Private Rented Sector

Part of Opposition Day — [2nd Allotted Day] – in the House of Commons at 3:49 pm on 25th June 2014.

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Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government 3:49 pm, 25th June 2014

I welcome the opportunity to debate an incredibly important issue, and to do so in a largely good-natured and constructive way, as Lyn Brown has just done. She showed real passion on behalf of her constituents, as she was quite entitled to do. I shall return to that shortly, but first let me also welcome the Labour party’s new-found interest in this issue, which they have developed four years after entering into opposition and, perhaps more significantly, 17 years after entering into government. They had a 13-year window of opportunity in which to tackle all the issues raised in their motion, along with all the additional issues that have been raised by Labour Members today, but they did not take that opportunity.

This coalition Government recognise that the private rented sector is playing an increasingly important role in the housing market. It has doubled to serve more than 3.8 million households, and many of those people value the flexibility that it offers them and choose, positively, to live in it. That is especially true of young people. The phrase “Generation Rent” was used by a number of speakers, including my hon. Friend Dr Huppert. I have spoken on a platform with the excellent people who are organising the “Generation Rent” campaign, and I recognise that the position of young people will be a serious issue in the run-up to the general election. I am proud of the fact that the Government are tackling many of the problems identified by that group and by other campaigning groups such as the National Union of Students.

The status of the private rented sector is extremely important, and it is actually performing very well. As I said earlier, the supply of private rented housing has grown to serve nearly 4 million people. As many Members have pointed out, during the current Parliament rents have increased more slowly than inflation, by an average of 1% a year. Overall, the quality of accommodation in the sector, which has been mentioned several times today, has improved. It is more energy-efficient, and there are fewer non-decent homes than in the past. The satisfaction levels reported by tenants themselves are high: 83% of tenants are satisfied, according to the most recent surveys. That is a higher percentage than reported following similar surveys of the public sector. I agree with my hon. Friend Jackie Doyle-Price: I too find, as a constituency Member, that many constituents come to me—sadly—with problems relating to the public sector.

The vast majority of people in the private rented sector move of their own volition. That is an aspect of the flexibility that the sector provides people, particularly during the early stages of their lives. I went through exactly that process myself. When I graduated from Bristol university, I spent one year in a one-room bedsit. I then spent three years in an attic; I had my own kitchen but had to share a bathroom. When I could afford it, I rented a one-bedroom flat, and then, when I could afford it, I entered the housing market.

Some Opposition Members will have had rather different social experiences. Nevertheless, we recognise that there are challenges that we need to tackle. The biggest challenge of all was mentioned by several Members. As we heard from my hon. Friend Mr Prisk, the former Housing Minister, we need to expand supply in this sector and, indeed, in all other sectors. We need to build more. John McDonnell acknowledged that the Labour party needs to have a good look at its past record, although perhaps, belatedly, it is learning some lessons in this regard.

We also need to look at the professional status of landlords and ensure that there is good management practice. We need to tackle rogue landlords, while not penalising the vast majority who provide a good service for their tenants. We need to make letting agents’ fees more transparent, and we need to meet the growing demand from families for longer tenancies. Those are the challenges, and the Government are taking action to meet them all.

We want the private rented sector to grow. We want more purpose-built accommodation in the sector, and we want it to attract institutional investment. We want more large-scale, professionally managed, high-quality, well-designed accommodation. My hon. Friend the Member for Hertford and Stortford asked what had happened to the £1 billion Build to Rent scheme that he launched when he was the Housing Minister. We believe that we are still on course to deliver 10,000 new units by 2015, and 16 projects are already under way. Due diligence is being done by the Homes and Communities Agency, and we hope to make further announcements soon.

We need regulation—smart regulation—only when it is appropriate. We do not want to adopt a blanket approach that would deter investment, add to cost pressures and increase rents. We want to crack down on rogue landlords but not to add to the burdens on ordinary landlords, such as the shadow Minister, who I am sure are providing a decent service.

Local authorities have a critical role in the sector, and we expect them to use the powers that are available to them to tackle the bad practice that sadly exists. Last year, we announced that £6.7 million would be made available to local authorities that suffer particularly complex problems with rogue landlords. We have provided £125,000 to Leeds city council to tackle the problems that it has identified. I am glad that the shadow Minister who wound up for the Opposition mentioned the problems in her constituency of West Ham. I am sure that she will want to thank the Government for the fact that they have provided £1 million to Mayor Wales in her borough to deal with the problems there—far and away the biggest investment we have made out of the £6.7 million.