Private Renting: Homeless and Vulnerable People

Lord Benyon Excerpts

Wednesday 8th February 2017 Westminster Hall

[Richard Benyon (Newbury) (Con)]

I beg to move,

That this House has considered private renting solutions for homeless and vulnerable people.

It is a pleasure to serve under your chairmanship, Sir Alan. I refer hon. Members to my entry in the Register of Members’ Financial Interests. I will talk about the housing problems around the country, but of course every area is different, and I concede that some of the ideas and statistics that I apply to my arguments may help the situation differently in different parts of the country.

The private rented sector is an increasingly important route out of homelessness. When renting works for homeless people, it can be life changing. It is often a huge step towards finding a job, reconnecting with family and rebuilding lives.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is the hon. Gentleman aware that the single biggest reason for homelessness in the UK, particularly in London, is eviction from assured shorthold tenancies in the private rented sector?

[Richard Benyon]

I am well aware that the hon. Lady and her colleagues frequently deal with cases in which people were made homeless for precisely that reason, which is an increasing problem. I will come on to talk about some of those issues, and I hope that the Minister can add some flesh to the bones of the White Paper that was published yesterday and the work that he is doing on tenure with the private rented sector.

Finding a home in the private rented sector can be difficult, and we all know that despite the Government’s welcome move to ban letting agent fees, up-front costs often act as a barrier for people trying to access the private rented sector. Research by Crisis shows that 16% of landlords report increasing the deposit when renting to homeless people, 12% increase the rent required in advance and 15% increase the contractual rent.

By way of example, I want to pay tribute to a constituent of mine, Adrian Smith, who runs Swift Logistics in Newbury. He discovered that one of his temporary agency workers had collapsed due to epilepsy, because he was finding it difficult to manage his medication as he was homeless and living in a tent. Adrian stepped in, gave him a clean uniform, offered him a permanent position and talked to him about his situation—things that I am sure he would do for any of his employees who were going through a rough patch. Adrian then started to look for accommodation for that employee. There was very little affordable accommodation in Newbury that suited that individual, and anything that Adrian found was made impossible because once the landlord or his agent discovered that the prospective tenant had debt problems—he had a county court judgment against him—they demanded six months’ rent up front. We can see the vicious circle here. I see some of the ideas put forward by organisations such as Crisis, which I will come on to talk about, as possible solutions to such cases.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My hon. Friend will come on to talk about various organisations that help people with homelessness. Shrewsbury Homes for All in my constituency does a good job of trying to help homeless people. Does he agree that the Government ought to do more to help such organisations?

[Richard Benyon]

Unless we are extremely hard-hearted, we are all moved not only by the huddled figures in doorways and the cases that come to us of people who are either homeless or likely to be homeless but by organisations in our constituencies such as the one my hon. Friend mentions. It is when those organisations work with local authorities and a Government and all point in the same direction that we can get real solutions to this problem, and I am sure that that happens in his constituency.

The Centre for Regional Economic and Social Research found that 55% of landlords said they were unwilling to let to tenants in receipt of housing benefit, and even more—82%—were unwilling to rent to homeless people. The majority of local authorities agree that it has become more difficult for single homeless people to access private rented accommodation.

[Neil Gray (Airdrie and Shotts) (SNP)]

I pay tribute to the hon. Gentleman for securing the debate. Does he acknowledge that the number of private landlords who turn away housing benefit claimants is partly to do with cuts to housing benefit and the fact that it is more of a struggle for tenants to pay the difference to their landlords?

[Richard Benyon]

It is for a multitude of reasons, but the hon. Gentleman is right that that factor has contributed in certain areas. I applaud private landlords who take housing benefit tenants. Not all of them do, and they need to be supported in trying to do so. I recognise that that is part of the problem, and some of the solutions that I will talk about go precisely to that point.

[Mr David Burrowes (Enfield, Southgate) (Con)]

The all-party parliamentary group on refugees has found that landlords increasingly are not taking another category of people: newly recognised refugees. They are unable to provide sufficient documentation to prove their status and struggle to get a deposit and first month’s rent in the 28-day move-on period to ensure that they get the tenancy that they deserve.

[Richard Benyon]

Many local authorities are doing noble work in trying to provide accommodation for the refugees—particularly the Syrian refugees—who we have taken in. I pay tribute to my hon. Friend’s local authority for doing its best. However, there will be several problems at the next stage, because we want those people to be assimilated into our society, get work and be able to function like any other person. We want to ensure that we have systems in place to allow them to transition from the support that they get at the moment. I have direct experience of that in several areas, and I am keen to talk to him about trying to find longer-term solutions to the issue.

The problem that we are talking about is coupled with the capping of local housing allowance and the shortage of available accommodation at the shared accommodation rate. Those burdens can result in people ending up on the street. However, I believe that there are ways of making the private rented sector work for vulnerable people, and innovative solutions are being delivered every day. Homeless and vulnerable people are being helped and guided into the rental market and, most importantly, given the tools and support that they need to sustain lengthy tenancies. Creative change in the market has the potential to improve not only access but standards in the private rented sector.

[Stephen Timms (East Ham) (Lab)]

On standards, does the hon. Gentleman agree that there is potentially an important role for private rented sector licensing schemes, such as the one in my borough of Newham, in helping to tackle the minority of landlords whose accommodation is below standard?

[Richard Benyon]

I am glad that the right hon. Gentleman, whom I respect greatly for his understanding of this problem, says that it exists among a minority of private rented sector landlords. One could have got the impression from yesterday’s statement that nearly every private landlord was a rougue who managed substandard accommodation. As he says, that is far from the truth. I entirely accept that in many cases, local solutions are better suited, but the Government should be given credit for really trying to move things on through a variety of measures, which are sometimes extremely burdensome to landlords but seek to raise the standard of accommodation and improve the way that landlords treat their tenants.

Evidence shows that when a vulnerable person is in secure and safe rented accommodation, they can leave their homelessness behind them and make a fresh start. That also makes good economic sense, which I hope will be a theme of the debate. If we get this right, there will be an entirely virtuous circle. Both the Residential Landlords Association and the National Landlords Association believe that, with the right support, financial risks can be reduced and letting to vulnerable people can be a viable business model. Even if hon. Members forget everything else that I say today, I hope that that will resonate with them. By changing perceptions, we can truly make the private rented sector work for all.

[Siobhain McDonagh]

How does the hon. Gentleman feel that the private rented sector will become a viable alternative for vulnerable tenants when rental claims under universal credit are taking an estimated nine weeks—in reality, it is three months in my part of south London—to be assessed?

[Richard Benyon]

I recognise that that is a problem. If the hon. Lady will allow me, I will come on to talk about that. If I do not, I am sure she will intervene again. I very much want to talk about the variety of different factors that influence homelessness.

I want to tell the Minister about two potential solutions that may be of help. A lot of work on this has been done by the homelessness charity Crisis, which I cannot praise enough. It is totally focused on outcomes, working with us, whatever side of the House we sit on, to try to find solutions that work. There is nothing particularly new in the two schemes I am proposing, and they will be familiar to some. The first is a help to rent scheme and the second is a national rent deposit guarantee scheme.

WPI Economics developed a model to assess the cost-benefits of the services over a three-year period and identified that £31 million would be required per annum over that period. That would be made up of £6.7 million for the rent deposit guarantee scheme and £24.1 million for a help to rent project. In a time of cash-strapped Treasury forecasts, I want to show—if the Treasury is listening—that this makes economic sense, because it will reduce the cost of the burden of homelessness that sits on the taxpayer.

From 2010 to 2014, Crisis, with funding from the Department for Communities and Local Government, ran the private rented sector access development programme, which funded specific help to rent schemes across the country, which helped homeless and vulnerable people access affordable and secure accommodation in the private rented sector. I have seen that work in my constituency in a different scheme run by the Two Saints hostel in Newbury, which moves people from the wayfarer beds and being the huddled figures in the doorway I described earlier through to supported accommodation and then on to independent living. That works only because all the complex problems that we know exist in homelessness, particularly in rough sleeping—mental illness, relationship breakdown and alcohol and drug abuse—are dealt with throughout the process, which allows a sustainable solution to each individual’s problems.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on securing the debate. I agree with many of the points he has made. However, those people with chronic and enduring mental ill health find it very difficult to access any suitable social housing accommodation, particularly in big cities. That group has been let down badly by the private sector and I am not sure whether the solutions he is proposing will change that, given that those people are often going in and out of mental health hospitals. What thoughts does he have on helping that particularly vulnerable group?

[Richard Benyon]

Mental health problems can cause homelessness and homelessness can cause mental health problems. In this place we think of things only in silos. We have a very good Minister here from one Department, but if we really are to deal with this problem we ought to have a whole range of Ministers from the Department of Health, the Ministry of Defence and people from all the organisations who care for people sitting down on the equivalent of the Treasury Bench here so that we can do so in in a much more cohesive way.

The schemes I have been talking about matched tenants with landlords and provided financial guarantees for deposits and rent, with ongoing support for both parties. They provided the landlord with a deposit and insurance throughout the tenancy were problems to arise. They also offered the tenant training in budgeting and help to gain and sustain employment. During the programme, more than 8,000 tenancies were created with a 90% sustainment rate, which is an incredible achievement.

Another person we should have here is an Education Minister. One statistic I find fascinating is from the Centre for Social Justice, which showed that while the national average of educational attainment is that 60% achieve five A* to C grades at GCSE, the figure is only 27% among those who have to move more than three times during their secondary school education. We can therefore see the knock-on problems caused by people having to move frequently, and that sustainability in one home is so important.

The schemes also saved the Government money. In just three months of operation, 92 schemes saved almost £14,000 in non-housing costs. The schemes created homes for those who need them most and helped some of the most vulnerable navigate a complex market. With the security of a home and the floating support from a help to rent scheme, a vulnerable person is less likely to need assistance from other services. That is a point that my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) will appreciate. Schemes varying in geography and specialisms still exist, yet without the funding they need they are unable to deliver all the services they would like to the number of people who need them. By working with landlords, such schemes have the potential to unlock the supply of private rented sector properties, which could particularly benefit areas where housing demand is highest. Local authorities could also incentivise good practice through the schemes as well as eliminate bad practice through enforcement policies.

Crisis is also calling for the second project I want to touch on: a national rent deposit guarantee scheme. To reduce up-front costs, help to rent schemes often offer bonds or guarantees to landlords in place of deposits, which cover certain types of costs that the landlord may incur at the end of a tenancy including damages and, in some cases, rent arrears. That was the case in the example from my constituency that I outlined earlier, where private sector landlords were demanding six months’ rent in advance. That means that vital funds are tied up in admin costs and reserves in case those guarantees are called in rather than in going into funding the support that helps vulnerable tenants sustain their tenancies. If the Government established a national rent deposit guarantee scheme, that would provide help to rent projects with greater financial security, with landlords safe in the knowledge that their property is protected and that the help to rent projects are providing the right support to help tenants maintain rent.

Crisis has found claims on bonds by existing schemes to be relatively low, within the 15% to 20% margin. That is one of the reasons why the schemes are attractive to the private sector trade bodies. It seems only fair that, along with help to buy, there is a similar scheme to help those who are just about managing and for whom purchasing a home is just not realistic. Crucially, both the Residential Landlords Association and the National Landlords Association support those asks of the Government.

Currently, schemes attract landlords through the development of a suite of services to mitigate the risks associated with letting to a vulnerable or homeless person or family. We could, and should, actively encourage more landlords to view working with those schemes as an effective business model. The moral argument aside, there are fiscal incentives to working with such schemes. For example, a targeted intervention by a scheme and a national rent deposit guarantee reduces the financial risks for landlords. Also, clients using the access support who have a history of homelessness are much more likely to be deemed vulnerable under universal credit and therefore they should be offered universal credit direct payments for a limited period, which landlords may welcome. I think that goes a little of the way to addressing the concerns of the hon. Member for Mitcham and Morden (Siobhain McDonagh).

Help to rent schemes give landlords a layer of security that they do not currently receive from letting agents or the local authority. Such interventions could significantly increase the landlord’s confidence to let to this vulnerable sector or to those in housing need, and that could be part of an agreed longer-term tenancy. Among landlords with experience of letting to homeless people, 59% said they would consider letting to homeless households only if that were backed by such interventions. I therefore believe that the rationale for Government is clear to see. These policies are cost-effective schemes that will provide stability in the private rented sector for the most vulnerable, helping to prevent and tackle homelessness. Investment in the private rented sector access support would build on the Government’s recent announcement for homelessness prevention trailblazers and the Prime Minister’s welcome commitment to put prevention at the heart of a new approach.

Government investment has the potential to reduce spending on temporary accommodation and the costs of rough sleeping. This would allow cash-strapped local authorities, such as mine in West Berkshire, to allocate more of their homelessness budget in a more targeted way—for example, West Berkshire Council continuing to support the mental health triage service, which is doing great work. Independent analysis commissioned by Crisis estimates that if access were available to all households approaching their local authority for homelessness assistance, some 32,000 people could receive support annually. The model assumed that if 60% of people leave temporary accommodation as a result of the scheme being available, savings amounting to between £175 million and £595 million could be realised from one year of the scheme.

Investing in the private rented sector access support fits with the Government’s wider agenda on universal credit and homelessness prevention. I was pleased to support the Bill promoted by my hon. Friend the Member for Harrow East (Bob Blackman) and will continue to do so. It will make a difference. My worry is that unless parallel schemes, such as those I have outlined, are introduced and accompany a review of the impact of the freeze on local housing allowances in certain areas, we could get into the mad situation where inadvertent actions by the Government create one problem on the one hand that my hon. Friend’s Bill has to solve on the other. I am pleased that the Prime Minister has made housing a priority in her wish to lead a Government that help those people left behind who have not benefited from recent economic growth. The White Paper is an important indication of that intent. I suggest to the Minister that here are two possible schemes that would work and put the private rental sector at the heart of achieving the Government’s ambitions.

[Several hon. Members rose—]

--- Later in debate ---

[Andy Slaughter (Hammersmith) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Sir Alan. I thank the hon. Member for Newbury (Richard Benyon) for raising this important subject. I will say a little more at the end of my speech about his specific proposals, which are worth while and which I commend to the Government—we will see what the Minister says about them.

However, I hope the hon. Gentleman will not mind if I take my cue more from the contribution of my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), who spoke with extraordinary passion and knowledge. I have known her long enough to know that she is one of the most assiduous constituency MPs in the House and that she speaks from absolute experience. I am sure that her experiences have been shared by all London Members, including my right hon. Friend the Member for East Ham (Stephen Timms), and increasingly by other Members from around the country.

Let us start by making it clear where the problem started. It started, to a large extent, with the Localism Act 2011 and the permanent discharge of homelessness responsibilities into the private rented sector, alongside lack of security for social housing and an almost complete cut of capital expenditure. Suddenly, the private rented sector was on the frontline, faced with problems that it was neither ready nor able to deal with.

In an intervention, the hon. Member for Airdrie and Shotts (Neil Gray) mentioned housing benefit cuts. We could add the benefit cap or the freeze on the local housing allowance, which the hon. Member for Newbury himself acknowledged. Those are among the reasons why, as my hon. Friend the Member for Mitcham and Morden said, more than 40% of homelessness cases are principally caused by the eviction of people on assured shorthold tenancies, largely because of landlords simply wanting higher rents or not wanting to deal with people who are on benefits. Those are the real problems.

There is also the problem of shared accommodation. In 2012, the shared accommodation rate for under-25s was extended to under-35s. In its briefing for this debate, Barnardo’s asked that those who are leaving care be protected from that at least until the age of 25. The Minister may respond to that request, but it will still not resolve the principal problem.

The budget of the Supporting People programme for vulnerable people was cut by 45% between 2010 and 2015. These are huge sums. I appreciate that the hon. Member for Newbury is asking for relatively modest sums by comparison, but they will have relatively modest results.

[Richard Benyon]

Does the hon. Gentleman concede that there are some landlords in London—I speak with a little experience—who are in it for the long term? They want to build a relationship with their tenants and they have never evicted somebody at the end of their lease, because they want to continue that relationship. I want to work with Members on both sides of the House to create a longer-term offer to tenants so that they can have certainty, whether it is about the education of their children or about their own retirement. There are opportunities to work together to find solutions.

[Andy Slaughter]

Nobody denies that the majority of landlords are good landlords, but I ask the hon. Gentleman: why has rough sleeping more than doubled—it has gone up by 133% since 2010—and why is statutory homelessness increasing hugely? He mentioned that the White Paper might give some detail. I do not know whether he has had time to look at what the White Paper says about the private rented sector, but he will not get much detail from it. There are five paragraphs with three proposals, two of which are ideas pinched from us but watered down, and one of which the Secretary of State has already pooh-poohed.

On letting fees, which are an important issue, the White Paper states:

“We will consult early this year, ahead of bringing forward legislation as soon as Parliamentary time allows”.

I thought that we were going to get something rather more quickly than that. The White Paper also states:

“The Government will implement measures introduced in the Housing and Planning Act 2016, which will introduce banning orders to remove the worst landlords”.

Again, that is good, but I heard the Secretary of State say in the House yesterday that looking for greater restrictions to deny houses unfit for human habitation was “frivolous”. I think that was the word he used. That does not show particularly good intentions. What on earth does it mean that we are simply going to encourage landlords to have longer tenancies? We need to legislate. We need longer tenancies if we are to stop the terrible curse of insecure accommodation.

The Homelessness Reduction Bill has the support of the Opposition, but we are waiting and taking our cue from local authorities, who know what they are talking about in this respect, on whether the funding will be adequate to the task. All the indications are that that will not be the case, despite the funding that the Minister announced. As my hon. Friend the Member for Mitcham and Morden said, we are just putting more burden on local authorities, which are already charged with the responsibility without having the resources to deal with the problem.

This is a real housing crisis. I appreciate the intention of the debate and the specific measures. We are blessed with some extremely good, very sophisticated organisations now. I have a lot of facilities from what used to be Broadway and is now St Mungo’s Broadway in my constituency. It previously ran a scheme very much of this kind off its own bat. People went out and identified private sector accommodation, took vulnerable people and matched the landlord to the tenant. They gave that degree of support, as well as supporting people with deposits. That is an excellent thing to do and it is what the organisations do well, but it does need support and some funding.

I fear that we are not going to address the key issues. It is not just I who think that. Yesterday, at the launch of the White Paper, I did media with the former housing Minster, the right hon. Member for Welwyn Hatfield (Grant Shapps). I never thought that I would agree with him on any matters in relation to housing, but his view did not differ much from mine, which is that the Government proposals are a sticking plaster and a missed opportunity. I do not say that with any pleasure, because this is the biggest social problem of our age. It is a problem that has accumulated over time. It is extraordinarily difficult for everybody, but it is particularly difficult for vulnerable people, young people and people who are made homeless through no fault of their own.

I hope that we are going to hear something from the Minister today. I welcome the engagement of all parties, including the landlord organisations. [Interruption.] I do not particularly want to be heckled; I am taking half of my time, which I am entitled to do. If the hon. Member for Newbury thinks that I am dealing with “frivolous” issues, as the Secretary of State does, he is welcome to say that, but let us have some home truths about what the real problems of the housing crisis in this country are.

--- Later in debate ---

[Richard Benyon]

No, Sir Alan, I was conceding the time to the Minister, but if I may have the 30 seconds I would appreciate it.

There is an all-party group in this House called the all-party group for ending homelessness. Some people roll their eyes when we talk about ending homelessness, but it is only with such ambition that we can address the kind of outrage we all feel when we see someone who is homeless. I am grateful to the Minister for what he said. I hope he will work with Crisis, the Centre for Social Justice and other organisations to try to bring some of the ideas forward. Together, we can achieve a lasting solution.