenant? In doing so, they may have to give out information about the landlord who has defaulted on the mortgage, and that, too, might breach data protection laws.
In an intervention I mentioned short-term and holiday lets. Were I selected to serve on the Committee, I would want to ensure that the Bill took those lets into account. However, it is a very good Bill and I welcome it. I look forward to supporting it if it comes to a vote at some point during this Session, and I thank the hon. Member for Bolton, South-East for introducing it.
Bob Russell (Colchester) (LD): I congratulate the hon. Member for Bolton, South-East (Dr. Iddon) on introducing his private Member's Bill. It is a fantastic swansong, and I hope that it will become law.
The Bill relates to just one piece of the jigsaw of housing in this country, and we must consider it as such. When I intervened on the hon. Gentleman, he acknowledged that a quarter of a century ago the problem did not exist. If it did arise, cases were few and far between. However, over the past two or three years cases have been brought to me in my constituency. As we all know, when an MP is notified of something it is probably the tip of an iceberg, so I suspect that the problem is more widespread.
The reason why there was not a problem in Bolton, Colchester or anywhere else in 1986 is that at that time we were still benefiting from 40 years or thereabouts of council house building. Successive Governments had embarked on building programmes that meant that people had no need to go down the route that they are now obliged to. The figures that the hon. Gentleman gave were startling and worrying, because I suspect that the situation will get worse. It is important that all political parties acknowledge that, short of protecting the realm, the most important thing that any Government should do is ensure that people are housed. Sadly, what has happened over the past quarter of century or so has meant that there has not been a supply of affordable rented housing. Increasing numbers of people are therefore obliged to look elsewhere to meet their housing needs.
There are unscrupulous people out there. We are not talking today about legitimate organisations and landlords, who welcome the Bill in the way that legitimate employers welcomed the minimum wage, because only the unscrupulous benefit from the free market that we are discussing. I am aware of six people in my constituency who have become millionaires on the back of what we are talking about today, fuelled partly or totally by housing benefit from the public purse and by the comparatively massive rents that are charged compared with those for traditional council houses and now for housing association properties.
We are dealing today with the consequence of failures in housing policy, which are forcing increasing numbers of people into the sector that the Bill seeks to regulate. I shall give an example. One of the millionaires in my constituency now owns 50 houses, and the one whom I have come across mostly recently owns 30. One has managed to acquire 12 former council houses. There are now private tenants in them, and the rents being levied are comparatively massive.
I support the Bill because of a case that has arisen in my constituency in the past two months. I believe that the hon. Gentleman has heard me discuss it with the Minister for Housing. The first time that the tenant involved was aware that something was up was when a
letter arrived. It turned out that the landlord had 30 houses. I contacted the building society and urged it to transfer the rent so that the tenant could stay. The family living in the property had been paying the rent to the landlord, but the landlord had not been paying the mortgage. The mortgage company therefore foreclosed, even though the tenant was bang up to date with the rent. That rent had not been passed through to the building society. A similar situation happened a couple of years back.
I question whether some mortgage companies and other money lenders are paying due diligence. I suspect that if what is happening with buy-to-rent mortgages in my constituency is being replicated across the country, it is one of the reasons why we had a banking crisis. In the case that I described, my constituent, the tenant, was sending rent to a post office box number in the south of Essex-we do not do this sort of thing in north Essex. The building society had lent money to purchase the house to somebody whose address was who knows where, and all the tenant's correspondence was to the PO box number. The building society kept sending reminders to the landlord, and after a while the tenant thought, "This is not quite right", and opened one of the letters. They realised that the mortgage had been foreclosed and that they were going to be out on the streets.
There are some scams going on, and we need to ask why they are allowed to happen. The Bill is good and deserves to succeed, but it will not address other pieces in the jigsaw. It will not deal with unscrupulous letting agencies that go under and then reopen, or with the service charges of unscrupulous property management companies. Most companies operate legally and legitimately, but we are concerned about the unscrupulous ones. Nor will the Bill deal with absentee landlords, who are quite often involved in cases such as we are discussing. Sometimes they are so absent that the tenant does not even know where they are.
We will need to address that issue in Committee, because associated with absentee landlords is the fact that often in buy-to-rent properties are the tenants nobody else will touch. The social consequences of such antisocial tenants, which can be addressed by councils or housing associations if they are their tenants, cannot be addressed with the same vigour by an absentee landlord. We need to take that into account.
I welcome the Bill although, as I have said, it is just one small piece of the jigsaw. There is a housing crisis in this country, but not necessarily a housing shortage. We have a mismatch, and there are empty houses that need to be brought back into use. The Government ought to use requisition powers, or introduce new powers. In a civilised country such as ours-the fourth or fifth richest economy in the world-it is ludicrous that we have thousands of children living in poverty, yet there are empty houses. The Bill is just one small step, but it is important. I support it and I urge the Government to embrace it and all political parties to get a serious grip on this country's housing crisis.
The 2,000 or more tenants each year to whom the Bill applies are generally vulnerable people. They are often exploited by others who are stronger and in a more secure position. They deserve the House's help, so I hope that the Bill will be successful. It would give tenants legal status so that the lender would have to deal with a tenant, even if that tenant were unauthorised. Sometimes tenants are not part of the scam that creates their unauthorised position. They are often vulnerable people and victims, and they deserve our protection.
I am delighted with the extremely good briefing that the Residential Landlords Association sent me. It broadly supports the Bill, but asks a couple of questions about its scope and other items. It welcomes clause 2 because it
"requires notification to the tenant of intended eviction with provision for a breathing space".
It enables everyone to consider the true situation, look for the justice in it and ensure that an injustice is not done, either to the vulnerable individual-the tenant-or the public purse. Often, as the hon. Member for Colchester (Bob Russell) said, landlords will trouser the money and not pass it on when the tenant's payments are up to date. The lender is thus defrauded, not by the tenant but by the landlord who has pocketed the money. The breathing space in which to investigate what has happened and enable a remedy to be found if possible is essential.
We need to know whether clause 1 will protect the tenant not only when conventional mortgage repossession proceedings take place, but when the lender takes independent proceedings against the tenant as an individual. The tenant is effectively, in law, a trespasser against the lender, so the lender could theoretically take proceedings directly against the tenant. We need to know that the Bill will protect the tenant in those circumstances, too. The Residential Landlords Association briefing is excellent on that matter.
"in a very limited number of cases unauthorised tenants need more protection".
The Bill will provide that. In balancing justice and what is right, and what is right for society as well as the individual, the House can and should support the Bill. I will vote for it, and I warmly congratulate the hon. Member for Bolton, South-East and wish him well for the future.
Philip Davies (Shipley) (Con): I join other hon. Members in congratulating the hon. Member for Bolton, South-East (Dr. Iddon) on continuing his triumphs in the ballot for private Members' Bills, which he mentioned at the beginning of his speech, and on introducing the Bill. He gave some indication of the volume of requests sent to the person who is fortunate enough-or unfortunate enough-to come top of the ballot for private Members' Bills. I have never been in that position, and, given the experience of other hon. Members who have been here a long time, I am unlikely to get the opportunity to understand how difficult it can be.
I appreciate that it must have been difficult for the hon. Gentleman to choose a Bill to introduce because I am sure that many good causes tried to benefit from his position in the ballot. I congratulate him on the Bill that he chose because he has rightly identified a problem in the market, which needs resolving. I would like to think that the Bill will get a Second Reading today with unanimous support. Some things may need ironing out in Committee, but Second Reading is about the principle of the Bill, and I wholeheartedly support that principle.
I do not see any great point in going through all the reasons for the Bill because other hon. Members have set them out, not least the hon. Member for Bolton, South-East, who made an excellent speech. He explained the reasons for the measure and its scope with the current wording.
I want to flag up at this early stage some ways in which the Bill could be improved. The hon. Gentleman made it clear in reply to an intervention from me that he was seeking broad support for the Bill from all parts of the industry, and he has made a good fist of that at the first attempt. He said that he looked to organisations such as the Council of Mortgage Lenders for support, and he has broadly got it. However, some changes could do two things: reassure the Council of Mortgage Lenders about some of its concerns, while not making a material difference to the purpose of the Bill. I do not want to amend the Bill in a way that would neuter it or the purpose behind it. The principle is very good, but perhaps some amendments could be made that would retain the purpose but address some small concerns. I will go through those concerns shortly.
At the outset, it is worth considering unauthorised tenancies and why they arise. The hon. Gentleman mentioned that. In the case of people renting out properties without getting the mortgage lender's permission, some might argue that we should abolish unauthorised tenancies so that tenants, whether authorised in the traditional sense or not, have general protection. However, it is worth pointing out, as the Council of Mortgage Lenders has done, that there is a good policy reason behind unauthorised tenancies. Without them, we could end up in a position whereby
"unscrupulous borrowers could blight the lender's security by granting long term leases to tenants"
The hon. Gentleman's strategy is right. It recognises the fact that we cannot give blanket coverage to tenants, whatever their circumstances. The provision to grant a two-month stay of execution is a sensible compromise, which protects the lender and the tenant.
The Council of Mortgage Lenders makes some other detailed points, which I want to raise. I hope that the hon. Gentleman will say whether he is minded to support those points through amendments in Committee or on Report and perhaps explain, if he is not, why not, because some of the points that the Council of Mortgage Lenders raises are worth further scrutiny.
The first point relates to trying to get a two-month delay. At what point should people apply for that two-month delay? As the hon. Gentleman said, the Bill does not set out whether that should happen at the possession hearing stage in court or at the warrant stage. As I understand it, the Bill would allow application for the two-month
delay at any stage. The reason that he gave was that letters sent before the possession hearing might not be received or opened, so people would not be aware of the process that was under way. It is therefore important that there is flexibility in the system, to make it clear that if someone only finds out at the warrant stage, they still have an opportunity to do something about it. I accept that point.
Dr. Iddon: Traditionally, buy-to-let tenants have two months before the notice kicks in. We discussed whether to apply that to the Bill, but the hon. Gentleman will have heard me say that the notice period is up to two months, so that if the tenant voluntarily gives up possession of the property, the sale can proceed. There is therefore a counter-balance, but the evidence from the charities working in this area is that most tenants are genuinely unaware that this is happening to them. I do not see any way around that. We have discussed this quite a bit with the Council of Mortgage Lenders, and we are prepared to meet it again. However, we believe that the Bill in its present form is the best we can achieve to protect the interests both of tenants and lenders.
Philip Davies: I accept everything that the hon. Gentleman says, and I do not think that there is any difference between us on what we are trying to achieve. The issue is more about minor detail, and how we reach the goal that we all wish to reach. However, regarding the point at which people can apply for a two-month suspension, the hon. Gentleman made it clear that clause 1(5) would prevent someone who had plenty of opportunity to know about the possession hearing from not doing anything at that stage and applying for the two-month delay at the warrant stage. I am not sure whether the provision does the job adequately, as the unauthorised tenant could ignore the notice about the possession hearing and the initial hearing, and could wait until the lender is at the warrant stage before going to court. I am not sure that the safeguard that he thinks the Bill contains is strong enough to stop that happening.
I appreciate that people may not be aware of the issue, and I shall come on to the way in which we can be more certain that they are aware of the possession hearing. It would be better if the Bill made that clearer and people were aware of that stage. For example, a letter might be sent to someone by registered post, so that they had to sign for it. It would be clearly documented that they had received it and there would be no doubt about that. That would be helpful, particularly as the hon. Gentleman made it clear that the matter of people deliberately ignoring action at the first stage had to be tackled. The position should be made clearer in the Bill so that people could not just ignore the notice and wait until the final stage before doing something about it.
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