ALDC Fringe Report: Do Private Sector Tenants Deserve a Better Deal?

1 in 6 voters live in the private rental sector and too many are not getting a fair deal from their landlords. ALDC were delighted to host a fringe event focused on this important issue at Spring Conference. The session chaired by Claire Hudson, ALDC’s Chair, welcomed Local Government Minister Stephen Williams MP, Alex Hilton (National Private Tenants Organisation), Cllr Catherine Smart (Cambridge City Council) and Duncan Stott (Priced Out).

Cllr Catherine Smart who is the Liberal Democrat Executive Councillor for Housing at Cambridge City Council reminded the meeting that private rented sector has been growing for a few years after a long period of decline. One in four people in Cambridge now privately rent but they’re not just students and young people but increasingly those seeking social housing, postgraduates and young professionals. The reduction in social housing, the lack of house building and difficulty obtaining mortgages are fuelling the private rented sector.

Cllr Smart asked the meeting to consider whether conditions were appropriate now that people were staying in the sector for longer and whether they fitted the needs of older people and families. Whilst acknowledging that most landlords are professional Cllr Smart said there were still too many that were underperforming for tenants either through ignorance, negligence or desire to maximise profit. When a situation gets sufficiently bad Councils must prosecute rogue landlords but Cllr Smart acknowledged this can be particularly difficult in harassment cases and tenants often just prefer to move. She queried whether a “fit and proper person” test ought to be applied to landlords. It is the role of councils to encourage good and mediocre landlords to be better and tackle rogue landlords possibly through a landlord or property accreditation scheme. Cambridge has found this approach works well when financial attachments are involved. They have used grants to encourage landlords to bring properties up to standard and improve energy efficiency which makes their properties more desirable to tenants and helps reduce energy bills. Cllr Smart was sceptical about licensing all housing as this likely to just force rents up as landlords will be lumbered with additional fees.

Alex Hilton informed the meeting that there were nine million private sector tenants as a result of buy-to-let mortgages. 35% are living in homes under the decency standards expected in the social sector. Evictions are rising as a result of rising rents. End of tenancy pressures are now the number one cause of homelessness and it is Councils that are picking up the bill. A third of private tenants have had to cut back on heating and a quarter have cut back on food because of the cost of rent. Mr Hilton argued that more needed to be done to discourage amateurs from becoming landlords and in particular a number of favourable tax cuts and arrangements should be reined in. Mr Hilton said 35% of tenants are swing voters and 85 MPs, including 22 Liberal Democrats, have a majority less than the number of private sector tenants. The National Private Tenants Organisation is now launching a campaign called ‘Generation Rent’ to improve tenants’ rights and representation in each of these constituencies to ensure they are not forgotten at the next general election. He challenged the Liberal Democrats on whether we are going to represent ‘generation rent’ 2015 or the landlords.

Duncan Stott said the explosion of house prices has resulted in young people being unable to afford a home. This has resulted in the boom of the private rental sector by accident and it has worrying consequences. Mr Stott suggested that private renting was the third class of housing tenure as home owners can live in and alter properties as they want and social tenants often have lifetime tenancies, decent landlords and low rent. He suggested it was time for private tenants to be given more rights; particularly to stop no fault evictions where someone can be unhoused within two months for no reason. Mr Stott argued that letting agent fees to tenants must also be brought into line as they were extortionate, unfair on tenants and only benefited landlords. He called for them to be banned as they are in Scotland. Mr Stott called for longer more stable tenancies as the average length is just two years. He argued that Mini Leases of five years as set out in a Government white paper are much fairer. But Mr Stott said that whilst reforming the private rental sector was needed the Government still ought to do more to encourage home ownership. The average house costs seven times a salary and it stopping the current rental generation from paying pensions. He argued home ownership should be widened.

Stephen Williams MP said the UK housing market was peculiar because of the home ownership obsession. A lot of attention recently has been going to social and affordable housing. As Minister for housing standards he has discovered that the Homes and Communities Agency, which builds social and affordable housing using taxpayers’ money, often builds to a higher standard than the private sector. The Minister said the Private Sector has historically received relatively little attention but the Liberal Democrats and Coalition government were taking the issues seriously. He is working to make private renting a positive choice and quality experience. Mr Williams suggested that better building standards result in better quality homes, which is why he is pushing for more purpose built private rental properties and the Government is trying to open up this market. He said the Government were also taking action to regulate letting agents and by October they will all have to be part of an ombudsman scheme. There is a consultation currently examining poor conditions in the private rented sector until 28 March and the Minister encouraged people to contribute. He said there was a suggestion that landlords may be more focused on the issue if they were forced to repay rent when Councils find poor quality accommodation. He is examining whether it should be compulsory to have smoke and carbon monoxide alarms in private rental accommodation.

Mr Williams is also looking at improving energy efficiency and said the Green Deal could help with this work. He said he was currently working on a project examining ‘Zero Carbon Homes’ where the carbon outlay of building new efficient properties is offset by retrofitting older properties. The Minister said housing has not been a positive general election issue since the 1950s but he said he thought housing affordability and quality will be in 2015. He called for good quality attractive homes to be prominent in the Liberal Democrat manifesto.

The meeting took questions from the floor. Duncan Stott said private sector tenants associations were starting to be set up but better coordination was needed. Stephen Williams said he was surprised there were not more associations and felt the private sector could do with more. The panel was generally sceptical about rent controls pushing investors away and rents up and felt more house building was part of the solution. The issue of buy to let divided the panel. Alex Hilton called for more non private investment and for the nature of landlords to change. He suggested the Government should encourage buy-to-let landlords to pool their housing so they could be better managed. Cllr Smart said buy-to-let landlords were needed because of the lack of supply. Mr Stott questioned whether buy-to-let landlords were just speculating on rising house prices and if so suggested they are not helping improve supply and should be discouraged. Stephen Williams said he was sceptical about buy-to-let and said he would prefer more ‘build-to-let’ to encourage purpose built private rentals. He said buy-to-let has drastically transformed the nature of some areas and communities. On issue of under-occupation Alex Hilton suggested the government could examine the tax threshold for people renting spare rooms as this could help alleviate some problems. Cllr Smart and Mr Williams both called for more attention to incentivise older people to vacate large properties. Stephen Williams said that the Coalition would be the first government in a long time to go into a general election with more social housing than they started with. By 2015 170,000 social housing units will have been built since 2011 and funding is in place to build an additional 165,000 from 2015-18; the fastest rate of social housing building since the 1970s.

ALDC would like to thank all the panellists and members of the audience for the contributions.

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