Landlord Registration Scheme

Private Members' Business – in the Northern Ireland Assembly at 1:00 pm on 20th June 2016.

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Photo of Robin Newton Robin Newton Speaker 1:00 pm, 20th June 2016

The Business Committee has agreed to allow up to one hour and 30 minutes for the debate. The proposer of the motion will have 10 minutes to propose and 10 minutes to make a winding-up speech. One amendment has been selected and is published on the Marshalled List. The proposer will have 10 minutes to propose the amendment and five minutes to make a winding-up speech. All other Members who speak will have five minutes.

Photo of Alex Maskey Alex Maskey Sinn Féin

I beg to move

That this Assembly calls on the Minister for Communities to review urgently the landlord registration scheme to ensure that it can both cope with this unregulated sector and protect tenants.

I rise to commend the motion to the Assembly and to accept formally the amendment tabled by the Alliance Party. I apologise on behalf of my colleague Fra McCann, who was to speak on this but is unwell. It is nothing too serious, thankfully. There is nothing to report in that regard, but, nevertheless, he was due to speak today. Most Members will now well understand that Fra McCann has had a singular focus on the provision of housing, particularly social housing, for people right across our society for many, many years. He regrets that he cannot be here to speak to this motion directly.

I remind Members that, as far back as 2007, Fra McCann tabled a motion in the House to have a landlord registration scheme introduced, and that was passed with the support of all Members and all parties. That was appropriate, and it was good that it happened, but it took a further seven years before the scheme for registration was agreed through legislation by the Assembly, with 25 February 2015 the cut-off date for complete registration. However, many of us will have thought at the time that it was important to have robust legislation in place to underpin the scheme. The Minister at the time, on balance, thought that a light-touch approach would be more appropriate, and time will tell how effective that will be. Of course, many of us argued that we need robust legislation to tackle poor quality of housing standards and the lack of accountability that was very evident in that sector. The balance, of course, was to not impose an overly bureaucratic burden on landlords, many of whom own a very small number of properties. In many cases, it is one or two houses. At the time, the then Minister felt that it was appropriate to have the balance with a light touch. As I said, the effect of that remains to be seen.

We have tabled the motion again because, in the last period of time, we have had some conflicting figures. It is important that I remind the House that, in written responses in the last mandate, on 25 February 2015, we were advised that 37,000 landlords had registered providing details of 72,000 tenancies. In another written answer, in March that year, the figures were that 35,000 landlords were registered providing details of 77,000 properties.

In February, we had a record that 33,000 landlords had registered, providing details of 70,000 tenancies. We were then given a further report on 1 March 2016, which stated:

"over 46,000 landlords have registered with the Landlord Registration Scheme and provided details of over 97,500 private tenancies."

It is therefore estimated, using figures from the 2011 census and the house condition survey, that 98% of private tenancies have registered with the scheme. That would obviously be very good and an important and fairly high figure, but it is important for the Minister to endeavour to get us as up-to-date figures as he can. Clearly, there are some considerable inaccuracies in at least three of those previous questions and the responses to them.

The private rented sector obviously leads the way numerically, in volume, in the provision of social rented accommodation over the Housing Executive and housing associations, which, between them, have 135,000 dwellings, including family, sheltered and supported housing. In that context, given the sheer volume of people who are reliant on the private rented sector, it is important to get accurate figures. It would also be interesting if the Minister could, if you like, try to bottom out how many people have not registered over the last 16 months or so — in other words, how many have not complied with the deadline — and, if any landlords have not complied, what action, if any, has been taken. The same obviously also applies to the tenancy deposit scheme. As many Members will know — the Minister will certainly know, and the Department will be well aware of it — the Assembly took forward those two pieces of legislation in an attempt precisely to protect those who live in the private rented sector and, given the essential importance of the private rented sector, to make sure that people will not be at the mercy of some poor landlords.

As representatives, most of us will have worked with landlords and tenants over the years and know that the vast majority of landlords are very professional and provide very good accommodation. Of course, as in every walk of life, there are others who are less professional. There are some who are much less scrupulous, and some people are therefore forced to live in housing that is certainly not up to standard. Therefore, we want the Minister to have an urgent review of the effectiveness of the landlord registration scheme to ensure that people are protected if they are living in unfit accommodation. Many of us will understand that there still too many people — there should not be any — who live in accommodation that is unfit in this day and age. Of course, we remind ourselves that the sector is in receipt of somewhere in the region of £300 million-plus. That was the last figure in 2013-14, and it is a huge amount of public money that is paid out by way of housing benefit to a sector that, very often, is not as regulated as it should be.

I commend the last Minister, Department and Assembly for passing the HMO legislation, which is, in a way, related. Clearly, it dealt with the whole question of the need to have proper regulation and proper accountability to ensure that landlords and tenants are protected against those among them who are less than professional. The reason why we are more than content to adopt the Alliance Party amendment is that it has included letting agents, which was a concept that was embraced in the HMO legislation.

It is also important to recognise that the former Department for Social Development, now the Department of Communities, is taking forward an overall review of the private rented sector. Given the sheer volume of houses and homes provided by that sector, it is essential that we start off the mandate with the very clear signalled intention of making sure that there is enough social housing provided for people by the Housing Executive, housing associations and, of course, the private rented sector, and that it is going to pertain long into the future. It is essential that the sector is fully and robustly legislated for and regulated. That will protect both landlords and, of course, tenants, far too many of whom, as I said, are living in unfit accommodation in this day and age.

I take the opportunity to commend this morning what I consider to be a brave intervention by Sandra Moore from the Welcome Organisation and Kerry Anthony from Depaul, who have tried to address the issues of begging in the street and homelessness.

All of us are keen to make sure that not one citizen is affected by homelessness or has to endure that condition, but it was a brave intervention, because it might not always seem the most popular thing to say. It may even jar with many of us who, when we see people on the street, think that they are, of course, vulnerable. If you listened to the interview with Sandra and Kerry, you know that, given their background, history and work experience, they are very sympathetic to the needs of vulnerable people. More importantly, they are professionals and experts in the field, and they draw attention to the issue in this day and age.

As I said on behalf of Sinn Féin, at the start of this mandate, we need to give a clear signal that housing and the well-being of tenants are important to all Members. We need to make sure that we provide adequate social housing in urban and rural communities, that those homes are fit for modern living and that all tenants, whether from the Housing Executive, housing associations or the private rented sector, are protected. We also need to make sure that landlords are protected from less-than-scrupulous tenants, because this can cut two ways.

On that basis, I commend the motion and thank the Alliance Party for tabling its amendment, which can only help. I urge Members to show their support for the concept of robust regulation, and I ask the Minister to take forward an early and urgent review of the effectiveness of the landlord registration scheme.

Photo of Stewart Dickson Stewart Dickson Alliance

I beg to move the following amendment:

Delete all after “scheme” and insert "and to introduce the regulation of letting agencies in order to ensure that there is sufficient regulation to cope with this unregulated sector and protect tenants.".

Thank you, Mr Speaker, for the opportunity to speak again on this important issue today. I thank Mr Maskey for his indication of support for the Alliance Party amendment, and, through him, I pass on our best wishes to Fra McCann, who is not feeling too well. I commend Mr Maskey for the work that he did as Chair of the then Social Development Committee, which dealt with this and many similar issues, and the way in which the whole Committee and Assembly came together to deal with these matters of robust regulation.

Today, I am standing in for my party colleague Naomi Long. I am sure that at least the Minister will be delighted to know that she is in France, preparing to cheer on the Northern Ireland football team. I welcome the opportunity to contribute to the debate on the motion, in conjunction with the amendment that we propose. As I said, I am delighted that the mover of the motion is willing to take the amendment on board.

The landlord registration scheme was an important first step in bringing about protections in a fast-developing sector. Since the introduction of the scheme in 2014, recent figures suggest — although perhaps some of those figures are in dispute, and it would be helpful if the Minister could clarify them — that 46,000 landlords have registered, and we possess details of 100,000 rented properties across Northern Ireland. Before 2014, 100,000 homes were being rented in Northern Ireland, with little knowledge of who the landlords were, what their function was besides being a homeowner and agent, or, more importantly, what their responsibilities or lack of responsibilities to tenants were — all of which we should expect from a good landlord.

It is on the last point that I have a personal connection to the motion and I am sure that many others in the Chamber do as well. I remember constituents coming into my office and telling me about the appalling conditions of properties that they were renting through a private landlord: the damp, the failure of heating systems, the ill health of their children — all the things that caused great concern to me and to many constituents across Northern Ireland who were living in properties that were in significant disrepair and had landlords who would not engage with tenants unless the rent was overdue.

At this stage, the landlord registration scheme has increased tenant confidence, introduced accountability and transparency, and ensured that landlords cannot shirk their responsibilities. The scheme is and must be praised for bringing hidden landlords into the open for the first time.

Today's motion takes a further step by calling on the Minister for Communities to review the scheme. That is vital, given recent statistics, which show that the rented sector will increase massively, with home ownership falling to 60% within the next 10 years. That reality, combined with the failure of the last Executive to build a sufficient number of homes for our rising population and a property market that prices out first-time buyers with exorbitant initial deposits, has fostered what is known as "Generation Rent". We need to ensure that tenants are protected by reinforcing regulation, the legislation and the rules. This desire was contained in our manifesto, which stated that we would support the introduction of legislation to improve the regulation of the private rented sector.

The amendment that Paula Bradshaw and I have brought today widens a positive motion through including the regulation of letting agencies. That is important, given the meteoric rise of the private rental market. It has been observed that a number of letting agencies are using the unregulated nature of the sector to fabricate fees and now treat a vital sector as a moneymaking scheme. A recent study by Housing Rights found that the basic initial checks, which take a few seconds on the computer, can incur a charge of up to £100. The Alliance Party feels that this is unjust and unfair, and we believe that our amendment will help to tackle a practice that preys on people in desperation and treats them as victims rather than as clients in a modern and progressive society, where the renting of property is something that we should be able to laud.

Photo of Roy Beggs Roy Beggs UUP

Does the Member recall evidence given by some letting agents to the Social Development Committee when examining the Houses in Multiple Occupation Bill? They indicated that all that they did was let the property, while others had a maintenance role. Do you agree that there needs to be a clear distinction of responsibilities so that everyone knows their responsibility moving forward, rather than have a situation in which we have those who simply let and walk away?

Photo of Stewart Dickson Stewart Dickson Alliance

I entirely agree with the Member's intervention. It is vital that the tenant knows exactly where the lines of responsibility lie and that that responsibility be clearly set out in appropriate agreements.

I endorse the motion due to the positive impact that, I believe, it will have on tenants who currently have to live in an unregulated environment. The landlord registration scheme is a positive first step, but we must now encourage the Minister to take the next step. The amendment, alongside the Sinn Féin motion, will take us forward in this important area.

Photo of Jonathan Bell Jonathan Bell DUP

This is an important motion, and I am happy to speak in support of both it and the amendment, which reflects what we want here, which is proportionality and a reasonable way forward. There is always a necessary balance to be struck between the landlord and the tenant — I should declare an interest as a landlord, Mr Speaker — and, as we look towards regulations, we want to protect both the tenant and the landlord, who in many cases provides a vital service. I refer to what Mr Dickson said earlier about the consultation by Housing Rights and consultations in Dungannon, Coleraine and Belfast.

It is important to look at the reasons that people rent. For 10%, it is flexibility. They are not going to put down permanent roots, be that for family or employment reasons. For 11% — this is the challenge for us — the waiting list for social housing is simply too long. We have heard good news in recent weeks from some of our social housing associations, which have thought outside the box, and we encourage them to see how investment can be brought in. The big sector in the survey — a third of our people — is those who simply cannot afford accommodation.

That group made up one third of the respondents. It is important that we look to good practice elsewhere in the United Kingdom. We have the Private Rented Housing (Scotland) Act 2011, the Housing (Wales) Act 2014 and the Renters' Rights Bill in England.

In my constituency office, tenants often speak to me about the affordability of the sector and the difficulty in getting repairs done. I have major concerns about landlords who are acting irresponsibly. Without breaking any confidences, I know of single parents in my constituency whom we have referred on to the environmental health office at Ards and North Down Borough Council. If the environmental health office accepts that the accommodation does not meet the necessary standards, it puts recommendations in place. One would have thought that, when that happens, the private landlord immediately acts to get the necessary repairs in place. Often, and I am sure I am not alone, I find in my constituency surgeries that, even when the council's environmental health office has acted and explained what needs to be done, there then begins a process, with them saying, "We do not need to do it that way; let me get a different plumber or joiner, or get in someone different", because the landlord reckons they can solve this problem, for example, just by putting in a dehumidifier. This is an actual experience, without breaching anybody's confidence, where a single parent with several children is unable to use her own bedroom in her own home. We go into a process of almost interminable delay while these negotiations go backwards and forwards. The three critical areas that we need to address are affordability, repairs and standards.

In conclusion, we want to see a proportional response from the Minister. It is the first opportunity that I have had to welcome him to his post. We want to see a balanced approach that looks towards effective regulation and protects the tenant and the necessary sector, the private rented sector.

Photo of Roy Beggs Roy Beggs UUP

I just want to pick up on some of the comments of the Member who spoke last. I, too, support the view that there needs to be balance in what happens. I declare an interest in this subject, to the degree that my son is a student renter of accommodation and my dad is a landlord. I see the issue from both sides.

Where exactly are we with this in Northern Ireland? What is our housing situation? We need to be careful, as we go forward, how we impact on tenants — we need to ensure that we bring about improvements — but also that we do not contribute to homelessness.

Our population is growing, and the average size of households is becoming smaller. It is estimated that we need over 11,000 new houses a year just to maintain stability. The Housing Executive has indicated that it needs 1,500 new houses; perhaps that has gone up to 2,000 homes, given the economic situations. The private sector has been building 4,500 houses a year. That means that we have a gap. There is a shortage of houses. How is it going to be filled? Will the Executive produce the money to do it? If they are, where the funds? I pose this question: are we going to be reliant on the private sector to help those who are facing homelessness today? We need to make sure that the decisions we make do not worsen the situation so that more people become homeless. We may have great intentions, but I argue that we need to take great care in bringing about changes.

Will any proposals address rogue landlords? That is the key issue on which I will judge any proposal, not on the amount of bureaucracy and cost for the nine out of 10 good landlords, where there are good relationships between landlord and tenant. What we do not need are additional costs that will be passed to the landlord and on to the tenant. We do not need bureaucracy; we need action where it is actually needed.

There have been a number of changes in the housing situation in recent times. We have had the new deposit scheme requirement for new purchasers, so fewer people have been buying houses. Recently, there have been changes to HMRC taxation rules. Some of those who invested may get cold feet. We have introduced a landlord registration scheme for houses in multiple occupancy. I participated in that, and I am well aware of the need for it and am fully supportive of it. We have our landlord registration scheme and tenancy deposit scheme.

As I said, the vast majority of the relationships are good. Indeed, a 2012 survey showed that 88% of tenants were fairly or very satisfied with repairs and 8% were fairly or very dissatisfied. Like others, I come across constituency cases where I feel that landlords are not carrying out their duty. I commend the actions of the Housing Rights Service and councils' environmental health officers for their actions in trying to bring to account those who are not responding to need. One of the ideas floated in some of the surveys that the Department has carried out is for an arbitration service where there are disputes. Instead of dealing with everybody, we may just need a system to deal with a dispute. Some 87% of tenants supported the creation of an arbitration service. I think that that has some merit going forward.

There is a small number of disreputable landlords who knowingly flout the law, and we need to make sure that we address them. I noticed that, in Scotland, comments have included those saying it is unnecessarily cumbersome and requires a large amount of data, yet it would not even assist landlords with tenants who were misusing their property or were in rent arrears or even advise them when they had left the property so that repossession could occur. We need to make sure that we have balance as we go forward. I noticed that Shelter Scotland indicated in 2009 that, after three years, it was failing to weed out the minority of bad landlords.

I reiterate what I am saying: we need a system that will deal with the offenders and those who are not carrying out their responsibility to tenants, rather than have additional costs that will ramp up bureaucracy. Let us deal with the problem, not create another bureaucratic system.

Photo of Nichola Mallon Nichola Mallon Social Democratic and Labour Party

I support the motion and the amendment. I also pass on my good wishes to Fra McCann. Fra is a steadfast campaigner on homelessness, and his contributions on the issue are always honest, passionate and worth a listen. I also declare an interest as the owner of a house that is out for rent.

In recent times, I have had the very humbling experience of listening to Father Peter McVerry. Father Peter is a campaigner on this issue in Dublin. He works at the coalface, but he is also vociferous in challenging government and landlords to responsibly and urgently address the issue. Peter very powerfully makes the case that there are five fundamental human rights: the right to food; an education; healthcare; work; and a home. I believe that all the evidence is there to show that the home is the anchor that holds other aspects of your life together. The distress and negative consequences that flow from not having a home are felt in families and households right across Northern Ireland, not least in my constituency of North Belfast. It is certainly a serious problem that requires serious and urgent action.

The private rented sector has an important part to play in providing quality, affordable and sustainable housing solutions. Successive studies and surveys, including the house condition survey, have shown that, generally speaking, the Northern Ireland private rented sector works reasonably well, with high reported levels of tenant satisfaction. Those findings are to be welcomed. However, as many of us also know — Members testified to this during the debate — a number of tenants do not find themselves in the situation of having a responsible and active landlord. In fact, many are faced with an unresponsive, or in the worst cases a neglectful, landlord. I have visited constituents in homes with a growing list of outstanding repairs. I have visited a home where the landlord has refused permission for minor adaptations needed for the health and well-being of a child. Sadly, like other Members, there are similar cases I could recall in the debate.

It is important that we acknowledge that the vast majority of landlords are good and responsible and provide a high level of service, but it is equally important to acknowledge that a minority do not provide the same level of service. The challenge for government is to create a system that increases standards while protecting tenant and landlord and without adversely affecting the majority of tenancies that are working. The landlord registration scheme implemented last year is a useful step. It allows us to capture data and gather knowledge, and its publication enhances accountability. The circulars that are sent to landlords, advising them of their rights and responsibilities, are also helpful. However, registration is not regulation, and it is right that the departmental review of the role and regulation of the private rented sector is under way and that it is looking at licensing, accreditation, security of tenure and affordability. I urge the Minster to ensure that, following the review, swift and timely action is taken.

It is important to remember that a high-quality and affordable private rented sector is part of the answer to resolving the acute housing shortage that we face, but it will only be successful in addressing the challenge if it is accompanied and supported by other housing solutions. That requires building more social and affordable homes, particularly in areas of high demand. It requires investment in and access to early intervention and prevention support to help stop people finding themselves homeless in the first place. It also means supporting people to live in their home through programmes like Supporting People and Housing First, alongside targeted support to the most vulnerable, including on-street access to mental health and addiction recovery services. It also requires the reform of the common selection scheme, with allocation based on objective need at its heart.

While that list is not exhaustive, those measures combined will go a long way to addressing our housing crisis. Ending homelessness is achievable; it is doable. It just requires the political will to achieve it.

Photo of Christopher Stalford Christopher Stalford DUP 1:30 pm, 20th June 2016

In my constituency, as, I am sure, we will hear later from Paula Bradshaw, housing is probably the biggest issue that people come to their Assembly Member about. In starting a discussion about this, it is important to consider some basic first principles. The first thing is that there are 48,000 landlords, the huge majority of whom are small landlords who hold one, two or maybe three properties. Those individuals are making a contribution towards meeting housing need, as has already been said. The reason measures such as those we are discussing today are necessary and should be built on — we all have experience of this — is that, when you suggest to a constituent that they consider the private rented sector, rather than Housing Executive accommodation, 99 out of 100 will back away, afraid of that prospect. There are reasons for that. I welcome the fact that we have embarked on a review, and it is important that we are looking at taking it forward into the future. I hope it will allow us to close the gap that exists in people's perceptions between social housing and the private rented sector. People should have the same confidence that a private landlord will repair their property or ensure that their home is maintained as tenants have in the Housing Executive. That is why I think that some of the measures undertaken by the successor Department to DSD are welcome. In protecting tenants' rights, for example, the tenancy deposit scheme secured 66,000 deposits totalling £37 million. This is real money that people put down as a deposit on a home. They are entitled to have it back, and, through the scheme that was introduced, we have been able to ensure that that is the case.

The Private Tenancies Order details the responsibility that landlords have to their tenants and to the local authority. It is important that we increase awareness and education around that, particularly amongst tenants, so that they know the responsibilities of their landlords to them. There may indeed be a role for local government to take on. I cannot help notice that there are plenty of Belfast people who want to contribute to the debate. In the city, we have seen what was our council taking the lead on lots of issues and increasing public awareness of them. This is one area where local government has a role: increasing people's awareness of their rights if they are in the private rented sector.

The Department is in the process — I am sure that we will hear more from the Minister on this — of reviewing the progress that has been made in this area, and I welcome that. We must not lose sight of the fact that we are talking about a sector that accounts for more than 100,000 properties throughout Northern Ireland, so it is in everyone's interest — landlord and tenant alike — that we set in place rules and regulations that allow the full potential of those 100,000 properties to be exploited for the purpose of solving or at least making a contribution to solving the problem of housing, which is very real in constituencies like mine and Nichola Mallon's.

All of us want to create a system where people are treated fairly and are not exploited whilst maintaining the rights that people have over their property. I am not a landlord, but I understand that, if people own property, we cannot tie them in red tape either. This is a delicate but important area of public policy, and it is essential for all our constituents that we strike the right balance between protecting people and protecting the rights of landlords.

I have one final point. I am a South Belfast representative, and we have seen there what happens when landlords get it wrong.

Photo of Michelle Gildernew Michelle Gildernew Sinn Féin

I am delighted to speak in the debate. I also send my best wishes to Fra, who absolutely lives and breathes this stuff and is very sorry that he cannot be here.

Back at the formation of the Housing Executive around 45 years ago as a result of the eviction in Caledon in 1968, a points system was developed in an attempt to prioritise housing need and ensure that people in the highest need got housed. The Housing Executive has done an amazing job over the past 45 years, but unfortunately it has not been able to build in recent decades. As a result, we have an acute housing shortage, which Members have talked about today.

There was rapid growth between 2006 and 2011 and an investor-led housing boom during those peak years. In my constituency of Fermanagh and South Tyrone, particularly in and around Dungannon, where there are lots of manufacturing and food processing jobs, the need for houses took off to such an extent that the Housing Executive and the housing associations could never keep up. We need the private rented sector to meet that need, but that is not to say that there does not need to be regulation. I welcome the fact that we have landlord certification. I welcome our motion and Alliance's amendment to it. As Alex said, the light touch that was applied originally is probably not robust enough.

I welcome the fact that an energy performance certificate is needed. A house has to be energy-efficient, which is hugely important, especially when you see the level of fuel poverty that exists, not just among vulnerable families. It is fairly prevalent at every level, so we need the energy performance certificate —

Photo of Michelle Gildernew Michelle Gildernew Sinn Féin

I will keep an eye on the time. Come back to me in a minute or two.

I welcome the fact that we have the energy performance certificate, but I cannot understand why we do not have an unfitness certificate. That was talked about, and there was a decision to prioritise the properties in the poorest condition with a date being kept under review. Unfortunately, we can see the dampness in many new builds as we walk past them, and we know that those houses are not necessarily well ventilated or dry. We also know about the problems that come from that. If you live in a property that has a problem with damp, it is in your clothes and is on you. It is hard to live an active and full life if you are embarrassed by the state of your house and what that entails. Probably more seriously, there is proof of the link between inadequate housing and the risk of ill health and disability. There are also links to poor mental health, lower educational attainment, unemployment and poverty. We recognise that there is a need for a quality standard in our private rented sector to ensure that landlords meet the needs of the people to whom they rent properties.

I also recognise how hard it is at times to get a house. I supported a family recently in a marital break-up, where the mother lived with the children in the family home and the father could not get a house for love or money in the town that he was from. He did not have anywhere near enough points to get onto the social housing ladder; the private rented sector was his only option. I disagree with comments made by Christopher Stalford: cost is a prohibitive factor for a lot of people going into private rented, especially if you are in full-time work on the minimum wage and are not entitled to top-up benefits. The gentleman whom I am talking about could not get a house that his children wanted to visit him in. That is so sad. We are talking about a man in a marriage break-up whose children did not want to visit him in the temporary accommodation that he lived in. We worked hard to get him a house that his children would call home as well and where he was able to fulfil his duties as a dad. He loves his children; he wanted them to be able to spend part of the week with him. That was very difficult for him.

I will give way very quickly —

Photo of Robin Newton Robin Newton Speaker

I ask the Member to conclude her remarks.

Photo of Steven Agnew Steven Agnew Green

I thank the Member for giving way. She made the point about energy performance certificates. I simply wanted to ask her — I think, from what she said, that she will agree — whether, now that we know the level of energy inefficiency in our housing stock, we should require minimum energy efficiency standards for letting.

Photo of Robin Newton Robin Newton Speaker

The Member has an extra minute.

Photo of Michelle Gildernew Michelle Gildernew Sinn Féin

It all has to be kept under review. Obviously, we have to have proper regulation. Energy is such an important thing. If you spend more than 50% of your income on heating your home, there are other areas that you absolutely cannot afford to cover. We have to ensure that all the certifications and regulations are robust and meet the needs of our families and people living in the private rented sector.

Photo of Clare Bailey Clare Bailey Green

For most of my life, I have lived as a tenant in the private rented sector. I want to make sure that the House is aware that regulation is so badly needed in that sector. There is no standard for tenants: the heating, insulation, conditions and decor that come with a house is very haphazard. I have lived with my two children as a single mother — we have heard an example given today — in the private rented sector. I have paid extortionately high rents. I have paid letting fees just to apply for houses. I have lived with more than half my income going on trying to heat through electric bar heating in the private rented sector, as well. I have lived with damp and in very bad conditions.

I have also been made homeless. My children and I ended up in a hostel through no fault of our own; it was simply because the landlord wanted to change the contract. I did not know my rights at the time. I was given notice to quit, and I thought that I had to quit, so I did. I left myself homeless through not knowing my rights. I spent four months with my children in a hostel on the Ormeau Road, not because I was a bad tenant but because I did not know my rights. There was no single point of contact to find out what my rights or options were. When I put that in a letter to the then Social Development Minister, her response was that she was glad to see that the system was working properly.

We have a lot to do to acknowledge what happens in the private rental sector in Northern Ireland. The latest figures show that 21% — just over a fifth — of our population live in private rental accommodation. While the landlord registration scheme was, absolutely, a good first step, it was a first step that we need to move far from. The tenancy deposit scheme still does not give adequate protections. It contains a time bar loophole: after six months, tenants can no longer apply to get their deposit back. In my experience of living in the private rental sector, I never got my full deposit back.

We highly recommend that the Minister, in looking at what we need by way of tighter regulation of letting fees, consider following in the footsteps of Scotland, where letting fees were made illegal in 2012. In Northern Ireland, people can face letting fees of anything from £30 to £120 a time, and then they have to pay a month's rent in advance. On top of the deposit, that is a huge cost, little of which ever comes back to the tenant. There is a huge body of work to do in bringing the tenancy deposit scheme, the letting fees and the regulation of landlords together into one piece that we can all use to help tenants, who make up, I repeat, one fifth of the population in Northern Ireland.

Photo of Robin Newton Robin Newton Speaker 1:45 pm, 20th June 2016

Before I call the Minister to respond, I remind the House that we have until 2.00 pm, when we will break for Question Time.

Photo of Paul Givan Paul Givan DUP

I thank all Members who have contributed to the debate. It is my duty to respond to specific points. If I do not cover something in my general comments, I will certainly come back to Members in writing. It is worth noting that the contributions of Members are incredibly well informed. They are testimony to the work that MLAs do in their constituencies. We all have a significant caseload of constituents who need support in housing, and the contributions made today reflect that MLAs are in touch with their community and are active, particularly in trying to help the most vulnerable. We have heard the stories from Members. Ms Bailey's personal story is one that will resonate with people. She speaks powerfully about that and will, I have no doubt, make a powerful contribution to the issue as we consider it in the future.

Let me wish Fra McCann all the best. He is one of the MLAs who very quickly came into the Department, wanting to meet me to talk about housing. I have no doubt that he will have a particular interest in this, as he has had for a number of years. He brings a lot of experience that I want to utilise in addressing the issues that we need to face.

I welcome the opportunity to respond formally to the motion, which calls on me:

“to review urgently the Landlord Registration Scheme to ensure that it can both cope with this unregulated sector and protect tenants”, and the amendment:

"... to introduce the regulation of letting agencies in order to ensure that there is sufficient regulation to cope with this unregulated sector and protect tenants.".

Before I talk about the scheme that has been in operation since 25 February 2014, let me provide some background on why the landlord registration scheme was introduced. In recognition of the growth of the private rented sector, the Department developed 'Building Sound Foundations – A Strategy for the Private Rented Sector' for consultation in 2009. The key focus of the strategy was to support the development of a healthy private rented sector in Northern Ireland. The two key, main changes introduced as a result were landlord registration and tenancy deposit.

With landlord registration, it was recognised that there was a lack of basic information surrounding the composition of the private rented sector that made it difficult for councils to fulfil their regulatory role of monitoring and ensuring compliance with the law. There was no central capture of data on the numbers, location or portfolio size of private landlords, although local knowledge may have been built up over time. Private landlords tended to operate across council boundaries, and, as the knowledge collected on an individual council basis was not held centrally, the information was not used to best effect to regulate the sector. The absence of centrally held and accurate data about the private rented sector contributed to a lack of confidence, perceived respectability and accountability. In addition, councils tended to react only when complaints or difficulties were brought to their attention, rather than in a proactive way through education and awareness, as well as enforcement when necessary.

The majority of respondents to the 2009 consultation provided overwhelming support for a mandatory Northern Ireland register of landlords. Most respondents felt that it should be proportionate, light-touch, not intrusive and inexpensive in order to minimise the burden on landlords. Councils advised that such a register should have inbuilt data protection to allow relevant information to be used to facilitate good information sharing, better tenancy management and enforcement as necessary but should be restricted to designated bodies to protect landlords' personal information.

When the landlord registration regulations were proceeding through the Assembly, it was made clear that a register of landlords was very much a first step to making improvements to the sector. The scheme gave councils the information that they needed to be proactive in ensuring that a private landlord adhered to the law already in place, and there were no regulatory functions or powers attached to the scheme.

The scheme has been very successful in what it was set up to do: to have a register of landlords with details of their properties. Currently, over 48,000 landlords are registered with the scheme, and over 100,000 private rented properties are registered. The private rented sector is characterised by a lot of small landlords who own one or two properties. Members raised that issue. The current figure is 101,000 private rented properties registered. On average, 400 properties a month are being registered. Clearly, more houses are being registered, but more need to be registered, given that it is compulsory for landlords to do that.

Landlords also get help when they register. On registration, they receive a landlord registration toolkit, which provides vital information and advice on landlords' responsibilities when renting out properties. My Department also issues quarterly newsletters to registered landlords making them aware of any changes that may impact on their letting of properties and other general information that may be of use to them.

As part of the drive to inform and professionalise the sector, the Department is part-funding the level 2 award in letting and managing residential property delivered by the Chartered Institute of Housing. The purpose of the course is to make private landlords more knowledgeable and better qualified and, in the process, to enhance the entire private rented sector of the industry. The funding for the course is over the next three years.

Prospective and current tenants are also helped. They can check whether a landlord is registered or whether the property that they are thinking of renting with the scheme is registered. That enables them to make a choice when considering renting in the private rented sector as to whether they want to live in an unregistered property.

My Department is carrying out an evaluation of the scheme that will help inform the forthcoming review of the role and regulation of the private rented sector.

I turn briefly to the other main change introduced as part of Building Sound Foundations: the tenancy deposit scheme. The scheme was introduced on 1 April 2013, and its purpose was to put in place arrangements that would safeguard a tenant's deposit and provide a means to allow disputes between landlords and tenants on such deposits to be dealt with independently and speedily at no direct cost to either party. Previously, the only available option to a tenant in attempting to get a deposit back was to take a landlord to the small claims court.

It was clear that the establishment of a tenancy deposit scheme would provide specific support for more vulnerable individuals and families and would help to ensure that they are able to access private rented accommodation when necessary. The scheme provides an effective means of managing the deposit arrangements and of giving tenants and landlords real encouragement to behave properly and look after a property, as well as facilitating disputes when they arise without additional costs to either party. In the three years since the introduction of the scheme, up until 31 March this year, 10,305 landlords/agents have protected 65,658 deposits, amounting to almost £36·6 million.

The HMO Bill was passed in the Assembly earlier this year and received Royal Assent in May. The Bill recognises the higher risks of living in an HMO with a more robust regulatory system that introduces a mandatory licensing scheme that will ensure higher physical and management standards for houses in multiple occupation accommodation.

We need to have a balance across the broader private rented sector between the need to protect tenants and to encourage a vibrant and effective sector in Northern Ireland. That is at the heart of the current review of the role and regulation of the private rented sector. The aim of the review is to consider the current and potential future role of the sector and assess the effectiveness of current regulation, identifying where improvements can be made to help make the private rented sector a more attractive housing option.

In November 2015, the Department launched a discussion paper for consultation for the first stage of the review. The paper did not contain any firm proposals for change; rather it invited views from those living and working in the private rented sector. A total of 85 responses were received, and the Department conducted a further survey of tenants, which received over 1,000 responses. A number of themes have emerged from the consultation for further consideration and analysis. They include the need to look at the case for introducing a licensing scheme for all private landlords; protecting tenants from fees charged specifically by letting agents; addressing the inconsistencies in letting fees and the services provided to landlords and tenants by letting agents; considering whether letting agents need to be regulated, although this may be for the Department for the Economy to consider under consumer legislation; considering the need for an independent dispute resolution or advice service, including a mediation service; concerns around the current eviction process, in that it is costly, lengthy and not fit for purpose; the support available for vulnerable tenants living in the private rented sector; improving awareness among landlords and tenants of their roles and responsibilities; and the view expressed by landlords that grants for improvements would incentivise the sector and help upgrade the housing stock.

Some of the positives that came out of the private rented sector tenants’ survey included the fact that 98% of tenants had a written tenancy agreement and over 80% had a positive relationship with their landlord The main issues that tenants commented on included the affordability of rents, the handling of repairs and the standard of some accommodation.

When the discussion paper was issued, the Department gave a commitment that it would issue a consultation document by the autumn of this year with clear proposals on the way forward. The Department will use a similar process to the discussion paper, engaging with representatives from the sector in the first instance to further discuss the findings of the discussion paper and gather evidence to make recommendations for change. Over the next number of years, I want to focus on improving the regulatory framework in a targeted way and maximise all opportunities to improve the quality of the private rented sector, making the private rented sector a more attractive housing option for a wider range of households.

I will now address specific points raised by some Members. Mr Stewart Dickson and Ms Gildernew asked about issues related to the fitness of properties. There are existing powers under the Private Tenancies (Northern Ireland) Order 2006 for councils to ensure that properties are fit. This is an area that we are examining as part of the review of the private rented sector as well as conducting a review of the current fitness standard.

Mr Maskey asked about the number of landlords not registered. I alluded to the point that, currently, on average 400 houses a month are being registered. The latest condition survey indicated that there were 125,000 private rented properties, so Members can do the maths. Currently, there are 101,000 registered properties, and we believe that there are 125,000, so there is an issue that needs to be addressed. Councils have powers to impose fixed penalties on non-compliant landlords, and there is specific information on that.

I undertake to correspond directly with Members on some of the other points that have been raised. I conclude by thanking the Members concerned for tabling the motion. It is an important issue that affects all of us, and we need to get the policy right going forward. I will undertake that review, and I will have concrete proposals in the autumn that we will put out for consultation and that, I believe, will have a positive impact in addressing a lot of the issues that Members have raised today.

Photo of Robin Newton Robin Newton Speaker

This debate will continue after Question Time, when the next to speak will be Paula Bradshaw.

The debate stood suspended.

(Madam Principal Deputy Speaker [Ms Ruane] in the Chair)