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House of Commons Private Rented Sector Debate

January 25, 2013 | Landlord News  

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Shadow housing minister Jack Dromney initiated the debate in the House of Commons with a lengthy introduction in which he mentioned the need to recognise the private rented sector’s growing role in meeting housing needs. He called upon the Government to regulate residential lettings and management agents and to end what he called the “confusing, inconsistent charges regime”, to make all fees up front for easy comparison, to promote longer-term tenancies where wanted, and to introduce a national register of landlords and increase local authority power to improve standards and tackle rogue landlords.

He said, “The question for debate today is simple: how do we ensure that the private rented sector provides enough homes that are sufficiently stable and secure, affordable and of a decent standard? Nearly 8.5 million people, including more than 1 million families with children, now rent privately. Labour believes that the private rented sector has an important role to play in meeting housing need. As a result of the biggest housing crisis in a generation, more and more people are being locked out of home ownership and are looking to find their homes in the private rented sector.

“The housing crisis gets worse by the day. House building is down; new starts are down 9% in the past year alone to fewer than 100,000. Homelessness is up, having risen by more than a third since the general election. People struggle to get mortgages and rents are ever rising in the private rented sector.”

Dromney was backed up by a number of his Labour peers, who spoke of rip-off fees. Liz Kendall, Labour MP for Leicester West, said she had conducted a mystery shopping exercise on letting agents fees, describing her findings as “huge, unclear and unfair fees”.

Dromney offered the words of Conservative MP for Rossendale and Darwen, Jake Berry, quoting an article he had written in which he stated, “The private rented sector is no longer fit for the people it now serves.”

He went on to cite an example of a landlord from Yorkshire who is in danger of losing his tenants because his letting agent are charging £400 to renew the tenancy agreement, which they could not afford. And that they were also charging him £100 also.

He argued, “This is not just about the fees that letting agents charge; many of them are entirely unregulated and provide no protections to their customers, whether they be tenants or landlords. More than 4,000 managing and letting agents are entirely unregulated. It is possible to set up a letting agency with no qualifications whatsoever. There are no requirements on their conduct or safeguards for the consumer and, unlike estate agents, there is no need to register with a redress scheme whereby awards can be made against agents for financial loss to clients. In other words, letting agents operate in the property market’s “wild west”, as the Royal Institute of Chartered Surveyors puts it so well.”

He then attacked housing minister Mark Prisk’s opposing stance on the issue, using his own words against him, quoting Prisk from 2007, when he said that as a Conservative he was “instinctively cautious about arguing for more regulation. However, as a chartered surveyor and a constituency Member of Parliament, I know that we need to put lettings on the same regulatory footing as sales.”

Dromney then ridiculed further, saying, “I agree with him. Does he agree with himself, or does he agree with his predecessor, the right hon. Member for Welwyn Hatfield, who scrapped such proposals? Surely multiple identities are not a prerequisite for the position of Housing Minister.”

The licensing scheme in Newham was highlighted as taking an “admirable lead”, although there is as yet no evidence that the scheme is having a positive impact. The debate was lengthy, but ultimately, the Government made clear that it is opposed to red tape in the private rented sector, reflecting its position last week in the House of Lords, where Baroness Hayter’s proposal was rejected.

A select committee will analyse the issues debated.

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