Committee (1st Day)

Part of Housing and Planning Bill – in the House of Lords at 6:45 pm on 9th February 2016.

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Photo of Lord Flight Lord Flight Conservative 6:45 pm, 9th February 2016

My Lords, I declare my interests as set out in the register, and will speak to Amendment 21, whose objectives I trust will command broad support. These are, in essence, to provide practical and low-cost measures to enforce existing laws to protect tenants from criminal landlords. If measures along the lines of this proposed new clause are adopted, I also believe they would avoid the need for new regulations.

The private rented sector has already become larger than the social rented sector, and PricewaterhouseCoopers estimate that, by 2025, 25% of UK households will be private rented homes. Such large increases argue strongly for greater scrutiny of how the sector operates. One of the main reasons for a lack of effective enforcement of existing laws is that there is no clear and systemic way of identifying the landlord of a property and how they can be contacted. This needs to be readily available, if both the enforcement of existing regulations and the taxation of landlords are to be effective.

There are also a number of other government policies which will work only if there is a way of knowing how to contact landlords. For example, the Government’s right- to-rent scheme—making landlords legally responsible for checking the immigration status of their tenants—needs the name and contact details of the landlord to be readily available for the Home Office to tell a landlord if a tenant is in the country illegally.

Within the Housing and Planning Bill, how can Government expect their proposed rogue landlord database to work if there is no systemic way of identifying such landlords? How can HMRC seek to claim tax for which a landlord may be liable if there is no ready way of finding him?

The case for a clear and systematic way of identifying landlords is, I suggest, compelling. A national register of landlords has been suggested as a solution to this issue. The problem is that it would be only the good landlords who readily identified themselves. What landlord, flouting his legal obligations, would voluntarily come forward to make himself known?

In 2014, a report on the regulation of private rented housing was produced by Michael Ball, professor of urban and property economics at Reading University. He noted that such registration schemes fall back on the threat of penalties for those who fail to register to try to ensure that higher numbers do so, but that such threats are unlikely to impress the worst landlords because of the more draconian penalties they would be likely to face if their poor practices were found out. They are thus unlikely to co-operate.

Ministers have claimed that the Bill already includes measures that will allow local authorities to access information held by tenancy deposit schemes to assist with the enforcement of regulation. This is certainly a welcome move to better use the data which are already available. However, councils will be expected to pay to access such information, which may deter many authorities. Also, the measure would not help local authorities find landlords who do not abide by their legal obligations as they relate to tenancy deposit schemes. Recent research has found almost 300,000 landlords still not complying with deposit protection rules.

The solution is, in essence, to ask the tenant. That is what this amendment is about. Something similar was promoted by Dame Angela Watkinson MP, in the other place. The amendment would make it compulsory for local authorities to ask tenants to provide on their council tax registration forms details of the property’s landlord or managing agent. Thus collected, the information should then assist local authorities to enforce all regulations pertaining to the private rented sector as well as support other government policies, such as the right to rent and the rogue landlords database, which require knowing where landlords can be contacted. Local authorities would also have an up-to-date picture of the size of the private rented market in their area, enabling better evidence-based policy. It could also be used as an invaluable tool to communicate with landlords.

Tenants are already legally entitled to information about their landlord, so landlords will find it difficult to prevent tenants identifying them. Where the tenant does not hold information on the owner of a property, they could provide details of the managing agent. If either the landlord or managing agent is not identified by a tenant, this would send a clear message to the relevant local authority that further investigation was appropriate. In some cases, there may be legitimate reason for the omission, but it is likely that criminal landlords will do what they can to remain hidden. In such cases, the tenanted address can then be checked against the Land Registry database and the owner identified. This approach would provide local authorities with the intelligence to target their limited enforcement resources on the relevant properties and landlords.

Ministers have argued that local authorities already have the power to collect such information on council tax forms but, crucially, this is not compulsory and few authorities are aware of their power. As a result, the DCLG knows of only a handful of councils that use the power. In some local authorities, environmental health officers who would like to collect this information are blocked by council tax officers who do not want to make changes to their forms, or believe that this is an issue of data protection. Rather, local authorities are using bureaucratic and expensive licensing schemes. As with a national register proposal, all these do is identify responsible landlords who register and drive up costs.

A system to collect data through council tax returns has a far lower cost, as it uses existing processing mechanisms and is a lighter-touch approach for good landlords. The proposal is that the amendment’s provision should be applied universally across all local authorities.

With your Lordships’ indulgence, I shall briefly address Amendments 24 and 25, which I tabled with Amendment 21. Amendment 24 provides for the relevant person concept to be removed on the grounds that it is confusing and gives little or no protection to tenants. When someone other than the tenant contributes to or pays in full the deposit for a home, they are required to be given prescribed information as well as the tenant, and such a person is known as the relevant person. Failure to give the prescribed information leads to financial penalties and an inability for the landlord to recover possession of their property. There is little need for this requirement, as the arrangement between the tenant and the relevant person is a private one that the landlord is not required to know about, despite being required to provide the relevant person with information. The provision can be forgotten about easily, thus creating a needless trap for landlords, who are potentially hostage to unscrupulous tenants entering into such agreements and then seeking to conceal it from their landlord, who is left in breach of their obligation.

Amendment 25 is about providing electronic information—