Communities and Local Government CommitteeWritten evidence submitted by the Brent Private Tenants’ Rights Group

1. Executive Summary

1.1 Brent Private Tenants’ Rights Group (BPTRG) welcomes this opportunity to make a submission to the Select Committee on the Private Rented Sector. We have contributed to the submission by the National Private Tenants’ Organisation (NPTO), which is comprehensive in its coverage. In this submission we wish to focus on the state of and need for advice and support for tenants, especially the most vulnerable in the private rented sector.

1.2 According to research by the Pro-Housing Alliance in 2012 there has been an estimated increase of 167% in enquiries to CABs about (tenure) insecurity over the past four years. The BPTRG’s case load is large but artificially constrained by the way that advice is funded. Over the past ten years the decrease in funding and the rules under which the Legal Services Commission prescribes advice is leading to a progressive loss of experienced advisers, an uncertain existence for specialist voluntary sector advice services and frustration for individual advisers unable to spend sufficient time on the growing number of complex cases, resulting from the state of the private rented sector and the vulnerability of the clients.

1.3 We are facing a situation in housing where renting in the private sector in London is the only option for the young, working people and increasing numbers of households in housing need and the homeless who are placed in the sector temporarily or as a permanent solution, because there is very limited social rented housing. A very recent report Monitoring Poverty and Social Exclusion by New Policy Institute 2012 and funded by JRF states that households in poverty have doubled in the private rented sector over the past decade.

1.4 In 2013 growing numbers of the poorest and most vulnerable households have no option but to live in a sector where the Government’s survey of private landlords 2010 shows that the majority of landlords are private individuals with one property, we would argue amateurs letting one or a few properties. The relative cheap end of the sector is characterised by short-term lettings and therefore insecurity for tenants, poor physical housing conditions, overcrowding [even low rents are too high and without benefit help the rent gap will mean crowding into smaller dwellings] and rogue landlords (as evidenced by Shelter research “Sustain” in 2010–11 and the constant stream of tenants approaching local authorities and advice agencies). Many tenants are likely to be forced to move to parts of the country where they have no social support networks and their need for timely housing advice and support will be acute.

1.5 Our submission therefore emphasises the need for independent, specialist advice for private tenants in the short to medium term, while measures to improve the disadvantages of private renting, about which the Select Committee will receive many recommendations, are resolved.

Given the foreseeable expansion of private renting as the only housing option for all sections of our working and vulnerable communities, BPTRG urges the Select Committee to raise with other relevant Government departments the need for adequately funded advice services.

2. Brent Private Tenants’ Rights Group (BPTRG)

2.1 BPTRG was established in the mid-nineteen eighties when a group of private tenants came together to campaign for improved living conditions and better laws to protect them. Tenants have always been at the heart of everything we do.

2.2 Although BPTRG’s services are delivered locally in West London, its reputation is recognised and valued regionally and nationally. As one of the leading organisations in the development of policies for the private rented sector, firmly based on the experiences of our service users, we are invited to participate in a range of policy forums, including the London Mayor’s Housing Forum chaired by the Deputy Mayor responsible for housing and the PRS Policy Forum, a “Chatham House” rules group chaired by Lord (Richard) Best. We have been members of a number of Government Task Groups and have addressed relevant parliamentary Select Committees.

2.3 The Centre operates as a Housing Advice Centre offering specialist legal advice and representation on housing matters. This work is delivered under a contract with the Legal Services Commission to provide Legal Help and Help at Court and Legal Aid.

2.4 It is also a resource centre and meeting place for private tenants and other community groups. Service users are encouraged to become members of BPTRG and to participate in the development of policies. Among our active campaigns are “Warming Up” which calls for more energy efficient PRS homes and a reduction in fuel poverty; and our work with partners to highlight the impact of the restrictions on housing benefit.

2.5 Throughout most of BPTRG’s existence it has complemented its core advice work with funding for time-limited projects. These have included intensive advice and support as part of regeneration areas (Kilburn and Harlesden); outreach advice services funded through the Big Lottery Fund; and a three and a half year programme called “HomePlan” (2009–11), generously funded by The Tudor Trust. This project aimed to raise clients’ aspirations and support them in a journey towards their goals by focusing on money management and financial inclusion; training and employment; community engagement; health; accessing support services; and housing.

2.6 We were also able to develop financial inclusion services through a one-year grant in 2010–11 from the Department of Work and Pensions. The legacy of this work is that we now run Brent Mutual, a branch of Hillingdon Credit Union, so we can encourage small savings and facilitate small loans for our clients.

2.7 During this period of austerity we see limited prospects of gaining development funding—funding bodies have decreasing resources and huge competition for the money available. Local authorities are also limiting or withdrawing funding from the voluntary sector and, while voluntary agencies will look at exploiting market opportunities for cross-funding advice services such activity also requires time and resources.

2.8 Over the 25 years that we have been working with tenants in insecure housing we have built an unparalleled expertise which is widely recognised. We have a Community Legal Services specialist Quality Mark for housing.

3. Funding for Voluntary Sector Advice Agencies

3.1 Changes in 2010–11 included the ending of our “Unified Contract” with the Legal Services Commission, replaced by a “Standard Contract” from November 2010, which we successfully bid for as a Consortium with the other two main advice providers in Brent, Brent CAB and Brent Community Law Centre. Although the Consortium was driven by the contract requirement to bid for contracts covering housing, welfare benefits and debt advice, we used this opportunity to explore how the users of all three organisations could benefit from more co-ordinated services.

3.2 The organisation has been in a vulnerable position since the onset of the recession with higher overheads and a lower income as the Legal Services Commission implements a series of cuts. All fees to all providers were reduced by 10% from October 2011 and further reductions are expected. The annual grant from Brent Council was reduced by 12% from April 2011.

3.3 Every year our Housing Advice Centre assists hundreds of vulnerable people who are financially eligible for legal help. Over the last two years our Housing Advice Centre has seen a marked increase in the number of very vulnerable clients, including an increase in those with mental health problems. Austerity is hitting the poorest very hard and families are becoming more stressed as they try to cope with reduced incomes, increased unemployment and poorer living conditions. At the same time, support services are being reduced and we are finding it harder to refer people on to agencies better placed to provide the type of support which falls outside our remit and for which we have no funding.

3.4 Legal aid contracts are set to be severely restricted in both volume and scope from April 2013. The number of housing matters in each Legal Service Commission procurement area will be dramatically reduced in 2013–14. For Brent the reduction is from 1,520 to 638. In addition, the advice previously available for Debt and Welfare Benefit matters will be reduced to nil. In Brent there was funding available for 2,300 such cases. This is inexplicable given the savage reduction in benefits due to the change in the method of calculating the Local Housing Allowance and the housing benefit caps which are forcing thousands of vulnerable families into debt and homelessness. We cannot understand how the Government has been able to reconcile this with their stated wish to reduce homelessness.

3.5 The reduction in the scope for legal help is of equal concern. The restriction to only the most urgent housing problems denies the opportunity for early intervention which in almost all cases is more effective and more cost effective. This is particularly true in the area of homelessness prevention. From April next year, we will not be able to intervene in a landlord and tenant dispute until the landlord starts possession proceedings. If we are approached, as we frequently are, by tenants who are concerned about the initial signs of damp, or the cracks appearing in the ceiling, we will have to say that we cannot help at this time, but they will be eligible for help when the ceiling has collapsed or when their home is riddled with dry rot and their health is suffering as a result. While this may result in a saving to the legal aid budget, costs will certainly mount for the NHS and for local authority homeless services.

3.6 Unless these issues are addressed urgently we foresee a number of specialist housing advice services being forced to close. We are aware of many, including our own, whose future is uncertain. Some, such as Brent CAB, have decided to cease specialist housing advice as the climate in which we are now expected to operate is simply too difficult. Those that remain will be forced to spend an increasing amount of (unpaid) time explaining to potential clients why they are unable to help them.

4. Context of Submission

4.1 The Committee will receive many submissions citing key very recent research on the private rented sector from prominent sources including the Government’s own evidence from the 2011 Census and the 2010 CLG research on private landlords, various Shelter reports including the interim report “Sustain 2012” and the Pro-Housing Alliance report “Poor Homes, poor health—to heat or eat? Private sector tenant choices in 2012”.

4.2 From all these sources the key messages and context within which BPTRG works are:

Private renting in London is growing

4.2.1The percentage of households renting their homes from private landlords in London has risen from 10% in 2001 to 15.3% in 2011. In England 25% of dwellings are now privately rented.

4.2.2In Brent the sector has increased by over a third from 20,000 in 2001 to 32,000 in 2011 (Census figures). While part of the increase is due to families who might previously have been able to buy, most has to be due to the fact that the local authority has for the last decade been directing homeless families to the private rented sector through its Housing Options process. The Census also shows that 18% of Brent households are most overcrowded in private renting [second only to Newham where the level of overcrowding is 25.4%]. Changes in benefits mean households have to move to smaller dwellings if they cannot afford the rent gap between benefit eligibility and rent. Survey evidence shows that mobility in private renting is more than 30% higher than in other tenures, with 34% households living in a tenancy for less than a year.

4.2.3Our Housing Advice Centre has seen a number of families who have downsized in order to meet the rent. These numbers are likely to increase dramatically when the overall benefits cap is introduced during 2013. Again, these cuts are likely to be a false economy. Overcrowding impacts on health and has cost implications for health and social care services. Children’s ability to study is impaired resulting in increased costs to education services and reduced chances of school leavers being ready for work or higher education. Children in overcrowded homes spend more time on the streets, with likely costs of dealing with anti-social behaviour. Relationships often come under severe strain in overcrowded homes. When household relationships break down irretrievably, this leads to split families, homelessness and a higher demand for housing. It also increases demand for housing advice.

Is private renting for all?

4.2.4A growing number of the most vulnerable households are now housed in a sector whose primary aim is profit from rents. History shows that this sector has not been an ideal tenure for many households. Statutory and voluntary agencies find themselves assisting households and individuals who experience multiple-deprivation and who are disadvantaged in more than one of the following ways:

Worklessness.

Poverty/material disadvantage/financial stress.

Lack of social support.

Poor physical or mental health.

Poor housing or physical environment.

Low or no qualifications.

4.2.5None of this is the concern of private landlords, their interest is about receiving the rent on time and for their property to be handed back to them in due course. Private landlords are not philanthropists and, frequently, they are also not property managers. There is a lack of knowledge and expertise in the management of properties and tenancies in the private rented sector (78% of private landlords nationally only let one dwelling).

Contributing to homelessness not preventing it

4.2.6There is a vicious circle involving households in need [including priority homeless] housed temporarily and permanently in private rented housing but then losing their homes through insecure tenancies. National and local statistics show that around 27% of households are homeless through the loss of their privately rented home, not for rent arrears.

4.2.7Around 28,500 homeless households were placed by local authorities in private rented accommodation [leased and otherwise] during 2011.

A Shelter survey in November 2012 found that Brent had 5,957 children in temporary accommodation, the highest number of the 29 boroughs to provide information.

Poor physical conditions in private renting

4.2.8The Government’s own research shows that nationally 1.3 million homes in the private rented sector are estimated to be not decent through reasons of age, type & upkeep [English Housing Survey 2010] and nationally category 1 HHSRS failure applies to 900,000 homes. Other Government research has shown that one third of landlords who had heard of the HHSRS reported that 58% of their dwellings had received some form of assessment for potential hazards.

4.2.9Fuel poverty also affects 564,000 [16% of tenants in the sector] and whether to heat or eat is an important choice for many poor and vulnerable households.

4.2.10There has not been a formal survey of house conditions is Brent since 2003 when it was found that although the sector was then only 18% of the total housing stock it contained 34% of all the unfit dwellings in the borough. The picture is almost certainly far worse now in numbers and percentage. The PRS now represents 30% of the total housing stock and, unlike other tenures, there is no new build so private rented dwellings continue to age. Meanwhile, local authority budget restraints have led to minimal inspection and enforcement.

4.2.11Data from the Department of Energy and Climate Change (2008) showed 12.7% of PRS households in fuel poverty in Brent though more recent assessments have put this figure as high as 20%.

Changes in the welfare system

4.2.12Brent falls within the top 15% most deprived areas, characterised by high long-term unemployment, low average incomes and reliance on benefits. A third of children live in low income households. 59% of residents are from BME backgrounds (Brent Borough Plan 2010–14). 85% of BPTRG’s service users are from BME groups.

4.2.13Around 3,500 Brent households are already affected by the housing benefit cap and struggle to pay the rent. Another 2,600 will be hit by Welfare Reform during 2013 which caps total benefits at £350 per week for single people and £500 per week for families regardless of size and household needs. Where total benefits exceed the cap, the “excess” will be deducted from housing benefit. Those with a high benefit entitlement could see their housing benefit reduced to 50p a week and hundreds will see such huge reductions they will be forced to move.

Official Government figures show that more households in Brent will be affected by this change than anywhere else in the country.

4.2.14The level of rents in London and in Brent in the private sector means that even working households struggle to maintain a tenancy in the private rented sector. In 2011 the average rent for a 1bed flat in Brent was £217pw and £460 for four-bed plus. In London approaching 30% of households renting privately were in receipt of LHA in 2012.

It is estimated that in 2012, 65% of tenants in the private rented sector have less than £600 income per week [about £30,000 a year]. After housing costs are taken into account, around 50% of private tenants fall under the national poverty line.

4.2.15The CLG’s Private Sector Landlord’s survey 2010 found that landlords do not want tenants in receipt of benefits. Although almost half (47%) of all landlords were happy to rent to tenants on Housing Benefit (HB) or the Local Housing Allowance (LHA), and a further 21% said they would be encouraged to do so if payments were not made direct to the tenant, there was a significant 53% of landlords who are not happy to rent to HB tenants (CLG Private Landlords Research 2010).

4.2.16The Centre for Economic & Social Exclusion completed research on the Universal Credit (UC) funded and published by the JRF in October 2012 showed that the Universal Credit (UC) replacing the means-tested benefits and tax credits for people out of work or on low incomes, will transform the system of service delivery but they identified certain difficulties for tenants:

Switching to monthly single payments to households is a significant challenge to low-income families and likely to affect women disproportionately;

The scope and scale of financial support and advice to help people through the transition needs urgent clarification;

Payments of UC need to be explained clearly and regularly, with the elements intended to support children identified separately; and

Service users must be informed about how schemes are changing at a local level.

4.2.17If these difficulties are the case where do tenants in the private rented sector go for explanation and advice before they face difficulties with rents and threatened eviction and homelessness?

January 2013