Julian Huppert
Main Page: Julian Huppert (Liberal Democrat - Cambridge)Private Rented Sector
Julian Huppert Excerpts(9 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
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.
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.
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.
Dr Julian Huppert (Cambridge) (LD)
It is a pleasure to have the chance to speak in this debate and to follow the hon. Member for Southampton, Test (Dr Whitehead). This is an important issue nationally and in my constituency. We have a huge number of people renting, and that is reflected across the country. For the first time there are more people in the private rented sector than the social rented sector, and there are still too many problems in the private rented sector. It is incredibly expensive, in many cases exploitative and in some cases unsafe.
Some people choose to rent because it suits their lifestyle, and that is something that we should allow and support. Others have to rent because they simply cannot find the deposit for a mortgage. The rented sector is now not much easier to get into than property ownership. I have been contacted during the debate by someone whose fees to rent a new, not particularly large, property come to £3,700 cash up front. That is not atypical. It is a significant amount of money for many people to find. Many agencies also impose exit charges. I have also been contacted by people who face having to pay a large amount of money simply to leave a property. People can find themselves trapped in inappropriate or inappropriately priced facilities.
Many people have a fantastic experience with landlords. There are many decent landlords out there who behave correctly. The challenge is those who do not, and I welcome the focus that is being placed on that problem. I was delighted to be at the launch of the Generation Rent manifesto and have a chance to speak about how important this is to me and my party and to talk about some of our party policy proposals.
I introduced a private Member’s Bill in the previous parliamentary Session, which sadly went the way of most private Member’s Bills in this place. It dealt with many of the issues that we are talking about today such as the regulation of letting agents, accreditation of landlords, an ombudsman for the private sector, longer tenancies and getting rid of above-cost fees. There are disagreements about the details of how one could introduce such measures, but I hope that we can resolve them.
The heart of the problem is often just that rents are too high. The fees and everything else are a problem, but the overall level of rents is just too high, because demand is so much greater than supply. I see this in my constituency. The solution has to be to fix the supply—to make more housing available. Unfortunately, that has not happened. Everyone knows the figures. Under the previous Government, the amount of social housing went down by 421,000. We need those houses; we have to build many more. Hardly any council houses are being built, which is a huge problem.
Under the previous Government, council tenants were taxed and the money was taken away from Cambridge and could not be used to repair council houses or build anything new. The Liberal Democrat city council has worked to build many more houses. There has been a huge increase in the number of affordable homes and social homes, and existing council houses have been improved. There is also a scheme to build 2,000 more council houses—something I am incredibly proud of. Unfortunately, Labour took control of the city council at the most recent elections and one of its first acts was to scrap a scheme to improve council houses, many of which are not wheelchair accessible and not fit for purpose. I hope that it will not also scrap our scheme to build 2,000 council houses because people want to get on with that.
Greg Mulholland (Leeds North West) (LD)
Like my hon. Friend’s, my constituency has a large number of privately rented homes. Does he share my disappointment that Leeds city council is not using its new powers to borrow to buy existing housing stock, which would be a much quicker way of delivering new social homes? Surely all councils should be considering that.
Dr Huppert
I do not claim to be an expert on the situation in Leeds, but my hon. Friend makes a good point. They should be doing such things. In Cambridge we charged higher council tax for empty properties instead of giving a discount, as was previously the case. People paid less if they brought a property back into use. It is hard for people who are desperately looking for a house to know that there are empty properties around.
I will not go through everything I spoke about in my speech on Second Reading of my private Member’s Bill. I went into more detail about the need for an ombudsman and for accreditation schemes. I prefer accreditation schemes to a national register because they would be cheaper, more effective and less bureaucratic and would avoid problems with letting property on a more occasional basis. We are agreed that we need a better system, and accreditation could work.
The hon. Member for Southampton, Test (Dr Whitehead) spoke about houses in multiple occupation. There are some good examples of HMOs, but others are a serious problem and do not comply with basic health and safety regulations. They are an essential part of the housing mix in a place like Cambridge. We rely on them to house people, and they do a good job. Yet Labour councillors have proposed to cap the number of HMOs and change the definition to any house with three people from two unrelated groups. Driving younger people out of HMOs would simply slash the supply and make it even harder to house people in my constituency.
Lilian Greenwood (Nottingham South) (Lab)
Like me, the hon. Gentleman represents a university city with a great number of HMOs. Does he share my concern that the definition of HMO—that it has to have at least five rooms and more than three storeys—means that many properties are not licensed? The standards in many of them are very poor, and that is precisely why councils such as Nottingham City council have introduced additional licensing schemes that cover a wider range of HMOs than those covered by the basic legislation.
Dr Huppert
I am happy to accept that some places should be looked at more, and I am about to talk about some of the safety issues. The question is whether the council should introduce some sort of accreditation scheme, as Cambridge has, to make sure that HMOs are safe, or ban them. I hope that the hon. Lady would not suggest capping the number of HMOs in her constituency because she knows as well as I do the problems that that would cause for people looking for somewhere to live.
We have problems with safety in the private rented sector. There are far too many unsafe properties. In particular, we have problems with electric fires. There are about 17,000 electric fires in the private rented sector and it seems bizarre that there are no requirements for them to be safety checked. We should introduce such a requirement; it is not excessive red tape, it is a simple safety measure.
We want a fair deal for tenants. One group that we also need to consider is people who rent from private landlords and pay their rent using the local housing allowance. This was touched on earlier. There have been shocking cases of people being told that they cannot rent because they are on benefits. That simply should not be tolerated. We should not let landlords exclude a large number of people who need to find housing.
We have a particular problem in Cambridge. The local housing allowance was introduced by the previous Government with broad rental market areas. One of the problems was that the rent levels for Cambridge were set by averaging places as far afield as Haverhill and Littleport, which are both much further out and have lower rents. It became impossible for anyone to find anything to rent in Cambridge on the LHA amount. My predecessor fought strongly against this when it was set up. It was highlighted by the Work and Pensions Committee, which emphasised the specific problems in Cambridge and Blackpool. Those problems were not fixed. The message that the Labour Government sent to people in Cambridge on benefits was, “You can’t afford to live in Cambridge. Go somewhere else.” They made Cambridge unaffordable and increased rents in places such as Littleport and Haverhill. It was a poor scheme and I am pleased that the Government have finally, after much effort, launched an independent review of the adequacy of LHA levels and increased the levels in Cambridge by 4%—well above inflation. That is a start.
There is agreement across the House that we should make it easier for people to have longer tenancies. The stability is worth while. Some time ago in our policy paper, we in the Liberal Democrats proposed mini-leases, with new fixed-term leases of at least three years after a probationary period.
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
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—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Time is up. I call John McDonnell.