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Private Rented Sector

Part of Opposition Day — [2nd Allotted Day] – in the House of Commons at 3:33 pm on 25th June 2014.

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Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons) 3:33 pm, 25th June 2014

In the short time left, I want to address a couple of points that seem to be central to the argument from Government Members: that rent controls have destroyed the private sector over the past 50 years; that rents have not risen recently; and that there is no need for any of the proposals from Opposition Members and the shadow Minister.

I shall deal first with the claim that the private rented sector was destroyed by rent controls. I remember my great granddad living in a rented property, as many people did on Grange lane in Accrington, but as in many areas and cities across the country, his house was demolished under the post-war clearance scheme, and he was moved into social housing—a bungalow. Many thousands of people were moved out of private rented accommodation; it was simply slum clearance. The properties were not fit to live in, so in the post-war period, people were moved to new builds, which, in those days, only local authorities could build. The transition of people from the private rented sector pre-war to social housing post-war, and the reduction in the percentage of people in the private rented sector, was primarily down to slum clearance and the expansive building of social housing by local authorities. It was not the post-war rent controls that destroyed the private rented sector, but the quality of the housing stock, and that still applies today. With the rise of the private rented sector, we see a deterioration in the quality of the housing stock, which leads us, in a roundabout way, to the proposals from the Opposition Front-Bench team, which I welcome.

I also want to take on the claim that rents have not risen. I think the Minister said that earlier, but when I intervened on him, he quickly reeled back from that. He made it clear that the reason rents have not risen is that they are indexed to the capital value of property. He said that people have a choice between realising their assets in property or investing elsewhere. The reason rents have not risen that much is that the value of properties has not risen. The housing market has been stagnating for some time, which caps rents, because naturally if someone has £100,000 in property, they will look for where they can get the best value, and if they can get it elsewhere, they will shift that investment. So rents are inextricably indexed to capital values, and when we see house prices rise, we will see rents rise, as we are now seeing in London. Caroline Lucas, who is no longer in her place, said that in Brighton rents and house values are twice the national average, which clearly made the point about indexation.

Neither claim is true, therefore, which is why we need to do what my Labour colleagues have proposed: to put in place rent controls, to cap rents and to provide assurance to tenants. As my hon. Friend Jack Dromey said, we cannot have young children and families being put on short-term tenancies and then being moved out. It destroys children’s education and it destroys the lives of families. We have to deal with that so longer-term tenancies are also vital.

It is claimed that the public can get redress, but they cannot. We have seen legal aid cuts to housing, and it is very difficult for people in the private rented sector to get any form of redress. Our local citizens advice bureaux have seen a reduction in staff numbers, the so-called big society is shrinking rapidly and people are finding it increasingly hard to get redress on housing issues. It is not as easy as is made out—if someone has a housing problem with a landlord, everything will be all right because they can get legal redress. Actually, I do not think that that was possible at the start of this Government, and the situation has only been made far more difficult by changes to government funding.

It is said that there is choice and that private landlords do their best. The problem with the private rented sector in many areas, including mine, is the stock condition. No matter how many landlords or what type of landlord, 20% of properties in my area have category 1 hazards and 40% have category 2 hazards. Landlords are operating in a very difficult environment and with very poor housing stock, and they are not improving that housing stock. That is an issue, and choice does not come into it when there is an endemic problem of stock condition. The problem needs to be addressed in other ways. We cannot just say there is choice out there.

Finally, I return to the housing stock in Hyndburn. Post-war and pre-war, roughly one third of the housing stock was rented, and the same is true today. All we have seen is a shift between the different rental types of social housing and the private rented sector. That reinforces the point that one third of people in my constituency will always want to rent and that two thirds will always be owner occupiers. That is likely to carry on. It is a question of how we provide the one third of accommodation that needs to be rented. It is not about saying the private rented sector is better than the social rented sector. Given the time, I shall sit down and allow the Front-Bench speakers to wind up the debate.