Mortgage Repossessions (Protection of Tenants Etc.) Bill

Part of the debate – in the House of Commons at 10:11 am on 29th January 2010.

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Photo of Bob Russell Bob Russell Opposition Whip (Commons), Shadow Minister (Defence) 10:11 am, 29th January 2010

I congratulate 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.

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