Tenant Fees Bill (Second sitting)
Melanie Onn ExcerptsThursday 7th June 2018
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 June 2018 - (7 Jun 2018)
The Chair
Members will now ask you questions. I should point out that this is a very unusual Committee, in that the Minister gets to have some fun and ask you questions, which will probably happen towards the end.
Melanie Onn (Great Grimsby) (Lab)
Q
Alex McKeown: One of the biggest issues is funding—I am sure that has been said many times, and Councillor Blackburn will say the same. There is a lack of expertise within trading standards when it comes to legislation that relates to letting agents. At the moment, not many boroughs or authorities are enforcing the legislation.
I watched Isobel Thomson and David Cox give evidence on Tuesday. Isobel did a survey last year of 42 boroughs to see who had issued financial penalties, and only 7% had done so—and I have worked for four of those. I am the person issuing them, so I know the pitfalls and issues with the current legislation. I have made the mistakes, but I have also achieved quite a lot in what I have done. My knowledge is very different because I do this every day. This is what I do 100% of the time—dealing with this legislation—whereas most trading standards authorities have more than 250 pieces of legislation that they have to deal with. So there needs to be more expertise; there needs to be more funding in order to train trading standards to enforce this legislation.
Melanie Onn
Q
Alex McKeown: Do you want a specific on something?
Melanie Onn
Yes.
Alex McKeown: Something that I have picked up on is that, at the moment under the Consumer Rights Act 2015 and the redress scheme legislation, the burden of proof is on the balance of probabilities, in terms of issuing these financial penalties. What you are trying to say is that this is going to be self-funding, and at the moment with the Consumer Rights Act 2015 that has the ability to be self-funding, because all we have to do is look at a website and we can see whether it is displaying the correct information or not. It is easy—we have to prove it on the balance of probabilities, we download the website and we have the proof.
In this Bill, you are asking for a criminal burden of proof for a civil financial penalty, and that is going to scare people off; that is going to scare trading standards off. They are not going to want to prove beyond all reasonable doubt that a tenant has been charged a fee. Then, you are also relying on the complaints to trading standards. We do not get that level of complaints to trading standards in relation to tenancies. Then you have to tell the tenant, “You have to give a witness statement on the fact that you’ve been charged a fee”, and they are going to say, “But we might get thrown out of our house. We don’t want to give you a witness statement.” To have it beyond all reasonable doubt, we are going to be up against it, and it will not be self-funding.
Melanie Onn
Q
Councillor Blackburn: We need to be clear that national trading standards is responsible for appointing a lead authority in terms of enforcement, because that is very important in directing and co-ordinating action. Their current partner—their current lead agency—is a Welsh local authority in relation to housing matters and, of course, because this Bill affects only England, it will not be possible simply to ask that authority to absorb that.
However, finance is also an issue. At the moment, £500,000 is promised to assist in the up-front costs of setting these schemes up. The average local authority trading standards budget is £671,000 a year, so that £500,000 spread across 340 local authorities is unlikely to fill the gap that exists. That is extremely important.
There is also a capacity-building issue within the trading standards profession. As it is, 64% of trading standards authorities are reporting that they have difficulties in recruiting and retaining people, and that issue needs to be looked at nationally. The LGA stands ready to assist in that process and will work with the Chartered Trading Standards Institute, but there is a demographic time bomb in there as well, about the average age of trading standards officers. As councils have cut back on trading standards because of the overall financial pressures on local authorities, it is not seen as a long-term, safe career, if I can put it that way.
Melanie Onn
Q
Alex McKeown: No. At the moment the rogue agents just fold their companies and re-phoenix, or they simply do not pay. There was a case in Redbridge a few years ago. A rogue letting agent was issued with a £5,000 fine by the local authority three times and they carried on trading. They said, “We are not going to pay it and there is nothing you can do.” Obviously, there are criminal sanctions under the Consumer Protection from Unfair Trading Regulations 2008, but when it comes to the fines, the agent continued to trade. They were featured on the Channel 5 programme, but they continued to trade. So the fine is not enough of a deterrent because, ultimately, they just folded their company and the directors walked away.
Helen Hayes (Dulwich and West Norwood) (Lab)
Q
The Bill mentions the need for effective communication with tenants about their rights. We know that the retaliatory eviction legislation is not working and not functioning. How do we get to a framework of protection for tenants that ensures people are sufficiently aware of their rights and also confident enough to come forward and report breaches so that the agents and landlords responsible for those breaches can be put out of business?
Alex McKeown: That is quite a difficult one. The tenants are always going to be scared of being thrown out because so many letting agents do not care about illegal evictions. Again, the housing teams are under so much pressure that they cannot take action when there is an illegal eviction and someone is locked out of their house and loses everything. I go back to having fines against directors as a deterrent and then the criminal sanctions further down the line. Money is always a deterrent to people. They prefer not to pay. They would prefer to have a company criminal record than pay out £30,000. As my colleague says, criminal prosecutions are expensive. It is down to resources, again. What we have often found with the criminal prosecutions is that even with some of the safety aspects, the fine will be £2,000, so we might as well go for the civil penalty—but it is difficult protecting those vulnerable tenants.
Councillor Blackburn: Perhaps I may briefly reflect on our experience in Blackpool of having a very high-profile scheme of selective and additional licensing, working with the local media, and using our own communications channels to get across to people exactly what the council are doing—taking journalists and other interested parties out with us, as has clearly been done in Newham, to see exactly what happens. That has had twin effects. It has raised awareness among tenants that the council is involved and is on their side rather than the side of the landlord. It has also had the effect of some of the worst landlords and letting agents deciding that it is easier for them to go and do business elsewhere. Again, on the awareness-raising side, I think there is a great deal we can do to communicate the fact that “The Government and your local council are on your side here, but you need to take us into your confidence and trust us.”
Alex McKeown: I will just add this: we have all mentioned HMO licensing, selective licensing and additional licensing. I started dealing with letting agents in Newham, so I am well versed in licensing, and I think it works very well in areas with a high percentage of rogue agents, because they will not get the licence, and there is that way forward.
The other thing I will mention is clause 12, which says that trading standards will assist tenants to get their prohibited fees back. As to the likelihood of that happening—it just is not likely. That is one of the problems. However, the Housing, Communities and Local Government Committee report refers in paragraph 99 to tenants being able to go to the first-tier tribunal. What I think would encourage tenants to complain to trading standards and give us statements would be if we could serve our penalty charge notices and, a bit like in a criminal prosecution, add the compensation order for the tenant to our case in the tribunal, rather than saying, “We are going to go to the tribunal with our penalty charges”—and then we have to start a new action in the county court.
It seems disjointed. If we can say to the tenants, “We will get your money back. We are going to deal with this. We will put it into our case, so it all goes into the same tribunal hearing,” I think that will work better. I think that will assist vulnerable tenants a lot more.
The Chair
I am jumping in, because I can see we are going to run out of time. I know the Minister is chomping at the bit to have some fun with you, but I am sorry, Ms McKeown, I am going to have to go to the shadow Minister.
Melanie Onn
Q
The Chair
As briefly as possible, please.
Alex McKeown: I did not look at the holding deposits, I admit, so I cannot answer on the holding deposit aspect and the removal of the criminal sanction on that. You asked about client money protection.
Melanie Onn
Yes, in terms of moving enforcement of client money protection schemes from district councils to county councils—it is probably a question for Councillor Blackburn.
Councillor Blackburn: There needs to be substantial flexibility in there. As Mr Goodwill commented before, in large counties, the number of cases that will be dealt with in one small district council could hugely outweigh all the other cases that are dealt with across the rest of the county council. There need to be options for local authorities to work together, if they so wish, or to appoint one lead authority—perhaps one district council in a county council, or the county council itself. There is not a one-size-fits-all answer to that question, because the way in which local authorities operate and the amount of expertise differ so much.
The Chair
I am sorry; it is very frustrating that we have such little time, but the Minister has been very patient.
The Chair
Thank you. We will shortly move to questions from Members. This is a very important part of the Committee system, because it allows Members to be better informed before going into the line-by-line examination of the Bill, which they will start this afternoon. It also gives the Minister the opportunity to put some concerns to you as well. We will start with the shadow Minister.
Melanie Onn
Q
Rhea Newman: We accept the principle that there may be certain circumstances in which a tenant should cover the cost of a default, but we want to ensure that there are sufficient protections in the Bill to ensure that, first, this is part of a fair term in a tenancy agreement, and secondly, tenants cover only the actual cost of the default. We welcome that the Government, as a result of the pre-legislative scrutiny, have already tightened the definition to limit payment in the event of a default to the landlord’s loss.
However, we think that that needs to be tightened further, so that the payment covers only the landlord’s reasonable and proportionate loss, because what could be included in loss is currently too broad. We do not think that landlords’ and agents’ business costs, which could include their time, should be factored into that, and we also think that charges for things like sending letters or making phone calls to chase late rent are unfair. Tenants chasing a landlord to fulfil their obligations cannot charge for every communication they send, so we think that there should be parity in those principles.
We think that that definition needs to be tightened further. We also think that, through regulations, the Government could set out clearly the types of things that are allowed to be charged for as a default fee, and impose a requirement on landlords and agents to produce evidence of their costs when trying to charge a default fee. That should be shown to a tenant up front, which would make it easier for them to challenge if anything looks unfair.
The Government are currently proposing to produce non-statutory guidance. We do not think that that will be strong enough, because it will not be binding on landlords and letting agents. Putting it in regulations will make it easier for tenants to challenge and strengthen the hand of trading standards when trying to enforce the Bill.
Katie Martin: I support everything that the witness from Shelter has said. The only thing I would add is that we have seen attempts to use guidance for enforcement in other sectors. For example, in the energy sector, Ofgem introduced guidance around back-billing. That was found to be ineffective, so it had to introduce rules around that. That is also true of council tax debt collection practices. There are other examples of guidance not being followed, which has then required stronger measures. We think that that should be pre-empted and that it should be written into the proposed legislation at this point.
Dan Wilson Craw: I agree with what has been said. I am particularly worried that challenging default fees that are unfair or that relate to unfair terms in a contract will be very difficult for the tenant. Because it is not clear cut, trading standards might not devote resources to investigating it, so we think something stronger than guidance is necessary.
Izzy Lenga: We need a bit more clarity on the reasonableness of charges. There is an issue for students in particular around garden maintenance. There is quite a big disparity as to whether the cost would be just for a gardener or for a whole landscape change. That difference can be a massive cost and that needs a lot more clarity. Anecdotally, I remember that when I was a student we spent two days just plucking weeds out of my garden, because we did not know what we were meant to do and what the cost could be. That clarity would help students a fair bit.
Melanie Onn
Q
Dan Wilson Craw: We think it is quite a big barrier. We have done some work and we published a report in March on tenancy deposits. The average deposit is about £1,000, and you have to find that as well as the current £400 average letting fee. The majority of tenants will get their deposit back in a number of weeks, but only after they have moved out of their current place and into their new place so, as you say, they are out of pocket. One of our proposals was to passport deposits or to enable a portion of the deposit to be passported from the first tenancy to the next one. The Residential Landlords Association is looking at that as well. This Bill is a great opportunity to explore that in further detail.
Rhea Newman: We support what Dan said about up-front costs: they are a significant barrier for tenants. In our most recent private rented survey, moving costs were about £1,400 on average, and for those who paid letting fees, the average fee was about £250. We regularly hear from our advisers across the country about what a challenge those up-front costs pose for people who are trying to secure a new tenancy, particularly lots of tenants we support who might be on lower incomes.
There is a distinction to be made between what we are referring to as up-front fees that are non-refundable and the refundable bits in the Bill, which are the holding deposit and the security deposit. We support proposals around deposit passporting and that is an area that certainly merits further attention, but it is perhaps beyond the scope of the Bill. Our priority for the Bill is to ensure that the existing provisions are clear and enforceable so it can have the maximum impact for tenants. There is further work to do on other up-front costs, as Dan highlighted.
Katie Martin: Clearly, up-front costs, whether they are refundable or not, are a big barrier for people who are moving within the private rented sector or entering it. We would like that to be tackled. If the cap on the deposit was brought down to four weeks, as we recommend, that would help in respect of dual deposits as well.
Izzy Lenga: I echo my fellow panellists. Our priority campaign this year at the NUS is “Poverty Commission”. We know that students are really struggling with money and are having to work two or three jobs to find where their next month’s rent will come from, on top of their studies and any extracurricular activities. Such things place an added burden and stress on people that in turn can have an impact on their mental health, their ability to study and so on. It affects students financially, but also academically and in their whole welfare.
Melanie Onn
Q
Izzy Lenga: A specific challenge is definitely affordability. That is a massive challenge that students face. As I mentioned earlier, the fact that students are too often living in poverty and do not know where their next month’s rent will come from really affects them.
Students often do not know their rights as tenants. That is something that we really try to train them up on. The NUS runs a “Ready to Rent” scheme and encourages student unions to do the same. Landlords often take advantage of the fact that a lot of students are first-time renters, so it might be their first time looking over a contract, for example. There is also the question of the effect on students who are estranged or do not have the necessary documents, such as a passport, and on working- class students who have lived in social housing their whole life and whose families have not filled in contracts and stuff like that for housing.
Those are big things. Another is that the quality of housing for students just is not up to par. People joke, “It’s student accommodation—it’s meant to be damp and in squalor.” We did a report this year about fuel poverty. Students are living in increasing fuel poverty and just cannot afford to heat their own homes, because of the price and because they do not know they can change energy supplier. Things like that are the key issues for students with renting at the moment.
Melanie Onn
Q
Dan Wilson Craw: Do you mean in terms of the general quality of housing?
Melanie Onn
Under the Bill, how will people be able to enforce the rights they are being offered in the context of housing legislation as it exists at the moment?
Dan Wilson Craw: A tenant has two options apart from simply saying to the agent, “This fee is unfair.” The tenant can say, “If you don’t retract it, we’ll report you to the council,” or, “We’ll take you to the first-tier tribunal.” Those are the two options they have, in essence. The tenant can go to the council’s trading standards or to another authority and rely on officers to carry out an investigation, or take it upon themselves to make an application to the first-tier tribunal. We need that back-up process, but all a tenant can get through that process is the fee back, so we think there is merit in awarding a higher form of compensation to a tenant who goes through that process. That would create more of a deterrent for an operator who charges an illegal fee, it would potentially save the council work, and it would give the tenant something back for the effort they put in.
Rhea Newman: Enforcement starts with having a really clear ban in the first place. The clearer the ban is up front in terms of all the different provisions—for default fees and refunding holding deposits, and the ban on up-front fees—the easier it will be for landlords and agents to know what they can charge and for tenants to know what they should pay. When the Bill comes into force, there will need to be clear communication to all parties, so that it is very clear what should be charged and what should be paid.
Once the Bill comes into force, it may be quite difficult for a tenant to challenge an unfair fee charged by an agent during a tenancy. That is one of our concerns about default fees. There is concern among tenants, who do not want to raise issues with the landlord during a tenancy for fear that they might face a retaliatory rent increase or eviction. There are problems with challenging unfair fees once you are in a tenancy.
We have concerns that few tenants will use the option to go to the first-tier tribunal. Citizens Advice has done some research about how likely tenants are to take formal routes of redress, such as going to court, for disrepair issues. We know that few tenants will use that option, but it is important that it works as well as possible for those who can be supported to use it. I know you heard from local authorities this morning. I am sure they made the point about ensuring they are sufficiently resourced to enforce the ban. That will be a key part of it.
I come back to the point that the clearer the ban is in the first place, the easier it will be for all to enforce it. The evidence from Scotland really points to that. The reason the ban needed to be clarified in Scotland in 2012 was that the provisions were not clear in the first place. Even after 2012, Shelter Scotland has been running a campaign to help people to reclaim their fees. That just highlights how important it is to get it right in the first place.
Katie Martin: We think that it is really important to get enforcement right. We are concerned about the reliance on trading standards in terms of resourcing and the willingness of authorities to take action. We think the market is very much skewed in favour of landlords and agents, and that tenants actually have very weak bargaining power. As we have pointed out, tenants feel like they are intimidated and do not want to take action against their landlord for fear of retaliation.
We very much support the Government’s moves to introduce mandatory redress membership and we want that to happen as soon as possible, but we do not think that that will fix all the problems. We think that trading standards needs to be adequately resourced. We need to make sure that the requirements in the legislation are really clearly set out so that we hopefully do not get to the point where we have to resort to this kind of redress, but if that happens, it has to be adequately resourced and tenants need to be supported.
Mr Goodwill
Q
Katie Martin: We have done some research on this. Our most recent research found that currently only 2% use their security deposit as their last month’s rent, and 34% have a deposit of four weeks, so it does not stack up as an argument for us. We think the benefits of bringing it down to four weeks would far outweigh the risks.
Tenant Fees Bill (Third sitting)
Melanie Onn ExcerptsThursday 7th June 2018
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 June 2018 - (7 Jun 2018)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Mr Sharma. I welcome all Committee members to the first of our line-by-line sessions. I hope that we make constructive and speedy progress through the various amendments and clauses.
The purpose of clause 1 is to ban landlords from charging any letting fees to tenants or other relevant people in connection with a residential tenancy in England, which very much achieves the overall aim of the Bill. In addition, the clause provides that landlords must not require a tenant to take out a loan in connection with a tenancy. Our approach to implementing this policy is to ban all fees, with the exception of certain permitted payments outlined in schedule 1, which we will no doubt discuss later.
The clause also provides that a landlord must not require a tenant to procure and pay for insurance or the services of a third party in connection with a tenancy, with the exception of utilities and communications services. That prevents landlords from circumventing the ban and charging fees by other means.
Melanie Onn (Great Grimsby) (Lab)
What does the Minister think about the terms of utilities and communications contracts that tenants may be entered into?
Rishi Sunak
Relatively straightforwardly, if a landlord has a utility arrangement in his or her name, as is common, it may be more sensible for the contract to stay in the name of the landlord but for the payments to be made by the tenant. That is what the clause refers to. That is reasonably common—indeed, it is accepted practice—and it is important that the Bill allows for it, as it is often cheaper and easier for all parties concerned for that to happen than for the name of the owner of the contract to be changed.
Rishi Sunak
As I am sure Committee members know, it is common for there to be hassle, time and cost involved in changing providers between people. I have personal experience of doing so for a satellite service and of adding my wife’s name to something. Those things can sometimes take time, and it is easier for all parties if they stay in the name of the landlord, with an agreement between parties that the tenant pays for the services as they are incurred. Indeed, it is common, generally accepted practice for the tenant to be obliged to pay for their use of such utilities as electricity or gas, as measured by inspection of the gas meters. That is what is allowed for under the clause.
Rishi Sunak
That is a separate question between a landlord and tenant in any rental contract. The clause deals with the question of payment. It is important, if the Government are attempting to ban payments being charged to tenants, to note that there are certain exceptions. The clause captures the fact that, on occasion, tenants will continue to pay for the utilities they consume, and that that should not be captured by a ban on fees. It would obviously not be right for tenants to use electricity and gas without the landlord being able to make an appropriate charge for them, if that was how things were arranged.
In the Bill, the phrase
“in connection with a tenancy”
is defined deliberately widely. Requirements in consideration of the
“grant, renewal, continuance, variation, assignment, novation or termination”
of a tenancy that are included in the terms of the tenancy are all covered. That is to ensure that fees cannot be charged at any point during the tenancy, including upon exit. That addresses the concerns raised during pre-legislative scrutiny that the previous drafting, banning fees that were a condition of a grant in renewing or continuing a tenancy, might still allow fees to be charged at the end of a tenancy. That would have been contrary to the policy intention.
Landlords also cannot require outgoing tenants to pay for a reference, in the same way as employers do not charge their employees for a reference today. The clause also applies to a person acting on behalf of a tenant, and a person guaranteeing a tenant’s rent. Tenants and such persons are referred to as “relevant persons”. The clause is one of the principal clauses in the Bill, and as such I beg to move that it stands part of the Bill.
Melanie Onn
It is a pleasure to serve under your chairmanship this afternoon, Mr Sharma, and to join the Minister in debating a Bill in our present roles for the first time. I am sure that it will be a suitably memorable occasion.
The private rented sector is the fastest growing sector of the housing market. The number of private renters is predicted to grow by 24% by 2021, which means that one in four households will be renting rather than in owner occupation in three years, according to a report on the PropertyWire website last June. PropertyWire says that property rental
“has doubled in the last 10 years or so, and it is expected to continue to grow to 5.79 million households while 68% of renters still expect to be living in the rental sector in three years’ time, according to the latest tenant survey from real estate firm Knight Frank.”
PropertyWire also says:
“The report says that growth of the PRS has been spurred by conditions both in the housing and labour markets. Younger workers especially are taking advantage of the increased flexibility of renting as a tenure which allows moving between locations without any of the costs associated with buying or selling a property.”
It is clear, therefore, that far from being a nation of homeowners, we are shifting towards being a nation of renters, with about 4.7 million people renting their homes—some by choice, and some because there is no other choice. We must make absolutely sure that regulation of the sector is fit for purpose in the 21st century.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. The future that my hon. Friend describes has already come to pass in many parts of the country. At least a quarter of properties in Cambridge are now in the private rented sector. The Bill is welcome in many ways, but I worry that it will not necessarily keep up with the changing business models emerging in many places. There is a tendency for landlords to find new and imaginative solutions. Does my hon. Friend worry, as I do, that some internet platforms and so on could provide avenues for people to get around the Bill?
Melanie Onn
That is an important point in considering the sector, which I will deal with later in my comments.
The Minister must be alive to ensuring that the Bill is future-proofed. We have heard evidence this week about online providers of landlord services who offer a much more flexible service to their clients—very different from that provided by the traditional estate agent and letting agent sector. The Bill must be right for the future, because the sector is fast-moving and swelling to meet housing needs that the state is currently not providing for in either type or scale. The needs of tenants must have a stronger role than in the past.
It is right that the clause sets out everything that a landlord must not do in relation to tenants, but it is sad that we have to be here prescribing rules to deal with those landlords who have not treated their tenants well. The Government have sought to limit the potential for a loophole where landlords simply require prohibited payments to be made to a third party. The clause sets the expectations that the Government have of landlords and attempts to deal with the relative position of power that landlords have held over tenants, whether that has always been fully recognised or not, to bring about an overdue rebalancing.
The Opposition recognise that the Government have previously taken steps to ensure that bad landlords have nowhere to hide. There will be a record of landlords who continue to flout rules on the quality of housing or overcrowding and of those who have certain criminal convictions. While it is slightly off topic, I cannot miss the opportunity to ask the Government to take steps to make that register more widely available so that tenants’ choice is made part of the country’s housing availability process.
As we heard in evidence this morning, an increasing number of tenants have for too long found themselves with the smallest of bargaining chips in their relationship with their landlord. On Second Reading, I talked about the inherent difficulty of the situation, with landlords, often seeing their property as an asset on which to secure returns, set against the needs of tenants who, in the absence of being able to secure ownership, wish to make their house their home.
The Government have made an exception to prohibition, including contracts for utilities and communications services, which is why I asked the Minister the questions I did with some interest. I understand that utility and communication services may be in place at the start of a tenancy. Indeed, some purpose-built to-let properties have all amenities covered, with free wi-fi provided to entire blocks, as an incentive or assistance to tenants, and as one less thing to worry about, with landlords not wanting to have their tenants wait around for engineers to arrive—or not, as the case may be—and deal with installations. However, is it not the case that the contracts that landlords have adopted for their properties may sometimes not provide the best value—for example, where prepayment meters are used or the tariff is at a general level—resulting in excessively high bills? That could come as a surprise to some tenants.
Prepayment meters are particularly common at the lower end of the housing market, and they bring their own problems. Once the equipment is in place, it is difficult to change provider. There can be charges for removals—no longer, I accept, from the big six—and if the account is in deficit, customers cannot swap between providers, let alone move to a billing system for their energy needs. That is important because, as the PropertyWire report goes on to explain, there is growth in the private rented sector at the more economic end of the housing scale at a time when the sector as a whole is changing.
With prepayment meters, it is not the tenant but the landlord who is the customer, but the tenant is tethered to the landlord’s choice of how their energy will be supplied, and those on low incomes or benefits are stuck with the most expensive method of energy bill payment. The Bill says—I paraphrase—that a landlord must not require a person to enter into a contract with a third party in connection with their tenancy, but that does not apply if the contract is for the provision of a utility to the tenant, or for the provision of communication services. For prepayment meters, the tenant is not required to enter into a contract—they have absolutely no choice in the matter. Worse than that, they are unlikely to ever have a choice in the matter so long as they reside in that property. They will remain tied into something that has been paternalistically decided for them.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
Is it not the case in many cases that there being a key meter or a prepayment meter in the property is due to the actions of a previous tenant, for whom the meter had to be installed because of an unpaid bill? It is then very difficult for either the landlord or the new tenant to change that situation.
Melanie Onn
The hon. Gentleman raises a valid point. It is certainly the case that landlords often find themselves feeling that they have no other option but to put a prepayment meter in to avoid ending up as the recipient of all the bad debt that may well have been run up. However, I think it has become a bit of a choice for some in the sector, particularly at the lower end of the market, and by doing so they devolve themselves of any more responsibility in relation to their tenants. That is a shame, because it means that a good relationship is then not built up between tenant and landlord and there is not the element of trust, or of being treated like an adult, that one might hope for in that situation.
Landlords come in all shapes and sizes and are at variance across the country in the type and number of properties that they hold. There are landlords who are not resident in this country; entrepreneurial, buy-to-let landlords with small portfolios; those who inherit a family home on the death of a loved one; those who find themselves with an additional property after meeting a new partner; professional landlord companies that purpose-build to cater for particular groups, such as students or young professionals; speculative landlords who devolve all responsibility to agents; and those who live in the next street and keep a very close eye on things. Subsection (4), which relates to utilities and communications, needs to be clear to all those different types of landlords. Does the Minister think that that is the case?
That clarity is especially important because there is continuing growth of large-scale investment in build-to-let or multi-housing, which is professionally managed rental accommodation, usually at scale, in purpose-built blocks. That market, which only emerged in force in the UK in very recent years, is now worth an estimated £25 billion. Will tenants be protected against being required by these large corporations to enter into a contract that may not be the most economical, and that may take away their ability to choose between providers?
What will happen if there are difficulties in the contract that tenants have been required to sign up to? How easy will it be for the tenant to extract themselves from that contract—or could they prohibited from doing so if it is connected to their tenancy? For example, if they want to live in a building, will they have to go with Virgin for broadband or Npower for gas and electricity—other good broadband providers and power and energy suppliers are available—as the landlord gets a special tariff when those are supplied to the whole building? That would be entirely outwith the tenant’s control. What are the Minister’s thoughts on that?
Young professionals aged 25 to 34 make up the largest proportion of households living in the private rented sector. That is expected to remain the same in 2021, with their stay in the sector further lengthening, as the affordability issues surrounding home ownership—particularly gaining access to a deposit—remaining a challenge. Why should those people be limited in their ability to make a choice on their provider?
Among professionals living in the private rented sector, it is expected that there will be slightly faster growth in the number of under-25 households during the next five years, as well as an increase in older households—especially baby boomers. We must have consideration for those when it comes to the affordability of bills.
Under-25s receive a lower rate of minimum wage than other workers, so their disposable income will be much more restricted. Younger workers are usually paid less commensurate with their post and experience, which of course does not make them any less professional, and their ability to access things like housing benefit, the limits on local housing allowance and the shared occupancy rate all have an impact on their securing housing in the first place. How much they are required to top up from their own funds will have a severe impact on what utilities they can afford.
Hon. Members present must have had numerous constituents come to see them about the challenges of utility bills. The Minister has mentioned the difficulties of trying to change provider. Such difficulties are encountered particularly when prepayment meters are involved and perhaps when there are multiple occupants. Getting bills straightened out when there is confusion about meters is a lengthy process that, in my experience, results in carrier bags full of contradictory letters from those providers. Older renters on fixed incomes may also face financial restrictions, and I ask the Minister to consider that in his response too.
On the definition of a landlord, I outlined some of the common understandings of the types of landlords that we might all recognise, but I would like assurances from the Minister about who will be covered by the Bill. We cannot have a situation where Parliament takes all reasonable steps to further protect renters from the precipitous situations that they currently find themselves in, only to discover that organisations are deliberately seeking to absolve themselves of the responsibilities that all other landlords are subject to under the Bill.
In particular, I think about the case of Lifestyle Club London that I brought up on Second Reading. At the moment, that company can forgo many of the protections that are considered standard in a usual tenancy. By defining itself as a membership club, it can enter a property with absolutely no warning, it can levy huge fines to tenants for small things such as dirty dishes, and it can even give just seven days’ notice before terminating a contract and forcing the occupying person to move out.
Of course, that goes against many of the things that should be guaranteed for any renter, but companies such as Lifestyle Club London can justify that behaviour by saying that their residents are licensees and not tenants on assured shorthold tenancies. Residents pay a membership fee rather than a deposit, a monthly contribution rather than rent, and have terms and conditions rather than a tenancy agreement. That type of practice is completely unacceptable and unfair to residents, who often do not realise they are being exploited by companies that act in that way.
The Bill is the place to end that practice once and for all, by ensuring that licensees are covered by the same protections against fees as assured tenants and by prohibiting membership fees, monthly contributions and terms and conditions fines. The fact that a loophole exists to allow that type of agreement suggests that licensees of that nature have been left out of protections brought in by similar legislation to prevent landlords from acting in certain ways towards tenants.
I do not intend to move an amendment today because I await the Government’s response with interest. The Government have an opportunity to be explicit in their intentions and perhaps to table their own amendments in future to make it absolutely clear that companies such as Lifestyle Club London are covered by the Bill. Is it the Minister’s understanding that such clubs will be considered to be landlords under the terms of the Bill?
I would also like reassurance from the Minister that there are no loopholes around how tenancies and tenancy agreements can be defined that would allow de facto tenants to be afforded less protection from prohibited fees, and that if it turned out that a landlord could use alternative definitions to charge prohibited fees, the Government would return to the House to make the necessary changes to close that loophole as soon as it became apparent.
What type of loan is the Minister thinking of in subsections (5), (6) and (7)? I have spent a long time trying to conjure the purpose of such a loan from tenant to landlord, how that might come about and on what evidence the terminology is based, but it remains altogether unclear. I hope the Minister will provide some reassurance on those points.
Rishi Sunak
It is a great pleasure to embark on my first Bill Committee with the hon. Member for Great Grimsby and I look forward to going through it with her. I will try to keep this on point and address the specific issues that she raised.
First, on utilities and the provision thereof, some of her comments will be well directed at the energy price cap legislation that is working its way through Parliament. I am sure she will engage in that process. With regard to this Bill and this specific clause, I say to her that that process is something that any tenant would likely follow as part of their deliberations about which kind of property to rent, in the same way as I would imagine tenants decide whether a property has good mobile signal, any broadband available, what kind of energy is available, and so on. Those are all things a tenant will have awareness of in advance of making a decision with regard to the suitability of that particular property for their circumstances.
Rishi Sunak
The clause bans letting agents from requiring a tenant or other relevant person to make a payment or loan, or secure insurance or services from a third party in connection with a tenancy. The clause works with clause 1 to ensure that the legislation applies equally to all tenants, no matter whether they let through a letting agent, as captured in this clause, or directly with a landlord, as captured in clause 1.
The provisions in the clause essentially mirror those in clause 1, so I will not repeat myself, but it may be helpful if I highlight briefly where the two clauses differ. The key differences are in the definition of “in connection with” a tenancy agreement, because the letting agent makes arrangements on behalf of the landlord and is not itself party to a tenancy agreement. There is also no exception allowing letting agents to require a tenant to procure utilities or communication services. That exception is relevant only to landlords, but clause 2 essentially has the same effect as clause 1, which is to ban letting fees.
Melanie Onn
I recognise that for the most part the clause mirrors the prohibitions applying to landlords. It is important that letting agents, which are often the professional guide to the amateur landlord and often operate on behalf of the landlord, developing close relationships over many years while in the pay of the landlord, have the propriety of their conduct considered closely.
The same principle applies to letting agents as to landlords, in that there are some excellent agents and some that fall far short, often seeming to set unreasonable charges without much comeback. Letting agents also lack the personable relationship with tenants that often develops between landlords and tenants. Landlords often develop levels of understanding with tenants that give tenants a bit of leeway, meaning that they could charge under the permitted fees under the Bill, and under a tenancy agreement through default fees.
Good landlords will often be empathetic about genuine and honest mistakes or problems that tenants make or face, and look for practical and easy solutions for both parties. For example, they may let tenants sort out replacing a lost key by themselves, and at a lesser cost, if it is a first offence. They may take some of the loss if a tenant has to move out in the event of a job loss, or a family emergency, or a genuine struggle to pay rent or exit fees. While there are some excellent letting agents that go the extra mile to keep tenants happy and in their property, too often letting agents take an extremely hands-off approach to tenants and only see them as a way to make money and collect fees, which are currently far too high, whenever they contractually can.
Currently, letting agents often charge fees that would be prohibited under the Bill during the move-in period and make a significant amount of money out of a new tenant. As a result of the Bill, letting agents will be far more driven by the desire to keep properties full for as long as possible, as they will see far fewer benefits from a property that rapidly changes tenancy than when they could charge those often high fees. That will help the drive towards achieving the aim of everybody in this room to see longer tenancies in the private rented sector, and increase the value of good-quality service from letting agents that keeps tenants happy and in place.
It will also move the balance of power in the letting market far more towards the tenant. Letting agents often make money through introductory charges to tenants and a percentage commission of the rent. Where once letting agents may have been happy to charge high fees and wait until someone comes along who is able and willing to pay them, the Bill will mean that letting agents will want a property to be filled as soon as possible, so they can earn commission on the rent. That will mean that letting agents have more reason to provide a good service to tenants and act to promote properties to get them filled as quickly as possible.
Tenants have no choice of letting agent if they want to move into a specific property. Who to choose as an agent for a property is currently at the behest of the landlord and therefore letting agents do not focus on offering a good deal to tenants, but on offering the best deal to landlords. Letting agents levy as much of the charge as possible on a tenant to avoid charging above the market rate to a landlord, as there is no point in trying to offer a good deal to tenants if no landlords use the agency to let their property. The result is that tenants are often charged well above reasonable amounts in set-up costs alone. They can often be expected to find hundreds of pounds for things such as credit checks, referencing and set-up paperwork, on top of a holding deposit, security deposit and the first month’s rent. Even for a modest property, that often runs into hundreds of pounds, perhaps even thousands.
We know that people on low and average wages often find it impossible to find the deposit to buy a property, but at the moment many would struggle to find the money to move into a rented property. That is grossly unfair, given that at the very least the landlords are the owners of a property that has increased often significantly in value over the past few years, and are often also rich in their own right. Yet they receive all the advantages in the letting agent market at the expense of our growing population of private renters, who are often young and increasingly likely never to own a home.
That is especially true in areas with high levels of student accommodation. For example, Leamington Spa has an extremely high level of student accommodation for a town of its size, due to a nearby university. Almost all that rental market is operated through agents and is used by students who have little knowledge of their rental rights and what is a fair rate for the charges that letting agents levy. It is a fast-moving market. There is pressure on students to secure a place that they like quite rapidly, often for a fixed-size group, six or seven months before moving in, and the pressure often leads to students paying £300 or £400, sometimes unexpectedly, if the pace of the property uptake surprises them, on top of their current rent and living costs while they are at university.
Jo Stevens
I represent a typical university constituency. It is in Wales and is not affected by this Bill, but by way of example, I mentioned on Second Reading a street in one of the wards in my constituency. I added up every single person living in student accommodation in that street of 200 houses, and letting agents are making in excess of £320,000 every single year in just that one street. Does my hon. Friend agree that that is something we need to prevent?
Melanie Onn
The important thing for students is that they understand the system that they are going to be entering, as for many of them it will be the first time they have moved away from home. They also should understand whether they are subject to unfair fees that are excessive for young people who are most likely to be reliant on student finance and part-time work if they do not have help from their family. We should also ensure they are fully aware of all their rights in those circumstances. The idea that they are having to make such decisions many months in advance when they are feeling the pressure leaves them wide open to exploitation. Their situation will hopefully be aided by the Bill.
Picking up what I was saying—it is a little haphazard, sorry—these costs represent a lot of money for a full-time worker, but for many students, they represent their whole living costs for a month. The balance needs to change dramatically. The extension of schedule 1 to letting agents will mean that they can no longer absorb the cost of a low landlord commission rate by passing the cost on to tenants.
We support the clause, but a few points of concern arise. As it is nearly identical to clause 1 in wording, I will not labour the points I raised in our consideration of that, but I want to seek some clarity on some particular differences between the clauses and draw the Minister’s attention to subsections (4), (5) and (6). Will he outline again the purpose of the loan and confirm that it is included as a preventive measure to avoid landlords seeking any alternative finance mechanism by which to re-route a payment? I would be grateful if he did. It would ensure that I have understood what he said.
The main point I wish to make about clause 2 relates to subsection (3), which states that a letting agent cannot require a tenant to enter into a contract for provision of a service or a contract of insurance. While the rest of the clause reflects clause 1, subsection (3) does not go on to specifically exclude utilities or communications. Why is that the case?
The Minister will know that letting agents can earn a commission for placing clients’ properties with particular utility companies. Switches of energy provider must be done with the bill payer’s consent, and that is likely to be the landlord during a period of the property being void, but it allows for a default situation to arise for tenants when they move in and start receiving bills that are not the most economical for them, requiring them to pay higher rates on generic tariffs. They are then free to change supplier, but they have already been paying at a higher rate and they then have to go through the process of moving supplier. I know that process is supposed to be easy and straightforward, but it is still a chore and an off-putting task for anyone trying to find the right and best deal.
Are letting agents to be permitted to continue to be incentivised to sign up unwitting renters to these rip-off rate utility companies? Will the Government commit to taking steps within the Bill, rather than waiting for guidance? If we are to deal with tenants’ fees and making things fairer for renters, why not do it all now? We should say that such inducements should not be available to letting agents. Renters should be notified in advance who the utility and any other established providers are and given the opportunity to make arrangements that better suit their budget. I hope the Minister can provide answers to those questions.
Rishi Sunak
To respond directly to the two specific points that the hon. Lady raised, I can give her the same assurance that I gave on clause 1: the exception for insurance can specifically not be a means to require a payment that otherwise would be prohibited by the legislation. The same assurance stands here, and I hope that gives her the reassurance she needs. Secondly, to focus specifically on the clause we are debating, it does not allow letting agents to charge for utilities or communications services, but clause 1 does. The specific reason for that is that the contract would typically be in the name of the landlord and would be a function of the landlord-tenant relationship. That should not be permitted for the letting agent. I assume that she does not think they should be included.
Melanie Onn
My concern is that letting agents are able, upon the agreement of the landlord, to set these things up in their own name. That does happen. Does the Minister think that that is okay, particularly given that they receive inducements for it?
Melanie Onn
I beg to move amendment 5, in schedule 1, page 23, leave out lines 19 to 29.
The Chair
With this it will be convenient to discuss the following:
Clause 5 stand part.
That schedule 2 be the Second schedule to the Bill.
Amendment 22, in clause 6, page 4, line 21, leave out “or Schedule 2”.
Amendment 23, in clause 7, page 4, line 35, leave out “and Schedule 2”.
Amendment 24, in clause 8, page 5, line 9, leave out “or Schedule 2”.
Amendment 25, in clause 8, page 5, line 29, leave out subsection (5).
Amendment 26, in clause 10, page 6, line 43, leave out subsections (6) to (9).
Amendment 27, in clause 10, page 7, line 2, leave out “(2), (5) or (8)” and insert “(2) or (5)”.
Amendment 28, in clause 15, page 10, line 13, leave out subsection (2).
Amendment 29, in clause 15, page 10, line 20, leave out “or holding deposit”.
Amendment 30, in clause 15, page 10, line 21, leave out “or holding deposit”.
Amendment 31, in clause 15, page 10, line 23, leave out “or holding deposit”.
Amendment 32, in clause 15, page 10, line 24, leave out “or holding deposit”.
Amendment 33, in clause 15, page 10, line 35, leave out “or holding deposit”.
Amendment 34, in clause 15, page 10, line 37, leave out “or holding deposit”.
Amendment 35, in clause 15, page 10, line 39, leave out “or holding deposit”.
Amendment 36, in clause 17, page 11, line 23, leave out subsection (2).
Amendment 37, in clause 17, page 11, line 28, leave out “or holding deposit”.
Amendment 38, in clause 17, page 11, line 30, leave out “or holding deposit”.
Amendment 39, in clause 17, page 11, line 32, leave out “or deposit”.
Amendment 40, in clause 17, page 11, line 34, leave out “or deposit”.
Amendment 41, in clause 17, page 11, line 36, leave out “or deposit”.
Amendment 42, in clause 17, page 11, line 39, leave out “or holding deposit”.
Amendment 43, in clause 26, page 16, leave out line 34.
Amendment 44, in clause 28, page 20, line 22, leave out subsection (11).
Melanie Onn
The aim of the amendment is to remove unfair fees from tenants’ disproportionate burden, and to make the system fairer and power more balanced than it has been in the past. On Second Reading, the Secretary of State described holding deposits as simply a “refundable” deposit to “reserve a property”. I fear that they have the potential to be used in other ways.
As I said on Second Reading, the inclusion of such deposits in the legislation was
“allegedly designed to minimise instances of tenants securing multiples of properties at the same time before finally settling on their preferred property. There has been very little, if any, evidence that this is a regular practice.”—[Official Report, 21 May 2018; Vol. 641, c. 647.]
Indeed, in this morning’s evidence session we heard completely the opposite from Generation Rent, and that, in fact, holding deposits can often be used by letting agents or landlords to hold multiple deposits from one individual, taking their funds, preventing them from seeking other properties or from participating in a bidding process to rent other properties, and setting them back weeks in being able to access the home that they want.
Richard Graham
I thought we heard clearly from all our witnesses this morning that the proposal to passport deposits was widely welcomed and would help to solve that problem. Does the hon. Lady agree?
Melanie Onn
The hon. Gentleman is slightly mistaken in his recollection. That was not to do with the holding deposit; it was to do with the deposit given as security once the prospective tenant has gone through the holding deposit process. The holding deposit is simply to secure a property and to register interest. Referencing is then undertaken before a person is accepted and considered to be the tenant. Although I agree with the principle of passporting deposits, that was not the specific issue with holding deposits.
Richard Graham
Surely the deposit and the ability to move from one tenancy to another are much more important.
Melanie Onn
I disagree. The principle aim of the proposed legislation is to limit the unfair, up-front costs that make it much more difficult. We know that young people make up the bulk of the sector at the moment, and that is only set to grow. Moreover, in general—I accept that this is not always the case—those young people will be on lower wages, so such deposits are an unnecessary barrier to people in that age bracket being able to obtain the property that they desire to become their home.
My concern relates to the abuse of those holding deposits. When this matter was discussed in the Select Committee, there was a suggestion that tenants seeking a property were putting down multiple holding deposits so that they could play a game of which property they were going to choose, as if individuals have so much money that they are able to put down multiple holding deposits. I have not seen the evidence for that.
Maria Caulfield (Lewes) (Con)
It was my understanding, listening to the witnesses this morning, that they all agreed in principle with holding deposits. They saw a need for them. They might have concerns about how that mechanism is used, but I heard them speak in support of holding deposits in principle.
Melanie Onn
The hon. Lady’s point that the witnesses had concerns about how holding deposits would be used is exactly why I am raising this matter. The aim of the proposed legislation is to make things fairer and easier for tenants. The suggestion has been that tenants are somehow playing a system or a game—
Melanie Onn
My hon. Friend says “spread betting” from a sedentary position. It does feel as though everyone is hedging their bets on the property of their choice. It seems nonsensical that anybody would have sufficient spare funds available to put down multiple holding deposits and undergo multiple reference checks, which would not work in their favour when it came to their credit scores. It is interesting that we heard something today that we did not hear during the Select Committee’s pre-legislative scrutiny. It was suggested that the situation could be completely reversed, with holding deposits being used unscrupulously by letting agents or with landlords holding all that money for a period of time. That would then set back individual tenants in their search for a property. There absolutely is room for improvement.
Mr Goodwill
The hon. Lady says that the aim of the proposed legislation was to make things fairer for tenants. Does she agree that all the NGOs that gave evidence this morning made it clear that it would make things fairer for tenants?
Melanie Onn
The NGOs were very clear that there were still issues and that they still had concerns. We were all in the same evidence session this morning, and we all heard them say there are issues. We are right to take into consideration all the evidence and not simply cherry-pick the bits we might wish to hear. I am raising this point because I do not think sufficient consideration has been given to the impediment that holding deposits may represent for individuals, particularly young people who may be on lower incomes.
In addition, the Government say that there are a number of exceptions to having to refund that deposit, including when the tenant provides false or misleading information. Although on the face of it that is a sensible measure, there are no additional protections for tenants if the incorrect information is not their fault. For example, a reference that does not exactly match a tenant’s claims should not immediately mean that they lose that holding deposit. There is scope to develop a mechanism to test inaccuracy and establish the reasons behind it before immediately assuming information has been deliberately misleading.
I suspect that the Minister will respond robustly to that point and say that there is provision within the Bill, particularly relating to landlords, that gives them flexibility to give reasonable consideration to the circumstances. That is absolutely fine, but in practice most people go through some form of letting agent or management agent as part of the letting process. It is a tick-box exercise and the possibility of any kind of flexibility is much reduced. Letting agents go through it page by page, thinking, “Have I done everything that I was supposed to do on the list? Have I collected the deposits? Have I done the appropriate checks? Have I compared the information provided to me by the prospective tenant with the information from their previous landlord?” Who knows what information a previous landlord may deliver to a letting agent, because there is nothing to say that it would necessarily be a favourable response.
The letting agent is not necessarily going to utilise any kind of discretion, because it is not in their interest to do so. They simply have to complete the necessary forms and stages to enable the tenancy to take place. They then have to provide evidence to meet the requirements of the legislation, or prove to their employer, who is also their client—the landlord—that they have undertaken all the necessary checks and that the information does not meet, to the letter, the requirements of the legislation, unless there is further regulation, so x number of people have been rejected. I am interested to know how many tenants are rejected because the information they provide is not a carbon copy of that provided by their previous landlord.
Jo Stevens
We know from previous Acts and codes of practice that guidance codes of practice have little weight in dealing with the rogue organisations that we are concerned with. If the Government are serious about their intentions—and I believe they are—they should simply put what they want in the Bill. If it is in the Bill, it can be enforced.
Melanie Onn
My hon. Friend is right. On Second Reading I was clear about wanting to make the Bill the best it can be and not leave gaping gaps through which tenants’ rights can fall, to be blatantly ignored. If there is an opportunity to improve it, I hope that the Minister will not be too precious, and that he will take those things on board and seek to make improvements so that the aims are achieved. I believe that the aims are genuinely held, so why not do accordingly? I would follow up on what my hon. Friend said by commenting that when such structures are left to mere guidance they are too soft and they will not prevent unscrupulous landlords and letting agents from doing all they can to skim off money and maximise their profit margins.
Guidance is not good enough if we are to transform a system that is stacked against tenants. That point extends across more than the provisions on holding deposits; it is a foundational problem with the approach taken in the Bill. Clarity is important not only in relation to landlords and those who might want to act unfairly. If it is not clear when the withholding of holding deposits is not legal, that is a serious problem. Informed tenants are empowered tenants; so if the Government are serious about transforming letting and the process around lettings, they will do all they can to inform all relevant stakeholders as clearly as can be.
Shelter said in their response to the Bill:
“Evidence from Scotland suggests there is lingering confusion around the ban on letting fees which has affected compliance”.
We do not, and I am sure that the Minister does not, want to be in the situation that Scotland was in, after many years during which legislation was in force that did not work all that well, of having to do it all again or put forward amendments. If there is an opportunity to get things right and learn lessons from our nearest neighbours, let us do so and make sure the Bill does all it sets out to do.
The Shelter response said that independent research had highlighted the fact that,
“even after the ban was clarified, less than one-third of renters clearly understood there was a law banning fees.”
That emphasises the importance of a simple ban. The Government must always prioritise clarity and good communication, as this morning’s sitting with a representative from the Local Government Association made clear.
The issue of holding deposits also adds to the broader financial burden facing tenants. To secure a property under the Bill would cost, according to Shelter’s estimates, £3,750 for a property in London and £2,290 outside the capital. Those figures include a six-week deposit—as the proposed cap, which is really quite high, allows—a month’s rent and a week’s holding deposit. The six-week deposit could leave a tenant out of pocket twice. If they leave one property and are seeking a new property, there is a period when they are doubly out of pocket. Although the deposits are refundable, tenants receive an average of only 77% of their deposit back, so the idea of passporting deposits must be given greater consideration.
Rishi Sunak
I will speak first to clause 5 and schedule 2 in general, and then respond specifically to amendments 5 and 22 to 44.
Clause 5 and its accompanying schedule, schedule 2, relate to the treatment of holding deposits. The Government recognise the concerns of agents and landlords that, in certain circumstances, they can be put at risk because of a tenant’s actions—for example, if a tenant withdraws from a property despite reference checks having been undertaken. To address that, landlords and agents will be allowed to charge a holding deposit, capped at one week’s rent. That will act as a deterrent to tenants from registering in multiple or unsuitable properties, and ensure that there is a financial commitment from the tenant to a property.
We also do not want to inadvertently encourage agents and landlords to discriminate against individuals when considering potential tenants for their properties. The use of holding deposits will ensure that landlords do not cherry-pick tenants they perceive to be the most suitable and therefore likely to pass a referencing check.
We recognise that it may sometimes be appropriate for landlords and agents to retain the holding deposit. For example, if a tenant fails a right to rent check under section 22 of the Immigration Act 2014 and the landlord or agent could not reasonably have been expected to know that they would fail; if the tenant provides false or misleading information that the landlord is reasonably entitled to take into account when deciding whether to grant a tenancy; or if the tenant decides not to rent the property. In such cases, the landlord or agent will be entitled to retain the holding deposit.
We will of course encourage landlords and agents to consider, on a case-by-case basis, the appropriate amount of deposit to retain and to provide a reasonable explanation to tenants when they decide to retain a holding deposit. Guidance will be provided to support landlords, agents and tenants to understand their rights and responsibilities around holding deposits.
Rishi Sunak
If I may finish the sentence, the hon. Lady will be pleased to know that organisations such as those we heard from this morning—Generation Rent, Shelter and Citizens Advice—are currently engaged with officials in helping to draft that guidance. I am sure she will want that guidance to be as accurate and as helpful as possible. I think I am right in saying that a meeting may have taken place yesterday, so that guidance is well on the way.
Rishi Sunak
As the hon. Lady said, I will not be precious in this Committee, and I will take reasonable suggestions. I will take her suggestion on board and rephrase to “in due course”. I assure her that work on the guidance is under way, and we are working to get it right. As I said, we believe that this approach is fair to landlords and tenants.
On the amendments, it is important to clarify for Committee members what we are discussing. The amendments do not suggest reforming, improving or tweaking the holding deposits. They suggest that holding deposits be removed entirely from the list of permitted payments outlined in schedule 1, so that, under no circumstances, should there be any holding deposit. That was obviously not the Select Committee’s position following its pre-legislative scrutiny, and it was not the position of the witnesses we heard from this morning, all of whom, when asked if they agree with the principle of a holding deposit, said they do.
The amendments go against that set of opinion and suggest removing holding deposits entirely. To do so would be to take away a vital mechanism in the Bill that allows landlords security while reference checks are carried out. That is important for several reasons. From the outset of this policy, landlords and letting agents have expressed concern that one of the side effects of the ban on tenant fees would be that tenants might speculate on multiple properties.
Melanie Onn
Where did the Minister get the evidence that that has ever happened in the history of anything?
Rishi Sunak
Yes, I heard the shadow Minister’s points on this. It is important to note that there is no evidence for this because there are currently letting fees. Tenant fees are charged, and that is what we are all here to get rid of. The side effect of tenants no longer having to pay any fees will be that there will be no financial disincentive when they apply for a property. The disincentive to speculate currently applies, but when we legislate to remove tenant fees, which is exactly what we are doing, that safety lock and mechanism will not be there. That is why people consider it to be a side effect. Looking for evidence of something that has yet to happen is unlikely to be fruitful.
Rishi Sunak
The hon. Lady talks about a subset. I am also talking about groups of agents. It is not necessarily the case that speculating might or might not happen, but it is important to guard against it happening. That is surely fair, and landlords are reasonable in asking for some protection against it. This is not about unfairly withholding money from people. In the cases that I will come on to, and as we have already discussed, there is no reason why deposits will not be returned to tenants acting in good faith.
Melanie Onn
The Minister seems to be asserting that, in the absence of these up-front fees, people will suddenly be going around with wedges of cash in their pocket that they would not otherwise have had, rather than understanding the difficulty that people have had up until now to get any money together whatever for this purpose. It really is a slightly erroneous argument.
Rishi Sunak
I do not think it is erroneous at all. Removing tenancy fees from the legislation, as we are doing, will of course put money back into the pockets of tenants.
What we are talking about here is a deposit that is there for a number of days while a tenant applies in good faith for a property, which presumably they have the financial means to afford and have the deposit for. It is entirely reasonable to request that and, as we have heard, not all agencies require it. Indeed, the guidance will not say that it is mandatory or necessary. It is there as a safety mechanism, should landlords feel that it is appropriate to their situation.
Rishi Sunak
That will be a function for people to decide individually. The legislation sets a cap of one week’s rent for what can be taken as a holding deposit, but it is not mandatory that a full week’s rent is taken.
Melanie Onn
How long will it be before individuals can get their deposit back, if they are required to pay one?
Rishi Sunak
I believe I am right in saying that, from a tenancy agreement being signed, it is a matter of days. If the hon. Lady allows me, I will get back to her with that information. My memory is that it is seven days, and it can be used in lieu of the deposit itself, but I will happily come back to her on that point. She is right that it will not be stuck there in the system so that it cannot be used for a subsequent purpose to do with the tenancy. I think that is the general point she is making.
Allowing a landlord to ask for a holding deposit enables tenants to demonstrate that they are sincere in their application for a property. It ensures that landlords and agents are not out of pocket if a tenant registers an interest in a property, only to withdraw it when something better comes along.
Secondly and importantly, we want to ensure that landlords do not take an overly cautious approach and pre-select the tenants that they perceive would be most likely to pass a reference check. Removing holding deposits from the list of permitted payments would put the tenants who most need the protections that the Bill provides in a position where they are less likely to be considered.
Finally, holding deposits act as a means of security for the landlord, who is at risk of losing out on a week’s rent if a tenant withdraws from the application, fails a right to rent check, or provides incorrect or misleading information.
Rishi Sunak
I could not agree more with my hon. Friend, who puts it very well. This is not about demonising people; it is about making sure that the private rental sector, which, as he so rightly identifies, is likely to experience some growth, is healthy and well invested in so that people who are looking for somewhere to rent have somewhere to call home. That is why we get the balance right in the Bill.
To conclude, we heard evidence on Tuesday from agent and landlord groups who were quite certain that if landlords and agents were unable to take a holding deposit, they would cherry-pick tenants. None of us wants to see that. I remind the Committee that the amendment would remove in its entirety the idea that landlords can charge any holding deposit. We do not support that and think that it would damage the functioning of the market, so I urge the hon. Member for Great Grimsby to withdraw the amendment and ask hon. Members to agree to clause 5 and schedule 2.
Melanie Onn
I have listened carefully to the Minister’s response, but I am not convinced, unfortunately. I would like to press the amendment to a vote.
Question put, That the amendment be made.
The Chair
For the sake of clarity, I remind Members that although we have debated clause 5, schedule 2 and various amendments, decisions on those points will be taken formally later in our proceedings according to the order of consideration set out on the selection list.
Melanie Onn
I beg to move amendment 10, in schedule 1, page 23, leave out paragraph 4 and insert—
“4 (1) Subject to sub-paragraphs (3), (4) and (5), a payment that a tenant is required to make in the event of a default by the tenant is a permitted payment if the tenant is required by the tenancy agreement to make the payment in the event of such a default.
(2) In this paragraph “default” means a failure by the tenant to—
(a) perform an obligation, or
(b) discharge a liability, arising under or in connection with the tenancy.
(3) But if the amount of the payment exceeds the reasonable and proportionate value of the loss suffered by the landlord or letting agent as a result of the default, the amount of the excess is a prohibited payment.
(4) The Secretary of State must by regulations made by statutory instrument specify the circumstances in which a payment is to be considered a payment in the event of a default within the meaning of sub-paragraph (1).
(5) Regulations under sub-paragraph (4) must also make provision as to the procedure to be followed by a landlord or letting agent in seeking to recover a payment under this paragraph, which may include a requirement to give notice of proposed recovery in a prescribed form accompanied by evidence of the loss sustained by reason of the relevant default.”
This amendment would require the Secretary of State to make regulations on payment of defaults and procedures for recovery of default payments.
The Bill leaves us with far too great a risk of subjective interpretations and loopholes through which those who would seek to maximise profits can do so at the expense of tenants. We are concerned that the Government are far too willing to leave these fees up for interpretation, with enough room for a whole manner of things to be put within them. That is why we tabled amendment 10.
When the fundamental purpose of the Bill is to ensure a fairer deal for tenants and remove fees that have no clear basis, it is a mistake to set out the specific circumstances in which default fees may be charged simply in guidance and not in regulations. We know that although guidance should be followed, unfortunately that is not likely to happen in every circumstance. That is why we tabled our amendment to remove paragraph 4 of schedule 1, which would require the Secretary of State to make explicit what is acceptable as a default payment. It must be absolutely clear; otherwise, abuse is all too easy.
The amendment also deals with the benefit of having
“a prescribed form accompanied by evidence of the loss sustained by reason of the relevant default.”
Having a paper trail akin to invoicing is a fair principle on which to work. Businesses have to invoice in all other transactions, and we see no reason why default fees should be treated differently. Transparency is key to trust in the system. If a tenant is being charged, it is fair and reasonable that they be able to see clearly what they are being charged for and that it is not disproportionate to the costs facing the landlord. Recovery of the costs genuinely incurred by the landlord would be guaranteed by the need to accompany the form with evidence, such as receipts.
Taking the example that recurred throughout the evidence session, if the tenant needed a replacement key but the landlord, as standard, wished to charge the capped fee of £50, the tenant would not know whether that was a fair charge. In fact, we know that that would not be a fair charge. Fifty pounds for a new key—does anybody think that that would be a fair charge? Yet that is precisely what landlords or letting agents will be able to charge. The tenant might think it unreasonable, given how much cutting a key costs, but their ability to query the charge would not be clear—it could be wrapped up with the agent’s time or the number of phone calls it took.
Plenty of people will ask “How many letting agents does it take to get a key cut?”, but a clear itemised bill will make clear what each charge is for. I would not advocate that a landlord or letting agent charge for their time spent on getting an additional key cut, phoning to make an appointment to get the key cut or sending a notice of the intention to get the key cut, but if that was happening and those were standard charges within the letting agent’s brief—there is often a set of standard charges for that sort of thing—itemisation would enable the individual tenant at least to see exactly what the landlord or agent was charging them for and thus to challenge the charge. There would be no place to hide any rounding up or skimming off that would boost the landlord or letting agent’s profits.
If we do not make the amendment, tenants’ confidence in the whole system could be fatally undermined. Trust needs to be rebuilt. As things stand, the relationship between tenants and those who provide them with homes is fundamentally unbalanced. We believe that the requirement for a paper trail fits in with the principle outlined in paragraph 5, which highlights the need for any charges to be reasonable, referring to
“the reasonable costs of the person to whom the payment is to be made in respect of the variation, assignment or novation of the tenancy”.
Amendment 10 is firmly in accord with that spirit and the broader intent behind the Bill. Finessing the Bill to require a paper trail and to clarify the provisions dealing with what is and is not a default payment would go a long way to restoring tenants’ trust in an often unfair system.
The Select Committee recommended
“that Government issue clear guidance to tenants, landlords and letting agents”—
in my view, that does not go far enough—
“on what constitutes a reasonable default fee, and guidance to tenants about how to challenge the inclusion of such fees in tenancy contracts. The reasonableness of both the type and the amount of fee should be considered. The Government’s intention to issue such guidance should be communicated during the Second Reading debate”,
and it was.
As we heard in evidence today, however, guidance is not always sufficient. Even if someone had the nerve to challenge a fee that was levied upon them when they suspected that it was unfair, the guidance would not be sufficient to enable organisations that represent tenants on a regular basis to support them sufficiently.
Rishi Sunak
I thank the hon. Lady for her comment, but the point of the legislation is that there will be far greater protection for tenants and a deterrent for landlords from behaving in the way she outlined, because there will be significant financial penalties and banning orders at stake for landlords who misbehave. There is a process for tenants to seek redress, partly informed by the recommendations of the Select Committee, such as going to the first-tier tribunal that does not exist today. The combination of all those things makes it much less likely that a landlord would behave in such a manner, for the simple reason that they would be behaving illegally. If that were to be found out by trading standards, the first-tier tribunal or any redress scheme, the penalties for that misbehaviour could be incredibly significant.
This legislation will have the impact required. The guidance we will put forward will specify that it will be best practice for the landlord to provide evidence of their loss, which they will do precisely because they know in the back of their mind that if they put out a speculative number and are challenged, the consequences will be significant for them. All in all, I ask the hon. Member for Great Grimsby to withdraw her amendment.
Melanie Onn
The Minister says that the Bill will seek to ensure that erroneous behaviours by landlords or letting agents will be far less likely, but that does not fill me with any kind of confidence. He goes on to talk about the enforcement element—the fines, trading standards and potential criminal prosecution if that happens more than once—but he fails to acknowledge the issues of enforcement, which I understand comes much later in the Bill, that have been very clearly expressed in the oral evidence we have heard.
Making the legislation work requires the enforcement to work. As we have not yet got to that point, it is very difficult for me to feel at all convinced that the Minister’s proposals will ensure that tenants will be properly protected from default fees and that letting agents or landlords will fulfil all their responsibilities. I know that the responsible ones will, but I am not remotely interested in them. For that reason, I am afraid that I will not withdraw the amendment.
Question put, That the amendment be made.
Rishi Sunak
We want to ensure that the effect of including a banning requirement as a term of a tenancy agreement is clear, and the clause provides that a term of any agreement that contravenes the proposed legislation is not binding on the tenant. The clause also establishes that the rest of the agreement will continue to apply where any part is found to be non-binding, to ensure that the tenancy can continue and that landlords and tenants remain protected by the terms of the contract. Finally, the clause provides that if the tenant or someone acting on their behalf has been required to make a prohibited loan, that money should be repaid on demand. Members of the Select Committee will be pleased that that provision has been included, as it reflects one of the Committee’s recommendations during pre-legislative scrutiny. The clause establishes vital protections for tenants.
Melanie Onn
The spirit of the proposed legislation is to protect tenants and remove burdens from them wherever possible, in order to rebalance power, which has for so long been in the hands of letting agents and landlords, in favour of tenants. That is as true for costs as it is for other things. We tabled amendments 11 and 12 because we would like to see more rights. Although we opted not to press them—we have not been very successful in votes this afternoon—we welcome clause 4, as it offers tenants greater protection from retaliatory evictions. Even if it is not as bold or strong as we might like, it is nevertheless a step forward legislatively.
As we know, retaliatory evictions are a real problem. They can cause a great deal of distress and concern for tenants, and they are one of the major reasons why people do not speak up against their landlords or seek to enforce their rights as tenants. The power imbalance in the relationship between the landlord and the tenant, which I have referred to throughout our deliberations, represents one of the worst abuses of the sanctity of people’s homes. Despite our amendments having fallen, any additional contract security for tenants is a good thing, although we urge the Government to consider strengthening it.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Kelly Tolhurst.)
Tenant Fees Bill (First sitting)
Melanie Onn ExcerptsTuesday 5th June 2018
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 5 June 2018 - (5 Jun 2018)
The Chair
Thank you. We will now move to questions from members of the Committee. This is a rather unusual situation because this is a time when the Minister is allowed to have some fun and to ask you questions. Let us start with the shadow Minister.
Melanie Onn (Great Grimsby) (Lab)
Q
David Cox: As you pointed out, tenant fees were technically banned in Scotland in 1984, but the legislation was not well drafted and it therefore required revision in 2012. It meant that tenant fees in Scotland between 1984 and 2012 were generally lower than they are in England, at around the £50 or £60 mark.
Various organisations have done research into this, and I would point to the Scottish Government’s own statistics, which suggest that in the 12 months after the ban came into force, rents in Scotland went up by 4.2%. Against that, the English housing survey suggests that rents in England went down by 0.7%. There was, therefore, a 5% difference—well, 4.9% to be specific—between rents in England and Scotland during that period. That is not based on our statistics; that is based on official statistics from the Westminster and Scottish Governments.
I do not suggest that the whole 5% is attributed to tenant fees, but a good proportion of it will be. That is a good example based on official Government statistics that show what is likely to happen. That is why in the impact assessment the Government have accepted that rents are likely to go up, and when this measure was announced in the autumn statement, the Office for Budget Responsibility said that rents will go up as a result. I am fairly sure that everybody who gave evidence to the Select Committee in the pre-legislative phase said that rents will go up as a result.
Melanie Onn
Q
David Cox: I am afraid I only have percentages; I do not have that figure in actual cash terms. On Shelter’s report, I draw your attention to the then Communities and Local Government Committee’s eighth report of the 2014-15 Session. It noted that the Committee had concerns about the methodological approaches adopted, and the sample used in that report equates to 29 letting agent managers surveyed. Its conclusion was that the information was inconclusive based on the small sample size. I would probably agree with that determination, and that is why I prefer to use the Scottish Government’s statistics, which come from a much broader sample base.
Melanie Onn
Q
Isobel Thomson: No, I do not have any details other than what David has already said.
Melanie Onn
Q
Isobel Thomson: I think there is a lack of resources—I think the will is there to do it, but there is a lack of resources. Because of that, as an organisation, we produce an enforcement toolkit for trading standards officers to use to assist them in their work. Although, of course, we were, and are, happy to do that work, we think that they should have the resources themselves to produce such documentation.
David Cox: I agree with everything Isobel just said. If I may, I will add two quick anecdotes. First, not long after the fee transparency rules came into force, I was on BBC Radio 4’s “You and Yours” programme with the head of the Chartered Trading Standards Institute, discussing their enforcement. The gentleman said on air, “Our budgets have been slashed, and we are reducing trading standards offices around the country. Would you prefer us to enforce against children’s toys that are dangerous and choking children, or to check whether tenant fees are being correctly displayed?” With the best will in the world, live on air, I could not say tenant fees.
The other example is of agents up and down the country coming to me and ARLA on a regular basis to tell us about agents that are not displaying their fees correctly. We notify the local trading standards departments, and we get nothing back. As an example, just before Christmas, I notified a trading standards department in the north-west of the country of 13 agents in its area. We provided the evidence that it needed. We got a “Thank you. We will reply within 30 days” email and then nothing. That was five months ago. We are doing the most we can.
That is why we are very supportive of the lead enforcement authority, because ARLA’s sister organisation on the sales side, the National Association of Estate Agents, has the national trading standards estate agency team, so we can feed all the intelligence across the country into one body, which can disseminate it more effectively and forcefully than we can to the local trading standards and environmental health department. We hope that the lead enforcement authority under the Tenant Fees Bill will have a similar impact on the letting side.
Melanie Onn
Q
Isobel Thomson: They may do ultimately, but there will need to be an accumulated number of fines applied to meet the cost of running the service. They need a pot of money to kick-start the lead enforcement authority, and they need it quickly, because in the Bill there is great reliance on the guidance that they will give to consumers. They need to scale up and be ready, but we have not had any indication yet of when that will happen.
David Cox: I agree entirely. Possibly, in years two or three and beyond, they will, once they have the teams up and running, going out and doing the enforcement. But if they do not have any of the seed funding across board and even in the trading standards department to resource the team in the first place to start going out and doing the enforcement, they will never get to that point where they can start to self-fund. It needs that initial seed funding. There is money set aside for seed funding, but I do not think it will be enough at this point in time.
Melanie Onn
Q
David Cox: Scotland and England are different markets. Rents and house prices are much lower across the board in Scotland. Rents follow house prices. The costs incurred are different, based on employment costs, office costs and the general nature of the business. Our research suggests that tenant fees in London are more expensive than they are outside London, to take into account the increased costs of running businesses in the capital, compared with the costs of running businesses outside the capital. Scotland is cheaper than England.
The Chair
Q
Adam Hyslop: To loop back to the previous point on enforcement, I would add that one of the great things that, hopefully, the Bill will bring through is the ability to self-enforce better. Currently, there is legislation that was designed to promote transparency and to make sure that tenants are aware of what fees will be charged, without seeking to limit those. That has not been totally successful, partly because it is quite difficult for a tenant to prove whether they were shown those fees and whether they were made clear to them. It is a somewhat abstract concept whether they were aware of the fees before they were asked to pay them at a later point in the process.
The good thing about a clearer and higher-level fee ban is that a tenant paying money is a far more provable event. A tenant can get to that point in the process and then simply refuse to pay the fee if it is presented to them. Even if they get past that phase and they were not aware that they were being charged a fee illegally, it is then easier to prove that they did pay a fee and to unwind that. I feel that self-enforcement is far easier with the legislation being proposed than with the current set-up.
The Chair
Q
Richard Lambert: I am Richard Lambert, chief executive officer of the National Landlords Association. Briefly, we are aware of the growth of these charges to tenants by agents over the past 10 to 15 years. We are aware that that has been exploited to some extent, so we see a wide variation. Some of those fees have, frankly, reached egregious levels. We are also increasingly aware that agents double-charge landlords and tenants possibly for the same services. We agree that the Bill goes a long way to dealing with the issues that have emerged.
We think it is important for the Committee to remember that you are legislating to deal with the activities, in the end, of a small minority, but that the legislation will impact the entire industry; and that you are also legislating without having had a chance to evaluate some of the measures that have been brought in over the past couple of years, to see the full extent of the impact that they might have on the industry as things go through.
In terms of the impact on landlords, as David Cox has explained clearly, the client relationship in the future will be unambiguous: the agent will owe a duty to the landlord through the contract.
We have no doubt that the costs to landlords will increase. Agents will certainly try and pass on part of the fee that they have charged to tenants to landlords. We do not believe it is going to be possible for them to move all those charges from the tenant to the landlord, but landlords will certainly have to absorb some of those and, like any other business, they will attempt to respond to an increase in costs by maintaining their profit margins by increasing the price. So, there will be some increase in rents, but how much that happens will depend very much on the market, and that will depend very much indeed on the locality and the situation there.
I think both landlords and agents will have to absorb some degree of that cost. As a result of agents charging landlords more, we expect that there will be more competition. That competition could be in terms of the quality of service, as agents try to retain and increase their client list by providing better value for money; but we could also see that competition emerge in terms of fees, in that agents will try and attract landlords by charging lower and lower fees. We are already advising our members to keep a firm eye on the level of service they are being offered and to make sure that the level of service they are being offered is what is delivered and that it relates to some of their other needs. For example, the number of inspections they are being offered each year by their agent should correspond to that which is required under their insurance contracts.
Undoubtedly, there will be more self-management. Landlords will look at the fees they are being charged and consider whether they should be managing themselves. We have some evidence from some of our surveys that people are increasingly thinking in that direction. Ultimately, as was also made clear in the previous session, the key is enforcement. There are many issues across the private rented sector where we have the legislation in place but there just are not the resources to enforce it, so we need to ensure the surety and certainty of enforcement to make sure that what is in this legislation—and, indeed, in all other legislation across the sector—actually sticks.
David Smith: I am David Smith, the policy director for the Residential Landlords Association. We also have some concerns about the Bill. Clearly, there has been a situation where some agents charge egregious fees, but as Richard rightly said, they are the minority, not the majority. We do not think the Government have done enough with the Consumer Rights Act 2015; there were powers to make regulations under the Act to increase transparency around fees, which were not taken up.
We are very concerned about enforcement. Enforcement under the Consumer Rights Act has been what I would generously call patchy—I have used other terms in other places—and we do not think that enforcement is going to be sufficient. In fact, enforcement provisions in the Bill are a bit of a mess, and we think that is likely to lead to poor enforcement and make the Bill ineffective. I think there is a very high risk that the Bill in fact will not achieve any effect at all, because there will be insufficient enforcement against the bad agents who are already charging the excessive fees and will carry on doing so, and in some cases people will find ways to work around the Bill, as they already have in Scotland to some extent.
We are also concerned that there is a missed opportunity here. Our view is that the biggest cost for tenants is not the fee they have to pay when they move, but the fact that they have to have two tenancy deposits—one for the outgoing property and one for the incoming property. We have advocated on a number of occasions for legislation to be passed to change that dynamic and to rethink the way we use tenancy deposits—to find some way of making tenancy deposits cross over from tenancy to tenancy, to avoid a scenario where tenants are actually having to pay two deposits.
There are no circumstances in which a fee is ever going to be as high as six weeks’ rent. Therefore, the tenancy deposit is always the actual controlling factor in terms of how much tenants have to pay.
Melanie Onn
Q
David Smith: The Consumer Rights Act has a £5,000 deterrent penalty, which clearly—presumably—has not worked, because otherwise, we would not be having this discussion at all. I endorse the National Approved Letting Scheme’s study from last year that shows that very, very few penalties have been levied. What is particularly interesting, which Isobel did not mention, is that even fewer of those penalties have actually been collected. Not only are people not levying very many penalties, but in many cases when they levy them, they are never in fact paid anyway. So, I do not see much deterrence there. Local authority officers have told me anecdotally of situations where they have levied penalties and people have said, “Yeah, fine. Send me a £5,000 penalty and I’ll pay it. It doesn’t make any difference to me.”
The structure is also a bit nonsensical. There is a certain situation where the Bill states that it is an offence to charge a prohibited fee, but it is only an offence if I have already sent you a £5,000 penalty notice and then catch you at it again. From a practical point of view—a trading standards officer point of view—they will have to do the whole thing twice to get a prosecution. The Bill also creates a system whereby we can ban agents under the new banning order provisions in the Housing and Planning Act 2016, but the reality is that banning is very unlikely to occur on a first offence, so you are going to have to get two prosecutions, which means you are going to have to catch somebody four times and prove a case against them before you can move to banning them. If prohibited tenant fees are an offence, then they should be an offence and they should be treated as an offence; they should not be an offence with some codicil on the front that says, “You can pay a little bit of money for it not to be an offence.” That does not make sense.
Melanie Onn
Q
Richard Lambert: Absolutely. I think the level of penalty is a deterrent to the law-abiding because it ensures that they will not slide into error, but for the people who are breaking the law and who factor it in as part of the cost of business, it will not matter at all, because the lack of enforcement means that they will assume that most of the time they can get away with it, and on the occasions that they cannot, it is simply a cost of doing business.
David Smith: There is a significant level of ignorance, as well. We should not ignore the fact that not all agents are bad in the sense of being evil; many of them are bad in the sense of just being fairly incompetent. While there is a significant percentage of highly professional and highly skilled agents, there is a minority of agents who I would not apply those words to.
Melanie Onn
Q
David Smith: It depends what you mean by “pay more”. Do you mean pay more for rent or for fees?
Melanie Onn
Q
Richard Lambert: Housing is a devolved issue, and therefore it is for the individual countries of the UK to decide their situations.
David Smith: I appreciate that there is a great attraction in comparing Scotland with England, but the markets are enormously different. Outside the main cities in Scotland, the vast majority of letting and estate agents are co-located with solicitors, so the economics of the business is totally different. Inside the cities, it is a bit more like it is in England and Wales, but the size of the market is tiny by comparison and I am not convinced that it is a particularly good comparator. You might do better by comparing with the Irish Republic, which is of a similar size and has much more similar economic structures in some way. I see your point, and I do not think you are necessarily wrong, but I do not think it is as simple as a direct comparison between the two—sorry.
Maria Caulfield (Lewes) (Con)
Q
So, currently, the enforcement system is not working. Is it not right that if fees are banned, tenants will be able to self-enforce, because they will be aware that no fees should be charged? Do you not recognise that this would give more power to tenants in the process, given that currently they are not able to make those decisions?
David Smith: But why? There is no mechanism within this Bill for tenants to self-enforce.
Tenant Fees Bill
Melanie Onn ExcerptsMonday 21st May 2018
(8 years, 2 months ago)
Commons ChamberRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts
Melanie Onn (Great Grimsby) (Lab)
I congratulate the Secretary of State on his appointment and welcome my hon. Friend the Member for Croydon Central (Sarah Jones) to our housing team. This tenant fees legislation is very welcome. We know that the majority of landlords are good landlords, or strive to be, and understand the expectations upon them before they embark on becoming a landlord. However, a number of rogue landlords and letting agents give the sector a bad name, undermine the good work of quality agents and landlords, and they have squeezed tenants for cash in unfair ways, with disproportionate charges for unjustifiable reasons. It is right that the Government are acting to change this unfair system and Labour welcomes that, but it would be remiss of me to fail to remind the House that we first suggested a move to ban letting fees back in 2013. After five years, it is good that the Government are finally acting on this issue. If we get the Bill right, it will have a positive impact on people’s lives on a day-to-day basis.
The overriding purpose of the legislation is to help to shift the balance of power from unscrupulous agents and landlords towards decent tenants—to make renting fairer, more affordable and more transparent and to give tenants greater clarity and control over what they pay. We will all have heard horror stories of agents or landlords charging people excessive fees to secure properties, or throughout tenancies, imposing additional charges with excessively high administration fees. With fewer social properties available, this places great difficulties on those with low incomes, or those who are renting alone or simply cannot afford thousands of pounds in up-front fees. In an increasingly competitive market, that has led to the UK’s nearly 5 million private renters sometimes feeling that they are an easy target from which to extract unnecessarily large sums of money. That is on top of the £50 billion a year paid in private rents.
As the number of private renters is predicted to rise to 5.6 million people by 2021, we should be aiming for a gold standard of contract of understanding between renters and landlords, or their agents. As it stands, there is an inherent tension between landlords who view their property as an asset or investment and a tenant who sees it as their home. We have to take steps to bring those two positions closer together.
Increasingly there are larger, more professional companies recognising the importance of peoples’ home life and striving to provide properties in high-demand areas. They do not use agents, seek to develop a sense of community and aim to retain tenants for as long as possible and keep rents affordable in line with local incomes—in places such as Argo Apartments—and stand in stark contrast to the enormous billboard I saw from Wentworth Estates, boasting that it could guarantee rents for between one and five years for landlords, would provide three months’ rent in advance and could offer “free evictions”.
Caroline Lucas
Does the hon. Lady agree that another way the Government could follow both Labour and Green party policy would be to tackle extortionate rents? The elephant in the room is the need for some kind of rent controls, including rent caps, because although what is in the Bill is a welcome step forward, until we tackle the size of rent increases, we will not be able to provide the homes for the people who need them.
Melanie Onn
Labour absolutely recognises the—[Interruption.] Before the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry) leaps on me—before I am able to make myself clear—Labour absolutely recognises the issue of the amount that people are paying in rent and recognises that there could be restrictions on the percentage of increases in rent, not a rent cap.
The pressure in the housing market is rapidly producing new forms of exploitation. For example, an alternative letting agency-cum-landlord service called Lifestyle Club London markets itself as a membership club. Tenants or members pay an annual fee instead of rent. Club staff are entitled to inspect rooms unannounced at any time and fines can be given for anything even as minor as dirty dishes. This is a fast-moving area. We can see that there are wildly differing practices in the world of private rental and that tenants have had difficulty in getting the treatment that they deserve, which is why groups such as Generation Rent and Marks Out of Tenancy have emerged to give a collective voice to private renters on matters of not only policy but practice.
Although the Bill is satisfactory in many respects, it still provides the opportunity for the continuation of an exploitative approach. For example, clauses 1 and 2 detail the prohibitions on landlords and agents applying fees in many circumstances. The cap of £50 for any of those charges is very welcome, but the explanatory notes go on to say
“or reasonable costs incurred if higher”.
That is a clear opportunity for a coach and horses to be driven through this otherwise very good Bill. We know that some letting agencies and landlords will push these grey areas, and without directly spelling out what charges are permissible and what “reasonable costs” are, there is undeniably room for incorrect interpretation.
The Government have so far given an indication that they will provide guidance on these and other issues, but how can that be enforced? If I speak to Shelter about how a renter can take a case against a banned fee being levied against them, the question then becomes a test of reasonableness. Whether or not such charges are reasonable, I know that it will say that if the Government want to genuinely give tenants additional powers, regulation is required to ensure that they are enforceable and meaningful.
The same goes for default fees, which are to be capped at the level of the landlord’s loss. At first glance, this seems eminently reasonable. A landlord should not be required to pay for a banking or other fine due to a tenant making a payment late or the replacement of a lost key or entry fob. However, the Minister must be aware of the scope for this to become a nice little earner for agents or landlords who would seek to unfairly penalise their tenants for minor errors.
Mr Jim Cunningham
I agree with my hon. Friend that there should be some form of adjudication or regulator, whichever way we want to put that argument. The weakness in the Bill, which is a good Bill by the way, is on enforcement, because as most people know, trading standards departments up and down the country in local authorities are totally underfunded.
Melanie Onn
My hon. Friend makes a very important point and I will come on to trading standards shortly.
There is no definition of what a landlord can include as a loss. If this includes the use of agents and agents opt to charge for their time—to replace a key or make some phone calls—charges may amount to far more than Government ever intended them to. This is one of the issues that we have seen with the scandal around excessive charges to private leaseholders: without a specified cap, there is scope for the unscrupulous to run riot.
Jo Stevens
The Bill is obviously necessary because of the bad behaviour of some landlords and letting agents. Without the measures that my hon. Friend set out, bad behaviour by rogue landlords and letting agents will not be prevented. They will carry on doing it because there is no sanction and no enforcement to stop them.
Melanie Onn
My hon. Friend makes a really important point. There is absolutely no point in this House taking through legislation, as good as it is, if it cannot be enforced because it holds no weight in law.
The inclusion of a one-week refundable holding deposit, on top of a month’s rent and six weeks’ tenant’s deposit, is allegedly designed to minimise instances of tenants securing multiples of properties at the same time before finally settling on their preferred property. There has been very little, if any, evidence that this is a regular practice. Additionally, the Government say that there are a number of exceptions to that deposit having to be refunded, including when the tenant provides false or misleading information. Again, although on the face of it, that is a sensible measure, there are no additional protections for tenants if the incorrect information is not their fault. For example, a reference that does not exactly match a tenant’s claims should not immediately mean that they lose that holding deposit. There is scope to develop a mechanism to test inaccuracy and establish the reasons behind it before immediately assuming information has been deliberately misleading.
Kevin Hollinrake (Thirsk and Malton) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Despite the fact that I have been involved in this sector for most of my life, and am still involved, I am very supportive of the Bill and the drive to ban tenant fees. That said, on the hon. Lady’s point about holding deposits and the reference fees that tenants pay to the agent or landlord, does she not think it a reasonable concern that if we do not allow a letting agent or landlord to hold back a reasonable amount for referencing, they might be more likely to pick a better-off tenant than some of the lower-income tenants she is seeking, quite rightly, to protect? There are concerns about the commercial behaviour that could result if what she describes was to happen.
Melanie Onn
The point is that poorer tenants struggle the most. That is why we are trying to make the Bill as good as it can be. It comes back to reasonableness and whether there is sufficient rigour in the proposals to ensure that people are properly protected, and that goes for landlords as well.
The Government must bring back evidence during the remaining stages to convince us that this is a legitimate charge to make, rather than a simple amelioration of losses to agents and landlords. It is notable that the Government have opted to cap deposits at six weeks. The Minister should know that in practice this means all deposits will be six weeks, despite most rents being payable on a monthly basis. Shelter estimates that a six-week cap still means that London renters have to find on average a £1,800 deposit and that outside of London the figure is £1,100. Add to that one month’s rent and a week’s holding deposit, and people are looking at needing £3,750 just to secure a property in London and £2,290 elsewhere. That is a huge amount to save.
Wages are not keeping pace with rents and many people struggle to afford a decent place to live. Most low-paid workers are women. Will they be more disadvantaged by these measures than men, and what about those with disabilities, from black and minority ethnic communities or the lesbian, gay, bisexual and transgender community? The Government have not undertaken a formal equalities assessment of the Bill. Will the Minister explain why and commit to ensuring that an assessment of the proposals is undertaken before the Committee stage? There has been an informal but not a formal process on this matter.
As I said earlier, none of the measures in the Bill will matter without their ability to be enforced. There is direction in the Bill for responsibility to lie with local authorities and their trading standards teams. The Minister will be aware that trading standards teams are currently responsible for checking on age-restricted products, agriculture, animal health and welfare, fair trading, food and hygiene standards, counterfeiting, product safety and weights and measures, and they do this despite having endured a drop in funding from £213 million in 2010 to £124 million in 2016 and a halving of their staffing capability—more in some areas.
The Chartered Trading Standards Institute has previously expressed its concern that the public are being let down in respect of its current areas of responsibility, let alone additional responsibilities—particularly ones that will not pay for themselves through the imposition of fines, which are limited to a maximum of £30,000, whose rules are not enforceable because the drafting provides too much scope for interpretation and for which the Government only plan to provide guidance rather than issue regulation to support tenants and those seeking to enforce the measures in the Bill.
Those in the private rental sector are in desperate need of clear and positive action from the Government to protect their rights. I hope we will see a strengthening of resolve from the Government as the Bill goes forward. They must not miss the opportunity to make a good Bill a great Bill, and I urge them to take this chance to make real changes that could improve this sector of our country’s housing market.
Several hon. Members rose—
Housing and Homes
Melanie Onn Excerpts(8 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Melanie Onn (Great Grimsby) (Lab)
I thank everybody who has participated in the debate. We have heard some incredibly thoughtful, welcome and, in some cases, unexpectedly radical contributions. That drives home just how important an issue housing is up and down the country.
However, we have a Government who have failed to do anything over the past eight years to help those who are suffering in this housing crisis. Speeches by Members on both sides of the House have given a glimpse of how across the board the Government are failing. Whether it is statutory homelessness, social house building, rough sleeping, home ownership or the proliferation of temporary accommodation, there is not a sector that has not suffered as a result of eight years of austerity.
To give one example, rough sleeping has increased by 169% since 2010. Crisis predicts that, without substantial changes in Government policy, it will increase by a further 76% in the next 10 years. I cannot be alone in being alarmed by the fact, as the hon. Member for Chichester (Gillian Keegan) said, that children in temporary accommodation lose out on 55 days of school on average. I think that we should all have a great sense of urgency about tackling this issue, rather than waiting for 2022 or 2027 to get to the heart of tackling it.
The Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for South Derbyshire (Mrs Wheeler), who has responsibility for housing and homelessness, has said that she does not know why rough sleeping is going up. Perhaps she should listen to the 70% of councils that said that they had difficulty finding social housing for the homeless. Even worse, almost 90% of councils have said that they have struggled to find private rented accommodation.
I welcome the Homelessness Reduction Act 2017, which was driven through by the hon. Member for Harrow East (Bob Blackman). It has huge promise, but we know that the resources that will be delivered to local authorities, which are expected to deliver on every element of the Act, will not match those demands. Schemes such as Housing First are a drop in the ocean compared with the losses of the supported people funding, which the Conservative Government decided to cut.
All of that is no surprise. We know that social house building is hitting historic lows under this Government. In the last year, during the now Home Secretary’s time at the MHCLG, £817 million was handed back to the Treasury that was meant to be used to build affordable homes and support local authorities. That is simply unacceptable. Where private house builders are building, the Government have been slow to close regulatory loopholes that harm consumers.
We heard from my hon. Friends the Members for Garston and Halewood (Maria Eagle) and for Ellesmere Port and Neston (Justin Madders) about the issues in their constituencies. Sixty-nine per cent. of new build properties in the north-west are being sold as leasehold, and that figure is higher than anywhere else in the country. I am sure the constituents of my hon. Friend the Member for Garston and Halewood in Gateacre Park and Cressington Heath will be delighted to hear that their MP is so active on their issues. The fact is that 999-year leases are being given out and maintenance charges continue in that period. That will be incredibly prohibitive. There are charges up to 20 times the ground rent to purchase the leasehold. People have been misled and exploited, and there are clearly issues with covenants in transfer documents. The House must give its attention to those issues when leaseholds are discussed, as I hope they will be later in the summer.
My hon. Friend the Member for Ellesmere Port and Neston was absolutely right to call these “fleeceholds.” He said that his constituents were unable to move up the ladder because the leaseholds were far too restrictive. I have seen the same in my own constituency. Constituents in Cambridge Park and Limber Court are in retirement villages, on fixed incomes, and they cannot sell their properties. We also have to think about what we can do retrospectively to try to deal with legacy issues when it comes to people selling leaseholds to freeholders who simply want to make as much money as possible out of people. The Government are taking action on the issue, which I welcome, but we have to make sure that we tackle the issues that have been brought to the House this afternoon. To be laid back in any way about this matter would not be acceptable to any of our constituents.
If the Government turned around tomorrow with the money and regulation changes required to seriously start to challenge the housing crisis, that still would not be enough. House building itself faces a crisis, with skills in the building industry in seriously short supply. The Federation of Master Builders warned earlier this year that small and medium-sized house builders are facing the worst skills shortage on record. Demand for carpenters, bricklayers, plumbers, electricians and plasterers is outstripping supply. Two thirds of construction SMEs are struggling to recruit bricklayers. Who will build the 300,000 houses the Government say they want to build?
Then there is the £250 million that has been put into a flagship Government scheme to boost starter home constructions: it has not led to a single property being built. What a betrayal of young Britons who are struggling to buy that all important first home! I commend my hon. Friend the Member for Reading East (Matt Rodda) for his work standing up for young people in his constituency. He says that the wrong kind of housing for local people is being built. It is too expensive. He urges the proper use of brownfield sites, and I hope the Minister has listened. That is a snapshot of the situation across the country.
I turn briefly to the speech made by my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick). It is telling that there are 25,000 people on the council waiting list in his constituency. The number of social homes being built has collapsed. The idea that affordable rents should be 80% of market rents means that in reality they are anything but affordable for his constituents. He was absolutely right to raise that issue. The private rented sector is therefore often the only option available. Perversely, one of the leading causes of homelessness is the end of an assured shorthold tenancy—the numbers have quadrupled since the Government came to power.
Rents are rising faster than incomes and there are 900,000 fewer homeowners among the under-45s. Renters are spending £9.6 billion a year on houses that the Government class as non-decent. My hon. Friends the Members for Crewe and Nantwich (Laura Smith), for Oxford East (Anneliese Dodds) and for York Central (Rachael Maskell) discussed really important points about the quality of private rented accommodation. Hopefully, the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill, which my hon. Friend the Member for Westminster North (Ms Buck) is promoting, will make its way through the House rapidly so that we can start to tackle properties that are simply not suitable for anyone to live in, impacting not only on people’s physical health but on their mental health.
There are also the issues around tenant fees and the expenses of people in rented accommodation, who may not ever have the opportunity to be anything but renters. What can we do for those people? In Oxford East, someone has to earn 16 times the average salary to be able to own their own property. That is an extraordinary figure. It cannot be a city for ordinary people—all those who are “just about managing”, who the Government have spoken so regularly about. My hon. Friend the Member for York Central was clear that the provision of homes in her city was inadequate and that property there was too expensive. Only 5% of homes are affordable there—surely far beneath what the Government would expect.
We know that building affordable homes is a good investment. The Government currently spend 95% of their housing budget on benefits to support people in their homes. In the 1970s, over 80% of Government housing spending funded homes, with just a fifth spent on housing-related benefits.
I would just like to mention very quickly the contribution by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), who was absolutely right as well as very brave to mention the classification of the green belt. Too often the assumption is that the green belt is a national park or an area of outstanding natural beauty and not, as she described, a tyre replacement plant.
Labour has a plan; the Government have empty words and eight years of failure. On every graph to measure housing failure, one can pinpoint clearly where Labour left office and when the Conservative party took charge.
Secure Tenancies (Victims of Domestic Abuse) Bill
Melanie Onn ExcerptsTuesday 8th May 2018
(8 years, 2 months ago)
Commons ChamberRead Full debate Secure Tenancies (Victims of Domestic Abuse) Act 2018 View all Secure Tenancies (Victims of Domestic Abuse) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 8 May 2018 - (8 May 2018)
Melanie Onn (Great Grimsby) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Amendment 1, in clause 1, page 1, line 9, after “tenant)” insert
“and regardless of whether the qualifying tenancy is in the jurisdiction of another local authority”.
Amendment 2, line 25, at end insert—
“(2BA) A local housing authority which grants an old-style secure tenancy under subsection (2A) or (2B) has discretion to decide whether or not the maximum rent for the old-style secure tenancy should be determined according to regulation B13 of the Housing Benefit Regulations 2006 (SI 2006/213) as amended by the Housing Benefit (Amendment) Regulations 2012 (SI 2012/ 3040).”
Amendment 3, page 1, line 25, at end insert—
“(2BA) A private registered provider of social housing or a housing trust which is a charity that grants a tenancy of a dwelling house in England must grant an old-style secure tenancy if—
(a) the tenancy is offered to a person who is or was a tenant of some other dwelling-house under a qualifying tenancy (whether as the sole tenant or as a joint tenant); and
(b) the provider is satisfied that—
(i) the person or a member of the person’s household is or has been a victim of the domestic abuse carried out by another person; and
(ii) the new tenancy is granted for reasons connected with that abuse and such a private registered provider of social housing or housing trust which is a charity shall be considered a person who satisfies the landlord condition under section 80 for the purpose of granting an old-style secure tenancy in accordance with this subsection.”
Melanie Onn
We are here to discuss a short but important Bill. It has been introduced by the Government to plug the gaps left by ministerial incompetence in the progression of the Housing and Planning Act 2016. Despite the Opposition’s warnings, the Government failed to listen, so we are here today to remedy the situation as fully as possible for victims of domestic violence.
In Committee, we tabled an amendment to try to secure additional guidance and training for local authority staff who are expected to make decisions about domestic violence cases. In response, the Minister talked about the high quality of Southwark Council’s homelessness team as an example of the Government already providing enough support. I am convinced that Southwark Council is doing an excellent job, but it has taken part in a number of pilot schemes, so surely the Minister recognises that it will not be representative of the whole country, particularly as it has been allocated well over £1 million to deal with the new burdens that have been introduced under the Homelessness Reduction Act 2017. Although there are good reasons for the extra funding, it allows the council to employ specialised officers who are responsible for specific areas of homelessness and to provide an holistic approach to those presenting as homeless.
However, if we look at another city elsewhere in the country—York—we find that it has been allocated just over one twentieth of the resources provided to Southwark and it does not have enough money even to hire one experienced housing officer, never mind a specified officer to deal with domestic abuse cases. The truth is that the quality of domestic abuse homelessness provision varies massively from authority to authority, and getting the proper care is far too much of a postcode lottery.
Although I am not introducing an amendment on this issue today, I hope that the Government consider the reports from charities such as Women’s Aid about the difficulty that some women face when trying to explain their situation to local councils. There are cases of women being told to go back to the perpetrator or to come back when the situation got worse. I think we can all agree that that is completely unacceptable. The Minister should look into those reports and take steps to improve the quality of advice in boroughs and districts where problems have been identified with the treatment of domestic abuse victims.
Mrs Maria Miller (Basingstoke) (Con)
I understand the point that the hon. Lady is making, but does she not welcome the fact that the Government are introducing an extra £17 million to help more than 40 local authorities to provide better services? The Government really have made this a priority; does she not welcome that?
Melanie Onn
As I made clear, we are not tabling an amendment on this, but I urge the Minister to consider the reports from Women’s Aid to make sure that across the country there is parity of service for all victims of domestic violence.
Wera Hobhouse (Bath) (LD)
There is obviously consensus that the Bill is a step in the right direction, and we welcome it, but are there not other barriers to secure tenancies—for example, if debt was incurred in the previous tenancy? Will social landlords have to accept these women? A lot of advice needs to be given, and that is why it is important that the extra services and help are provided.
Melanie Onn
I thank the hon. Lady for that intervention, and I agree: sufficient support should be available across the whole country. Very often, individuals will present with unique circumstances, and legislation cannot provide for each and every eventuality, but making sure that the appropriate training is in place across the country will go some way towards assisting those individuals.
Toby Perkins (Chesterfield) (Lab)
I agree entirely with what my hon. Friend is saying about the postcode lottery. When I raised that on Second Reading, the Minister said that I was complaining about an issue that did not exist, but it has become clear from subsequent meetings with Women’s Aid that different local authorities are applying very different interpretations of the rights in terms of housing allocations and local connections, so I support her efforts to ensure more consistency across the piece.
Melanie Onn
I thank my hon. Friend for his intervention and concur with his remarks. Other issues raised by hon. Members have prompted assurances during the Bill’s progress, and I take the Minister at her word and hope the Government live up to her words.
New clause 1 would ensure that cross-border travel does not negatively affect the rights in the Bill. People who flee domestic abuse end up in all parts of the country, but an unevenness in legislation means that domestic abuse victims in the devolved nations are subject to different rights and protections. The new clause seeks to protect the rights of domestic abuse victims countrywide and ensure that travelling from one council area in one country to another in another country does not impede the rights of a domestic abuse victim.
Domestic abuse victims often have little time to plan when fleeing an abusive partner and are unlikely to think that a move to their nearest large town or city might change their circumstances as a victim of domestic abuse, yet that is the reality in places such as Chester and Wrexham. It should be unequivocal that the rights in the Bill travel with the victims. In Committee, the Minister informed me that this matter would be brought up at the devolved Administration roundtable last month in the hope of agreeing a memorandum of understanding between the Administrations.
John Redwood (Wokingham) (Con)
I understand what the hon. Lady is trying to do, but I do not think her new clause does it, because it says that the Government should “review” the situation. What powers would she want the Government to take to override devolved Governments?
Melanie Onn
The purpose of the new clause is not to override the devolved Administrations, which is why it calls for a review. If the right hon. Gentleman listens to the remainder of my speech, perhaps it will clarify things for him.
I am pleased to see action to improve cross-border collaboration, but I have not seen any such memorandum. In any event, domestic abuse victims need more than a memorandum of understanding, and we have the opportunity to give them just that right now. I am aware of the sensitivities surrounding devolution, so the new clause does not seek to impose Parliament’s desires on the devolved Administrations, but would instead commit the Government to publishing a review of the domestic abuse policies of each Administration and to working towards ensuring that victims of domestic abuse are treated equally when they move from one nation to another.
Sir Robert Syms (Poole) (Con)
Has the hon. Lady written to the Scottish Parliament or Administration, or indeed to the Welsh Government, to ask whether they approve of her new clause?
Melanie Onn
I have relied on the good offices of the Minister, who is in government, to undertake the duties of consultation with the devolved Administrations, which was due to take place, I believe, on 19 April, and we await the distribution of a note on the outcome of those meetings, which was requested but which I have not had sight of as yet.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)
It was emailed to the hon. Lady and all Committee members this morning.
Melanie Onn
That is an opportune time for materials to be sent, as we found out during the urgent questions this morning. I am sorry I have not seen the note. I am grateful that the Minister has provided it, but it is incredibly unfortunate it was not provided sooner, because the information might well have informed the debate. [Interruption.] The Minister may well wish to provide it to me right now, but I am in the middle of my speech and it would be difficult for me to speak and read at the same time—as good as I am at multi-tasking!
Amendment 1 adds a requirement for a secure tenancy to be offered when domestic abuse victims apply for rehousing in a local authority area different from the one in which they previously had their secure tenancy. In Committee, the Minister said that the amendment was ineffective because the requirement was already provided for in the Bill, but there remains some unease about the current wording. The amendment would provide peace of mind, as prescribed by the Government back in 2016. We must not forget that the sector has been waiting for two years, having been assured by the Government that the requirement would be covered by the Housing and Planning Act 2016. The purpose of the amendment is simply to ensure that we do not end up in the same position again if it turns out that the Bill does not guarantee domestic abuse victims secure tenancies if they end up crossing local authority boundaries.
Ruth George (High Peak) (Lab)
I am sure that my hon. Friend, like me, welcomes the fact that tenants who have suffered domestic abuse will be offered secure tenancies, but does she share my concern about evidence given to the Work and Pensions Committee that when local authorities apply to the Department for Work and Pensions for benefits to support a victim of domestic abuse, they are frequently told that it will be several weeks before a decision can be made, and victims are returning to perpetrators because they cannot be guaranteed the funds that would secure their secure housing?
Melanie Onn
That is an important point, and I hope that the Minister will take it on board. The issue needs to be dealt with on a cross-Government basis. The Minister has given repeated assurances that she is engaged in conversation with representatives of other Departments, but there certainly should not be any Government policies that discourage victims of domestic violence from leaving the perpetrators of that violence.
Two thirds of all domestic abuse victims who present themselves at refuges come from outside the local area. We know that housing insecurity is a major reason for the fact that too many victims stay with their partners. The amendment is important, because this issue affects far too many of the domestic abuse victims whom we are trying to help today for us to leave things to chance. For the sake of absolute clarity, I ask the Minister again to accept it. I assure Conservative Members that this is not a matter of policy or politics, but a matter of good practice.
Amendment 2 would ensure that victims of domestic abuse do not have to pay extra charges as a result of the bedroom tax if they are provided with a secure tenancy that incorporates a spare room. There are particularly good reasons why the Government must see sense when considering whether to apply the tax to victims of domestic violence. Victims face all sorts of barriers to leaving abusive partners, and the sad impact is that one in five spends more than 10 years living with an abusive partner. That statistic applies only to women who are able to leave: as we all know, countless women never manage to leave their abusive partners, and every week two women are killed by a partner or ex-partner. That is why we need to knock down as many of the barriers as possible.
The amendment would help to remove some of the financial pressure on people fleeing domestic violence, and will ensure that no one who is considering leaving an abusive relationship has to worry about the extra burden that the bedroom tax could add to their costs. It is a vital amendment, because domestic violence victims often have limited means, and may not be able to take jobs that would enable them to provide for themselves and their families. Many domestic violence victims have been subject to financial abuse, being forced to quit their jobs and give their money to their abusive partners, and having little control over their own finances. Domestic abuse victims need help, not a cruel and unnecessary tax over which they have no control. I plead with the Government to make an exception to their bedroom tax, and provide the help and support that domestic abuse victims desperately need.
Amendment 3 would ensure that those in housing association properties are given the same rights to secure tenancies as those in council housing. In Committee, I was concerned about the Minister’s seeming lack of appreciation of the variety of council housing available. While I accept that some housing associations fulfil different functions in society from councils providing housing, a number of them represent the sole social housing provision in a local authority. In Committee, the Minister said that
“local authorities and housing associations are very different entities, which are subject to different drivers and challenges.”––[Official Report, Secure Tenancies (Victims of Domestic Abuse) [Lords] Public Bill Committee, 27 March 2018; c. 30.]
If someone is a resident of Wakefield, their social housing is managed by the Wakefield and District housing association, which exists to manage the local authority’s housing needs and assets, whereas my own local authority underwent a full stock transfer, with tenancies transferring as per council tenancies. Many housing associations in this country have extremely similar drivers and challenges to council-managed housing, and many people in areas such as Wakefield still think of their housing association house as a council house. This amendment seeks to ensure that such victims of domestic abuse in areas such as Wakefield and North East Lincolnshire are given the same rights and protections as those in council housing.
Melanie Onn
The minimisation of the issue around the bedroom tax seems to be due to the fact that the Bill is predicated on an example of someone with a stable and consistent life. But at the point that these people present at a housing office, their life will not be consistent or stable at all, which is why we need to amend the Bill.
Jess Phillips
I absolutely agree. If we could get our housing and welfare systems, which have become fragmented—and were never perfect, don’t get me wrong —to work better together, at least people would have a fighting chance of understanding what the hell they were meant to be doing, because it is a bit confusing at the moment. My hon. Friend is completely right that we are talking about people in chaos.
A tiny fraction of victims of domestic violence present as homeless. The vast majority either stay or end up in refuge, and they will likely have help in those circumstances to get them through the process. But we have to do better for those who turn up the housing office. We have to ensure that local authority staff have a much clearer understanding of this cross-border issue, because the triumph of hope over experience has left many people unhoused.
Luke Graham (Ochil and South Perthshire) (Con)
I rise to speak to new clause 1, which would have a specific impact on local authorities in Scotland, including in my constituency. I would say at the outset, in relation to the thrust of what was said by the hon. Member for Great Grimsby (Melanie Onn), that I agree about the need for more co-operation across the United Kingdom, and I will come on to that shortly. The difficulty, as shown by the fact that I am the only Scottish MP in the Chamber, is that the Bill is not necessarily the right vehicle to do so, because it cuts across some devolved areas, and I want to go into that in a little more detail.
The Government have a strong record on domestic abuse, and the Bill is a further example of that. We have criminalised coercive and bullying behaviour, and we have made sure that we have domestic violence orders. We currently have an open consultation, which provides the potential for more powers and a greater understanding of other types of crimes, such as economic abuse, that are often unseen. That is certainly the experience of many of my constituents, as many people in public authority have seen.
My knowledge of this matter has largely come from my constituents, as well as from some of my own family experience. Many of my constituents have relationships that span the United Kingdom. Men and women who have had such relationships may have some children in England and some in Scotland, so there is a real need for co-ordination and for a UK minimum standard. I have seen at first hand, in refuges and in my constituency office, the bravery of these women as well as the hardship that they have endured. I know how much of an impact there can be on individual lives, and how much need there is for them to move from one local authority to another, which may not be an adjacent one but a local authority far up the country in Scotland or somewhere in England.
Members have talked a lot about the terrible abuse that women have endured, and we know that domestic abuse has a disproportionate impact on women. It is also important to say, however, that 700,000 men were victims of domestic abuse in 2015-16, and that young people are also victims. When we talk about giving people opportunities in secure tenancies in other local authorities around the country, we need to ensure that we capture everyone, because domestic abuse affects many different types of individual at many different ages.
As I have said, and I will keep my remarks brief, a national minimum is desirable. I very much feel that there are times when we are four nations and many regions, but there are also times when we are one country. On this issue, I believe that having a national minimum would be incredibly desirable. I am very keen to work with Opposition Members, certainly as we examine other pieces of legislation in this place, on having UK-wide frameworks, especially in new policy areas, to make sure that there are UK-wide minimums, even if the services are delivered through devolved Administrations, local authorities or other devolved agencies. I am very willing to help in such a way. Unfortunately, however, as the Bill is targeted at England, making an amendment to loop in what is a devolved area in Scotland—it would have an impact in my local authority and others—this is not the best place to do so. I hope to work with Opposition Members in future to try to develop policies on such minimums.
I hope that my hon. Friend the Minister will continue in the spirit of consultation that she always shows in relation to the devolved Administrations, and perhaps she will consider extending her audit of services elsewhere in the United Kingdom—beyond England to Scotland, Wales and Northern Ireland.
Melanie Onn
I want to assure the Minister that at every stage of the Bill, since I have been involved, I have sought to be constructive in my approach. Having heard the arguments and the Minister’s response, let me say that I do not intend to push new clause 1 or amendments 1 and 3 to a vote. We have made our points as fully as we can—sadly, to no avail—but I do not want to cause any unnecessary delay to the Bill.
On the bedroom tax, however, the Minister’s response was not wholly sufficient to ease the Opposition’s concern about the potential for a damaging loophole to be created, which would be to the detriment of domestic abuse victims. As the hon. Member for Poole (Sir Robert Syms) said, we want a fit-for-purpose policy, and that is what we are all aiming for. I therefore request that the House be permitted to divide on amendment 2, but I beg to ask leave to withdraw new clause 1.
Clause, by leave, withdrawn.
Clause 1
Duty to grant old-style secure tenancies: victims of domestic abuse
Amendment proposed: 2, page 1, line 25, at end insert—
“(2BA) A local housing authority which grants an old-style secure tenancy under subsection (2A) or (2B) has discretion to decide whether or not the maximum rent for the old-style secure tenancy should be determined according to regulation B13 of the Housing Benefit Regulations 2006 (SI 2006/213) as amended by the Housing Benefit (Amendment) Regulations 2012 (SI 2012/ 3040).”—(Melanie Onn.)
Question put, That the amendment be made.
Melanie Onn
I would like to start by thanking my colleagues in this House, in particular my hon. Friends the Members for Croydon Central (Sarah Jones), for Birmingham, Yardley (Jess Phillips), for Chesterfield (Toby Perkins), for Nottingham North (Alex Norris), for Walthamstow (Stella Creasy), and for Canterbury (Rosie Duffield), and, for her contributions this afternoon, my hon. Friend the Member for High Peak (Ruth George). I also thank Members in the other place for scrutinising this proposed legislation and ensuring that it leaves in a marginally better state than when it arrived. I would particularly like to pay tribute to my colleague Baroness Lister, as her amendment to the original Housing and Planning Act 2016 is the reason the Bill is before us today.
I am disappointed that the Minister has been so reluctant to support any of our amendments, as they would have strengthened the Bill by helping to equalise the quality of care across the country and guaranteeing that domestic abuse victims who move authorities still have a secure tenancy in their new authority. I had hoped that, given that mistakes had been made in this area in the past and such provision had not been included in the Housing and Planning Act 2016, the Government might have listened to some of the concerns from the sector about the ambiguity of the Bill. However, given that we have just divided on the matter, we will support the Bill as drafted.
Despite that, the Bill leaves the House today and it will do a large amount of good for many domestic abuse victims across the country. By guaranteeing a secure tenancy to victims of domestic abuse moving from a secure tenancy, the Bill will remove a key barrier that prevents domestic abuse victims from leaving their perpetrator. There is a clear need for a new radical and credible approach to housing and refuges, but the Bill will provide more security to many domestic abuse victims who are in secure tenancies. We therefore support the Bill.
Oral Answers to Questions
Melanie Onn Excerpts(8 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
James Brokenshire
I am grateful to my hon. Friend for his comments about my father and his sense of focus and dedication as a public servant. My hon. Friend makes a point about the private sector and about landlords and those who own buildings seeking to pass on those costs. I would say clearly that the costs should not be passed on to leaseholders. They should be borne by the owners in the same way that local authorities and public sector buildings are maintaining that approach. I welcome the decision from one property developer, Barratt, to pay for remediation costs, and I hope that others will follow its lead.
Melanie Onn (Great Grimsby) (Lab)
On 17 June last year, the Prime Minister said:
“My Government will do whatever it takes to…keep our people safe.”
Plymouth Community Homes says that its request for funding to replace cladding has been turned down, and it is not alone. We have heard the same thing from local authorities up and down the country. Will the Secretary of State update the House today on how many funding applications to replace cladding have been approved by his Department, to demonstrate that it is doing all it takes?
James Brokenshire
As the hon. Lady will know, I am relatively new in post, but I will investigate the specific question that she has raised and respond to her. Obviously, our commitment remains to working with local councils on this important issue.
Street Homelessness
Melanie Onn Excerpts(8 years, 3 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Adam Holloway
I have not come across the Cyrenians, but I agree with the hon. Gentleman that across the road is an excellent sleep spot.
The No Second Night Out programme is a good example of an early intervention service. It was launched in 2011 by my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), now the Secretary of State for Foreign and Commonwealth Affairs, and it aims to ensure that no one, once identified, spends a second night sleeping rough in central London. More recently, Sadiq Khan has gone further and set up the No Nights Sleeping Rough Taskforce, trying to come up with new solutions. The taskforce brings together boroughs, voluntary organisations and central Government.
Apart from the proactiveness of the agencies that are helping, I noticed some other differences. In February 2018 the majority of the people I came across living on the streets were foreign nationals. One evening, at a soup kitchen on the Strand, there were—I will not exaggerate this—certainly 200 people. Various church groups—from Maidenhead, I think—and some Ahmadiyya Muslims, a Sikh group and an evangelical group were helping out. I wandered about while shawls and brand-new trainers were handed out, and I honestly did not hear English being spoken by anyone. I heard east European languages, Arabic and Italian.
The statistics seem to bear out my anecdotal evidence. Information collected by the Combined Homelessness and Information Network—the joint agency of people working with rough sleepers that is run by the excellent charity St Mungo’s—records that, in 2016-17, of the rough sleepers in London for whom nationality information was available, 30% were from central and eastern Europe. The figure for non-UK nationals overall was 52.6%; that does not include those who do not wish to give a nationality, and other sources put the figure nearer 60%, which was certainly my experience.
Melanie Onn (Great Grimsby) (Lab)
I note that the hon. Gentleman mentioned that those figures relate to London. Does he accept that, UK-wide, only 4% of rough sleepers in England are non-European Union nationals and 16% are EU non-UK nationals? Will he join me in thanking those faith groups who go out to serve all communities, regardless of background, and to help people who are in the direst of straits if they are rough sleeping?
Adam Holloway
Well, of course—the hon. Lady need not even have bothered asking the latter question, because it is a no-brainer, isn’t it? As for the numbers for the rest of the country, I do not know—I have not looked at them—but they are very interesting. There are many different people with different sets of figures, and I am sure that hers are correct. With the example of the numbers of foreign nationals living homeless in London, we can take our pick, but the CHAIN figure is the most reliable—I do not think that the figure is much more than 60%, but nor do I think it is much less.
Melanie Onn (Great Grimsby) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray. I thank the hon. Member for Gravesham (Adam Holloway) for securing this very important debate. The turnout of colleagues goes some way to demonstrating how important this issue is to so many representatives throughout the country. I am only sorry that more colleagues have not had more time in which to share their views and discuss issues affecting their constituents.
Street homelessness is just one part of the ever increasing problem of homelessness, but it is one that shames the country, so we must welcome the Government strategies to tackle it. I am referring to piloting the Housing First schemes in mayoral areas and bringing in the Homelessness Reduction Act 2017. However, I must enter a small caveat. Housing First has worked incredibly well in Finland and areas of Canada, and St Mungo’s, which the hon. Gentleman has spoken to and worked with closely, has also been undertaking this work for quite some time outside the pilots, so we should take this opportunity to congratulate those organisations that have already been undertaking this good work for some time. I also need to raise my concerns about local authorities’ ability fully to implement the range of facilities in the Homelessness Reduction Act without the funding properly to support the requirements of that Act.
Afzal Khan (Manchester, Gorton) (Lab)
I, too, feel that those are exactly the problems, so does my hon. Friend agree that local authorities up and down the country face these difficulties? In my own city of Manchester in 2010, we had only seven people in this situation, but in 2017 the number was 94. Manchester City Council is giving £3 million to tackle homelessness, but it is also fighting the tide of crippling cuts to local authority budgets, an historical housing crisis and punitive welfare reform—
Melanie Onn
My hon. Friend the Member for Manchester, Gorton (Afzal Khan) is absolutely right, and I could not support him more. I congratulate Andy Burnham, Mayor of Greater Manchester, on the action that he has taken to ensure that homelessness is at the top of his agenda and to tackle this issue for his city, including by putting some of his own funds into the task group. The rise in homelessness in Manchester and other areas has not simply happened by chance; it is a result of Government choices.
Faisal Rashid
The figures show that almost 5,000 individuals are now sleeping rough on our streets. That is a 15% increase on 2017 and a 169% increase since 2010—a massive increase. Does my hon. Friend agree that we cannot help the homeless if we do not provide the homes that they require?
Melanie Onn
Absolutely, and I will come on to that issue shortly. This problem is not insurmountable. When Labour was in government, there was an unprecedented drop in homelessness, but since 2010 it has worsened by every measure. As the hon. Member for Bury South (Mr Lewis) made clear, the doubling of rough sleepers since 2010 is a problem of the Government’s own making. Home ownership is at a 30-year low. The average home costs eight times the average salary. Today in England there are 120,000 homeless children. The building of social rent homes has plummeted, with fewer than 1,000 last year—the lowest level on record.
The Minister, who has responsibility for homelessness, recently said that she did not know why homelessness had risen. I find it very hard to believe that anyone in this place cannot immediately see some of the main reasons for homelessness increasing. My hon. Friend the Member for York Central (Rachael Maskell) rightly recognised some of them: a lack of social and council homes; disproportionately high rental increases making homes unaffordable for those on lower incomes; reductions in council funding meaning less for drug and alcohol services; crippling welfare reforms that have cut too fast and too far for those who were genuinely just about managing; and difficulty in accessing mental health services as the thresholds for those services get ever higher.
I shall take the opportunity to highlight some of the innovative work that NAViGO mental health services is undertaking in my constituency. It has worked closely with the local housing association to purchase properties and then uses them as step-down accommodation to support the service users who come to it for help, to ensure that they have wraparound care. That is the principle of Housing First in action in measures being taken by innovative organisations around the country.
Mr Sweeney
My hon. Friend gives very good examples of people who are homeless being given assistance. I wonder whether she will share my dismay at a letter that I received from Eleanor Wilson, a medical student in Glasgow, last night. She said that she witnessed, in a branch of Starbucks in Glasgow, a homeless man who was just queuing for a cup of coffee being told to get out of the premises. That is one of a litany of issues with Starbucks in the city of Glasgow. Starbucks cannot pay its taxes—does not contribute to helping the public realm—and is also ostracising homeless people on our streets who need help. Does my hon. Friend agree that that is totally unacceptable for a corporate citizen of the UK?
Melanie Onn
Absolutely. I think that we all have a responsibility. The hon. Member for Gravesham talked about a society that is enabling homelessness, but I think that there is room for compassion when dealing with people who have myriad social, economic and personal issues driving them to be in this situation.
A sensible welfare state provides security to those in society who need it. That has been eroded over the last eight years, creating an underclass to the extent that the Bureau of Investigative Journalism has stepped into the Government’s shoes with its report published yesterday in the New Statesman and identified 78 homeless people who have died this winter. That is 78 human lives lost, 78 people without a place that they could call home, 78 lost people. Why do I call them “lost people”? Because the Government do not collect those figures centrally. Because in response to my written questions and those from colleagues about deaths associated with rough sleeping, the Minister has repeatedly brushed that question off. There was no acknowledgement that the central collection of data would prove to be of discernible use—that it would better inform the Government of the scale of the issue at hand and provide some evidence and a means by which Government initiatives could be measured.
The Minister’s Department seems similarly unaware of which local authorities have commissioned adult safeguarding reviews in the event of homelessness-related deaths in their area, so we cannot know which local authorities have good practices and which need improvement. Will she agree today to start collecting centrally data in relation to deaths from homelessness? For everyone’s information, at least 59 men and 16 women have died. Their ages ranged from 19 to 68, and 14 of those who died were under the age of 35.
I congratulate them on their assiduousness, but it should not take investigative journalists calling round councils, charities, coroners’ offices and police forces to establish a full picture of how many people are dying on the streets of our country. And it is not just those figures that matter. The Government should be doing better in collating general information about people who are rough sleeping, because the accuracy of those figures is wholly insufficient. In the official figures, the estimated figure for rough sleepers in my constituency sits at around 22, but the list that I get every single month from my local outreach services shows more than double that number.
Mr Ivan Lewis
My hon. Friend is making an excellent contribution to the debate. Does she agree that there is a case for reviewing the nonsensical, arbitrary headcount that takes place once a year, in November, and leads to completely misleading statistics? We actually need a personal profile of each individual so that we know what their needs are and how to address them. The headcount once a year is completely misleading and unhelpful.
Melanie Onn
The hon. Gentleman makes an incredibly valid point, and I hope that the Minister is listening. I see that the hon. Member for Gravesham, who initiated the debate, is nodding: he thinks that what has been referred to would be of great use.
It is shameful that in 2018 we have experienced such a rise in homelessness in all its guises, from families left in supposedly temporary accommodation for up to two years, to those without even a roof over their heads. There must be action. Now is not soon enough, let alone 2027, especially for those who have lost their lives without the security of their own home.
Draft Licensing Of Houses In Multiple Occupation (Mandatory Conditions Of Licences) (England) Regulations 2018
Melanie Onn Excerpts(8 years, 3 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Melanie Onn (Great Grimsby) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Moon, and to discuss these important HMO regulations. I will hazard a guess that I am one of the very rare parliamentarians to have lived in an HMO as a young homeless person and later as a between-homes, slightly older young person. I know how it feels to live in a property that was originally built for a single family, but that has been carved up in weird and wonderful ways to accommodate as many people as possible to maximise rental and housing benefit income. With the charity and housing association I was placed with, I was in the fortunate position of not having to suffer sharing a room or a house with multiple families, but that is the situation that many people across the country find themselves in. It is for them that we should not hesitate in improving the standards of the accommodation available.
The Government have made welcome steps in improving the deal for those living in HMOs, as the Minister outlined in her opening remarks. Labour has long argued for stronger rights and protections for renters, and the regulations will go some way to improving the rights of many of the most poor and vulnerable tenants, who are often the ones occupying such overcrowded houses. I take this opportunity to echo the sentiments of my hon. Friend the Member for Ealing North about the impact of HMOs on local communities. The number of HMOs impacts not only on immediate neighbours, but the whole community. With more people residing in individual rooms, people become less and less connected with their local community.
Gareth Thomas (Harrow West) (Lab/Co-op)
I have the great privilege of being the neighbour of my hon. Friend the Member for Ealing North. The situation in his constituency that he so ably describes also affects mine. Does my hon. Friend the Member for Great Grimsby believe that the Minister’s reply to my hon. Friend the Member for Ealing North would have been improved had she said that her Department was willing to support local authorities that want to go down the path of addressing that with additional resources? That would certainly speed up the introduction of such schemes.
Melanie Onn
Would that we were all so lucky to have my hon. Friend the Member for Ealing North as a neighbour. I am sure the Minister listened intently to the comments of my hon. Friend the Member for Harrow West and hopefully will take them on board. I am sure they are offered with a generous and genuine sentiment.
I am pleased the Government are bringing forward the regulations and supporting the Bill of my colleague, my hon. Friend the Member for Westminster North (Ms Buck), to ensure that all rental properties are fit for human habitation. Nearly 170 years after the industrial revolution, and a generation on from slum clearances and rife Rachmanism, it is none too soon that we have in one place clear definitions of what is acceptable as a minimum space for a human being to sleep.
However, it would be welcome if the Minister expands on the details of the regulations, of which we are broadly supportive. One concern is the impact of setting a small national minimum room size. I raise that in full recognition of the consultations, but remind the Minister that, in HMOs, the room allocated to someone is not just a bedroom. There are ordinarily shared bathroom and kitchen facilities. Individual rooms provide not only a sleeping location, but everything else—study, hobby, exercise and leisure, and all of that person’s belongings, are within that space. It is not simply a case of considering that there should be enough space for a bed and a chest of drawers. There may be no other space to store, for example, a bicycle by which people might transport themselves, or space for shelving for books, or space for a chair on which to sit rather sitting than on the edge of a bed, or a table at which to study or to eat.
The Minister must take those things into consideration when concluding that the proposed minimum standard for a single occupier should be 6.51 square metres or 10.22 square metres for two people. Those sizes will be further compromised if young children requiring a cot share the space. Would the Minister be happy to live in such a restrictive space?
Local authorities are well aware of the conditions in which some of their residents live and may seek to provide alternative room sizes in their licensing schemes. I note that the regulations do not seek to limit local authorities from setting more generous room size allowances than the national minimum, as the Minister said in her opening remarks, but can she confirm whether she believes that local authorities are protected from legal challenge in the residential property tribunal by landlords who wish to test specific local circumstances? Will she confirm that she has taken steps to allow local authorities to set room sizes freely without fear of a residential property tribunal?
The Minister mentioned fines for anybody letting out rooms that are smaller than the minimum size in the regulations. That requires enforcement and goes to comments made in interventions. Will any additional resources be made available for local authorities? There is no point in having these regulations unless we can properly enforce them and check that they are being adhered to. Local authorities will struggle to do that without resources—officers should be available to go and check on properties.
If the Government are prepared to intervene to set minimum room sizes in private rental HMOs, will they consider doing the same for new build private properties? On a recent visit to a development in Doncaster with Keepmoat Homes, which is working in partnership with the local Labour council, I was shown new builds, some of which will be handed to the council for social housing. They are being built with a 30% greater footprint to avoid the problems that have so often been experienced by people buying new houses—that the rooms are too small for regular furniture and do not have any storage space for things such as cleaning materials.
A number of issues arise when living space is unsuitably small. That applies to all properties, whether they are privately owned or rented HMOs. First, in HMOs there is the obvious danger that overcrowding and over-cluttered space could create a much greater fire risk. Usually there is only one way out, and residents should not be hindered in getting to the exit easily because of insufficient space. Secondly, one of the biggest issues connected with limited space, especially in HMOs, is the impact on mental health. Once someone is in the room, it is usually locked. There is often limited socialising between tenants, and a lack of shared social space can lead to isolation. If children are living in and sharing such a room, the ability to play, develop, be creative and learn is hampered. The likelihood of serious decline in mental health is all too real.
Of course that all fits into the wider problem of a housing market in crisis. It is fair to say that part of the reason for such shocking standards of accommodation is that many of those affected simply have no other option. There is a serious lack of council and social homes, and private rents for sole occupiers are too often unaffordable.
Stephen Pound
I hope my hon. Friend will not think me churlish when I say that, if we are talking about becoming neighbours, I should prefer it if she moved to Ealing—although I am happy to move to Grimsby should that be required.
My hon. Friend makes a powerful case and is speaking up for those whose voices are seldom heard—those who occupy houses in multiple occupation. Does she agree that in such cases we should consider a community infrastructure levy or some other sort of payment because of the impact on local facilities? I do not just mean community centres—I mean places such as libraries. HMOs put an extraordinary strain on the community in terms not only of social cohesion but of demand for facilities, for precisely the reasons she has so eloquently explained.
Melanie Onn
Thank you for your guidance, Mrs Moon. I shall not talk about libraries, but I thank my hon. Friend for his intervention, which relates to the point made earlier about the impact of HMOs on communities and the resources that local authorities require to meet the needs of all their residents properly.
Many of the vulnerable people who live in HMOs have to wait far too long to be provided with the council homes that they desperately need. The Housing and Planning Act 2016 offered little respite for many of those people, who are facing the sharp end of the crisis. Unfortunately, rather than providing enough council houses for the many who are on waiting lists, the Government decided to continue a sell-off of what council house stock we have left.
The regulations before the Committee show that the Government are aware of some of the problems facing the housing sector today, so will they back some of the steps that will help solve the crisis? Will they back a moratorium on the right to buy, under which more than 80,000 council houses have been sold since 2012?
The Chair
Order. I again remind the hon. Lady to stay within the scope of the regulations. The purchasing of council housing is not in the provisions that we are here to look at.
Melanie Onn
Thank you, Mrs Moon.
I shall move on to an issue that is dealt with in the regulations—landlords’ responsibility for waste, and the additional waste generated in HMOs. The Government are right to require HMO landlords to take more responsibility for waste and its disposal. Often residence in HMO properties is transient, and the provisions should hold no fear for good, responsible landlords who take an interest in their property and tenants and the wider community.
A number of issues have been raised in the debate, and I hope the Minister will take as many steps as possible to answer those queries, but on the whole we believe that this statutory instrument represents a clear step forward for many poor and vulnerable people who have ended up in terrible conditions due to overcrowding of room space, and the Opposition are happy to support it.
Secure Tenancies (Victims of Domestic Abuse) Bill [ Lords ] (Second sitting)
Melanie Onn ExcerptsTuesday 27th March 2018
(8 years, 4 months ago)
Public Bill CommitteesRead Full debate Secure Tenancies (Victims of Domestic Abuse) Act 2018 View all Secure Tenancies (Victims of Domestic Abuse) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 March 2018 - (27 Mar 2018)
Melanie Onn (Great Grimsby) (Lab)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Ms Ryan. The most common scenario in domestic violence cases is that of a woman fleeing her abuser. She escapes a harmful and dangerous situation and tries to find a place of safety—often a refuge. As we said this morning, for 68% of those women that is in another local authority area. The Minister said she does not think there is a problem with that in the Bill and decided not to accept amendment 5, which we withdrew following our discussion this morning, but we still hold that there may be a problem if the cross-boundary duty is not made explicit. The situations becomes even clearer if we think of people fleeing from another country in the UK—from Northern Ireland to England, from Scotland to Wales, from England to Wales, or from Scotland to Northern Ireland.
There are significantly fewer resources in towns than in cities. For those living in the more far-flung reaches of our country, access to support services, including housing, may be much more limited. The homelessness services provided by, for example, Crisis, are well known, but Crisis clearly operates somewhere where a significant amount of rough sleeping occurs—London. The excellent services it provides at its Crisis Skylight centre in central London are much harder to come by in, say, Norfolk or Wiltshire, although it now has an excellent service in South Yorkshire. The groundbreaking work and the centrepiece services tend to be in cities, and the same is true for domestic violence services. It stands to reason that the more people there are, the broader the range of support services catered for, and the greater the experience and knowledge base that is built up.
The anonymity of cities can be a draw for victims. If there are services to support those experiencing domestic violence, or if that is the nearest place where spaces are available, that is where victims will go. Complications may arise if someone who lives in a border town—for example, Wrexham—is directed to or heads to Manchester to seek sanctuary. Similarly, people from Northern Ireland may head to Birmingham, which my hon. Friend the Member for Birmingham, Yardley tells me contains the largest diaspora of Irish people in the country, to be supported by extended family members. Will the rights conferred by the Bill travel with them? Will the rights follow the victim? When the system differs among our devolved nations, will victims find that they do not receive the same treatment and housing opportunities as someone who straightforwardly moves from one council house in their local authority area to another in that same local authority area? I fear that the Government are looking at this matter far too simplistically and that down the line they will come a cropper as they realise that the Bill has not worked as intended.
Lord Bourne of Aberystwyth recognised the issue presented by the Bill and has committed to taking this particular matter to the Ministry’s devolved Administration roundtable, which I believe is due to convene in Cardiff in April. He has also committed to provide the Library with a copy of the letter that follows the outcome of that roundtable. I am unclear about what that might mean for the Bill, because the outcome of that roundtable will surely serve as some form of response to some of the issues that have been flagged up in debates so far.
I very much accept the difficulties and sensitivities involved, so the new clause will not force England-only duties on to the devolved nations. It strives to ensure that full collaboration is exercised and provided for to enable all victims to be treated fairly and equally, wherever in the country they come from and wherever they end up. To do that, there must be some method of reviewing the issue, and I personally prefer to understand the issue that we are trying to fix with the import of new legislation.
The new clause would recognise that there should be no detriment to anyone travelling between Northern Ireland, Scotland, England or Wales who requires security of tenure. At the moment, the Bill does not do that, despite the recognition of the problem. The new clause therefore proposes a review period of six months to establish where the problems lie in the legislation and to enable the Government to take steps to resolve them.
We do not want to see anyone dissuaded from getting themselves to a place of safety if that place is in one of the devolved nations. The matter was recognised in debate in the Lords. Rather than having to reflect on a missed opportunity, and in full understanding that this is an issue of a premise accepted by Lord Bourne, I urge the Minister to take the necessary steps to future-proof this Bill.
Sarah Jones (Croydon Central) (Lab)
I want to speak in support of new clause 1 and the principle of co-operation, and to give a couple of examples. I used to work for Shelter, and I lobbied successfully for the Homelessness Act 2002. It was a groundbreaking piece of legislation because, for the first time, local authorities had to have a strategy in place to tackle homelessness. It also extended the definition of priority need to many different groups who had not fallen into that category before, including people fleeing domestic violence, as well as 16 and 17-year-olds and people leaving care, prison or the armed forces.
Shelter put a huge amount of resource into lobbying for the legislation. We worked during the passage of the Bill and lobbied civil servants on the guidance that followed. It was a good Bill and there was good guidance, but we knew that we could not necessarily guarantee that it would be implemented in the way that legislators had intended. As a charity, we funded about 15 full-time members of staff to work with every single local authority to help them understand the legislation and implement it.
My point is that even though we had a good Bill, good guidance and all this extra resource from Shelter, which was used widely by all local authorities, there were still differences in implementation, with pockets of good practice and pockets of bad practice. For example, the good practice was that a local authority should have a safe place—a safe room or a safe opportunity—for people once they came to the local authority and said that they were fleeing domestic violence. Not every local authority does that; there are differences in implementation. The implementation and what is written in the Bill are absolutely crucial.
We know that there are different definitions of priority need in different nations. If someone is fleeing domestic violence in England, the category of priority need is stronger than it would be for someone fleeing in Wales. If someone is fleeing in Wales, they have to have been the victim of domestic violence. In England, they have to be the victim or at risk of domestic violence. There is a slightly different way of interpreting that legislation, because it is different in the two nations. I would hate, as I am sure the Minister would, for us to introduce legislation that does not enable every single person we can possibly help to get the support that they need.
The new clause is a sensible addition to the legislation. Giving six months to look at this before anything has to be introduced is sensible. We can support those victims of domestic violence who need our support. Croydon, which I represent, has the highest number of applications by people fleeing domestic violence of any London borough. We have a fantastic service in Croydon. We have the only family justice centre in Europe, which brings together all the agencies that help to support people who are fleeing domestic violence, including housing and the police. We provide brilliant support, which I would like to see across the country and across the nations, but sadly that is not the case. I am supportive of co-operation and new clause 1.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)
The new clause calls for a review of the potential for future co-operation between local authorities in England and those in Wales, Scotland and Northern Ireland, with consideration of how it may be possible to extend the provisions in the Bill to apply across the UK. The issue was raised during passage of the Bill through the Lords and, indeed, an amendment was tabled and subsequently withdrawn.
As hon. Members are aware, housing is a devolved matter, so it is for local authorities, or the Housing Executive in Northern Ireland, and social landlords to decide whether to allow access to social housing under the law that operates in that particular country. Wales, Scotland, and Northern Ireland have their own homelessness legislation. There may of course be differences of approach, according to the requirements of the devolved area and the pressures on their housing stock. As I understand it, for example, in Wales, where social housing stock is in highest demand, the local authorities can and do discharge their duty to rehouse using the private rented sector.
The Minister for faith, Lord Bourne of Aberystwyth, wrote to peers on this issue following Second Reading, setting out how each devolved Administration would deal with the situation if a person, as a result of domestic abuse, were to flee from their home in England to a devolved Administration. I am more than happy to share that with the Committee.
I agree that there should be increased co-operation between England and the devolved Administrations on the question of victims of domestic abuse, including where a victim needs to move from one country to another to escape the abuse and to feel safe. Furthermore, I understand that the Minister, Lord Bourne, gave the commitment that he would raise the issue at the roundtable with the devolved Administrations, which I understand is next due to take place on 19 April in Cardiff. In fact, the noble Lord has written to ask whether the issue could be put on the agenda of that meeting. He has made it clear that he would like to explore whether we can develop a concordat or joint memorandum of understanding between the four countries on our approach to social housing and cases of domestic abuse.
I remind hon. Members that the purpose of the Bill is to remove an impediment that might prevent someone who suffers domestic abuse from leaving their abusive situation in England when the provisions under the Housing and Planning Act 2016 come into force. The Housing and Planning Act applies only to England.
In the current situation, a victim of abuse in another part of the UK, such as in Scotland, will not have an impediment to fleeing their situation from fear of losing their lifetime tenancy, as another council in Scotland will grant them a lifetime tenancy when they are rehoused. The commencement of the Housing and Planning Act does not change that.
I do not believe it would be appropriate to include a duty in the Bill, which applies to England only, to consider the potential for amending legislation in other parts of the UK. In this instance, I firmly believe that addressing the question at the devolved Administration roundtable is the correct approach, with a view to securing a memorandum of understanding or concordat. This is a common issue in which all parts of the UK have an interest, but, as I have said, the differences in housing legislation across the devolved Administrations mean that I do not believe a UK-wide provision in a Bill based on an Act that applies only to England is the correct approach. For all those reasons, I do not consider the amendment to be appropriate or necessary and I ask for it to be withdrawn.
Melanie Onn
Yes—yes please to the sharing of information that has been distributed by Lord Bourne. I very much welcome that, as I would a notification to confirm that the meeting of 19 April has taken place and the detail of the conversations that took place within it. I am slightly concerned that the legislation is almost being drafted with eyes shut to the reality of people’s lives. I would urge every consideration to ensure that that is not the reality.
For example, I do not know whether the concordat or memorandum of understanding would be legally binding, how it would operate in an enforceable way and how, if an individual felt that they were being treated differently because they happened to cross a nation’s border, they would go about challenging that, what the normal process would be, whether legal aid would be available, and so on.
There are still concerns that the legislation will not fully do what is necessary to meet the intention that has been set out, but I await the outcome of the meeting on 19 April. I agree that there should be a pause to establish whether that meeting can resolve this issue in an amicable fashion, rather that something that seems to have a UK parliamentary overbearing overtone, which may not be well received by the devolved nations, and I mentioned the sensitivities of the issue in my speech. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill to the House.
Mrs Wheeler
Ever so briefly, I thank everybody for the lively debate. It has been a very well-informed discussion. I think there will be some issues on which we will be able to give greater clarity and comfort to those who have asked questions. Ms Ryan, I thank you, and all the Clerks and staff who have helped us get through this Bill.
Melanie Onn
I thank the Minister for listening in an open and honest fashion to the points that have been put genuinely to try to improve the Bill. I also extend my thanks to the staff of the House authorities and the civil servants [Hon. Members: “Hear, hear!”]. I thank all of those who have participated in the debate for their contributions.
Question put and agreed to.
Bill accordingly to be reported, without amendment.