Private Rented Sector

Part of Opposition Day — [2nd Allotted Day] – in the House of Commons at 3:39 pm on 25th June 2014.

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Photo of Lyn Brown Lyn Brown Shadow Minister (Communities and Local Government) 3:39 pm, 25th June 2014

I draw the House’s attention to my quarter share in a residential rental property, as recorded in the Register of Members’ Financial Interests.

We have had a wide-ranging and, at times, very moving debate today on a subject that is at the centre of family life for many households in the country. The unprecedented growth in the private rented sector over recent years takes us into new territory. The politicians and policy makers—and, I think, us collectively—need to update the regulations and the expectations that we have of this sector.

The most insecure sector is the private rented sector, and many tenants in it are among the lowest paid. They are without resources and often face the biggest challenges. In many areas, rents are still rising faster than our pay packets, with some industry estimates indicating that rents have risen more than 10% since 2010. In his well-researched speech, my right hon. Friend Frank Dobson spoke with real knowledge about the ruinous hikes and much greater than 10% rises in central London. As he rightly said, this is bad for tenants, bad for communities and bad for the key workers on which this city depends.

Almost 4 million households—around 9 million people—now live in the private rented sector, and the majority are let through an agent rather than directly through the landlord. My hon. Friends the Members for Nottingham South (Lilian Greenwood) and for Kingston upon Hull North (Diana Johnson) spoke with great knowledge of the problems caused for students by the letting agents in their areas. I listened with real interest to the action of the Hull student union to counter the difficulties caused by letting agencies and substandard landlords.

As we have heard throughout the debate, the problems associated with letting agents include rip-off fees, and we have heard of Shelter’s survey, which found that 94% of agents charge additional fees on top of rents and deposits—and additional fees can total over £700. That is why, given that the landlord is the client of the letting agent, we propose to ban fees charged to tenants. The lack of safeguards, including no right to a written contract or a guaranteed code of conduct, is another problem, while there is no proper accountability. Despite 8,000 complaints to the ombudsman about letting agents in 2012—50% higher than just four years ago—there have been very few prosecutions.