Private Rented Sector — [Andrew Rosindell in the Chair]

Part of the debate – in Westminster Hall at 2:26 pm on 29th November 2018.

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Photo of Sarah Jones Sarah Jones Shadow Minister (Housing, Communities and Local Government) (Housing) 2:26 pm, 29th November 2018

It is a pleasure to serve under your chairmanship, Mr Rosindell. This is an important debate, and we have heard some really helpful contributions. I thank my hon. Friend Mr Betts for securing it and for his leadership of the Select Committee, and I thank the other Committee members who are here. All have raised important points.

I should be clear at the outset that, as hon. Members might expect, the Opposition agree with the Committee’s assessment that the majority of landlords are good. I do not think anybody questions that. They play an important role in the housing system and in our society. However, as the Committee’s report illustrates, the situation faced by a growing number of private renters is intolerable. Most of us here today will see in our constituency surgeries—I certainly do—the horrible things that too many people have to endure. That includes the 800,000 privately rented homes with at least one category 1 hazard, landlords cutting off electricity to vulnerable tenants, and letting agents demanding hundreds of pounds to do things such as view a property.

We need to keep in mind all the time what private renters want, and that needs to be the test for policy makers. I think there are two things: first, people want to rent a property fit to be called a home; and, secondly, they want the same rights and redresses enjoyed by consumers in lots of other areas of society. For many, the private rented sector undoubtedly fails those two tests. Standards at the bottom end of the market are poor. As Opposition Members have said many times, people have more rights when buying a fridge-freezer than when renting a property.

The report identifies some important failings in Government policy that have led us to this point. I will look at two broad areas: the lack of intervention and enforcement, and the imbalance of power between tenants and landlords. On the first, as the report demonstrates, outdated legislation and a lack of enforcement mean that the current system of setting and enforcing standards does not work. We agree that the current legislation is overly complicated. It has built up over many years and has become somewhat hard to navigate and dated. Penalties are not strong enough to deter bad practice, and fines are too small to incentivise legal action in the first place.

We have already heard about the Homes (Fitness for Human Habitation) Bill introduced by my hon. Friend Ms Buck. However, the Government could have helped its provisions to become law years ago by accepting Labour amendments to the Housing and Planning Act 2016. The fact that so little enforcement action is taken is all the proof we should need that the system is broken. As we have heard, Advice4Renters estimates that just 0.1% of landlords letting non-decent homes are prosecuted each year.

The Guardian revealed today that nine out of 10 local authorities failed to issue a single civil penalty notice against a landlord or letting agent last year. It is impossible to deny that the billions of pounds of cuts faced by local authorities have affected their ability to enforce through environmental health and trading standards. I accept the argument that we also need leadership in local authorities, but the extent of the cuts has been very significant and must inhibit what local authorities can do. The fines being so low means that there is neither a deterrent for bad landlords nor an incentive for councils to take action. We share the disappointment expressed by the Local Government Association and others that the Government ignored the Select Committee’s recommendations to improve enforcement through increased fines and powers.

The report was right to express concerns about the situation with landlord licensing schemes. I have seen the positive impact of such schemes in my own borough, where Croydon Council has issued more than 30,000 licences. It is wrong for the Secretary of State to hold a veto over councils wanting to tackle rogue landlords. The Secretary of State has blocked councils such as Redbridge from introducing borough-wide licensing. There is a clear contradiction: Ministers talk about standing up for renters, but their actions prove otherwise.

Let me turn to the imbalance in the private rented sector. The report is clear about the things that need to be done to make the rules fit for purpose and to ensure that they are enforced more, but there are deeper structural issues in the private rented sector. The Committee rightly points out that we cannot draw a clear line and say that there is a small minority of rogue landlords and everyone else is perfect. That would oversimplify the issue and ignore the structural problems that mean that a landlord does not have to be rogue or even breaking the law in any way to make tenants’ lives difficult. There is an imbalance that no court or enforcement authority can solve, because it is part of a system that is fundamentally skewed against private renters.

The system is stacked most heavily against those at the very bottom—that is clear. Permitted development and abuse of the local housing allowance in lockdown properties make a mockery of planning and welfare rules. That is a symptom of a broken housing market. We are failing so badly to build the homes that the country needs that the Government are essentially saying, “Anything will do.” Tenants, left with little or no choice, pay the price, but yet again the Government ignore the Committee’s valid recommendations on this topic.

We could talk more about what needs to be done about landlords refusing to rent to people on benefits. That issue comes up repeatedly in my constituency. I know that Shelter is trying to take some legal cases through the courts to affect that. I will not talk more about that now, but it really is heart-wrenching in constituency surgeries.

Retaliatory evictions are a real concern. They have been talked about today and were rightly raised by the Committee. When 44% of renters say that they will not negotiate over disrepair for fear of eviction, and when charities are having to warn people that raising a complaint might get them evicted, that is a structural failure in the system. We agree that the current protections are nowhere near robust enough to avoid retaliatory evictions or punitive rent rises. I have seen this happen to my own constituents, as we all have. Labour would go further than the Committee’s suggestion of extending the time limit for protecting tenants from section 21, which the Government seem not to be observing anyway. If we say that section 21 is unfair for those who have made a complaint, why do we accept it for those who have not complained? No-fault evictions are at the heart of the imbalance between tenants and landlords and should be scrapped entirely.

The Government have admitted that they need to do more. They say that they want to rebalance the relationship in the rented sector and give tenants access to redress. But given the record of the Government in relation to renters, people would be right to be sceptical. Consultations, calls for evidence or plans to introduce measures such as a housing court, ombudsman schemes or letting agent regulation are worth very little if they do not result in action. The Department has a bad record in terms of turning consultations into legislation: 185 housing consultations have been launched by the Department since 2010. Too often, consultation fails to translate into anything substantial.

The Government recently announced plans to look at introducing three-year minimum tenancies, which then appeared to be quietly dropped. There is little point in a housing court or ombudsman if tenants do not have rights to protect in the first place. The Department’s record on private renting so far has been to talk tough but under-deliver. The Government have blocked Labour’s proposals to amend the Tenant Fees Bill so that deposits could be capped at three weeks’ rent. As we have discussed, that would mean an average saving of £575 for tenants across England and £928 in London. The current six-week cap has the potential to cost tenants more: we know that the majority—more than 50%—of landlords charge four weeks’ rent as standard, so it would end up increasing people’s deposits and not saving them money.