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Private Tenants and Leaseholders (London)

Thank you, Mr. Cook. I shall start again. I am pleased that we are having this debate today. In many ways, it is a continuation of yesterday's debate, which was about housing shortages in London, and the overwhelming need for rapid construction of a large number of affordable rented council places. My constituency has, roughly speaking, about 40 per cent. of its residents living in council-owned or housing association accommodation, a fast-declining level of owner occupation—probably about 30 per cent. and falling—and the remainder of its residents in private rented accommodation, which is the fastest growing sector and one that causes many tenants and me a great deal of concern. I shall come on to that in a moment. We have to open the debate by recognising the need for everyone to have a decent home to live in, in security, where they can bring up their children in reasonable space and be part of community life. Because of the large growth in the private rented sector, there is huge population turnover, certainly in my constituency, which is in inner London. Indeed, I suspect that many colleagues in other inner-London constituencies and inner-city constituencies all over the country experience this problem. It is disruptive for families, particularly children, who have to move schools as a result of it. In short, we have three forms of private sector tenancy in this country. The biggest by a long way is the assured shorthold tenancy, which provides limited security under the Housing Act 1988. The assured tenancy provides greater protection than assured shorthold tenancies, but there are many fewer of them. The last kind of tenancy, of which there is a very small number, is the regulated tenancy, which is a derivative of the Rent Act 1977. The then Labour Government were resolute in controlling tenancies, providing security of tenure and controlling rent levels. It is that issue that I want to deal with first. Rents in the private sector are absolutely enormous. Typically, to rent a flat of any reasonable size in my constituency would cost £250 to £300 per week, and upwards of £400. I have seen some flats at £500 per week. I constantly feel a sense of anger when I am in my advice bureau on Thursdays and Fridays and people come in to see me who are living in privately rented former council properties. I know that the council rent for an exact equivalent of the property would be around £100 per week, but they are paying £300 or £400 per week, the majority of which is paid by housing benefit. Somebody who had the good fortune to buy a council property under right to buy at some point in the past is making £300 per week more than they would have had to pay in rent if they were in council accommodation. That has an impact, which I will come to in a moment. A serious problem that I pick up on all the time is that of repairs done, or not done, by private landlords. I am not saying that all private landlords are bad landlords, or that they are unreasonable or difficult people. They are not; some of them are extremely decent and generous people who manage their properties properly. However, I come across a large number of cases of people in private rented accommodation—they have been referred by the council or have got it themselves—who find it difficult to get any repairs done. They know full well the danger that if they complain too strongly, their tenancy will come to an end. The issue is one of security of tenure, as well as decent levels of repair and complaints not satisfactorily dealt with. Most tenants feel a sense of disempowerment in challenging a private landlord on what are often basic repairs. There is a cost to all of that in housing benefit and local housing allowance. In my constituency and, I suspect, that of my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter), who has just joined us, and those of many other inner-London MPs, the local authority is not able to put many people from the waiting list into existing council accommodation, so, through the rent deposit scheme, it puts them in private rented accommodation. Others simply go into private rented accommodation because they cannot even get on the council waiting list and certainly have no chance of buying anywhere of their own. Therefore, they claim housing benefit. The housing benefit costs to all of us of high private sector rents are absolutely enormous. I have tabled some parliamentary questions on the subject. Generally, if a person on jobseeker's allowance or income support is in council or housing association rented accommodation and is entitled to housing benefit, they get 100 per cent. of the benefit because they are in socially rented accommodation. If they are in private rented accommodation, they get a proportion of it. I fully understand the desire of the Department for Work and Pensions to drive down housing benefit costs, but the reality is that we then end up expecting people on housing benefit to pay on top of what they receive in housing benefit in order to maintain a roof over their head. I come across constituents who are paying £30 or £40 a week out of benefits on rent, in addition to what they receive as housing benefit. We all know what the levels of income support and jobseeker's allowance are—those people are left with hardly anything on which to survive. We have to recognise that there are enormous costs here. Those who administer the housing benefit system will say that people are required to pay the equivalent of a local market rent—no more and no less. I can understand where that philosophy comes from, and the calculations that they make on many occasions, but the reality in large parts of inner London is that the payment of housing benefit fixes the market rent and feeds into the voracious appetite of the market continually to increase rents. I am not saying that there is a simple solution to this, but it is very expensive for the public purse, and it does not much help the people whom it is designed to help. We need a radical reform of housing benefit, and the Minister will probably agree with that. I am not sure whether he has the solution today. If he has, I will stop now. The benefit trap is also a serious problem. If a person on jobseeker's allowance is encouraged to find a job, as they are by the jobcentre, and they get a job, that is good. However, at present, they will lose housing benefit fairly quickly, and, as a result of that, they will be much worse off in work than they would be on benefit. If they have to pay, say, £300 a week in rent, they must get a job that pays at least the equivalent of jobseeker's allowance plus £300 a week just to break even with their situation while they were out of work. The Government have recognised that, have increased the amount of time for which housing benefit is paid, and have increased the in-work benefit, but that does not solve the longer-term problem of those on low pay, or those moving back into the labour market. Typically, women who are single parents move back into the labour market in their late 20s or early 30s. They are unlikely to get jobs on £25,000 or £30,000 a year in order to meet their enormous housing costs. We must see what we can do to improve that situation. A great deal of evidence supports the fact that there are problems. The Government's response to the private rented sector housing review, published in May 2009, stated:""Moving forward in partnership with landlords, tenants and local government representatives, we should continue to monitor and review the regulatory and incentive framework to ensure it is fit to deliver the consistent high standards and professionalism."" I welcome what has been done in that respect. I also welcome the attitude that the Government are now developing towards security of tenure in the private sector and reforms of the housing benefit system. I hope that the Minister is able to give me some relatively good news in that respect. I should like to mention the situation faced by leaseholders. Large numbers of people bought their council property under right to buy, which was introduced in the early 1980s. With the right to buy a street property—a house—goes the freehold. That is a transfer from the public sector to an individual—the considerations of leaseholders clearly do not apply. However, those who buy flats always get a lease, with which goes a number of things, particularly service charges and capital costs, which apply to the large number of people who have purchased leasehold flats. The issues facing local authority leaseholders—I will mention housing association leaseholders in a moment—are similar, but not identical. Some local authority leaseholders bought into council ownership in the 1980s without any real consideration of the longer-term implications of doing so, what capital works were required on the property or what the service charges could be. Many fly-by-night solicitors gave inadequate advice at that time, simply saying, "Buy your flat. You'll be okay." When capital works come along—I support and welcome the decent homes standard and all the intentions behind it—they can be catastrophic for poorer older people who bought into council accommodation many years ago. I came across the case recently of an elderly woman, a retired nurse, who bought her council flat in the early 1980s and was now faced with a massive major works bill that she could not afford to meet. She could not get a mortgage because of her age and seemed unable to do anything about that other than to move out, share a small flat with her brother some distance away, and rent out her former council flat to pay the cost of the capital works—to do up the flat that she could not afford to live in. She has got herself into a crazy bind. I know that was not the intention behind those measures, but there are serious issues to consider. The high costs of capital works and the often limited transparency in respect of those, in the perception of leaseholders in council accommodation, also need to be considered seriously. I am sure that colleagues from London—we have been joined by the hon. Member for North Southwark and Bermondsey (Simon Hughes)—would bear out the great concerns of many living in council leasehold accommodation about the costs involved and their difficulties in meeting such bills. One asks for flexibility on the part of the councils and for a sense of fairness in the allocation of funds. Many hon. Members have become experts in the costs of scaffolding, surveying and carpentry, and every other cost that results from such works. I shall now mention the important matter of leaseholders put in places by housing associations and people who have bought leases or part-ownership from housing associations. The idea behind that strategy was that those who did not own any property would be able to buy a share of a property and possibly staircase up their proportion of the ownership and pay rent on the remainder. In addition, they would have to pay a service charge, as all leaseholders do, and pay either into a sinking fund or pay their share of capital costs when major works came about. To prepare for this debate, I spent an hour or so last Sunday morning talking to a group of leaseholders in a housing association development, which happened to be a Family Mosaic development, but the issues probably apply equally to all housing associations. Those leaseholders were concerned that, prior to 2002, building and repairs contracts were let by individual tender on a process that had been going on for a long time under a value-for-money regime, which seemed fair enough. Under that arrangement, leaseholders living in property owned by councils or registered social landlords were protected by process under section 20 of the Commonhold and Leasehold Reform Act 2002, in that they had to be consulted on any work that they would be asked to pay for—usually more than £250 per property—so there was a quite open process of consultation and agreement on what the costs would be. In 2002, that culture was changed and the registered social landlords—the housing associations—signed huge contracts with building firms to undertake long-term maintenance on many hundreds, if not thousands, of properties over several boroughs. As a result, the local control went away. One suspected that the partnership arrangements with the housing associations provided nice work for the building companies because they knew they were getting paid, but more than occasionally there were serious questions about the levels of so-called savings made under those economies of scale. In reality, a lot of people were paying large sums for work that they were not clear about. Electors in my constituency have shown me cyclical maintenance bills that have risen astronomically between 1999—pre this system—and the current regime coming into effect. With that process goes a lot of tendering and sub-tendering of repairs. I would be grateful if the Minister told hon. Members in this Chamber what kind of investigative and regulatory regime is placed on the housing associations in letting major repairs and maintenance contracts and—this is serious—what level of real involvement of leaseholders there is in most housing associations in any kind of meaningful consultation. I detect that the bigger the housing associations get, and the bigger the contracts get, the more remote becomes either the operative in the housing association—the official—or the tenant. I should be grateful if the Minister gave us some news about the powers and operation of the Tenant Services Authority. To combat this scandal I would be grateful if the Minister considered the reintroduction of proper consultation on all cyclical maintenance contracts with tenants and leaseholders, or with appropriate residents' groups, so that there is some degree of transparency and openness in the whole process. I am proud and happy to live in a vibrant, exciting area in which many people are making huge community contributions. But unless we can deal with housing, give people security of tenure and lower the overall housing costs for large numbers of people, the pressure that the market is applying will gradually become an unstoppable force, driving away the poorest and most needy people from inner London and other equivalent inner-city areas of this country. I am grateful for this opportunity to bring these matters to the attention of the House. I look forward to the Minister's reply.