House of Commons - Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions

Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Tenth Report

6. Other matters

190. Witnesses have suggested that a number of additional matters could be included within the scope of the Bill. Whilst not wishing to create an epic piece of legislation, the Minister acknowledged that the final version of the Bill is likely to be longer than the current draft.[268] We have set out below matters which we think should be included in this Bill. We also consider further outstanding matters where additional legislation or other actions are required.

191. We welcome the Leader of the House's support for pre-legislative scrutiny. He told us that the scope of the Bill is a matter for negotiation between the Department and the Leader of the House. We welcome the Leader of the House's commitment that the Government will look favourably at recommendations that propose "sensible amendments [to] and tidying up" the clauses already contained in the Bill and we hope that the Government will look with sympathy at recommendations on a number of items which lead to short clauses for additional inclusion in the Bill.[269]

Additional matters for inclusion in this Bill

192. The Government has said that two matters, a tenancy deposit scheme and the amendment of the law on succession to tenancies for same-sex relationships will be the subject of later legislation. Witnesses argue that proposals for such matters are 'ready to go,' fit with other elements of this Bill and need not be delayed by lengthy consultations on wider issues pending the introduction of other legislation at some point in the future.

Tenancy Deposit Scheme

193. Significant numbers of witnesses argues that the draft Bill should be used to introduce a statutory tenancy deposit scheme.[270] Adrian Davies, the Manager of the Citizen's Advice Bureau in Brighton and Hove explained the problem with deposits

"In the city of Brighton and Hove we have the highest proportion of rented accommodation in the country. What we find is that there are almost two types of market in existence. There is a market which has good quality accommodation with reputable landlords, good tenancy conditions, and very rarely do the landlords or tenants bring problems to us. What we find is that those people who can afford less expensive accommodation are more likely to be at risk of losing their deposit from a rogue landlord or agency or, quite often, an agency just washing their hands of the issue, saying, "That is not our problem. We refer you to the landlord", and then the tenant having to find out who the landlord is and how to get hold of the landlord. What we are finding is that people are giving in and not going to court because of the barriers in terms of fees and the chance of losing, and often borrowing money to get deposits for new accommodation, and so people are getting struck twice. They are getting struck by the fact that they cannot get their deposit back, which makes it harder for them to get new accommodation, and the other barrier that exists is the need in a city like Brighton and Hove to have a reference from a landlord, so they do not want to upset their landlord."[271]

194. Shelter explained the scale of the problem

"Research has shown that that 70 per cent of the 2.2 million tenants in the private rented sector have paid their landlord a rent deposit at the start of their tenancy. The average deposit is around £510, and it is therefore estimated that landlords currently hold a total of around £790 million in deposit monies. This money is currently completely unregulated. Although most tenancies end without dispute, around 20 per cent of households say that part or all of the deposit from their most recent tenancy was unreasonably withheld."[272]

195. Citizens' Advice commented that, "Both the timing and the content of this Bill make it highly appropriate for taking forward this issue:"[273]

i. Timing—the voluntary scheme operated by the Independent Housing Ombudsman is coming to an end. With the closure of that scheme experience and momentum will be lost. The introduction of a new statutory initiative now would enable the voluntary pilot to become the statutory scheme with a minimum of fuss;[274] and

ii. Content—the draft Housing Bill "is a major piece of legislation setting out to improvement management standards in the private sector, admittedly on a selective basis in respect of some types of property in some areas. In our book non-returnable deposits are one of the key problems that people bring to us about the private sector."[275]

196. In February 2002, the then Housing Minister Lord Falconer noted that slow take-up to the voluntary pilot scheme suggested that there was a "strong case for legislation on tenancy deposits"[276] On 16 June 2003 (the first day of our oral scrutiny of the draft Bill), ODPM Ministers said in a written statement that "the Government are committed to addressing the case for legislation" on tenancy deposits alongside Law Commission proposals for a single tenancy, i.e. not in this draft Housing Bill. One of the reasons given in the written statement for not taking more rapid action is that the costs of the scheme will be £19 million bringing estimated benefits of £20 million.[277] Shelter questioned this analysis

"They say that the value of the money saved would be £20 million but it would cost £19 million for such a scheme to be administered. The first figure we entirely agree with but the notion that a scheme would cost £19 million seems extraordinary. It seems to have been arrived at by government assuming that every single case where there is a deposit returned will lead into a dispute costing £150. That is not true. We have statutory schemes abroad—New Zealand is an obvious example—and only two or three per cent of the cases actually produce disputes."[278]

In addition, the Government's consultation document on tenancy deposits added that alongside the benefits to tenants, £31.6 million could be raised by holding tenants' deposits on deposit.[279] We recommend that a tenancy deposit scheme be introduced in this Housing Bill.

Succession to tenancies

197. The National Housing Federation's memorandum stated

"Although further consultation is needed before any general review of tenancy law, we believe it is urgent to amend the law on succession to tenancies to remove the current discrimination against same-sex relationships."

It continued

"The current law of succession to regulated tenancies, secure tenancies, and assured tenancies, contained respectively in the Rent Act 1977 and the Housing Acts 1985 and 1988, contains provisions that discriminate against same-sex couples compared with heterosexual couples and, in the case of secure tenancies, further discriminate between married and unmarried couples. We do not believe these provisions have any place in modern housing law. The Court of Appeal has already acted against them in Ghaidan v Godin-Mendoza (2002), a Rent Act case. We have advised our members that they should assume the Ghaidan decision applies equally to secure and assured tenancies but it is far from certain that this is correct. We suggest that the Housing Bill should take the opportunity to put the matter beyond doubt."[280]

This Housing Bill should be used to amend the law on succession to tenancies to remove the current discrimination against single sex relationships and unmarried couples in the case of secure tenancies.

Additional matters to be taken forward by ODPM

Further legislation

198. We received evidence on a number of important areas for action that have been included in the scope of the draft Housing Bill but where further legislation is required.

Park homes

199. The 1983 Mobile Homes Act sets out the legislation for the management of park homes. We received evidence from the All Party Parliamentary Group for the Welfare of Park Home Residents, who identified a number of problems with the current legislation and called for improved standards, both of physical conditions and management.[281] As Hilton Dawson MP told us, the Government has accepted the need in principle for changes to be made,

"Let us go through what the government have actually said in the response to the work of the Park Homes Working Party. 'The government accepts in principle that there would be benefits to be gained by requiring all authorities to be under a duty to attach, monitor and enforce conditions to licences. The government accepts in principle that a licensee should be a fit and proper person. The government accepts in principle that protection against harassment ought to be on a par with that available to private rented tenants. The government's initial view is that the current maximum fine for the breach of a site licence appears low in comparison.'"[282]

The Government should commit to introducing a new piece of legislation on park homes within the next two years.

Gypsies and travellers

200. We received evidence from a number of gypsy and traveller groups calling for a new duty to be placed on councils to provide accommodation for travellers.[283] The duty on local authorities to provide such sites, established by the Caravan Sites Act, 1968 was repealed by the Criminal Justice and Public Order Act, 1994. This has increased the number of travellers living on unauthorised sites, causing problems both for travellers and the settled community.[284] The Local Government Association agreed that re-introducing a duty on councils is the best way to encourage provision

"The LGA believes that site provision can only really be improved in the longer-term by re-instating a statutory duty on local authorities to 'make' or 'facilitate' provision supported by a central subsidy. Capital funding should be extended to include the revenue costs of ongoing maintenance and management of sites. We believe this is fundamental to helping to tackle resistance from settled communities and to overcoming political barriers to provision. Local authorities face a range of competing service delivery pressures and unless there is a statutory duty supported by adequate funding it is unlikely that site provision and wider service provision for travelling communities will be developed as a priority area of work for both financial and political reasons."[285]

We recommend that a statutory duty on local authorities to 'make' or 'facilitate' the provision of sites for gypsies and travellers is introduced as soon as possible, again within the next two years.

Single tenancy

201. The Law Commission has been consulting on proposals for a common tenancy agreement across tenures and will be publishing its proposals in a draft Bill in the autumn. This will then be the subject of significant consultation.[286] Shelter suggested that it would be unlikely to become law during the current Parliament.[287] We look forward to the introduction of the draft Bill to create a single tenancy.

Ground rents

202. Landowners who have leased their ground for development levy rent charges known as ground rents or chief rents. The vast majority of rent charges are on properties in the Bristol, Manchester and Wearside areas. The Rent Charges Act 1977 enables some householders who are liable to pay rent charges to redeem them cheaply and easily. However, certain rent charges are excluded from the Act.[288] The Department is reviewing the procedures for those who have to pay a rent charge to see if there is greater scope for them to redeem it, i.e. buy it out.[289] We recommend that the Government completes its review of rent charges as soon as possible and takes appropriate action to ensure that people can buy their way out of this prohibitive situation.

Lifetime homes

203. The Joseph Rowntree Foundation is working to promote 'lifetime homes.' The Foundation's evidence explained

"The "Lifetime Homes" standards were conceived over 10 years ago by a group of experts (including a number of disabled people) who shared concerns that traditional housing design was not "fit for purpose" for most households. The average household will have occupiers who will grow old and less mobile: someone may fall off a ladder; a teenager may break an ankle; disabled friends or grandparents will be invited to stay; and so on. Sixteen universal design standards were conceived with the aim of making new housing safer and more convenient for the majority. These are the Lifetime Homes Standards."[290]

204. The Government has taken some commendable action towards the introduction of the lifetime homes standards, with the introduction of an amended Part M of the Building Regulations from 1999. However, as Lord Best told us, more could be done

"There is to be possibly an ODPM review of this aspect of the building regulations and we would very much like the Select Committee to say, 'Speed up that review. Have a look at both implementation and any small, extra points that would just make the system better.'"[291]

205. One element of the lifetime homes standard is access to a shower without going up steps or stairs. We received a memorandum from Helen Jackson MP calling for the Government to take action to amend the building regulations and upgrade existing properties to include provision of level access showers.[292] The Rowntree Foundation said

"The Lifetime Homes standards recommend that drainage is incorporated at the outset for a possible shower in the future, on the entrance level (usually included in the downstairs WC); this simple measure is not part of the Building Regulations."[293]

We recommend that the Government undertakes a timebound review of the building regulations to consider how they could be further amended to meet the lifetime homes standard. This should, in particular, include level access showers.

Underwriting housing markets

206. Our predecessor Committee's inquiry into Empty Homes recommended

"We recommend that the DTLR, working with the Council of Mortgage Lenders and the Treasury, should undertake a full feasibility study into the financial, community and social costs and benefits of each of the options available for sharing the risk of housing market collapse. A simple solution would be for local authorities in areas of market weakness to underwrite the market with a guarantee to buy back the property at their valuation of it at the point at which the sale took place."[294]

207. Professor Brendan Nevin of Sheffield Hallam University told this inquiry

"In theory that is a very good idea. Part of the problem we have with institutional finance with the Pathfinders is lack of guidance about the way we should engage with them. At the moment, the transaction costs for doing that for a Pathfinder would be quite high if they did it individually. It would not be so great if they were doing it as a collection of nine and pooling the risk in insurance terms between them but we would need quite a degree of co-ordination to do that. In the absence of that co-ordination nationally, speaking as somebody who directs a Pathfinder, I would be very reluctant to pursue it and would look at other models to try to stabilise the market."[295]

We recommend that central Government should develop an approach to underwriting housing markets which is available across the low demand pathfinders.

Regulation of registered social landlords

208. On the same day that the draft Bill was published, the Government also launched a consultation on the regulation of registered social landlords.[296] The Minister suggested that these proposals would be reflected in the final Bill.[297] One of the proposals within that is to give social housing grant (SHG), which supports the provision of new social housing to private developers (previously it has only been available to registered social landlords, who are subject to regulation by the Housing Corporation). The Chartered Institute of Housing was concerned about this

"A proposal to give SHG to profit making bodies not subject to the code is therefore a significant step, yet the consultation paper is sketchy about the arguments for this and how it will operate."[298]

The Institute suggested that the Government's aims could be achieved differently

"We would share the need to build more houses for a reduced amount of money. I think there are two prongs to the dangers, if you like. One is we think there are probably a whole load of reforms that can be brought into place to make the existing arrangements with registered social landlords more effective, not least planning reforms, some of which have been dealt with elsewhere. Also, something like reducing the total number of RSLs that do development … If you reduce the number of housing associations who can do development they will all do more development. The other thing that private developers will say is that they produce more standard house types. Again, you could look at that for RSLs. You can achieve the same kind of savings through modernising the RSL development process rather than giving grant to developers … Our fundamental concern is do not give grant to unregulated organisations, let us try first at improving and modernising the RSL development sector."[299]

We recommend that the Government considers way to streamline and improve the effectiveness of registered social landlords before introducing any measures to pay Social Housing Grant to private developers.

268 Q813, Keith Hill MP Back

269 Qq814-823, Peter Hain MP Back

270 For example the Law Society, DHB40, the National Rent Deposit Forum (DHB37) and the Chartered Institute of Housing (DHB33) Back

271 Q49, Mr Davies, Citizens' Advice Back

272 DHB20 Back

273 DHB04 Back

274 Q111, Brent Private Tenants' Rights Group and National Union of Students Back

275 Q52, Citizens' Advice Back

276 Tenancy Money: Probity and Protection, ODPM, 2002 Back

277 Column 2:WS, 16 June 2003 Back

278 Q510, Shelter Back

279 Tenancy Money: Probity and Protection. Back