On Friday 10th June 2016 the Bishop of Derby, the Rt Revd Alastair Redfern spoke during the debate on Baroness Grender’s Renters’ Rights Bill. The Bishop highlighted his concerns about vulnerable people and malpractice by some rental landlords and property management agencies.
The Lord Bishop of Derby: My Lords, I too wish to offer some thoughts about the importance of the issues raised by the Bill and the sense of direction in which it seeks to travel.
First, I note the point made by the noble Lord, Lord Palmer, regarding a definition of so-called “rogue” landlords. The Housing and Planning Act has introduced a database of rogue landlords and property agents, which is to be made available to local authorities so that they can check for compliance, but there is a question over whether tenants should have access to that kind of information.
I recognise that there may be some reluctance by the Government to demonise landlords who may be on a register for relatively minor issues, and it might be important to consider some kind of two-tier system so that anonymity is lost at the point of conviction. If a landlord were convicted of a serious banning order offence, for instance, it would seem very proper that any would-be tenant should know that that was part of the hinterland, whereas if there had been a fine for a more minor offence, that might not require to be so readily available in the public domain. We could think imaginatively about the degree of seriousness of malpractice and making very serious malpractice available as a matter of right to would-be tenants.
I have a second thought about Clause 2 and the issue of so-called letting fees. It seems to me that the major point, as stressed by the noble Baroness, Lady Grender, is that, very often, we are talking about extremely vulnerable people in vulnerable situations with very limited resources. It is a matter of balance between recognising the legitimate costs of letting agencies and needing to charge for that, and not subjecting people to unpredictable and often unaffordable fees.
I also read the report on the Scottish system and the fact that the withdrawal of fees there does not seem to have raised rents, according to Shelter’s research. However, if there is a case for a fee, it would help the folk involved if it was a fixed fee of a modest nature, rather than a fee that seems to go up and down. Two weeks ago, one of my colleagues in the diocese where I work wanted to secure a property and was asked to pay £380 just to be able to go and view it. As the noble Baroness, Lady Grender, said, the variety of fees is unacceptable. The Government should look at what has happened in Scotland and perhaps consider not allowing that particular fee. And, if it is allowed, it needs to be controllable, predictable and modest.
My third point is about the clause that deals with mandatory electrical safety checks, which the noble Lord, Lord Palmer, has just mentioned. It seems strange to those of us who are not experts that gas checks are mandatory but electrical safety checks are not. Currently, there are about 70 deaths a year involving electricity and only 18 involving gas. Therefore, the risk is equally, if not more, substantial. If there is a proper case for mandatory gas checks, I hope that the “may” will go in the direction of “must”. We are very concerned with proper standards of health and safety, and electricity is a potentially very dangerous factor in homes if it is not checked and operated with care. A tenant who is paying rent is entitled in their contract to a proper system of mandatory checks and standards.
The proposals in the Bill are very worthwhile and I endorse them warmly. I hope that the Government will look very seriously at the rights of a tenant to know whether a prospective landlord has had a serious conviction and to have a predictable and low letting fee—or perhaps the Scottish system could be looked at. The Government must take very seriously the dangers of electricity and I hope that we can pursue making that check mandatory.
Viscount Younger of Leckie (Con): My Lords, I thank the noble Baroness, Lady Grender, for setting out the purpose of her Bill about the rights of renters. I know she is concerned about this issue and I congratulate her on bringing the Bill before this House….
The noble Baroness may not be surprised to hear that the Government have some reservations about the Bill, some of which have been raised already by noble Lords, and I would like to explain these for the benefit of the House. I have listened carefully to the debate. Of course, many of these issues were discussed at some length during the passage of the Housing and Planning Act, as the noble Lord, Lord Kennedy, has stated. I welcome the opportunity to debate these issues further and offer clarification where I am able to do so, and of course to answer a number of questions that have been raised.
I have taken note of the comments raised by the noble Baroness, Lady Grender, and the noble Lord, Lord Foster, and in particular by the right reverend Prelate the Bishop of Derby, all of whom alluded to the experience in Scotland. As mentioned, the Scottish Government clarified rent laws a little while ago in 2012, banning any letting agents’ fees beyond rent and a refundable deposit. I believe this was raised by the right reverend Prelate, but the research conducted by Shelter since this clarification suggests that only 18% of letting agency managers believe that the enforcement or penalty measures for non-compliance were robust enough. In August 2015, Shelter Scotland reported that around 1,500 people have tried to reclaim nearly £250,000 since the law was clarified. Its research suggests that around 10% of letting agencies do not comply with the ban. We should take note of that. The right reverend Prelate suggested that the fee should be predictable and ideally moderate. I acknowledge that. He also suggested the possibility of a fixed fee and the House should take note of that. My overall conclusion, however, is that the Scottish experience may not be a panacea for the way forward.
The Government want to strengthen the hand of consumers to tackle the minority of agents who offer a poor service and engage in unacceptable practices. Since 1 October 2014, it has been a legal requirement for letting and managing agents in England to belong to one of the three government-approved redress schemes, which offer a clear route for landlords and tenants to pursue complaints, to weed out the so-called cowboys who give agents a bad name, and, of course, to drive up standards, which we all want.
Banning letting agent fees would not make renting any cheaper for tenants. Tenants would still end up paying, but through higher rents. That is why the Government believe that ensuring full transparency is the best approach, by requiring letting agents to publicise a full tariff of their fees, giving consumers the information that they want and supporting the majority of reputable letting agents. Such transparency will help to deter double charging by letting agents—my noble friend Lady Gardner alluded to this issue—and enable tenants and landlords to shop around, encouraging agents to offer competitive fees. I also took note of the comments made by my noble friend Lady Gardner about the Australian experience. If I read her correctly, this is the opportunity for consumers to go and buy a generic agreement in an Australian post office. I thought the costs rather high, but my maths might be bad in trying to convert Australian dollars to the UK. I hope my noble friend will forgive me. However, and this might help answer the question raised by the noble Lord, Lord Foster, we still believe that it is too early to say how successful these measures are. They need time to bed in and the Government have committed to reviewing the impact of letting agent fee transparency later this year…
Baroness Grender: [extract]: ..I thank the right reverend Prelate the Bishop of Derby for his comments. Like him, I have heard stories about landlords everywhere charging people £380 for the pleasure of viewing a property, with the implication that they may or may not take that person on as a tenant. We are not plucking these arbitrary sums out of the air—they actually exist. If anything, the sums are arbitrary on the part of these letting agencies who think that they can get away with this.
He has also asked whether we can explore the impact with regard to rogue landlords—a definition, by the way, that I never want to debate again. I was here for the original debate; I thought that it was ridiculous and I do not want to participate in any debate of that nature. For me, they are rogue landlords and I completely agree with everything that the Minister at the time said. I am very clear on that, let us never debate it again. But we do need to explore this and Committee stage is the perfect opportunity to do so…..
Bill read a second time and committed to a Committee of the Whole House.