Private Rented Sector

Debate between Clive Betts and Matthew Pennycook

Thursday 9th February 2023 Commons Chamber

[Mr Betts]

I thank the hon. Member for his question, which is one that he must address to the Minister. Certainly, we had evidence that the reforms particularly hit smaller landlords who personally own their properties, rather than the larger landlords who own their properties through a company and can continue to offset their interest payments against their rental income.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I congratulate the Select Committee on another first- rate report, and I trust the Government will give the recommendations serious consideration as we look forward to the long-overdue renters reform Bill.

The Opposition wholly agree with the report’s conclusion that the affordability crisis in the private rented sector can only be properly solved by a significant increase in housebuilding, particularly affordable housebuilding, with social rented housing as a large proportion of affordable supply. Given that we are going backwards in that regard, with the latest data released by the Department indicating a net loss of 14,000 social homes last year, what does my hon. Friend and the Committee believe the Government could and should do right now to arrest this loss and boost markedly the supply of genuinely affordable houses that the country so desperately needs?

[Mr Betts]

In the previous report, we did not look specifically at mechanisms for increasing housing supply. In this report, we recommended that 90,000 social homes are built a year and said that that could cost up to £10 billion a year, which is about £70 billion more than has been provided through social housing grant. The Government must give that serious consideration, because the housing crisis will not go away unless something significant is done. The worry is, and this is something the Committee is looking at, that housing associations and councils will start to build fewer homes because of the pressures from disrepair, particularly around mould and damp, and because they are fixing safety defects post-Grenfell, all of which are adding further demands on their limited capital resources.

Exempt Accommodation

Debate between Clive Betts and Matthew Pennycook

Thursday 27th October 2022 Commons Chamber

[Mr Betts]

I thank the hon. Member genuinely for the way he engaged with the Committee as a Minister. Some Ministers engage better than others with Select Committees, and although he did not always agree with us, he engaged with us entirely properly, so I thank him for that.

In terms of the hon. Member’s question, he is absolutely right, and we reflected that, but what we are asking of even the best providers is simply that they register, so that we can be aware of who they are and what they are doing. They have nothing to fear from a basic registration fee—that is all. I completely agree with him: it is not just about closing down the bad; it is about how we can expand the good, particularly on domestic abuse. There is a shortage of such accommodation for people fleeing domestic abuse in this country, so there need to be more funds. Perhaps some of the funds that are being siphoned off inappropriately could be channelled into providing good accommodation, provided by organisations such as Women’s Aid, which came to give evidence to us.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I commend the Select Committee on the publication of an excellent report, which makes a series of extremely sensible recommendations. What is particularly concerning, albeit sadly predictable, is the Committee’s finding that, despite some limited improvements in quality and standards, vulnerable people were still living in “utterly appalling circumstances”, even in areas subject to supported housing oversight pilots. It is obvious that much more needs to be done in terms of national standards and local authority powers and funding. May I press my hon. Friend to expand on why he thinks Ministers remain unwilling to introduce the substantive emergency measures that are clearly required if we are to finally bring this scandal to an end?

[Mr Betts]

I thank my hon. Friend for that question, though perhaps it would be better addressed to Ministers, rather than the Committee. I do not know why the Government do not want to act more quickly. I take the point about not putting off good providers, but we have talked about a light-touch registration scheme for the good providers. We are not calling for more money; we said that. There is enough money in this system. We hear of organisations buying properties for a few thousand pounds—probably £100,000—then converting them into exempt accommodation and charging £1,000 per room in housing benefit per month. These are eye-watering sums of money. If that money was diverted into better accommodation and if local authorities had the powers to enforce it, using existing funds, it could all work well. We heard from the pilots that there were problems in lots of places, not just Birmingham, and every council that fed back said it could do more once it had some additional funds through the pilot schemes. That additional funding needs to be rolled out to all local authorities.

Building Safety Bill

Debate between Clive Betts and Matthew Pennycook

Report stage
Wednesday 19th January 2022 Commons Chamber

[Matthew Pennycook]

It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.

As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.

[Mr Betts]

Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?

[Matthew Pennycook]

The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.

I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend the Member for Leeds Central (Hilary Benn) in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?

New Homes: Developers, Housebuilders and Management Companies

Debate between Clive Betts and Matthew Pennycook

Wednesday 5th January 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Betts. I wish all hon. Members and staff present a happy new year, and add my congratulations to the hon. Member for Wantage (David Johnston) on securing this important debate, and on his comprehensive and extremely well-judged introductory remarks.

As expected, given the subject, this has been a wide-ranging debate, with a series of thoughtful contributions informed by the experiences of hon. Members on both sides with new build developments in their respective constituencies. I highlight, in particular, the contributions made by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Warwick and Leamington (Matt Western), who spoke of the importance of local authorities in housing and planning and the imbalance of power between councils and developers, and the constraints that the former therefore face when it comes to meeting the needs of their populations.

My hon. Friends the Members for Stretford and Urmston (Kate Green) and for Halifax (Holly Lynch) spoke powerfully about cases of unscrupulous developers in their own constituencies, as did the hon. Member for Keighley (Robbie Moore) in relation to Harron Homes, and the lack of accountability, at least in the current system, for redress for the serious defects that people face.

In the time available, I would like to expand on three issues that have featured in the debate this morning and that the hon. Member for Wantage touched on in his introductory remarks. First, what is the quality of new homes being built? Secondly, as well as building new homes, do we have a system that supports the creation of sustainable communities where individuals and families can not just live but thrive? Thirdly, are buyers of new build homes getting a fair deal?

I turn first to quality. It manifestly remains the case, despite the problem being both of long standing and widely understood, that a significant proportion of those buying recent new builds in England find, having moved into their new home, that their property has serious defects. As has been made clear today by cases from across the country, to which I could add a great many from my own constituency, we are talking here not about minor snagging issues but about major defects, whether that be in relation to the fabric of the building, unfinished fittings, or faults with utilities.

The fundamental reason why standards remain too low is simple: the housing market is broken and the planning system is in crisis. As the right hon. Member for Rayleigh and Wickford (Mr Francois) argued, the housing market does not have sufficient diversity of supply, and it is not one in which—aside from a minority of homes at the very top end of the market—quality of product is rewarded by price. A decade of planning deregulation has exacerbated that situation, and the relaxation of permitted development is the most egregious example of decisions taken by this Conservative Government that will increase the amount of substandard housing being delivered across the country, with all the negative impacts on health and life chances that flow from that. For all the rhetoric about beauty and the various initiatives announced in the wake of the Building Better, Building Beautiful commission, the present system still overwhelmingly produces, as extensive analysis by the Place Alliance has shown, “mediocre” or “poor” outcomes when it comes to build quality and design.

We of course must robustly challenge developers and house builders to improve their performance, and call out those choosing not to build better-quality housing or using the planning appeals process to force through schemes with the lowest design quality, but there is much more that the Government could do to drive up standards. The establishment of the new homes ombudsman is of course welcome, although the Minister will know the concerns that Opposition Members have about the scheme’s membership. Likewise, we welcome the publication of the new homes quality code. However, given its nature and the fact that it relies on compliance with national standards that currently, I argue, fall far short, we have little confidence that it will lead to the needed step change in developer behaviour. The fact is that until the Government act to ensure that we have a planning system fit for purpose and make greater progress on diversifying the housing industry and delivering a marked increase in output, including in terms of genuinely affordable homes, the numbers seeking redress for serious defects are unlikely to fall significantly.

I turn next to the question of how we ensure that the construction of new homes creates sustainable and thriving communities. As things stand, far too many new build developments are not being delivered with the necessary key amenities and social and physical infrastructure to provide for such communities, and we have heard a great many examples this morning. That is because the present housing and planning framework is simply not conducive to effective place making. Of course, that is not a new phenomenon—indeed, it was remarked upon as far back as the 2007 Callcutt review. But the problem has become more acute in recent years, as a direct result of this Government’s commitment to deregulating the planning system, with the relaxation of permitted development rights in particular preventing councils—the skills, morale and capacity of whose planning departments are at an all-time low after a decade of budget cuts—from co-ordinating development or planning vital infrastructure and services.

The situation is having a direct impact on the provision of environmentally sustainable development—for example, in terms of the relationship between relatively inaccessible development sites and rates of sustainable transport use, or buildings that are constructed on sites without due regard to climate resilience. Again, the fundamental problem is a development model that is geared primarily towards the wants of developers, as opposed to one whose primary purpose is securing what is in the public interest.

When it comes to enabling effective place making, the Government must, as a minimum, rescind the damaging relaxation of permitted development rights and return those powers to local government. Ministers should then turn their attention to what more the Government must do to encourage the creation of thriving communities that support the health and wellbeing of their residents, not least by implementing comprehensive national housing standards so that developers—particularly the volume housebuilders—have no choice but to deliver in core place making.

Lastly, turning to whether those people buying new homes are getting a fair deal, the answer in far too many cases is clearly no, particularly for leaseholders. That is most obvious in the topical issue of ground rents for new leasehold homes. The House will know that the Opposition welcome the Leasehold Reform (Ground Rent) Bill but remain of the view that onerous ground rents must be tackled for existing long residential leases, not just new homes, and we urge the Government once again to reconsider their position on the matter.

With regard to existing long residential leases, we welcome the commitment given by Taylor Wimpey to the Competition and Markets Authority to remove onerous ground rent terms from its existing contracts. The imposition of those terms was wholly unjustified, and it is obviously right that the relevant clauses will be removed. Other developers and freehold investors must also do the right thing and abandon escalation clauses in their leasehold contracts. When he responds, I would welcome the Minister making it clear, for the record, that that is what the Government now expect them to do.

However, the issue of ground rents is not the only way in which those buying new leasehold homes are getting a bad deal. There are a range of issues, from soaring service charges to the unregulated nature of managing agents, that all point to the need not only for measures to address specific problems, but for wider leasehold reform and reform of the current framework for resident control of estate management—issues that I have no doubt Ministers and I will return to on many future occasions.

On protecting the owners of new homes from abuse and poor service at the hands of disreputable management companies, I ask the Minister to tell the House whether the Government intend to implement the recommendations of the regulation of property agents working group, chaired by the noble Lord Best. What progress has been made on that, given that the final report was published back in July 2019?

To conclude, this has been a valuable debate and a welcome opportunity to hear the concerns of hon. Members from across the House regarding new homes. However, it is taking place after almost 12 years of Conservative-led Government, with numerous changes to housing and planning legislation in that time. Yet when it comes to new homes, the outcomes for people and communities, on the whole, have not only not improved but noticeably deteriorated in a number of key areas.

It is self-evident that more must be done to drive up quality and design standards across the industry, to enable and support more effective place making, and to ensure that those buying new homes get a fair deal. I look forward to hearing from the Minister, not least in relation to the planning legislation that we are told the Government remain committed to introducing and on what the Government will do differently to ensure that real progress is made on these objectives.

[Mr Clive Betts (in the Chair)]

I call the Minister. If he could allow a brief period at the end for the mover of the motion to wind up, that would be appreciated.