Housing: Rented Sector — Motion to Take Note

Part of the debate – in the House of Lords at 4:39 pm on 12th July 2012.

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Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government 4:39 pm, 12th July 2012

My Lords, I, too, thank the noble Baroness, Lady Rendell, very much for having initiated this debate. I am sure that she did not sound like somebody from the angry brigade, but she spoke very forcefully and with her usual cogence. I thank her for that and I thank other noble Lords who have taken part. As one might have expected with this debate, it has wandered widely around the subject of housing but, as noble Lords have said, you cannot really think about a house without people or about those people without their conditions. It is perfectly understandable that that is how it should have developed.

We have had some particularly moving examples of bad practice and bad things going wrong. I do not think any of us would sit here and pretend that everything in the private rented sector was glorious. It is not possible to believe that. I have read the recent report by Shelter with great interest. The key points in it are about the difficulties that some families have in managing within the private rented sector-the insecurity of short tenancies and a general feeling of difficulty over the renewals of rent-have been touched on by noble Lords today.

For a number of reasons that have been raised, many more people are now accessing the private rented sector. There is increased pressure on affordable housing. There are those who could possibly afford a mortgage, but who cannot raise enough for a deposit on a house. That slows down home ownership. Those people enter the private rented market as well and are increasing the need for it.

Many people can not only afford private renting, but find it a useful short-term or long-term way of living because of its flexibility. I recognise that those are probably not the people we are talking about this afternoon. We are talking about those on low or medium incomes, many of whom access housing through assured shorthold tenancies. These give initial terms of six months and in general these terms are renewable after the six months expire. At the outset, tenants and landlords can offer initial fixed periods. Shorthold tenancies play an important role in the housing market. There is sufficient flexibility in them, but I would not say that everything was perfect.

The constraints of renting are understood and some of them have been mentioned. However, only 8.2% of tenancies are stopped by tenants by mutual agreement. While it is true that families with children are having to rent, this has not in most cases meant constant upheaval and disruption. However, I accept that there are times when it does, and the 8.2% refers to the people who are giving up tenancies.

We have not heard a lot about the English Housing Survey report today, though the noble Lord, Lord Morris, did mention it. We can all extrapolate and take out the little bits which interest us most, but that is what surveys are about and is one of the advantages of having them. The report shows that most tenants are reasonably satisfied with their accommodation. Where they are not there are regulatory ways by which problems can be dealt with. I will briefly go through some of these.

For example, where there are concerns about the level of rent, people have access even in affordable short-term tenancies to rent assessment committees. People should not therefore feel pressured about increases in rent as there is a perfectly reasonable route to have the rent reassessed. Once it is fixed by the committee, that is the legal maximum that people can be charged. A number of noble Lords referred to the standard of property. If a tenant feels that the landlord is not maintaining it and is failing to carry out repairs, the local authority has powers to deal with that. It can deal with it not only under its own enforcement powers but under the health and safety rating system which could result in the landlord being required to carry out repairs if he will not do them voluntarily.

We have heard quite a bit today about rogue landlords. We recognise that in some places they are a significant problem. Rogue landlords include those who are doing the beds-in-sheds renting that we believe to be completely unacceptable. The Government have been working with local authorities, Shelter and other organisations to deal with the problem, which we recognise. As I think was mentioned, we are shortly going to publish guidance for all local authorities to provide them with advice on how to take action against these rogue landlords, including prosecuting them. Local authorities can deal with rogue landlords, and we have to be really clear about that. They have legal powers to do so, and that will be in the guidance. My department has provided more than £1 million to nine local authorities where beds in sheds is a particular problem to help increase their enforcement activities. Action can therefore be taken.

The private rented sector is a major source of housing and will continue to be so and to have an essential role in the housing market as this Government continue to work to increase the supply of affordable housing, which I confirm we are doing, and to find ways of making land available for development of all kinds. Making land available includes getting every government department to identify its surplus land and make it available for the housing initiatives that are coming up and are in the housing strategy to ensure that there is extra housing. We will not take lessons from the previous Government about the amount of housing that has been provided. One of the reasons why we have less housing than we should have is because there was not quite enough built previously. Of course, houses finished in 2010 were started previously. We are working very hard indeed on increasing the amount of property, and at the moment there is provision for more than 170,000 homes between now and 2015.

I shall develop what the Government are doing at the moment because it has been suggested that we are not doing very much. There is the new homes bonus, which will encourage and help pay for affordable housing and more private housing. We are also marketing new build-to-rent pilot sites through the Homes and Communities Agency. There are the First Buy and NewBuy policies to help with mortgages, and there are mortgage incentives with the banks to help with deposits. We are also putting in place an independent review of barriers to investment in private homes to rent. There is a lot going on. The housing strategy that was published last year goes into much more detail than I can, but if noble Lords go through it, they will realise that the Government expect that with either the public sector, the New Homes Bonus, the private sector or with institutions, we will provide or start to provide the housing that is necessary.

We are working with the industry to build up standards and, as I have already said, we are encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes. I was asked about the decent homes standard. We continue to support it to ensure that those properties that fall outside the decent homes bracket are brought up to standard.

It was also mentioned that we have commissioned a report by Sir Adrian Montague on encouraging institutional investment. It is due to be published very shortly and either will or will not include the points raised by the noble Baroness, Lady Royall. However, it will be an influential report to will help us to get institutional investment into housing.

With the limited availability of mortgage finance, there must be an important role for new homes that are built to rent. More homes mean better conditions and less pressure on people to have to live in unsatisfactory and overexpensive housing. The point was made today that one of the reasons we have high rents and inadequate housing is the shortage of housing in terms of the size of the population. There are several reasons why demand for housing is increasing, not least of which is the larger number of single-occupant homes while the population is increasing. We also need better homes for older people. There is a lot of demand on housing supply but, along with everybody else here, I accept that that housing supply must be of a decent standard.

I am very sympathetic to the issues that have been raised today. A number of points were made. The noble Baroness, Lady Rendell, mentioned tenants' deposits and of course they are protected. There is now a requirement for all landlords to ensure that deposits are put into two schemes and that they are returned at the end of a tenancy.

Those on housing benefit account for around 30% of rented housing. While I understand the concern about the cap having come down, housing benefit will be available to most of that 30%. It is mostly in London, if at all, that that has to be reassessed. The right reverend Prelate the Bishop of Chester raised the point that most people on housing benefit are in work. I cannot dispute that but, again, housing benefit is available up to the cap.

I thank the right reverend Prelate for acknowledging that the housing strategy is in place. I should add that the housing associations that he mentioned access money and have their own ways of doing so. However, we are also trying to open up institutional investment again to try to increase the number of properties.

The noble Lord, Lord Morris, referred to the difficulties of young people, particularly those aged 18 to 20. Yes, I absolutely accept that many young people now have to live with their parents for a lot longer than they might like to have done. I had my children living with me for quite a long time, and I am glad to say that they have now moved on. In most families, children do not now find it easy to move out. I hope that I have covered most of the points that have been raised.