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Private Rented Sector

Volume 592: debated on Monday 2 February 2015

6. What progress his Department has made in promoting longer-term tenancies in the private rented sector. (907333)

8. What progress his Department has made in promoting longer-term tenancies in the private rented sector. (907335)

19. What progress his Department has made in promoting longer-term tenancies in the private rented sector. (907347)

We are progressing longer tenancies by promoting a model tenancy agreement with bodies representing landlords, tenants, letting agents, mortgage lenders and local authorities. Recent figures show that tenancy lengths have increased to an average of just under four years.

A survey conducted in Croydon North showed some letting agents charging registration fees as high as £500, and hundreds more in finder’s fees and for simply handling the deposit. Of course, short tenancies make this rip-off even worse. Why are the Government not standing up for hard-pressed renters against rip-off letting agents?

Actually, we are. The new provisions in the Consumer Rights Bill will require all letting agents to publish their full tariff of fees, both on their websites and prominently in their offices, regardless of whether they are a member of a protection scheme and of which redress scheme they have signed. This will protect tenants from the small minority of agents who charge unreasonable hidden fees and will raise awareness of safe agents and the right of redress.

Nine million people, including 1 million families with children, are in private rented accommodation, which, as thousands in my constituency know, leads to uncertainty and fear about people’s long-term future and stability. When will this Conservative Government and their Lib Dem accomplices take the issue seriously? Will they do something now, rather than engage in spurious consultations that take months and years?

I am not sure exactly what the hon. Gentleman is asking us to do. As I said, we have published a model tenancy agreement to encourage longer tenancies. It is worth noting that, according to Savills, a majority of people, particularly younger people, do not want longer tenancies and that 81% of private renters who have moved in the last three years ended their last tenancy because they wished to move, predominantly for work reasons.

Thousands of families in Hull are subjected to unfair, unsecured tenancies. Why can the Government not accept Labour’s plan for three-year secure tenancy agreements? What is wrong with it?

Given that average tenancies have increased to almost four years, I think that we have already achieved what we needed to achieve and that the hon. Gentleman should be saying, “Well done!”

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Despite what we have just heard, the evidence from abroad is that the best way to create a more professional private rented sector is actively to encourage pension funds and the long-term institutions to invest for the long term. Given that, may I strongly encourage the Minister to ensure that all our policies—taxation and otherwise—now encourage that long-term investment, not short-term capital gains?

As the House will know, my hon. Friend has a wealth of experience in this matter, and he is absolutely right. We have worked hard to expand the private rented sector, and we want it to grow further and not be threatened by the risk of Labour’s rent control. That is why we have £10 billion of housing guarantee schemes and have allowed the industry to unlock borrowing at the lowest rate in its history. We also recently announced a further £3.5 billion package to promote long-term institutional investment, which holds prices well and brings better and well-managed properties into the market.

I was delighted that the Minister supported the private Member’s Bill introduced by my hon. Friend the Member for Brent Central (Sarah Teather) on preventing retaliatory evictions. Given that the Bill can no longer proceed, will he support the amendments tabled in the House of Lords by my colleague Baroness Bakewell and others to introduce these measures into the Deregulation Bill?

I thank the hon. Gentleman for his question. It is in fact a Government amendment that is being taken through the Lords. The principle of ensuring that retaliatory evictions cannot happen is one that we would all wholeheartedly support.

Does my hon. Friend agree that evidence from abroad also shows that the last way to get the long-term investment that the private sector needs is through the distorting effect of rent controls, which damaged the quality of the private rental sector in places such as New York when they were tried there?

Absolutely. My hon. Friend makes a very good point. History—both in this country and in a number of countries overseas—has shown us that all rent controls do is put prices up for tenants and reduce supply, which is the opposite of what we want in this country. We want a good, thriving and growing rental sector.

In relation to the private rented sector and all other housing, the English housing survey

“is used extensively across government and beyond and is a public good of national importance.”

Those are not my words but those of the national statistician in reaction to the Minister’s plans to stop the survey next year and then do it only every other year subsequently. In the light of the national statistician’s concerns in urging a rethink, will the Minister confirm that he will take that advice and not scrap next year’s survey?

I am sure the right hon. Gentleman will appreciate that we still have to deal with the record deficit and debt left by the last Labour Government, so we have to be sensible with public sector money, and look to see how we can do things more efficiently and more effectively. We are in consultation at the moment, and I shall make my response to the House when the consultation ends.

May I congratulate my hon. Friend on what the Government have achieved through the model agreement? There will be appeals, so will he say a little more about how the approved redress scheme is coping with those appeals?

No issues have been reported at this time, but if my hon. Friend has any particular concerns, I would be happy to meet her and any concerned residents.

The Minister keeps peddling the myth, but we are not proposing rent controls. The Government have taken no meaningful action to promote longer-term tenancies. Both the Under-Secretary of State, the hon. Member for Keighley (Kris Hopkins), and the current housing Minister told us last year that rent levels were falling, with the Under-Secretary saying that rents were falling even in London. But now the Office for National Statistics has confirmed what everybody else knew all along—that rents are rising faster than wages and rising in real terms. Will the Minister now admit that he was wrong and that millions of private renters are facing insecurity and rising rents?

I am afraid to say to the hon. Lady that real-term rents have been lower than the changes in inflation, so rent costs have fallen in real terms. We need to continue to see supply come through and get that institutional investment that was mentioned a few minutes ago so that we continue to see good-quality housing available at good prices.