– in the House of Commons at 2:08 pm on 3 November 2022.
[R] I beg to move,
That this House
has considered the White Paper A fairer private rented sector.
I thank my co-chair of the all-party group on renters and rental reform, Mrs Elphicke, who is the co-lead sponsor of today’s debate, and the 30 other MPs from across the House who supported it. I also thank the Backbench Business Committee for ensuring that we have such a timely debate on the matter. Of course, I direct Members to my entry in the Register of Members’ Financial Interests and declare that I am the chair of that all-party group.
Many commentators have said that the private rented sector is really three markets. The first is the luxury and high-end market, where people wish to pay high amounts for quality housing. To some extent, that market does not need the regulation we are discussing here. It will not be harmed by it, but this regulation is not aimed at it. The second is the market for people who are unable currently to buy a home or wish to have the flexibility of renting. This White Paper is about making their market a feasible, long-term, sensible one that they can live in. The third is for people who need social housing and often wider wraparound support. They should not really be in the private rented sector, as it will never be appropriate for them, but the White Paper still must protect them while we deal with the social housing problems that the Government, in the Bill they are bringing forward on Monday, recognise we need action on.
The core of the debate is about how we create a private rented sector that is stable, affordable and safe, and where all parties have access to justice. I do not think that is a controversial thing. If it is not, the question is: how do we go about achieving those principles? It is not about whether those principles are desirable. Again, I believe there is broad consensus on the ways of doing it, most of which are laid out in the Government’s White Paper, “A fairer private rented sector”, published in June. It not only covers the points I have mentioned, but discusses information, enforcement, children and pets in the home, and giving people the protections they need.
The chief executive of the National Residential Landlords Association said, on the release of the White Paper, that the
“headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful”.
The renters’ campaign group Generation Rent said:
“This is a serious set of proposals that will help to raise standards in private rented homes and restore some balance to the relationship between tenants and landlords.”
The charity Shelter said:
“This White Paper promises people safety and security in their home”.
I could go on with the countless other ringing endorsements of the White Paper and its proposals that are coming from across the sector, with everyone wanting to go further on one bit or another, but welcoming the core.
That is why it came as such a shock to many of us when it was briefed to The Times at the beginning of last month that all of that was being dropped. In Prime Minister’s questions on the same day, the former Prime Minister—I know it is hard to keep up with which one we have at the moment, but I am referring to Elizabeth Truss—recommitted to a ban on section 21, but the full status of the rest of those proposals remains unclear. I hope that the Minister will continue in the good vein that the Minister but one initiated. I put no blame on her immediate predecessor, who did not have the brief long enough to make a difference one way or another. This is about how we make the pledges that we all put in our manifesto a reality.
Let me deal with the substance of this issue. I start with the root of so many of the problems in the private rented sector: the issue of people’s stability and security in their home. Section 21 provides the ability for a landlord to evict without any reason a person from their home—that structural power imbalance is hugely consequential and exists in almost no other form of contract that we have today.
On safety standards, I know of many cases in which renters do not wish to complain about the condition of their property, through fear of revenge evictions. The law at the moment is not good enough on revenge evictions; it currently requires a council to have made an assessment that the home is unsafe or in poor condition, in accordance with the housing health and safety rating system, in order for someone then to have the protections from eviction. That sets the bar well beyond where it is practically useful if it is to protect a renter who complains about something such as a boiler not working or the windows jamming.
On affordability, section 21 is creating a crisis that is spiralling out of control, where we see a wave of assured shorthold tenancies coming to an end and section 21 being used to get higher rents, pushing up inflation, to above 20% in some areas. I know of a schoolteacher who received a demand for a 40% rent increase at the end of their lease. Unable to pay, he is now sofa surfing and homeless. A school teacher who is working full time is homeless not through any fault of his own but due to the state of the housing market today.
Shelter commissioned research to show that some 230,000 private tenants have been served with section 21 notices since the Government made their first pledge in 2019—that is one every seven minutes. But that does not even show the scale of the problem, because a notice is not usually required; knowing they have no rights, renters will often just leave when the landlord asks them to do so, at an inconvenience to themselves. Section 21 provides no real recourse, no appeal and no exemptions, and even if it did, we know that the current court system has delays coming out of its ears, so taking things to court will not be an answer to these problems.
Last week, in preparation for this debate, I asked renters to get in touch with me with their stories. One of the many replies I received was from a young couple who said that before they moved in the landlord agreed to carry out a deep clean, but when they entered the flat they found that it had an insect infestation and it had not been cleaned for months. Both the agent and the landlord refused to do anything. Later, the couple found that two windows were broken and so they asked for repairs, but, again, there was a refusal to do anything. They contacted the council, but it did not carry out an in-person inspection—we all know the pressures on councils—and in the end, on the balance of things, it just accepted the landlord’s word against that of the tenants. At the first possible instance, in November 2021, the couple were issued with a section 21 notice. They had a three-month-old baby and they were homeless.
I have countless other such examples, and I am sure many other Members do, so it is no wonder that the commitment to deal with this was a cross-party commitment in all manifestos, but we cannot allow the abolition of section 21 to be in name only. We must not allow the next crisis to be the use of section 8 evictions due to rent arrears. If we simply abolish section 21 but allow landlords to increase rents uncontrollably, we will create a loophole that a lorry could be driven through. If a renter complains about the state of a property and the owner wants them out, the owner will just raise the rent to £10,000 a month and evict the tenant. The current rental increase protections are inadequate for protecting renters. When I last looked, the only way to make an application to the tribunal was by fax. That is ridiculous.
Potential economic evictions were foreseen by the Renters Reform Coalition, and I am pleased that the White Paper addresses the issue. It states:
“We will only allow increases to rent once per year... We will end the use of rent review clauses, preventing... rent increases that are vague or may not reflect changes in the market price… where increases are disproportionate, we will make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal”.
Those are the Government’s words. If that works, it will be a game changer for stability in the rental market. Personally, I would like the Government to take on more rental controls. I know that they have ruled that out, but I hope that others will press them on the matter. My friend the hon. Member for Dover will say more about rental controls. However, the proposal in the White Paper is a sensible compromise on which we can start to make progress.
I note the concerns of the National Residential Landlords Association about moving from periodic tenancies and the effects on student housing. It points out that both landlords and students need to know that a property will be available many months ahead. I am sure that the Government are working on solutions to that perceived problem, but if I could offer one piece of advice, it would be, please leave the proposals in the White Paper as they are. More loopholes will be taken advantage of.
I offer a solution. Dare I say that there should be an opportunity, if not a duty, for universities to house all their students who wish to be housed? Universities could engage in tenancies with the private rented sector. They would be permanent periodic tenancies, and universities could license rooms to their students. That would give the private rented sector the security it needs and students the wraparound support they often require. In our communities, we often hear complaints about people not coming forward. Such a solution would give universities the knowledge that their students were in safe and secure accommodation. It could also work for other institutions and would still mean that the decent homes standards that the White Paper requires had to be fulfilled in such accommodation.
Security of tenancy is particularly urgent. We are facing a difficult time, with many landlords selling their properties. Mortgage rates are going up and many landlords may wish to leave the market. That is fine. Some say that landlords leaving the sector means that rental provision leaves the sector. However, for every landlord who leaves the sector, there is another homeowner or private rented landlord entering it. My fear, which is shared by many, is that turmoil in the housing market will mean that renters are evicted so that landlords can sell property to another buy-to-let landlord, who would often be more than willing to allow a renter who had been paying rent for a long time to stay there.
The Government stated:
“We encourage any landlord who wishes to sell their property to consider selling with sitting tenants, which may provide an easier and faster solution.”
However, most mortgages do not allow that. I ask the Minister to sit down with mortgage providers and work out a way in which buy-to-let tenancies could facilitate that. It might mean a slightly higher premium in some circumstances or some conditions, but it needs to happen now.
Ideally, we would have a system such as TUPE, whereby when an employer is taken over, the employees continue in employment. If a landlord is taken over, the tenants should continue to live in the property. We should aim for that. Of course, a new buyer might choose to move in and renovate the property. The existing clauses allow them to remove a tenant as they see fit.
There is broad agreement on both side of the House and in the sector on access to justice. Unless we take enforcement and the ability to access redress seriously, this is all a waste of time. The rogue landlords list was set up in 2018 with a great deal of fanfare. It was meant to be a game changer. Earlier this year, the Government were asked how many landlords were on the list. The answer was 61. That makes a joke of the entire system. I could probably name more than 61 in my constituency, let alone the country. That is even more reason why the White Paper’s proposed property portal, which would require all landlords and properties to be registered, is the only way forward. I think that the Government have come to realise that. I genuinely believe that they have seen the error of their ways. That is why they talked about establishing an ombudsperson to
“provide fair, impartial, and binding resolutions for many issues without resorting to court.”
The White Paper goes on to say:
“The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.”
That is spot on. It empowers renters and gives them a body to seek redress, but it also means that landlords know that there is a place where they will be fairly heard. That, combined with the removal of section 21, is a life changer for many. It will give people the ability to complain about poor housing.
One person told me:
“One electrician said that the wiring was the worst he had ever seen. The poor wiring led to us having a power cut, which was only repaired with a temporary fix. The landlord admitted that they were aware of the oven being faulty at the start of the tenancy but refused to fix or replace it.
Our hot water didn’t work when we moved in—the landlord had a friend (who wasn’t a qualified gas safety engineer) disconnect our heating from the boiler without telling us. We had to call out emergency gas and electrical technicians to fix these issues and shortly after” — surprise, surprise—
“we were served with a Section 21 notice.”
If the Government enact their proposal, renters could go to the ombudsperson and get their home fixed to a decent standard, and they would not have to fear a section 21 eviction notice.
It is vital to include deposit protection schemes in the responsibilities of the ombudsperson. Decisions about such schemes should be published on the property portal. At the moment, they are not and they are only sporadically enforced.
Last year, the APPG heard from a young woman in her early 30s. She said that she was still sharing a house in an insecure renting arrangement, despite earning £35,000 a year. She spoke about wanting to start a family with her partner, but said that she could not because she could not provide a stable home. The system has robbed that young woman of the ability to start a family. The White Paper could not just address some of the imbalances in the system but restore dignity to millions of renters.
As is customary, I will finish with some questions for the Minister. Will she commit to implementing all sections—that 12-point plan—of the White Paper? Does she recognise that the pledge to abolish section 21 is not about getting rid of a clause called section 21 but about providing stability, security, and justice in the housing market? Will she commit to introducing the draft legislation this year? If not, when will that happen? Will she commit, as I have asked, to meeting mortgage lenders to discuss buy-to-rent mortgages with sitting tenants?
I thank my friend and co-chair of the all-party parliamentary group for renters and rental reform, Lloyd Russell-Moyle for his opening speech.
Housing is a long-standing interest of mine, and I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Reforming the private rented sector is an important area of work for all Governments, and I and other Conservative Members signed up to that in the 2019 manifesto on which we were elected. The vehicle for that important pledge is the White Paper, “A fairer private rented sector”, which was published in June. There has been much change in the short time since the White Paper’s publication. I welcome the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend Felicity Buchan warmly to her place, and I hope she will not mind if I place on record my considerable regard for the work that her predecessor at the time of the White Paper’s publication, my hon. Friend Eddie Hughes, undertook.
I wish to illustrate the pressures of capacity in the private rented sector by reference to my own constituency and across Kent, before turning to why these reforms are so important and need to be progressed urgently.
Today, the Home Secretary is visiting Dover. The situation of housing people who have crossed the channel illegally in small boats is putting a huge strain on housing and local services. It is not unheard of for local people to be turfed out of accommodation by landlords who want higher rents. There are concerns that landlords are looking to cash in on lucrative, long-term Home Office contracts. That is why we must push forward on these reforms.
It is a great pity that the Home Secretary had not planned her visit to Dover and to Kent so that she could meet Kent MPs and Kent council leaders to discuss at first hand the serious local impact on residents, including the struggle to access affordable private-rented housing. I hope that she can meet us urgently to discuss these issues. The extent of the issue was laid bare in a strongly worded letter to the Home Secretary from Kent council leaders yesterday. They said:
“Put simply, Kent is at breaking point. Our public services, including health, social care and schools are already under extreme pressure. We have approaching 20,000 households on the waiting list for social housing, soaring costs, limited availability of private sector rented housing and temporary accommodation all fuelled by being in an expensive south-east London periphery, while having pockets of severe deprivation and low average earnings… Kent’s housing sector cannot absorb further asylum places on top of those existing burdens over and above local demand.”
How does the concern expressed by the council leaders translate to my constituents on the ground? Let me give an example of its impact in my constituency. My constituent, who I shall refer to as Emily, is a mother with seven children. She was required to leave her privately rented property on no notice, under section 21, and there was no suitable accommodation. In the end, she was offered accommodation in Leeds, some 280 miles away. She has ended up living with her mother in a two-bedroom house, sleeping on the sofa and the floor. Her grandmother told me how upset she was that migrants were housed in four-star hotels while her granddaughter and great grandchildren faced these conditions and impossible choices.
In an attempt to shut down debate, too often such concerns can be labelled as extreme or even racist. There is nothing extreme for a person to be concerned about their family; that is about as mainstream as it comes. In my area, inevitably, given the scale of the small boats crisis, it is the issue of accommodating migrants and asylum seekers that puts this additional strain on the private rented sector and services. In other areas, it might be holiday lets, Airbnbs or student accommodation. But the underlying point is the same: there needs to be reform of the sector, which needs to be implemented as set out in the White Paper, and consideration of all these different housing markets and drivers.
Building on the White Paper, there is other work that could drive improvement and understanding of local market dynamics further, and that might require supplementary solutions—be that Airbnb registration or other measures. I would be happy to meet my hon friend the Minister to discuss this further.
Pages 7 and 8 of the White Paper set out a 12-point plan of action for private renters. In effect, it is a 13-point plan, as page 8 references that this plan is a support for the journey to home ownership. I shall shortly be developing an argument for a 14th point to that plan: support on the journey to council housing and social housing.
There are three types of housing tenure in England: owner occupation; social rented; and private renting, which is property owned by a person who is different from the tenant and let out at rates and on terms and conditions that are different from those that apply to registered social landlords.
The private rented sector has grown rapidly in recent years. As it has become more dominant, it is inevitable that that has been at the expense of both the social rented and home ownership sectors. Throughout the 1980s and 1990s, and right into the early 2000s, the proportion of total housing in private rented stock was around 10%. Between 2008 and 2017, it mushroomed to more than 20% of all stock, before settling to its current level of around 18.5% of stock. That translates into a doubling from about 2 million to more than 4 million households in private rented homes.
In the context of this debate, housing stability means that a person knows where they stand; that if they pay their rent or mortgage and they do not behave outrageously, they have the choice as to whether to stay in their home. That is not the case for private rented tenancies. The landlord chooses whether a person can stay or must leave, no matter how long they have been in a property or how good a tenant they have been. That is what these reforms are trying to address—otherwise, the expense, time, disruption, distress and uncertainty caused by a section 21 notice all falls on the tenant.
Improving housing stability is at the heart of abolishing section 21 no-fault evictions. The reform is intended to take away the immediate day-to-day worry and concern for tenants that they will wake up one morning to a notice saying that they have to go. The longer-term solution is to introduce more affordable accommodation and council housing as well as promoting home ownership.
Dover District Council is a Conservative council that is compassionate and active in many ways. It has embarked on a council house building programme to help prioritise local need. I wish to give a couple of examples. Walter Hammond Close is a development in Dover, which comprises 16 studio flats, all let at social rents, providing interim housing for local people facing homelessness. It complements the Elizabeth Carter Court project in Deal. Completed in August, it provides eight one-bedroom flats, which are also let at social rents, providing interim accommodation for local people facing homelessness. Those two excellent examples of the work being undertaken by the council are encouraging, but the council cannot build enough to keep up with demand. That is why we need a large-scale affordable and council housing programme across the country.
Helping constituents with private-rented housing is a staple of our work as MPs. I want to refer to one of my constituents, who I shall call Natasha. Her granddad asked for my help. He said:
“My granddaughter and her child have been given notice to quit by a private landlord in Dover and have been desperately looking for alternative accommodation without success… She has suffered domestic abuse, ensuing mental health difficulties”— for which she has had counselling and has recovered amazingly well. He went on to say that she lives in a property with a dangerous electricity system and that they had battled with the landlord about this for months. He said:
“The current situation is that we are now 52 days away from Natasha’s eviction date, which, ironically, is Christmas day… Here is a young single mother and her two-year-old child who have been given the most awful situation to face when all they wanted to was…to live in a safe environment.”
It is vital for Natasha and all the others in Dover and Deal and all over the country that these measures are brought forward into legislation promptly. I had been concerned that there had been some hesitation about this, so I would be grateful if the Minister could confirm when we can expect these measures to be brought forward.
In Natasha’s case, as hon. Members will have heard, there was an electrical safety issue in her flat. She battled for months, but it did not get fixed. Natasha is now in flat two and her child is three. This is her current position:
“The property is a privately rented flat. The area where she lives affects her three-year-old child’s health due to traffic fumes. He now has a constant cough. The area is overrun by rats, which can be heard scratching and scurrying in the walls of the property and can be seen in the surrounding areas.”
I look forward to seeing how the proposals in the White Paper will help Natasha and the many other cases that fill my inbox and, I am sure, the inboxes of many other Members across the House.
There is good intent in the ombudsman’s proposals for redress, but that redress needs to be extremely swift and enforcement robust. In order for that redress to happen, landlords need to be identifiable as well as accountable. At the present time, we do not know how many landlords there are. In addition to potential revenue loss to the Exchequer, this makes accountability and traceability of landlords very difficult and expensive for councils in instances where they wish to take public health or other enforcement action.
I welcome the proposed measures for the property portal, but I ask the Minister to consider what steps may be taken to ensure that the information contained in it is validated as to ownership and management, and that it can support efforts to ensure that all taxes are paid where they are due, and that the new proposed ombudsman, local authorities and other enforcement agencies may be able to access the portal in order easily to fulfil their obligations.
I wish to move on to the White Paper’s plan around rent management and challenging excessive rent rises. Even before the current cost of living crisis, rent levels were unaffordable for many. The Local Government Association’s view is that the best way to increase housing security is to address the unaffordability of housing, which is the key reason why people lose their tenancies and become homeless.
I agree completely that affordability is a vital ingredient of a good home. In the longer term, there is a need to rebalance the housing market through a tenure strategy to make sure we balance affordable and council housing and increased home ownership alongside a reduction in the private rented sector, but in the near term, there is increasing pressure on rents, making them unaffordable and unsustainable for many.
In the White Paper, the Government rule out rent controls to set rents at the outset of the tenancy. In recent weeks I have proposed controls to freeze current rents for up to the next two years, while the current economic pressures are expected to reach their peak. The proposal would comply with the premise set out in the White Paper because it affects only rent rises, not base rent levels. The measure would be deflationary, not inflationary, and would be to the wider benefit of everyone, including landlords.
A case may be argued for managing rents more widely, but to some extent high rents are the symptom, not the cause. As the hon. Member for Brighton, Kemptown eloquently set out, the private rented sector has expanded to become all things to all people. It is providing both homes to those who can and should be home owners with a mortgage, and a roof over the head of those who have none, who should be in affordable housing.
I understand that many landlords want to be compensated for any costs they pass on to tenants—indeed, some of them are very vocal on that subject—so the nature of the landlord and their relationship with the property is important. The UK landlord market is unusual compared with some other countries, dominated as it is by individuals, not by housing organisations and institutional landlords. The latest English private landlords survey shows that some 94% of landlords are individuals representing 84% of tenancies, so they are strongly dominant. About half of them are longer-term landlords of more than a decade. When people were asked to describe themselves as a landlord, over half said they considered their properties to be a long-term investment to contribute to their pension, and 27% said they considered them to be an investment for capital growth. So while for the tenant the property is their home, for the landlord it is first and foremost an investment, and as we all know, investments can go up and down.
Just as there are longer-term structural issues around tenure, there are longer-term issues with savings and investment vehicles, including property. In that context, I ask the Minister to consider whether the financial management proposals on rents set out in the White Paper could be developed further, and whether there should be more robust measures to assist renters during this cost of living crisis. Communications I have received from landlords seem to suggest that they are unable to weather changing market conditions in the way that other businesses are expected to. The assumption seems to be that the tenant should bear all the financial costs and risk; otherwise, the landlord threatens to sell, even in a falling market.
In that context, I ask the Minister what work has been undertaken to assess resilience to market changes in the landlord market with the mortgage lenders, as happens for individual owner occupiers, and whether stronger mortgage market regulation is needed for landlords with buy-to-let mortgages, to make sure they have sufficient planning and affordability to weather different market conditions. Is the Minister considering interest support or greater interest deductibility to support under-capitalised landlords in the near term? I would be grateful if she also considered whether such support could be linked to, for example, landlords committing to keep their rents in check during this cost of living crisis.
There is strong evidence that the inherently insecure nature of the private rented sector has an adverse impact on people living under that type of tenure. There are measures in the White Paper that will incrementally move the private sector forward, and I welcome them. I look forward to working with my hon. Friend the Minister on this important aspect of her work.
Thank you for calling me so early in the debate, Madam Deputy Speaker. This is a very important issue in my constituency and across England. More than 7,000 households—households, not people—are on the waiting list at Stockport Homes, which is one of the main providers of housing in my constituency, and 11 million people rent privately in England. That underlines the importance of this debate, and I am grateful to my hon. and good Friend Lloyd Russell-Moyle for securing it.
We heard about reforms the Government were going to bring in some three years ago; unfortunately, in the three long, hard years since, we have seen very little progress. I will describe two separate cases that have recently come into my inbox. The first involves a family of three—a single mother with two teenage children, one of whom has severe autism. They were served with a section 21 notice of no-fault eviction. The mother had always paid her rent and kept the house spotless, and the family had lived in the property for 12 years. When they were served the section 21 notice, the landlord said they wanted to sell, but my constituent suspects that the landlord was seeking a higher rent in the market.
Sadly, the family were evicted. They were rehoused in a hotel outside the borough of Stockport, which caused massive problems for the family, including the 16-year-old son with a medical condition. The three of them were accommodated in a small hotel room, and Stockport Homes has had to extend the six-week period for hotel costs because the son is unable to cope with the trauma of moving into temporary accommodation before being rehomed. Stockport Homes is also paying the storage costs, which the family will have to reimburse, increasing the pressure on the family. The mother is flexible about where the family can be rehoused; she is just desperate for a permanent home. There has been a mental impact on the entire family, but particularly on the son who has autism. It is a serious case and I wanted to highlight it in the Chamber.
The other case is also quite tragic. I was contacted by a recently bereaved constituent who was on a protected tenancy. Her private landlord’s agent had asked for her rent to be increased from £350 a month to £800 a month. She had been living in that one-bedroom flat with her late partner for 44 years on a protected tenancy, with very little upkeep and maintenance of the property undertaken. The valuation office was approached and the formal rent valuation process was gone through. The rent for the property was determined to be £450 a month, not £800 a month as the agent was demanding. This tenant was fortunate to have protected tenancy status at a time when she was most vulnerable, after the loss of her partner of 44 years. Sadly, most people are not so fortunate. Those are two serious cases, but I could go on. My inbox is filled with similar cases of people who are desperate to get housing.
I am grateful to several organisations, but particularly Shelter, which provided an important briefing for the debate. Research from Shelter conducted in April 2022—three years after the Government first committed to scrapping section 21 no-fault evictions—shows us that every seven minutes a private renter is served with a section 21 notice and that more than 200,000 renters have been evicted in the three years since the Government first said they would scrap no-fault evictions. These figures are staggering and very worrying. Other colleagues have mentioned Generation Rent and other organisations, including Shelter, which conduct important research and act as a lifeline for many people in that desperate situation.
While we are debating housing, I want to mention Mrs Sheila Bailey, a local councillor in my constituency who very sadly passed away recently, and highlight early-day motion 428, which I tabled in this House to pay tribute to her work. She was a champion for housing in particular, and played an important role in creating Viaduct Housing Partnership, a local housebuilder, when she was cabinet member for that portfolio.
I know there are several other speakers, so I will not take much more time. I want to mention the inadequacy of local housing allowance. I have raised this matter on several occasions via both oral and written questions. According to the Office for National Statistics, the median rent for a one-bedroom flat in the private rented sector in Stockport borough is £600, yet, by the Government’s own admission in answers to written parliamentary questions I have tabled, in the two broad rental market areas that fall under that local authority, 71% and 52% of households respectively have a gap between local housing allowance rates and their rent. That needs to be looked at.
I could say a lot more; a vast amount of casework comes through my office via letters, emails and telephone calls from people desperate to find housing in my borough. Stockport, I would say, is the best place to live out of the 10 boroughs in Greater Manchester—in fact, I would say it is the best place to live in England—but that means that the housing market is very competitive. People are facing hardship as it is because of the failed economic policies of this Government, but in addition, in Stockport, we have a problem where housing is in a dire state. We must ensure that people are not left behind.
Lastly, I must mention Stockport Tenants Union, which was set up just over two years ago and provides support to people across the borough; Jonathan Billings, who is a long-standing campaigner against homelessness and has set up a charity named EGG, or Engage Grow Go; and the Wellspring in Stockport, which has been serving the local community for decades. My hon. Friend the shadow Minister will speak later on, but I want to congratulate my hon. Friend Paula Barker, who has just been appointed to the role of shadow Minister for homelessness and rough sleeping.
The Opposition are taking this issue very seriously. We cannot wait three more years for action, or even three more months—we must ensure that it is delivered quickly.
I thank Lloyd Russell-Moyle and my hon. Friend Mrs Elphicke for securing this important debate.
Apparently I have mentioned this in the House before, but North Devon has a housing crisis. The enormous growth in short-term holiday lets and second homes has resulted in an unsustainable shortage of houses for local residents to live in. Matters are now at such a stage that many businesses and public services are simply unable to recruit and numerous businesses are unable to operate full time.
Many will say, “Well, don’t you welcome your tourists?”. Indeed we do welcome our tourists, but we would like them also to eat in our local pubs and restaurants, which are unable to open full time because they cannot get staff, because there is nowhere for anyone to live.
The private long-term rental sector across Devon has declined by more 50% in the last two years and by more than 60% in my own North Devon constituency. Unfortunately, Government policy has not helped. The changes to landlord tax relief made it preferential to have a short-term furnished holiday let rather than a long-term rental tenancy.
Although the changes were introduced in 2017, they only became fully effective in 2020, when most of us were rather consumed with the pandemic, and came into effect at the same time that people were suddenly desperate to escape to wide-open spaces such as my beautiful constituency. Moreover, as soon as we were allowed to go on holiday, people rushed to North Devon and the prices paid for our holiday lets soared.
In addition, the legislation we passed only last week to raise stamp duty thresholds still applies to second homes and holiday lets. That is more complicated, because we desperately need more people to become long-term landlords again—we must find a way to reverse the demise we have seen in that area. I recognise the challenges, but I hope that we will be able to consider how some of the policies designed to help people to get on to the property ladder are just facilitating more people’s buying second homes or short-term holiday lets that sit empty for half the year.
The Department for Digital, Culture, Media and Sport’s consultation on a registration scheme for second homes or short-term holiday lets is now complete, but we still have no date for when the results will be released, which leaves councils with few tools available to them to tackle the surge in properties that lie empty for months of the year, yet are still more profitable to their landlords than a long-term rental. We must ensure that there are change of use clauses for properties made into holiday lets. Those properties were built as homes and should be lived in. If they are a business, they should have to declare a change of use and be taxed accordingly.
This situation is made even harder by the increased requirements on landlords with regard to energy performance certificates, with rural and coastal properties often requiring huge amounts of investment to achieve the necessary rating. That is resulting in even more rental properties being sold or converted to less regulated short-term holiday lets. While I agree that we must ensure properties do not leak, we need to recognise that rural housing stock is very different from urban housing stock and find other, more creative ways to tackle this, so that landlords do not take the logical way out of selling or moving on to a different type of tenancy.
Swathes of long-term tenants in my constituency have found themselves evicted under section 21 notices, so that landlords could take advantage of the tax breaks available to them when their property is let out as a short-term holiday let. Post pandemic, a small two-bed long-term rental in my patch may cost £800 a month, whereas a short-term holiday let will cost at least that per week, and probably double.
Because of the lack of rental properties in my patch, when people are evicted, there is simply nowhere to go. The council housing list is so long that people are being rehomed as far away as Bristol. Some families stay in the area for their children’s schooling, and we now have multiple children being bussed or taken by private taxi 10 to 15 miles each morning to their primary school. At a time when council resources are under pressure, we are adding layer upon layer of extra cost, simply because we do not have enough homes for people to live in.
For tenants, section 21 notices have been horrific—we all have awful stories of people’s experiences—but not all landlords are bad. Many find themselves struggling to evict people who have not paid rent, for example, and section 21 notices are taking up to 18 months to get through the courts in my constituency. I hope that, as we see some progress in this area, landlords are not demonised, because we need more landlords to come forward, so that we can tackle this section of the market. It is the relationship between landlord and tenant that drives a successful rental relationship. Although we feel that that relationship is unbalanced at present, I hope we can support both sides of this delicate balance. We need to find a way to give security to tenants but also give landlords the ability to evict when they genuinely need to. The concern with some of the proposed legislation is that we are already seeing landlords choosing not to risk not being able to evict a tenant. When a landlord could have a short-term holiday let in my patch, why would they have a long-term rental?
We need the housing stock we have to be better utilised and not sat empty for half the year, but I do not disagree that we need to build more homes. Over 16,000 people are currently on Devon’s housing lists, and even if those lists closed now, at the current rate of building, it would take over 32 years to clear the backlog. We need urgent intervention in the housing market in Devon and many other places around the coast. The demise of long-term rentals makes moving to remote, rural and coastal locations to work nearby impossible, and we have so many job vacancies that many companies are simply not operating at full capacity. If we want economic growth, we need workers who can live close to their place of work and find affordable accommodation.
For communities to thrive, they need people living there all year round, so that we do not have the winter ghost towns that blight far too many of our popular tourist destinations. We warmly welcome tourists, but the balance between visitors and workers is now not there, and urgent intervention is needed. MPs in seats like mine have been raising these issues for years with multiple Ministers, and I hope that this Minister will remain in post long enough to deliver substantive change and find a way to reverse the demise of the long-term rental sector.
Thank you, Madam Deputy Speaker.
“Being a new and first time mum is hard and challenging without having your foundations stripped from you, evicted with no warning, in the middle of winter, when other rent is hard to secure”.
Those are the words of my constituent Katherine, who gave birth to her baby boy in June. Last December, Katherine signed a two-year contract with her landlord, informing them that she wanted a longer contract to give herself stability during her pregnancy. Unfortunately, she received an email in October saying that the owner had noticed that market prices had increased a lot recently and would like to adjust the rent. After she explained the situation to the letting agent and landlord, however, she was told that the landlord was now moving back into the property—surprise, surprise—and there was no room for negotiation. That has left her and her young family without the security of a home and facing eviction just weeks before her child’s first Christmas.
Sadly, having listened to other examples this afternoon, I know that Katherine is not alone in Vauxhall or across the country in facing the sharp end of our imbalanced rental market. My hon. Friend Lloyd Russell-Moyle outlined the similar situation of a young woman in her 30s who is hoping to start a family. Katherine has started her family, but now faces that difficulty in the rented sector.
It cannot be right that tenants are expected to find thousands of pounds in moving costs in the space of just two months after a landlord serves a section 21 notice. It cannot be right that tenants, who are paying ever-increasing rents, are denied the most basic security of knowing whether they will have a roof over their head in a matter of weeks. It cannot be right that, during the sharpest cost of living crisis in decades, tenants are expected to bid extortionate amounts against each other to secure even the most basic of properties, as happened recently to a constituent in Clapham.
My hon. Friend Navendu Mishra mentioned that rents in his constituency total about £600; in my constituency, the average rent for a one-bedroom flat starts at £2,000. A tenant recently contacted me to say that they had contacted an online letting agent to go and view a property, only to be informed that 35 people were already in the queue waiting to view and that they should expect to bid for the property.
The Government announced an end to section 21 notices in April 2019. Since then, we have had four Prime Ministers and six housing Ministers, but not a single act to end section 21 notices. During his short period out of the role, the recently revived Secretary of State for Levelling Up, Housing and Communities reportedly urged the previous Prime Minister, Elizabeth Truss—stay with me now—to stick to a commitment to ban section 21. I will be honest that I am glad to see him back in that role, because I think that he was making some headway in key areas on housing, including cladding. Now, however, I hope that he will put his money where his mouth is and bring forward a date for a renters reform Bill today.
Rents in London have risen by an average of 15%, and across the country by an average of 11.8%. That is not sustainable for our constituents. Sadly, any reforms will come too late for my constituent Katherine in her current property. As the Government delay and dither, more people will be left in a desperate situation as a result of section 21 notices. It is within our grasp to fix this issue. I am grateful to the hon. Members for Dover (Mrs Elphicke) and for North Devon (Selaine Saxby) for raising the issue, but I hope that they will push their Ministers to make sure that we see reform come through now.
It is a pleasure to follow my co-chair on the all-party parliamentary group for ending homelessness, Florence Eshalomi. I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
As my hon. Friend Mrs Elphicke said, the private sector rental market in this country has expanded not just to cover what it was intended to provide—a way for people to let out houses as they choose—but to take into account what is needed for social rented housing. I will start with our biggest problem, which is that all political parties have failed for 30 years to build enough socially rented homes in this country. The reality is that we need to build 90,000 socially rented homes a year to provide what is required. At the moment, we expect the private rented sector to pick up that slack, so we have to then interfere with the market.
I counsel my hon. Friend the new Minister to ensure that we do not look at the issue in a piecemeal way, because we need to reform the whole market, not just bits of it. As I have said on many occasions, the biggest cause of homelessness in this country is the end of a private sector tenancy through the serving of a section 21 notice. However, if someone gets a section 21 notice now, they can, thanks to the Homelessness Reduction Act 2017, at least approach the local authority and seek help and assistance, whereas previously they could not.
We have the challenge that, if all we do is abolish section 21, we will force private sector landlords to move to section 8 evictions and all that involves. The problem then is that it not only becomes an expensive process across the board, but lands the tenant, who is probably completely innocent, with county court judgments against their name, and when they go for another private sector tenancy, they get told, “Sorry, you’re a bad risk and we’re going to up the deposit or impose conditions on you to get the private sector tenancy.” That is wrong in principle. What we have to do is to look at the complete area of the market.
One other issue, which my hon. Friend the Member for Dover mentioned, is the changes that have taken place in the promotion of the private rented sector by previous Governments. When Gordon Brown was Chancellor of the Exchequer, he promoted the concept of buy to let, which has of course continued to expand across the piece. When George Osborne was Chancellor, he put brakes on the incentives to do that, which of course did not kick in for several years after he proposed them. The result is that many private sector landlords are leaving the market because it is no longer as profitable as it once was. Where do they go? They go to the Airbnb market or the completely unregulated sector, which my hon. Friend Selaine Saxby mentioned.
The risk is that, unless we look at the whole ambit of this, all we will do is reduce the size of the sector, increase rents overall and make sure that tenants are put in a worse position than they were in the first place. So there has to be a complete revolution in this regard. I commend the White Paper for offering a menu of choices, but I think we still need to go further in looking at the entirety of the sector to prevent that from happening.
Lloyd Russell-Moyle made the point about a landlord being able to sell a property with a sitting tenant. Why not? Many mortgage providers will now allow that to happen—not enough, I would accept, but many do. As we have heard, 94% of landlords have one or two properties, and they dominate the market. Most landlords want the position of having a good tenant, who pays their rent and does not misbehave. If that happens, why should they not continue on that basis?
The model in this country is a six-month assured shorthold tenancy, with limitations on renewing that tenancy and, indeed, conditions on both sides that the landlord and the tenant should honour. My view has been this. The Housing, Communities and Local Government Committee—the predecessor to the current Levelling Up, Housing and Communities Committee—did an inquiry on this, and we recommended long-term tenancies of three years or more, so that people had security of tenure. A capability was enshrined within that about how rents could be increased—in other words, once per year and in line with inflation—so that both sides knew, with predictability, how that should be. That, to me, is a way forward.
We also suggested having a specialist housing court. Rather than have the expensive processes we currently have, we could have a housing court that would concentrate purely on these subjects. We have to face up to the fact that, every single day in this country, there are 300,000 people sofa surfing who cannot get anywhere to live. Also, 7%, at least, of private sector tenants are in severe rent arrears. Some people say, “Well, 7% isn’t too bad”, but that means 300,000 people or families in severe rent arrears who face eviction through the courts at any one time.
Unless we address this problem—I have warned successive Ministers, and we have mentioned how many Ministers we have had—we are going to face a homelessness crisis the like of which this country has never seen before. The reality is that the moratorium on evictions during the covid pandemic was the right thing to do—without question. There were people who could not afford to pay the rent during that time. Perhaps their jobs disappeared, or the benefits system did not catch up with them or they did not apply properly. Others just refused to pay because they knew they could get away with it. I have no sympathy for those people. I have several examples in my constituency where tenants just refuse to pay their landlords; from their perspective, they are reprehensible.
As things have unwound and the economy is coming back into fruition, we are seeing rents and pressures on tenants rise, and a rush by certain unscrupulous landlords to try to increase rents dramatically before the renters’ reform Bill comes into play. We need measures immediately to counter those issues. I have a question for the Minister. I understand that she is new to the job, but there were strong rumours that the renters’ reform Bill would be delayed and postponed, and perhaps even kicked into the long grass. I hope that the Bill will be published and brought forward as rapidly as possible, with, if necessary—I do not normally agree with this—retrospective measures to prevent what could happen while the Bill completes its passage through Parliament; in other words, unscrupulous landlords evicting tenants or hiking their rents to get them out, and causing further problems. We must include within that Bill what to do for the entirety of the market: both the Airbnb market and short-term lets. If we do not, we will drive private sector landlords to the more profitable end of short-term lets without any regulation, and without anything to assist people who desperately need accommodation.
I welcome my hon. Friend to the Front Bench. One quiz question I often have is, “How many Housing Ministers have we had since 1997?” I think we are up to 32 in 25 years. I am afraid that demonstrates the problem we have in this country: a lack of long-term planning in terms of the Ministers at the Department. I welcome the Minister to her position and hope she can give us some good news.
It is a pleasure to follow Bob Blackman. I sat on the levelling up Bill Committee, and seven Ministers served us during that time, so I share that frustration. We need a long-term strategy to ensure we address the housing crisis we face.
I congratulate Mrs Elphicke and my hon. Friend Lloyd Russell-Moyle on securing this important debate, which has caused hon. Members to stay behind on a Thursday because we care so passionately about housing. I also welcome the new Minister to her place. I trust she will produce the goods that we are all longing for: not just a fairer private rented sector and a 12-point plan, but the first step of a comprehensive strategy to address once and for all the housing crisis that we see.
The private rented sector has now become the backstop to housing, as opposed to local authorities, which traditionally had that role. As a result, power has shifted from the state into the hands of private landlords, which is why we face some of these deep-seated crises. In York, 20.4% of people live in the private rented sector. I have looked at the number of class 1 measures that need to be taken because of a failure to keep those homes in good condition. A quarter of homes have trip hazards, poor wiring, mould, rodents—the list goes on. That is why today’s measures on raising those standards are so important. But that can be only a first step.
Most landlords are there to serve a community in their own way, but also to realise the value of their estate and investment. Much extraction of property and money removes those opportunities from anybody else. For any tenant I speak to in the private rented sector, renting is not their choice. It is a matter of needing a home and for many people that home is not satisfactory for them. Since the year began, we have seen a plethora of section 21 notices; they are rising in number. I will talk about that because we are seeing a rise in costs and a decline in conditions. Looking at costs, my constituents spend 32% of their income on rent, which means that, with the cost of living crisis and energy costs, there is little left to start saving for that longed-for home. Property prices are rising in York at a rate that is running away from people, so they are trapped, with no assets, in the private rented sector. We must facilitate people’s ability to break out from that.
Some costs fall heavily on people who receive local housing allowance. I really hope that the Minister will talk to colleagues about that—I appreciate that there is crossover of interest in housing—and how the broad rental market is evaluated. The average rental cost in York is £945 per calendar month, and yet someone would receive only £650 in their LHA for a two-bedded property. That gap means that people cannot afford to live in the private rented sector and have nowhere to go. Ultimately, we see that many people with the vital skills needed to ensure that our economy can function are leaving our city. There are deep-seated challenges because the rental market covers a much broader area than York, which has a particular hotspot in property expense.
We also see people taking real advantage of section 21 notices because of the short-term holiday let market. Selaine Saxby focused her speech on that, and I will do so, too, because it is hitting holiday hotspots across the country at such an alarming rate. Private landlords are flipping their properties over from the private rented sector to short-term holiday lets. In York, a landlord can get £700 from a property for a weekend. In the light of the measures spoken about by the hon. Member for Harrow East and the changes first in buy-to-let mortgages and then when George Osborne pulled back some tax advantages, landlords say that their margins are too tight to maintain their properties in the private rented sector so, to make any profit on their assets, they need to flip their properties.
We have more than 2,000 short-term holiday lets just in my constituency and the surrounding area, which are hollowing out streets and communities. Ultimately, because of that market, people are being kicked out of their homes and having to leave the area and their jobs, and children are being taken out of school. That is why I have a private Member’s Bill—the Short-term and Holiday-let Accommodation (Licensing) Bill—before Parliament. I hope that the Department will work with me to bring it into being and regulate and license short-term holiday lets. It is due to have its Second Reading on
I welcome the measures in the White Paper for greater accountability and for greater power for tenants—something that has been so absent. That is why I very much hope to see those measures brought forward in a Bill at the earliest possible stage. An ombudsman is a way of bringing powers to book, but it needs to be properly resourced. If it is not, it will be ineffective in bringing about the changes that we need to see and to put curbs on landlords wanting to exploit the system.
I turn to students. My hon. Friend the Member for Brighton, Kemptown mentioned the challenges in student accommodation. I met York Residential Landlords Association to discuss the matter as well as the universities in York. Purpose-built student accommodation has an exemption and can issue just one-year tenancies to students. However, in the private rented sector, there is not that option. That will cause real challenge. Next year’s students are already seeking out their accommodation. Landlords are saying that if the legislation comes in, they will simply start looking for their accommodation during the exam period. That, clearly, would not be in anyone’s interests. My hon. Friend the Member for Brighton, Kemptown came up with a really sensible and positive suggestion, and I hope the Minister can look at it, but we do need to solve this issue for the sake of students. I have 40,000 students in one form or another in York, so it is a major issue for us.
I hope the Minister, in her time in the role, will look internationally at good practice, as there is much to learn from across the globe. In particular, I am attracted to measures taken in Finland where tenants are provided with resourcing, instead of just a local housing benefit, to start being able to access the property market themselves. It is an interesting model that should be considered as an opportunity.
I concur with hon. Members from across the House on the need to build social homes. We really do have a crisis, and when there is a crisis urgent measures need to be taken. The problem with housing is that it is still seen as a short-term fix for developers trying to make their revenue. We have to think far more long-term about it. I urge the Minister to think about the opportunities her Government have to use public land for public good. I am talking about disposals of Ministry of Defence land, NHS property services, Network Rail and so on—significant estates. If we can build social housing and affordable housing on those estates, as opposed to housing to market, it could be a real game changer. The interest of the spending Department is to receive a capital receipt, but if we can find that as a mechanism to deliver the housing our communities need it could be really important.
I will close on this point. When Nye Bevan sat where the Minister is and had the opportunity to deliver housing—I think we all recognise that he delivered more for social housing and more for housing in our country than any other Minister ever has, and I certainly pay tribute to him—he said that the only way to deliver the housing the country needed was to empower local authorities, municipal authorities, to have the authority to go ahead and build. He built and he delivered. I trust the Minister will, too.
I thank my hon. Friend Lloyd Russell-Moyle and Mrs Elphicke for securing this very important debate. It is definitely one of the biggest issues in Putney, Southfields and Roehampton in my constituency. I thank the London Renters Union, Generation Rent and Shelter for their campaigning work to raise concerns that are very common across my constituency, but also for their work in supporting renters. I commend Wandsworth Council for its 1,000 Homes scheme, which are all going to be council housing. That is the right way forward, because, as so many Members have pointed out, the housing crisis across our country needs to be addressed and can only be done so with more homes.
I speak today on behalf of the 41,000 renters in Wandsworth, especially those who feel they are stuck in a rental system that is overheating, burning through their finances and taking an emotional and mental health toll on their lives because of the imbalance of power. We look to the White Paper and to legislation to address the imbalance of power between landlords and renters. Renters are spending so much money, yet still have an insecure system.
There is much in the White Paper that is welcome, but I am beginning to lose faith in whether any of it will be delivered. I hope to hear warm and encouraging remarks from the Minister today, but also pledges for action. The long-awaited renters reform Bill has still not been brought to the House. I therefore ask the Minister: where is it and when will we see it? The Government promised renters reforms in the 2021 Queen’s Speech, but as yet have failed to deliver. The private rented sector did not even get a mention in the most recent Queen’s Speech, yet the stories told today, and there are many more that I know of, really highlight the need for change.
To give one example, I was evicted from my rented home 20 years ago. The landlord told the three of us that we would have to leave because they were going to sell the house. Someone visited who claimed to be a solicitor—I am still not sure whether they were. They made sure that we paid our rent right up to the end, rather than using our deposit for the last month, so we did that quite properly. However, the landlord then gave some spurious reasons for not paying back our deposits and took them all. By then, we had moved on to different places. We could not afford to go to the small claims court. It was all too difficult. We then went back to the property only to find out that it had been re-rented to another group—and on went the landlord. That was so unfair, and it has stayed with me ever since.
The other day, on the way to see a constituent, I went past a house where the family were moving out. They were absolutely furious. They—a nurse and a policeman—had been given a section 21 notice to leave, because they had complained about the mould in their flat. It was a revenge eviction, or—as I hear about so often—an eviction because of complaints to the landlord. They were asked to leave and could not afford to move to any other property in the area, so they were going to have to move north of London and come back every day to their local jobs in south-west London. Their lives were being upturned and, to them, it seemed so unfair.
I also heard from someone locally who described herself as a “beginner teacher”. She moved into a flat that seemed to be absolutely fine, but very soon after moving in, she found that there was damp and spreading black mould in the bedroom. That had an impact on her health. The landlord did not acknowledge the complaints for a long time, took no action to get rid of the mould, and then, after 10 months, served her with a section 21 notice. She had to leave. I have no doubt that the next tenant then moved in, found the same thing and the whole cycle continued, allowing the landlord to leave alone the black mould and the health and safety concerns.
I have also heard from many survivors of domestic abuse, for whom the state of the private rented sector has a huge impact. The fear of abuse versus the fear of homelessness ensures that many women who should move out for their safety do not. Women’s Aid reported that the high costs of the private rented sector create a barrier for many women who want to leave their abusive partners.
The Conservatives pledged to ban section 21 evictions in 2019, and I have raised that issue several times in the House since being elected. They have still not been banned. The latest Prime Minister has yet to confirm whether it is his policy to do so, so I hope to hear from the Minister that the legislation will end no-fault and revenge evictions.
Since the Government first promised to end section 21 evictions in 2019, around 230,000 private renters have been served notice. As has been mentioned, that is an eviction every seven minutes. The introduction of the legislation is very urgent for so many people. Renters need the Government to legislate now to provide them with immediate protection. There have been lots of nice words and aspiration but no delivery. That is perhaps not surprising as there have been five Housing Secretaries —or is it six?—since I became an MP.
Too many people are stuck in a system with no power to challenge rogue landlords and no savings to get on the housing ladder, and they are in housing that falls well below acceptable standards. Renters need a deal that gives them the security and dignity that they deserve, yet the system’s problems are getting more and more acute. Everyone has been vying to give the highest costs of the private rented sector in their constituency, but I thank I can beat all the previous hon. Members. In Putney, the average rent for a two-bedroom flat is £3,900 a month. That is nearly £47,000 a year. [Interruption.] A one-bed flat is about £2,700. That is astronomical. A rented property will go on to the market first thing in the morning. By 11 o’clock, there will be many visits. By 1 or 2 o’clock, offers will be put in and those ratchet up through the afternoon. I have heard of landlords asking for three years’ rent up front and increasing monthly costs. Respective renters have to outdo one another in what they can offer to a landlord, when they are not entirely sure what will make a difference in the sector. I know many people who are having to move out, move to a different place and entirely change their life. They also know, as I do, that their children will not be able to afford to rent in the area they live in.
The insecurity of the sector is having a huge impact on the social housing sector, where many people are living in increasingly overcrowded homes with more and more children. Their fear of moving into the private rented sector is so great that they are living in those overcrowded homes far longer than they otherwise would. It is not just for the private rented sector that we need reform.
Four in 10 under-30s now spend more than 30% of their pay on rent, according to the data. That is a five-year high, and it is absolutely shocking. The Minister knows exactly what the situation is like, especially in London. Demand for homes to rent privately in London has exploded post pandemic, and the ratio of prospective tenants to rooms available is 7:1. The private rented sector also has the highest prevalence of category 1 hazards, which are those that present a risk of serious harm or death. Poor housing costs £1.4 billion a year to the NHS and £18.5 billion to society as a whole.
There are more than half a million more households with dependent children in the private rented sector than there were in 2005; they make up 30% of the sector. Eviction from private tenancy is the second leading cause of homelessness in England. It is all happening in the context of an unprecedented cost of living crisis. I am so worried about what it will mean for my constituents in Putney through the winter ahead.
As I say, much of the White Paper is welcome and will make a huge difference, but it makes no promises about in-tenancy rent increases. It lacks detail on the decent homes standard and makes no mention of the previously promised lifetime deposit. There is a lack of legislation to help renters to afford legal advice when using the new PRS housing ombudsman.
I welcome hon. Members’ comments about students. Will the Minister meet Universities UK to look at ways to make the student rented sector far more secure? I have an interest: I currently have two students in my family, and I have had three, so I have spent a lot of my own money on the student private rented sector. I know that lots of student unions are running campaigns to say, “You don’t have to rush into getting your tenancy very early in the academic year, signing up to unaffordable conditions and paying huge amounts during the summer.” Any way in which universities could take on a larger amount of the private rented sector and ensure that it is stable and fair for students would be welcome and revolutionary.
There is lots of work to do. As a minimum, legislation needs to include increased security of tenure, including longer notice periods, a longer period of protection from no-fault eviction, and an assurance that tenants will be compensated when forced to move. Secondly, there needs to be increased protection from abuse. In particular, landlords must provide unequivocal evidence when they are selling or moving back in. There needs to be a longer no re-let period, with increased resources for local authorities to investigate abuse. Finally, there needs to be a focus on affordability, a limit on unaffordable rent increases, a rent tribunal system that is easier to access—in fact, easy to access—and an end to automatic eviction for arrears. Most of all, we need clarity from the new Prime Minister on whether he will honour the 2019 manifesto pledge to end section 21 evictions.
Renters in my constituency and up and down the country deserve safe, secure and affordable homes. It is time for the Government to put their money where their mouth is and deliver for them.
I congratulate my hon. Friend Lloyd Russell-Moyle and Mrs Elphicke on securing this debate, but I must be honest: I find it disappointing that we are having a general debate on the private rented sector yet again, three years after we were promised legislation. The time is overdue for us to get beyond discussing policy in the round and on to discussing the substance of legislation and amending it.
Having said that, we have had some really strong speeches. I was struck by the speeches of Conservative Back Benchers, who sounded—well—like us, really. I am pleased that it seems to be appreciated that there are limits to deregulation and we have hit the bumpers in that regard—particularly in respect of short-term lets, which have had a devastating effect on lettings in a number of towns and coastal communities and, of course, in inner London, notably my own constituency, which has the largest private rented sector in the country.
In the years during which we have been waiting for the Government to enact the promised legislation, we have been plunged into a deepening affordability crisis for renters, who are facing an increasing squeeze on their incomes. London rents are now averaging £2,000 a month, and since last year have increased by 20% in inner London and just over 15% in London as a whole. Nationally, one in five renters have faced an increase of £100 a month. As 45% of renters have no savings at all, the fact that they have managed to survive for this long is a miracle. However, as we go into the winter with a cost of living crisis, there is a real risk that a catastrophic number of people will be tipped into homelessness, and certainly into poverty. Even more than any other tenure group, these people will face a choice between keeping a roof over the heads, eating and heating.
It needs to be said that there is an inequalities dimension to this. My hon. Friend the Member for Brighton, Kemptown was right to say that there are three different rental markets. We are most concerned with the average renters, people who would otherwise be buying but are deferring buying because of the cost of rents, but we must also consider the third or so who constitute the poorer renters. Of those, a disproportionate number are women-led households and black and minority ethnic communities. It is members of black and minority ethnic communities who are least likely to have mortgages, and who are therefore most likely—especially given the squeeze on social housing—to find themselves trapped in the poorest-quality private rented accommodation and the most expensive in proportion to income, with all the consequences that will have for those communities. It is important for the Government to understand the inequalities dimension, and to frame the legislation accordingly.
The Evening Standard, which has rightly had a continuing focus on the private rented market, recently ran a piece headed “London’s renting crisis: brutal choices, heartbreak and escalating costs faced by renters at breaking point”. That is absolutely accurate. The competition for rental properties is unprecedented. We hear stories of auctions with people having to bid against each other, and of deposits and other up-front costs. Every time someone has to move, not only do they have to deal with a deposit, but the moving costs are piled on top of that. It is no wonder that younger renters cannot afford to buy, and are locked out of the housing market that most wish to join, as a result of that combination of rents and recurring one-off costs which eat into their incomes.
Today’s interest rate rises will feed into mortgages, which is entirely due to the Government’s mishandling of the economy, and which means that people will be trapped even deeper and for even longer. Those at the lower end of the market who, in any normal and healthy system, would have been enjoying the security and the fair rents of social housing appropriate to their circumstances and their income are locked out as well, because the number of lettings in social housing has plummeted by more than 100,000 in the last 10 years alone.
Why is that? It is because over the past 12 years the Government have deliberately chosen not to build social housing. One of the first acts of the 2010 Government was to halve the housing investment grant, making it impossible for local authorities to build. But it is also because—this has not been understood by successive Ministers—there always used to be a flow out of social housing and into home ownership, and that has effectively stopped.
People end up trapped in the social housing that we do have. They are unable to move into the home ownership that they aspire to, and that they would have been able to afford a decade or 15 years ago. They are keeping those social housing properties and tenures for longer, so there is not a flow into them from other households, and that of course bleeds into increasing homelessness.
We have an affordability crisis and a security crisis—a section 21 notice is issued every seven minutes. We also have a standards crisis and a decent housing crisis, particularly at the bottom end of the market. Close to 1 million households are in substandard accommodation. The private rented sector is the tenure with the worst standards; more than 500,000 premises have category 1 hazards, which represent serious threats to health or life. We have a growing crisis for older renters, who are trapped in the private rented sector. They never expected to be without the means to improve their accommodation.
Hon. Members have cited case studies, and I too want to read one into the record. This is the kind of story that we hear in our surgeries about people in inappropriate and substandard accommodation:
“I have a special needs boy. He has hypoxia, ischaemic brain injury, epilepsy, global development delay, hepatitis… my flat in the last two months was flooded with rainfall bcz the roof has a big leak. We sleep on the floor, so mattress, furniture, clothes get wet… Recently the ceiling light exploded, so now there’s no power in the property. Our flat is only electric supply, no gas. So now there’s no food, no heater, nothing I can do. We are struggling financially bcz my child needs 24-hour support and he has lots of appointments so that’s why” my constituent
“can’t go to work… So it’s difficult to survive like this…no one will understand my pain.”
I am afraid that that is not uncommon. This kind of case comes before us time and again. People with no power, and no purchasing power in the private rented sector, get stuck in properties, and landlords—I do not call them rogue, because there are far too many of them for us to regard them as exceptions—will exploit that for their own purposes.
We need the promised legislation, but we need more than that. I want to flag up two other issues that need to be seriously addressed. We have heard reference to enforcement; it should not be an empty word. Enforcement requires resources. If the Government do not resource a policy change, and do not give local authorities the resources to take enforcement action against bad landlords in cases of substandard accommodation, that will be exploited. When a landlord is seeking an eviction under section 8 rather than section 21, it is even more important that the tenants have power, or somebody who is on their side and can support and assist them.
Local authorities prosecute in only 1% of cases in which poor-quality accommodation is brought to their attention. Why is that? Sometimes it is because local authorities do not focus on the issue, but it is also a question of resources; councils in London in particular have lost 20% of their resources in the last 10 years. The Government must address the issue of capacity to deal with environmental health matters, and capacity in legal aid on housing, because once again we see evidence of advice deserts, and of people being unable to access housing lawyers.
I want to raise one more issue, which I do not think the Government have addressed. In a post-section 21 environment, if we get there, there will be even more risk of illegal evictions. I come across illegal evictions in my casework; people ring my office to tell me that a landlord is inside their property illegally, and is driving them out. Unfortunately, we have very little data on this, because the Government do not collect data on the extent of illegal evictions. The Greater London Authority and the Mayor of London are doing very good work teaching the police how to handle illegal evictions, and teaching them not to step back and regard an illegal eviction as a civil matter between two parties. However, that work is not done nationally, and a great deal more needs to be done about that.
There is a lot that we can do. If we ever get the legislation, we would look to amend it to improve protection of tenants from illegal eviction; I hope that the Government can address that.
Renters deserve security, affordability and decency. At the moment, far too many do not have any of these things. They all have to be addressed together and in a wider context that includes advice, representation and enforcement. Above all, they all have to be addressed now.
It is a pleasure to wind up this important debate on behalf of the Opposition. I congratulate my hon. Friend Lloyd Russell-Moyle and Mrs Elphicke on securing the debate, and I thank the Backbench Business Committee for allowing time for it.
I also thank my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck), and the hon. Members for Harrow East (Bob Blackman) and for North Devon (Selaine Saxby), for their excellent contributions and powerful case studies. Collectively, they highlighted both the particular challenges facing private renters and how these challenges vary across the country, and that, irrespective of geography, there is a need to overhaul the private rented sector and to better regulate both short-term holiday lets and excessive rates of second home ownership as a matter of urgency.
I put on record our thanks to all the organisations that have made the case for rental reform over so many years, including Generation Rent, Crisis, Citizens Advice, the Joseph Rowntree Foundation, Shelter, Z2K, the New Economics Foundation, the Law Centres Network and various renters unions, as well as all the private renters who bravely shared their experiences publicly and the journalists who provided them with space to tell their stories. Their collective efforts have been integral to ensuring this issue is kept firmly at the top of the political agenda.
Labour strongly supports fundamental reform of the private rented sector, and we have called for it for many years. Regardless of whether they are a homeowner, a leaseholder or a tenant, everyone has the basic right to a decent, safe, secure and affordable home. Yet as this afternoon’s debate has reminded the House, millions of people renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal, if any, justification.
On an individual level, the lack of certainty and security that is now inherent to renting privately results not only in ever-present anxiety about the prospect of losing one’s home but, for those at the lower end of the private rental market who have little or no purchasing power and who are increasingly concentrated geographically, as my hon. Friend the Member for Westminster North said—there is an equalities dimension to this, too—a willingness to put up with often appalling conditions for fear that a complaint will lead to instant retaliatory eviction. That is why some of the worst housing standards are to be found in the private rented sector and why, despite the existence of many good landlords and a steady, if glacial, improvement in conditions overall, one in five private rented homes still does not meet the decent homes standard and one in 10 has a category 1 hazard posing a risk of serious harm.
For tenants forced to live in such substandard properties, whether they wake up every day to mould, vermin or dangerous hazards, what should be a place of refuge and comfort is instead a source of daily unease and, in many cases, torment and misery, which takes a huge toll on their physical and mental health.
Far too many tenants are evicted each year from a private tenancy without due cause, which is why so-called no-fault section 21 notices are a leading cause of homelessness in England. This broken system can no longer be tolerated, not least because the numbers affected have risen markedly over recent decades, as the hon. Member for Harrow East said.
This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old—I suspect you were not that much older, Mr Deputy Speaker. The private rented sector has changed beyond recognition in the more than three decades since. Some 11 million people now rent from a private landlord. As well as the young and mobile, the sector now houses many older people and families with children, for whom greater security and certainty is essential for a flourishing life.
To ensure private renters get a fair deal, we need to transform how the sector is regulated and finally level the playing field between landlords and tenants. That is why, with important caveats, Labour welcomed the proposals in the White Paper when it was published in the summer. We unequivocally support the proposed ban on section 21 evictions. There is no justification for such notices, and they should have been scrapped long ago. We support the introduction of minimum standards in the private rented sector through the extension of the decent homes standards, although we have real concerns about how it might be enforced in practice given that it is not an enforceable standard in the social rented sector, where it already exists.
We recognise that landlords will need recourse to robust and effective grounds for possession in circumstances where there are good reasons for taking a property back, for example, because of antisocial or criminal behaviour. However, we want assurances that such grounds cannot be abused unfairly to evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland.
We welcome the proposed limit of rent increases to once per year, but we take issue with the inadequacy of the proposed measures in their ability to address unreasonable within-tenancy rent hikes of the kind that are likely to increase markedly once section 21 is scrapped and with the absence of any measures to tackle illegal evictions, a point that has been raised by my colleagues.
Labour would go further in several important respects, introducing a more comprehensive new renters’ charter, but we do want to see all 12 of the proposals set out in the White Paper translated into primary legislation as a matter of the utmost urgency. I cannot emphasise enough the need for that urgency, a point we have pressed time and again with successive Ministers, to no avail. There is a desperate need for the Government to act quickly, because the problems inherent in a sector that for far too many renters has always been characterised by insecurity, high rents and poor conditions, have become acute in recent months, as those renting privately struggle to cope with the impact of high inflation and rising prices.
As hon. Members will know, and as we have heard this afternoon, in many parts of the country rents in the private rented sector are surging and the costs involved with moving are soaring. With the Government having decided, once again, to shamefully freeze local housing allowance, millions of hard-pressed tenants are now being stretched to breaking point, with the risk of mass arrears and evictions that entails. What is so frustrating for Labour Members, and for those outside campaigning for renters’ reform and for private tenants themselves, is that instead of introducing legislation that we could have fast-tracked through this House to address this looming winter crisis, all we have, despite years of promises from successive Conservative Administrations that they would enact renters’ reform, is the White Paper and a vague promise, one that I had from the Minister’s predecessor just last week, to introduce a Bill at some point during the more than two years that remain of this Parliament.
On urgency, figures from the Local Government Association show that the ending of a private rented tenancy is the most common reason for homelessness, with this being responsible for 37% of homelessness between January and March this year alone —in those three months. Does my hon. Friend see that this urgent crisis needs solving now?
I absolutely agree with my hon. Friend on that, and I will come on to say why I think the situation is particularly urgent and what has happened in terms of the delay that has been caused. It is not good enough that the Government have taken so long to make progress on this issue. It is not as though they have not had ample time to legislate, even accounting for the impact of the pandemic. It is now well over three years since the Conservative Administration of Mrs May promised to abolish section 21 no-fault evictions. In that time, not only have hundreds of thousands of tenants been evicted through a section 21, but more than 45,000 households have been threatened with homelessness as a result of being served such notices. As my hon. Friend just mentioned, the figures released so far this year suggest that possession claims resulting from them are increasing markedly as the cost of living crisis intensifies.
Faced with a phenomenally difficult winter, private renters cannot wait until 2024 for the Government to act. I say to the new Under-Secretary of State for Levelling Up, Housing and Communities, Felicity Buchan, whom I welcome to her place, that every extra month the Government delay bringing forward the renters’ reform Bill they have promised means thousands more private renters suffering. The Government must act, and they must act now. If they introduced emergency legislation enacting the proposals set out in the White Paper, Labour would support it and work with the Government to ensure it made rapid progress. But it is the Government alone who control the business of this House and only they can ensure the necessary legislation is given the priority it deserves. As I have put to Ministers before and sadly suspect I will have to do so again, it is high time the Government stopped talking a good game about private rented sector reform and finally got on with delivering it, because private renters have waited long enough for the protections that they deserve and that they rightly expect.
I thank Lloyd Russell-Moyle, my hon. Friend Mrs Elphicke and the Backbench Business Committee for securing this important debate on the proposals in our White Paper. I thank Members who have spoken for their considered and constructive tone and for speaking powerfully on behalf of their constituents. I also thank hon. Members for their warm words about my hon. Friend Eddie Hughes, who worked so hard on the White Paper. I pay tribute to my right hon. Friend Andrew Stephenson, who took that work forward.
The Government are determined to deliver a new deal for tenants and landlords in the private rented sector. Hon. Members have made a number of points about reform and I hope to address as many of them as possible in the time I have. If I do not reach some of the points, I am happy to sit down with hon. Members on a one-to-one basis.
I want to make a couple of observations about the sector as a whole. As Members know, the private rented sector has grown significantly in recent decades. It has doubled in size since the early 2000s, with landlords and tenants becoming increasingly diverse. The sector provides a home for 11 million people—19% of all households. At least 1.3 million of those are families with children. However, the sector is also the least secure and has some of the lowest-quality housing. Too often, the current system does not work for tenants, or for the many good landlords operating in the sector.
Everyone in our society deserves to live somewhere decent, warm, safe and secure. The Government are determined to make that vision a reality.
Hon. Members will know that the White Paper sets out a 12-point action plan, and I note that it has received support from Members on both sides of the House. The changes that it sets out amount to a significant shake-up of private renting. We know how important it is to get it right. We are grateful to our partners across the housing sector who have worked closely with us on developing the reforms. We will continue to consult them closely as we move the process forward.
Several hon. Members raised the issue of the poor quality of some privately rented homes. The majority of landlords and agents treat their tenants fairly and provide good-quality, safe homes, but that is not always the case. Too many of the 4.4 million households who rent privately live in poor conditions and pay a large proportion of their income to do so. Poor-quality housing undermines renters’ health and wellbeing. It can affect their educational attainment and it reduces pride in local areas.
I am proud of the action that the Government have already taken to put things right. We have strengthened local authorities’ enforcement powers by introducing fines of up to £30,000, extending rent repayment orders and introducing banning orders for the most serious and prolific offenders. We have introduced new regulations, which require landlords to install smoke and carbon monoxide detectors and ensure that the electrical installations in their properties are safe. We are concluding our overhaul of the housing, health and safety rating system, which is the tool used to assess hazardous conditions in rented homes. That will make it more accessible to tenants and landlords and allow more efficient enforcement.
The Homes (Fitness for Human Habitation) Act 2018 empowered all tenants—private and social—for the first time to take their own action against landlords who let unfit properties. As a result, conditions have improved over the past 10 years, but we know that there is more to be done. Alongside this we have consulted on introducing a legally binding decent homes standard in the private rented sector. That consultation closed on
Many hon. Members talked about tenancy reform and, clearly, that is critical. Our reforms will provide tenants with security. They will also ensure that good landlords are still able to gain possession when necessary.
Hon. Members have rightly mentioned the insecurity caused by section 21 no-fault evictions. It is not right that a landlord can ask a tenant to leave without giving a reason. The Government are clear that they want to support the majority of landlords who act responsibly, but it is not right that tenants live in fear that their lives may be uprooted at the whim of the minority of rogue landlords. That is why, as we have set out in our manifesto and confirmed in this House, the Government have committed to abolishing section 21 of the Housing Act 1988 and giving millions of private renters a secure home.
At the same time, the White Paper proposes to simplify complex tenancy structures. It will move all tenants who currently have an “assured” or “assured shorthold” tenancy on to a single system of periodic tenancies. Periodic tenancies will allow either party to end the tenancy when they need to. That will enable tenants to leave poor-quality properties without remaining liable for the rent, or to move more easily when their circumstances change—for example, to take up a new job opportunity. Landlords will always have to provide a specific reason for ending a tenancy.
Good landlords play a vital role in providing homes for millions of people across the country. We want to reassure them that the new system will continue to be a stable market for landlords to invest and remain in. No one will win if our reforms do not support landlords as well as tenants. It is only right that landlords should be able to get their properties back when their circumstances change, or when tenants break the rules. A number of hon. Members mentioned the real issues attached to antisocial behaviour. We will reform grounds of possession so that they are comprehensive, fair and efficient, and we will streamline the possession process, removing unnecessary restrictions on landlords seeking to recover their property.
Alongside that, we will continue to listen to landlords and students, as mentioned by a number of hon. Members —landlords provide much-needed accommodation to thousands of students every year—to ensure that the sector continues to work for those in higher education, and I will continue to have those conversations.
I am sure that hon. Members will agree that going to court should be a last resort, when all other avenues have been exhausted. But we know that sometimes it is unavoidable, and that court proceedings can be costly and time consuming for landlords. That is why we are working with the Ministry of Justice and HM Courts and Tribunals Service to streamline the process and ensure that the most serious cases are prioritised. I just checked on the fax point and can assure Members that people can email or make paper submissions. Alongside that, we are reviewing the bailiff process. That is currently a big source of frustration and delay.
Many Members have mentioned issues surrounding the cost of living—
Does the Minister not recognise that the lack of legal aid is a huge problem for people in the private rented sector? In the last Session, I introduced a Bill that would have cost the Government nothing but provided £20 million in legal aid and early legal support for private renters by taking the interest from the £2 billion- worth of deposits held in this country and putting it into a special, reserved fund for legal aid for renters. Would she look at that measure, so that the court process is supported?
The hon. Gentleman will recognise that legal aid does not fall within my remit, but I am happy to meet him and have a conversation.
We empathise strongly with those affected by the cost of living issues. That is why the Government have provided over £37 billion in cost of living support this year to those who need it the most. We have given unprecedented support to protect households from high energy prices. For tenants who are unable to afford their rental payments, there is a range of potential support available through the welfare system.
My hon. Friend Selaine Saxby and Rachael Maskell both raised the issue of second homes and holiday lets. I am aware of the pressures in their constituencies. The White Paper contains a proposal on that issue, and I point both hon. Ladies to the Department for Digital, Culture, Media and Sport’s call for evidence on the topic.
Specifically, that falls under the DCMS, but I am happy to have a conversation with the hon. Lady.
The DCMS consultation took months to see the light of day, and my local council submitted pages of evidence. I recognise that the issue falls within the remit of the DCMS, but one of the reasons constantly given for the inability to tackle it is that it lies with a different Department, either LUHC or DCMS. If anything can be done to bring the Departments together to enable progress to be made, we would be most grateful.
I hear my hon. and good Friend, and I will do everything I can to facilitate that.
I hope that all Members present today recognise that this Government are committed to reforming the private rented sector in a fair and balanced way, abolishing no-fault section 21 evictions and strengthening and clarifying landlords’ rights when seeking possession.
I am sorry, but I have been told that I need to conclude.
The Government are committed to giving tenants the security and peace of mind they need to settle down with confidence and make their house a home. We are committed to empowering tenants so that they can make informed choices and raise concerns, and to supporting responsible landlords. As I said at the outset, we stand by our manifesto commitments to abolish no-fault evictions and to ensure that landlords have rights to repossess when that is required. We published the White Paper in June and we are discussing it with interested parties. The consultation on the decent home standard closed on
I am very pleased with the contributions we have had today. I again thank the co-chair of the APPG, Mrs Elphicke, and we heard good responses from my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck) and from the hon. Members for North Devon (Selaine Saxby) and for Harrow East (Bob Blackman).
I will not repeat what other hon. Members have said, but my greatest disappointment is that I still do not really know when something is going to come forward. We all know that “in due course” in Government and parliamentary language means the never-never. That is what the Minister has promised us: the never-never. It might come or it might not—we do not know. I am afraid I do not think that is good enough because only last week there was a debate in Westminster Hall on a similar topic, so it is not as though the Department was not forewarned that these questions would be asked. It is not good enough because at least a timetable, even an amendable one, could have been put down.
I am disappointed that we have not had that, but I am pleased that the Government are still committed to reforms. I just want them to get on with it, because we have heard of the desperate need and the proposals in the White Paper are not enough. We did not quite hear a commitment to every single one of the 12 points in the White Paper; we just heard a reiteration of the evolution of section 21.
I will take the Minister’s words in good faith. I am sure we can meet about some of these issues in person, one to one, but I want to see that timetable and I hope she will commit to updating the House “in due course”, in due course.
Question put and agreed to.
Resolved,
That this House
has considered the White Paper A fairer private rented sector.