Affordable Housing

Debate between Emma Reynolds and Julian Huppert

Wednesday 4th March 2015 Westminster Hall

[Dr Julian Huppert (Cambridge) (LD)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this important debate, because there is a huge affordable housing problem. Whether in the social rented sector or the private rented sector, people are struggling. She and the hon. Member for Islington South and Finsbury (Emily Thornberry) are right that the problem is not new; there has been a problem for a long time. The previous Government did not build enough houses, which leaves us where we are now, and the current Government have not fixed the problem, either.

My constituency of Cambridge has an acute problem, partly because we are a success story. We have a booming local economy and very low unemployment, particularly youth unemployment, but we have not had the housing or infrastructure that are needed to keep up. In fact, in previous decades, there was a deliberate policy of not building houses in Cambridge but only building in the surrounding villages, which increased the cost of housing and worsened traffic congestion. That has now changed, but it takes a long time to catch up, so private sector prices are getting ever higher, whatever the category. Rent for a one-bedroom flat in Cambridge is the highest in the entire east of England. The average house costs 11 times the median salary, which prices many people whom we desperately need—researchers, teachers and nurses—out of the housing market.

We have a shortage of social and council housing. As of September 2014, 2,500 people were on the housing needs register. Many people are waiting two years or longer to find a place. There is huge demand. In November, there were 90 bids for a one-bedroom flat, and there were 152 bids for another property in December. We have a shortage, which is not a new thing. The previous Government managed to reduce the number of social and council houses by 421,000 across the country, which is a big problem—a huge indictment.

What hit us perhaps even worse in Cambridge was the ridiculous negative subsidy scheme, in which council tenants’ money was taken from Cambridge to be spent elsewhere. In Cambridge, £1,300 had been taken from every tenant by the time we got rid of the scheme. Over the 13 years of the Labour Government, the sum taken from Cambridge city council was £120 million. In our surrounding district, South Cambridgeshire district council lost £118 million to the scheme. The money was taken directly from council tenants.

Just think what we could have done with that money if we were allowed to keep it. We could have spent £5,000 doing up every council house and still have had enough money to build about 1,000 more. I am delighted to say that the Government have scrapped the scheme, so the city council has been able to build and improve council housing. When we ran the council, we started a programme to invest £286 million, partly from those savings, to build 2,000 council homes over the next decades. Free from negative subsidy, we can make that a reality: we built 146 council homes before the elections last year.

We got through an ambitious local plan, now being inspected, calling for 14,000 new homes by 2031, 40% of which would be affordable, and the Greater Cambridge city deal with a total of £1 billion of investment in affordable housing and transport. I want to go further and faster. Although we lost control of the city council last May, just last week at the budget meeting we pressed the new Labour administration to invest the council’s own money in housing, rather that speculate on commercial property as it wanted, because we think that people in Cambridge need those houses. We therefore argued for £12 million to be put into 100 affordable homes, but sadly Labour decided to stick with its rather more risky approach. That housing was needed locally and would have generated revenues for the council as well.

We will keep pressing, but we also need to do that nationally. My party has the most ambitious plan among the three parties: to build 300,000 homes a year, because the calculations show that replacement needs 225,000 homes as there are more households. If we do anything less than 300,000, we will not be keeping pace and the pressure will continue, albeit perhaps at a slower rate.

[Emma Reynolds]

Given that the Liberal Democrats are part of a Government who have presided over the lowest level of house building in peacetime since the 1920s, what is the hon. Gentleman’s party’s plan for those 300,000 homes a year?

[Dr Huppert]

I am sure that the hon. Lady has heard the discussions. Garden cities would be a large part of that plan, because they are a sustainable way to go ahead. It is no secret that we have wanted to see much more of this, but coalition government is not the same as a single-party, Liberal Democrat Government—I look forward to seeing that at some point.

The other thing we would like to do that we have set out in plans is to give local authorities the ability to suspend the right to buy and the right to acquire. They have played a useful role in many places, but they are incredibly damaging in other areas. They are depleting social housing in places such as Cambridge. A localist agenda would allow councils to decide what is best and ensure that all proceeds are used to build more social housing.

Since we have the Minister here, I would like to pick up another issue quickly.

Private Rented Sector

Debate between Emma Reynolds and Julian Huppert

Wednesday 25th June 2014 Commons Chamber

[Emma Reynolds (Wolverhampton North East) (Lab)]

I beg to move,

That this House recognises the private rented sector’s growing role in meeting housing need; notes that there are nine million people, including more than one million families with more than two million children, now renting privately; notes with concern the lack of stability and certainty that the sector provides to those who rent privately; further notes the increasing cost of renting and the unreasonable letting agent fees levied on tenants; calls on the Government to bring forward legislative proposals to reform the sector by banning letting agent fees being charged to tenants and making three year tenancies the standard for those who rent their homes in the private sector; and further calls on the Government to act on unpredictable rent rises by prohibiting excessive rent rises during longer-term tenancies.

The Opposition have called this debate because we believe that the private rented sector is simply not fit for purpose—in fact, it is more suited to the 1980s than the 21st century. The sector has grown massively in size, and is beyond recognition in terms of the demographics and character of those renting from private landlords. Some 9 million people now rent privately—more than those who rent a social home. More than a third of those who rent privately are families with children, and nearly half are over 35.

Many people who are renting privately do so not out of choice but because they cannot get on the housing ladder and are being priced out, or because they cannot secure a social home. Private renting is not a cheap alternative—far from it. In fact, it is the most expensive type of tenure. On average, people renting privately spend 41% of their income on housing, compared with 30% in the social rented sector and 19% for owner-occupiers, but that extra expense is not buying greater stability or higher standards. In fact, those who rent privately are more likely to live in a non-decent home than in any other tenure. We have one of the most short-term, insecure and unstable private rented sectors in Europe.

[Dr Julian Huppert (Cambridge) (LD)]

The hon. Lady is right to highlight the problems with the private rented sector. I presume she is aware that I tabled a private Member’s Bill on this subject last year. Does she support its contents, and can we work together to make some progress on it? Many people across the House share these concerns.

[Emma Reynolds]

There is cross-party concern on this issue, but the question is whether the Government are willing and able to take action; I am afraid that up until now they have not been.

--- Later in debate ---

[Emma Reynolds]

The hon. Gentleman raises a valid point. According to research by Shelter, which has conducted a thorough piece of work on the issue, only one landlord in 120 that it surveyed said that they had noticed an increase in agency fees and had passed that on in full to their tenants. Therefore, to be frank, the change we are suggesting is not that big. It is pretty big news for tenants, but it will not make a massive difference to the letting agent industry. It will have to change its business model slightly, but what it has done, especially in the years of the global financial crash, is shift ever so slightly, often little by little, the costs of the tenancy on to the tenant, who does not have the power and leverage to negotiate with the letting agent. The tenant sees a property that they like. They do not choose the letting agent. They do not have leverage over the negotiations. The landlord has that leverage, and the landlord should do the deal with the letting agent on the fees, including on the fee that the landlord pays the letting agent to manage the property.

[Dr Huppert]

Will the hon. Lady give way?

[Emma Reynolds]

I will not, as I have already given way to the hon. Gentleman and others want to speak.

The sad truth is that Ministers and some Government Back Benchers know that there is great concern about the instability and insecurity in the private rented sector, but they are simply unwilling to do anything about it. They have paid lip service to the concerns of generation rent, but they lack the courage of their convictions to bring about any meaningful change.

The Government have claimed that they are in favour of long-term tenancies and predictable rents. As I said, the Secretary of State has talked about inflation-linked rent rises, but four years into this Parliament, they have failed to act. I urge right hon. and hon. Members on the Government Benches to look carefully at our proposals to make three-year tenancies the norm, to put a ceiling on rent increases and to ban letting agent fees charged to tenants. It would be far better for the Government to take action now, but if they continue to ignore Generation Rent, the next Labour Government will not.

--- Later in debate ---

[Dr Huppert]

I am sorry; I have given way twice so I am running short of time.

I hope we can go forward and find alternatives, with greater agreement between landlords and tenants, so that people can turn their houses into homes.

Another aspect that concerns me is the status of guarantors. When they rent, many people are told to find a guarantor who will apparently underwrite the cost of their rent. That is discriminatory for people who do not have somebody who has sufficient income to provide such a guarantee. I am aware of cases in Cambridge where people whose parents live in Scotland have been told, rather bizarrely, that a guarantee from somebody in Scotland is not acceptable because it may not be legally binding. I hope the Minister can clarify that that is not the case. There are a number of students from Scotland who should certainly be able to rent places in Cambridge.

Letting agent, fees are a serious issue and make people’s blood boil. I agree with Shelter and many of the 9 million people who rent that fees are out of proportion. That is why I proposed ending any permission to charge above-cost fees. They should not be allowed. I was interested in the proposal from the Opposition, and I voted for an amendment, but for reasons that I do not understand, the Labour amendment specifically excluded any controls on fees that could be charged for credit checks. I hoped to press the shadow Minister on that. It is a great flaw in the Opposition’s proposal as it means that letting agents who do not wish to comply will charge vast amounts for a credit check and shift all the money on to that.

[Emma Reynolds]

rose—

[Dr Huppert]

I will take an intervention, but it must be quick.

[Emma Reynolds]

I shall be brief. I am sorry I did not take the intervention earlier. The tenant would pay up front, otherwise they might be able to walk away, but they would be refunded if they agreed to the tenancy.

[Dr Huppert]

That still seems to be a recipe for letting agents wilfully to turn people down on the basis of their credit checks, or to be very difficult in order to make money. That is the problem I have with that proposal. Letting fees should be limited and capped, but I am happy to talk further to the hon. Lady about that. I expect that 15 seconds is not quite long enough to resolve the disagreement on that.

We should get rid of letting fees. Studies in Scotland by Shelter which have been mentioned found that the increases in rent that one might expect did not take place.

Transparency, to which the Government are committed, is welcome. I support that. There is such an imbalance in power between the tenant and the landlord—