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Rented Housing

In opening this debate, I should like to put the report in the context, first, of the work of the Select Committee on Communities and Local Government and, secondly, of the wider situation. While the report was being written, and certainly subsequently, a great many other reports have been published and there have been other developments that relate to the topic. To put the report in the context of the Committee's work, it follows our earlier report on the affordability and supply of housing which focused largely on the housing numbers that are needed for affordable ownership, although it also recognised the additional numbers that are needed for affordable renting. Of course, we all know that home ownership is incredibly important and that the majority of people, if they do not already own a house, aspire to home ownership. That is not everyone, however, so it is extremely important to look at the social and private rental sectors which, between them, cover 30 per cent. of the housing stock and meet crucial housing needs. That is why they were the subject of the report. The report was published in May 2008. We began the inquiry in autumn 2006, and held a total of seven oral evidence sessions and went on three visits. Our first visit, to an inner-London housing estate, was organised by my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck). We are grateful to her for organising meetings with a variety of tenants so that we could understand the problems that private sector tenants face in that part of London, although I am sure that the experience is relevant to other inner-London areas. Secondly, we went to the north-west, to Manchester, and looked, among other things, at city-centre housing developments and one of the pathfinder areas. Thirdly, we went on a visit to the Netherlands. It was extremely interesting to see how its social housing organisations operate, and we drew particular attention to a couple of lessons from the Netherlands experience in our report. I should briefly mention other relevant reports and documents: Professor Hills's review on the future of social housing; the Cave review of the regulation of social housing; the Housing and Regeneration Act 2008; the Rugg review of the private rented sector, which is more recent; and the housing Green Paper. Of course, we have had the turbulence on the financial markets and the credit crunch since publication, so those developments are not reflected in our report. Clearly, the credit crunch has had a very serious effect on the housing market overall, but the Committee would insist that, despite the difficulties that people currently experience in buying houses and the effect on the rental sector, the underlying housing need, both for ownership and rental housing, remains unchanged. The Committee's recommendation that the Government fulfil their targets on new house building and, especially, that they deliver 50,000 more social rented properties, therefore still applies, although we recognise that the targets are now much more difficult to achieve. I should like briefly to outline the key findings of the report and a couple of general findings, then go through tenants' experiences. I shall then make specific comments about social rented housing and private rented housing, as well as housing providers, and make some general conclusions. The two key general findings were, first, to remind the Government, if they need reminding, that rented housing is an important part of housing provision. The Committee thought that Government policy has up to now rather favoured the interests of owner-occupiers, and that it needs to give greater attention to the needs of tenants in both the social and private rented sectors. Secondly, the Committee wanted to stress the point that if we are committed to everyone having the opportunity of a decent home, at a price they can afford, within a sustainable community, that must apply both to people who rent and to those who buy. Some of the experiences of tenants are shared across the social and private rented sector, but we recognise that there is huge variety of experience in both sectors, and that there are often big geographical variations. There is a general feeling that there is a view out there among the public, and perhaps in government, that renting is second best and, in a sense, a default option, and that ownership is what everybody aspires to. That is especially applicable to the private rented sector, parts of which have an image of being poor quality and of offering not many rights, and definitely not something people would want to be in if they could manage to be in their own home. There are reasons why rental housing is an extremely sensible option for people, either throughout their lives or during certain phases. Most obviously, younger people at the beginning of their professional lives often want to move quite frequently from one area to another. It is not sensible for such people to get into home ownership; the rental sector, especially the private rented sector, gives those rather more mobile individuals the freedom to move around without the high transaction costs that people incur if they get into ownership and selling. The rental sector is also an option for elderly people who do not want the responsibility of maintaining a property. It also provides the option for many people on a low income of a decent home with security, which they would not be able to get in any other way. We asked for rental to be recognised as a valid and valuable option, and highlighted various ways in which the experience of tenants could be improved. Certainly, it is important for social rented tenants that their housing is within mixed communities. The Hills report, I believe, highlighted the severe problems that arise when social rented housing is concentrated in areas with no other form of housing tenure, especially given that the shortage of social rented housing tends to mean that tenancies are offered only to families or individuals in extreme need, many of whom are extremely vulnerable. There tends to be a great concentration of problems, which reinforce one another, and reinforce disadvantage, if we do not have mixed communities. In the private rented sector, tenants feel strongly that the regulatory regime needs to be strengthened, particularly at the lower end. Several organisations pointed out that demand exceeds supply at that end of the sector, so the market does not work: individuals have to take whatever is on offer because there is not enough affordable private rented accommodation. That does not apply at the top end of the private rented market, which can operate well.