Monday 16 March 2015
Communities and Local Government
Private Rented Sector
My, noble Friend the Parliamentary Under-Secretary of State, Department for Communities and Local-Government (Lord Ahmad of Wimbledon) made the following written ministerial statement on 13 March 2015.
I would like to update the House on the actions that the coalition Government have put in place to support a healthy and prosperous private rented sector. The private rented sector is an important part of the housing market providing flexibility and allowing people to move quickly, helping those who do not want to own a house or who are currently saving to buy in the future.
There are now 4.4 million households who rent in England. Rents in the private rented sector have risen less than inflation during this Parliament. Surveys suggest that 84% of private renters are satisfied with their accommodation, and the average tenancy length is 3.5 years.
This Government have actively encouraged more institutional investment into the provision of new build rented homes, avoided excessive regulation and taken action to tackle the small minority of bad landlords.
Increasing housing investment
Supporting house building is part of this Government’s long-term economic plan. The Build to Rent Fund provides development finance to support the creation of a purpose-built private rented sector, backed by institutional investment. We have already announced 14 contracts worth £230 million, delivering over 3,000 homes for private rent. Over this year as the contracts are finalised, the Fund will deliver £1 billion of investment, meeting our 10,000 homes target.
The Private Rented Sector Housing Guarantee Scheme will facilitate investment of up to £3.5 billion in new private rented sector homes across the UK. PRS Operations Ltd (a subsidiary of Venn Partners LLP) was appointed to operate the scheme in December 2014 and has already started engaging with potential borrowers.
The Affordable Housing Guarantee Scheme utilises the Government’s hard won fiscal credibility to deliver more affordable housing by making debt cheaper for affordable housing providers. It aims to deliver up to 30,000 homes through guaranteeing up to £3.5 billion of debt. To date, 35 registered providers have been approved under the scheme. Combined they will borrow over £1.25 billion of guaranteed debt, supporting the delivery of over 11,000 additional affordable homes across the United Kingdom. In March 2015, a £194 million bond issuance achieved an all-in price of 2.92% and brought the total value of bond issuances to £600 million since launching in May. This is the cheapest ever housing association bond, and the cheapest debt of any kind for 27 years. It is also the first bond in the sector to break the 3% barrier.
Through the rent to buy programme, the Government are providing £400 million of low-cost loans to housing associations to build new homes between 2015 and 2018. This programme will act as a springboard to home ownership for aspirational working households on lower incomes. The rent to buy programme will enable us to deliver thousands of new, high quality homes to help those who need them at a far lower cost to the taxpayer. This fund will deliver 8,000 to 10,000 new homes, helping households to move from renting to owning, while giving very good value to taxpayers.
In addition to direct funding, the Government’s private rented sector taskforce is continuing to accelerate the development of the private rented sector as an investment market and has helped to generate aspirations to invest over £10 billion of domestic and foreign investment in this tenure. The taskforce is holding a conference to launch their build to rent guide for local authorities later this month.
Ensuring a professional industry
The coalition Government have not jeopardised investment in the sector by increasing red tape and unnecessary regulation. Instead we want to drive up standards in the sector and improve the level of professionalism among landlords. We have:
Published “How to Rent”, an accessible guide with clear advice for tenants on their rights and responsibilities with advice on what to do if something goes wrong;
Issued a model tenancy agreement which sets out a fair balance between the rights and responsibilities of the tenant and landlord and which can be used for longer tenancy arrangements, helping to reduce voids and letting agency fees;
Rejected calls for statist rent controls, which would destroy investment in new and existing rented properties, reduce supply and ultimately force up rents;
Introduced a new code of practice in September 2014 to improve the sector’s professionalism, so all landlords and agents understand what they should deliver;
Required all letting agents and property managers to belong to one of the three Government—approved redress scheme. This will offer a clear and simple route for landlords and tenants to pursue complaints about their agent and where complaints are upheld they could receive compensation;
Ensured full transparency on letting agents’ fees shortly all letting agents will have to publicise, prominently in their offices and on their websites a full tariff of their fees, whether or not they are a member of a client money protection scheme and which redress scheme they have joined. Transparency will encourage competition on fee levels and enable choice on service provided not just cost. We have considered but ruled out a ban on fees, as this will simply increase rents for tenants.
We are today publishing a short guide “Renting a Safe Home” which will help tenants recognise potentially harmful hazards in the home, such as damp, mould and excess cold and what to do about them. This will help tenants avoid properties with potential health hazards.
Supporting leasehold properties
There is an estimated 4.1 million leasehold dwellings in England, 1.6 million of which are in the private rented sector. My Department announced in August a number of areas that we are looking to address. A package of works is therefore being taken forward, which includes making it easier for tenants associations to be recognised and improving theEnsuring high standards for Park Homes
We are committed to ensuring that the rights of park home residents are respected and the sites they live on are healthy and safe. Many have suffered over the years from unscrupulous site operators. We have already introduced important new measures under the Mobile Homes Act 2013 which have given residents important new rights to improve their lives and protect them from rogue site owners.
We have given local authorities powers for the first time, to issue compliance notices requiring a site owner to carry out any necessary work to the site to comply with their licence obligations. In an emergency, a local authority may also enter a site and do the works if it considers there is an imminent risk to the health and safety of residents. The local authority will in any of these cases be able to recover all its enforcement costs directly from the site owner.
To ensure the costs of carrying out their licensing functions did not fall unfairly on council taxpayers we gave local authorities powers to charge site owners an annual fee for administering and monitoring existing licences.
Each local authority must publish its policy on how it will set the fees, showing clearly this is reasonable and will do no more than recover the council’s costs. To ensure the system for charging fees was fully transparent, we published a guide for local authorities on setting site licensing fees, which provides options for setting fees and devising their fees policy. We also published a guide for site owners on the new enforcement regime introduced by the 2013 Act.
The new park homes site licensing regime gives local authorities more effective control of conditions on mobile home sites. In appropriate cases, it provides local authorities with the tools required to take enforcement action including the power to serve compliance notices in relation to breaches of site licence conditions, emergency action powers, and the ability to carry out works in default and recover expenses. We have today issued enforcement guidance to local authorities on how to use their new powers to best effect.
We have given local authorities powers to refuse to grant a new application or transfer of a site licence. We have today issued guidance which sets out the matters an authority can take into account when considering an application including the funding and management arrangements in place for managing the site and complying with the licence.
Getting the right balance on regulation
We made a commitment to take forward a review of property conditions in the private rented sector. A discussion paper, “Review of Property Conditions in the Private Rented Sector”, was subsequently published last year seeking views on what more can be done to improve property conditions in the private rented sector, and how best to tackle bad landlords without negatively impacting on the good ones. The Government’s response has been published today.
We are issuing updated guidance to local authority officers to help them identify and successfully prosecute rogue landlords and letting agents. We made available £6.7 million to a number of local authorities to help tackle the acute and complex problems they face in tackling rogue landlords in their area, which includes action on “Beds in Sheds”. So far nearly 40,000 properties have been inspected and over 3,000 landlords are now facing further action or prosecution for breaking the law;
We have laid secondary legislation to reform selective licencing schemes, giving councils more discretion to target action against by rogue landlords. At the same time, the new measures put tighter checks and balances on the introduction of blanket licensing, which increases costs on responsible landlords and drives up tenants’ rents;
We are protecting tenants against retaliatory eviction where they have a legitimate complaint and made the eviction process more straightforward in appropriate circumstances. Subject to the Deregulation Bill receiving Royal Assent, these provisions will come into effect in October 2015;
We are clarifying tenant deposit protection legislation in response to recent court cases. As a result where landlords took a deposit prior to the introduction of the tenancy deposit protection legislation on 6 April 2007 in respect of a tenancy which (a) rolled over into a statutory periodic tenancy on or after that date and (b) is still in existence when the Deregulation Bill shortly receives Royal Assent will have a period of 90 days from the date of Royal Assent to protect their tenant’s deposit or potentially face a fine.
We are laying legislation requiring landlords to install smoke alarms on every floor of their property, and test them at the start of every tenancy. Landlords would also need to install carbon monoxide alarms in high-risk rooms—such as those where a solid fuel heating system is installed; affirmative resolution secondary legislation is being laid and subject to Parliamentary approval, the provisions will come into effect in October 2015; we have worded the secondary legislation to allow for rollover to the next Parliament if necessary;
We believe this is the right balance to ensure high standards, while avoid excessive red tape which would reduce supply and force up rents. By working constructively with landlords and the property sector and supporting free enterprise, tenants will benefit from a better range of quality rented accommodation and competitive rents.
Copies of the documents associated with these announcements have been placed in the Library of the House.
Asbestos Management in Schools
On Thursday 12 March I published the Department for Education’s review of asbestos management in schools. The review was initiated following a statement by the Department of Health’s Committee on Carcinogenicity on the vulnerability of children to asbestos compared with adults in 2013.
It is important for the safety and health of all staff and children in schools that asbestos is managed properly. The Department for Education has a role to support schools, and those legally responsible for managing school buildings such as local authorities and academy trusts, in ensuring that they are fully aware of their responsibilities and are executing them effectively.
This review sets out the steps we will take to enhance our role in supporting the management of asbestos in schools. First, we are publishing refreshed, more user-friendly, guidance and ensuring it is widely disseminated, so that all of those with a responsibility for keeping their schools safe know and understand how to manage asbestos.
Second, we want to improve accountability in the system, and are proposing to gather data to ensure those responsible for asbestos management are fulfilling their duties. The Department will consult with stakeholders to ensure we do this in the most effective and efficient way possible.
We will continue to invest in the school estate in a way that ensures asbestos can be dealt with adequately and that, over time and where appropriate, we see a reduction in the number of schools buildings with asbestos-containing materials. And we will continue to seek to improve the evidence base on asbestos levels and asbestos management in schools, so that we can ensure our policies fully respond to any barriers to the effective management of asbestos in schools.
This publication builds upon the extensive investment made by this Government in improving the condition of our schools, including most recently last month’s announcements of a further £6 billion of investment. Copies of the review have been placed in the House Library.
Foreign and Commonwealth Office
EU Foreign Ministers Meeting (Gymnich)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs (Philip Hammond) attended the informal Foreign Ministers meeting on 6 and 7 March in Riga, Latvia.
The informal format of the Gymnich allows EU Foreign Ministers to engage in a free-ranging discussion on a number of issues. In contrast to the formal Foreign Affairs Council (FAC), Ministers do not agree written conclusions. The next FAC is due to be held on 16 March. The Gymnich was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini. Discussion centred on Libya, Ukraine/Russia, Eastern Partnership and European Neighbourhood Policy Review.
Elmar Brok MEP, Chairman of the European Parliament’s Committee on Foreign Affairs and the OSCE Secretary General, Lamberto Zannier attended the discussion on Ukraine/Russia. Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations also attended. Foreign Ministers from EU candidate countries joined EU Ministers for a session on the European Neighbourhood.
UN special envoy to Libya, Bernardino Leon joined the discussion by telephone and gave a broadly positive outline of the talks in Rabat. Ms Mogherini stressed the EU’s support for the talks and highlighted the need for the March FAC to prepare for the discussion on Libya at the March European Council. The EU was looking at all options for Libya, including possible missions and operations.
OSCE Secretary General Zannier briefed Ministers on progress in the OSCE’s tasking in support of the implementation of the Minsk agreements, and provided his assessment of the situation on the ground. Mr Zannier welcomed the EU’s readiness to increase availability of personnel, resources and technical support to strengthen the effectiveness and the mandate of the OSCE monitoring mission. Ministers expressed support for the role of the OSCE.
EU Ministers highlighted the importance of fully implementing the Minsk agreements and noted the fragility of the situation. The Foreign Secretary argued that economic sanctions should remain in place until the Minsk agreements had been fully implemented to strengthen the likelihood of full compliance. The Foreign Secretary also noted the anniversary of Crimea’s illegal annexation, highlighting the human rights violations, especially towards the minority Tatar population.
Ms Mogherini emphasised that the EU should be ready to increase economic pressure on Russia if there was further escalation, but the question of sanctions should be left to the March European Council. Meanwhile the special monitoring mission should get all necessary support. Ms Mogherini emphasised need for EU unity in handling Russia.
Eastern Partnership (EaP): Riga Summit (21-22 May)
Ms Mogherini set out her view that the Riga EaP summit’s political messages should be: commitment to the Eastern Partnership; a differentiated approach; the importance of implementing reforms; and a co-operative, not divisive approach. The challenges would include managing expectations on European perspectives, and ensuring coherent political messages. The summit would also be discussed at the March FAC and at a joint EaP ministerial in the margins of the April FAC in Luxembourg.
European Neighbourhood Policy (ENP) Review
Ms Mogherini drew attention to the launch of the review process through the EEAS and Commission Joint Communication published on 4 March. There would be an ENP discussion at the April FAC. Consultations on the review will run until June, with final proposals emerging in the autumn.
Assessment of the impact of changes in the global environment
Ms Mogherini updated Ministers on the ongoing analysis of changes in the global environment as tasked by the December 2013 European Council. Initial findings will be presented to Ministers for discussion at the May FAC, which will inform a paper for discussion at the June European Council.
Leader of the House
VE Day (70th Anniversary)
I would like to inform the House of plans to commemorate the 70th anniversary of VE Day. On VE Day in 1945 millions of people across the UK and abroad, shared a sense of relief and euphoria that the war in Europe was over. The 70th anniversary is an opportunity to remember the sacrifice and sheer determination of the people who saw us through this dark period, give thanks to all those who so bravely played their part and celebrate peace and reconciliation. The three days of events will commence on Friday 8 May at 1500, the moment Sir Winston Churchill made his famous speech declaring that the war in Europe was over. There will be a national two minute silence followed by a Service of Remembrance at the Cenotaph, with wreaths laid in tribute, including by representatives of veteran organisations. Schools will be taking part in a range of activities. In the evening, a chain of beacons will be lit across the UK to mark the transition from remembrance to celebration. On Saturday 9 May, cathedrals, churches and others will ring bells, ships will sound their horns and in the evening there will be a live commemorative concert broadcast from Horse Guards Parade. Central London will reflect the spirit of VE Day with flags flying and illumination of landmarks; from Trafalgar Square, along the Mall, Whitehall and in Parliament Square. On Sunday 10 May, there will be a Service of Thanksgiving in Westminster Abbey and later, military and civilian veterans and their representatives will parade through Whitehall. In the afternoon there will be a reception for the veterans and a flypast by aircraft, including the Spitfire and the Lancaster. Throughout the weekend communities and families will bring the commemorations to life in the way which is most meaningful for them, whether this is a picnic in the park, a street party, exhibitions or formal receptions. The programme of events will be staged in partnership with a large number of organisations, including the Royal British Legion, and I thank them in advance for their passion and commitment to making VE Day 70 a success. I hope as many people as possible of all ages and from all walks of life will take the opportunity to reflect on, and mark, this important anniversary in our history and give thanks to those that contributed so much.
The Muslim Brotherwood Review
I would like to update the House that a report into the main findings of the Muslim Brotherhood review will be published alongside the Government’s new counter-extremism strategy.
As we consider broader policy questions emerging from the review and the wider strategy, it is clear that further, more comprehensive measures will be required in the next Parliament to tackle the threat from extremism in the UK, and to support communities to challenge those who oppose British values.