Committee (1st Day)

Part of Housing and Planning Bill – in the House of Lords at 6:15 pm on 9th February 2016.

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Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat 6:15 pm, 9th February 2016

My Lords, we are being asked in this amendment whether we think there is a need for further protection for tenants in the private rented sector. I suspect that I can guess the Minister’s response, although I hope I will be proved wrong. The Minister will point out that there is already a large amount of legislation to protect us from—I hesitate to use the phrase—“rogue landlords” and that further strengthening of that is to come, and that there is protection as regards retaliatory eviction against people who run

“beds in sheds”. The Government’s own website lists a large number of tenants’ rights, which include the rights to,

“live in a property that’s safe and in a good state of repair”,

to have your deposit protected, to,

“challenge excessively high charges, know who your landlord is, live in the property undisturbed, see an Energy Performance Certificate … be protected from unfair eviction and unfair rent”,

and to have a written agreement if the tenancy term is fixed for more than three years. The Minister will no doubt point out, rightly, that some councils already have an accreditation scheme; she will point to the excellent Private Rented Sector Code of Practice that was developed on behalf of the Government by the Royal Institution of Chartered Surveyors back in 2014. She may talk about the trade bodies that many residential landlords associations have, and as a fallback she will also of course refer, rightly, to the county court mediation service.

On first sight, given that long list, it may appear that there is no need for further protection for tenants in the private rented sector. However, noble Lords will be aware that in a number of the areas I have referred to there are ongoing problems. For example, after the list of rights that appear on the Government’s website, a section then tells you what to do if you feel that you are not able to exercise those rights. It suggests that you should first complain to the landlord; failing that, you should complain to one of the recently set up “designated persons”—that is, an MP, a councillor or one of the various tenant panels; and finally, if all that fails, you should go to your local council. Notwithstanding the responsibilities in some areas—but not all—that local councils have, as most noble Lords will be aware, many councils simply do not have the resources and expertise sufficiently to deal with the wide-ranging types of complaints that will and do come forward. The county court mediation process has of course been successfully used on a number of occasions, but there is a problem, due to various legal arguments as to whether private sector landlords are defined as “suppliers”. Can the Minister can tell us whether, if landlords are not defined as suppliers, that particular problem means they will fall outside the remit of that mediation service?

Even though the private rented sector code of practice is excellent, it has no teeth. Earlier this morning I talked to somebody at the Residential Landlords Association, which is one of the signatories to that code of practice. It says that although it is a signatory, it has no ability to enforce it. It is of course also worth reflecting that the vast majority of the maybe 2 million landlords are not even signatories to the code. On that point, nobody is entirely sure what the figure is for the number of private sector landlords, whether in England or across the whole of the country. Can the Minister help? I have looked everywhere to try to get a figure but cannot get any clear, precise figure from anywhere beyond that figure of around 2 million.

There are a number of ways we could move forward instead of accepting this amendment. The most effective is to make the code of practice to which I have referred a statutory code, and I am aware that there have been discussions within government about the possibility of doing that. Have those discussions taken place and are the Government likely to come forward with a proposal to make it statutory? If so, we would have a fairly powerful tool instead of the proposal in the amendment before us. We have got pretty clear evidence that, unless the code is made statutory, with all the appropriate ways of making it work in that state, there will be concerns about whether the many forms of protection are collectively sufficient.

However, before I can be finally persuaded that this is the right way to proceed, I would be grateful if the noble Lord, Lord Kennedy, clarified some aspects of the proposal, as the Committee will need to have confidence that there is in fact going to be a Housing Ombudsman as such. The Committee will be aware that the Government recently consulted on the idea of having a single public sector ombudsman, bringing together the Housing Ombudsman with the Parliamentary and Health Service Ombudsman and the Local Government Ombudsman services. During that consultation, there was a loud outcry from many of the respondents about the idea of incorporating the Housing Ombudsman within a single public sector ombudsman. I was pleased that the Government made it clear in their response to the consultation that they intend to start by combining the Parliamentary and Health Service Ombudsman and the Local Government Ombudsman, and not include within that the Housing Ombudsman. However, rather ominously, the consultation response goes on to say that they will establish that combination “in the first instance”, providing,

“a framework that allows others to join over time”.

The Committee will be interested to hear from the Minister the Government’s thinking on the slightly longer-term situation for the Housing Ombudsman. Clearly, if it is going to change, that will create a problem for this amendment.

There is also the issue of the resources needed to operate the scheme proposed in the amendment. At the moment, the Housing Ombudsman deals with roughly 5 million housing units, with a staff of 55 people. In the last financial year, they have seen a 28% increase in the number of complaints, so there is quite a lot of pressure on them, although they have helped to achieve a solution to that by providing a lot of support and help —on which I congratulate them—for local resolution. But if we take the current figure of 5 million housing units and add a further 3 million, which is roughly what would be required, clearly, that would place a significant additional load on the Housing Ombudsman. I would be interested to know what solution the proponents of the amendment have thought of for funding it.

The Housing Ombudsman is funded by levying a charge per housing unit. Because of increased efficiency the ombudsman has been able to reduce that charge, which is now—this may surprise many noble Lords—down to just 96p per individual housing unit. If we added to the scheme all private rented sector landlords, the vast majority—72%—of whom have only one property, and if the funding regime remained the same, in order to collect an appropriate amount of money, the Housing

Ombudsman would have to find a mechanism for raising 96p from something like 1.5 million individuals. Clearly, that does not make a great deal of sense.

I have some concerns about some of the details, but broadly, I think the level of protection for tenants in the private rented sector is still not strong enough. We need to do something. We have before us one possible solution. The alternative could be to make the code statutory. I look forward with great interest to the Minister’s response to this proposition.