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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1744-ii
HOUSE OF COMMONS
TAKEN BEFORE THE
ENERGY AND CLIMATE CHANGE COMMITTEE
FUEL POVERTY IN THE PRIVATE RENTED AND OFF-GRID SECTORS
TUESDAY 7 FEBRUARY 2012
DAVID TIMMS, JENNY HOLLAND and TERESA PERCHARD
DAVE PRINCEP, ROBERT TAYLOR, SUE WALKER and TONY JEMMOTT
Evidence heard in Public
Questions 128 - 197
USE OF THE TRANSCRIPT
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Taken before the Energy and Climate Change Committee
on Tuesday 7 February 2012
Mr Tim Yeo (Chair)
Sir Robert Smith
Dr Alan Whitehead
Examination of Witnesses
Witnesses: David Timms, Friends of the Earth, Jenny Holland, Association for the Conservation of Energy, and Teresa Perchard, Citizens Advice, gave evidence.
Q128 Chair: Good morning. Welcome to this meeting of the Committee. Thank you for coming in. As we are a few minutes late, I shall crack straight on without any formalities.
Would you like to tell us to what extent the housing health and safety rating system is actually enforced by local authorities?
Jenny Holland: Thank you, Chair. I will lead off on this, if I may. It has been noted for many years now, most recently in a report by the Select Committee on Environment, Food and Rural Affairs in 2009, that the enforcement by local authorities of their duties under the housing health and safety rating system is not as proactive as many would like to see. There is common consensus that there are a number of reasons for that, which I can enumerate, if you would like me to.
First and foremost, what local authority environmental health officers would tell you is that there is insufficient resource for them to use their powers proactively. More and more, they are resorting to using their powers reactively-in other words, merely responding to complaints, rather than using their powers under section 3 of the Housing Act 2004 actively to review the quality of the housing stock in their area.
There are a number of other issues that local authority officers would tell you about if they were here to do so. First of all, there is a lack of clarity as to how to assess the category 1 hazard of excess cold. A lot of them, de facto, use an EPC rating of F or G to signify a category 1 hazard of excess cold, but there is lack of clear guidance as to whether that should be their criterion. One of the things that we are asking for is that guidance should be issued forthwith by the Secretary of State to local authorities clarifying that, in every instance, an F or G rating signifies a category 1 hazard of excess cold.
There are a number of other issues, including lack of appropriate software systems for recording data; complexity in terms of the amount of paperwork and bureaucracy that is required; a lack of political support, often at local level, and also they would say at national level; and inconsistent and confusing rulings by residential property tribunals. Last but not least, in the CSR at the end of 2010, funding was removed for private sector renewal works. It had been in existence for many decades, but came to an end in April 2011. That was a mechanism whereby local authorities could bring landlords to the table with an offer of private sector renewal funding and engage them in that manner with HHSRS. Clearly, that is something that can no longer take place. So, there are a number of issues not necessarily at all relating to the desire of local authority officers to treat this matter seriously that mean that they are not able to do so as actively as they would like.
Teresa Perchard: I might add, from the Citizens Advice perspective, there are also the tenants’ thoughts. The HHSRS is a potentially very powerful tool for tackling inadequate properties on a number of fronts, not just cold, especially if we are looking at tackling fuel poverty and substandard housing resulting in fuel poverty. This is a very powerful tool, but tenants fear to make trouble. We have highlighted in our submission to the Committee a number of examples of people who are cold or living in damp, mouldy accommodation and have involved the local authority, which has duties in this area, and have subsequently been evicted by their landlord, who needed no cause to evict them. That kind of thing means that tenants fear to complain. That is part of it-how can we protect tenants who simply want something done about very poor quality accommodation?
Q129 Chair: Looking at landlords, Consumer Focus suggested that local authorities could hold a register of landlords. Would that be helpful, do you think?
Teresa Perchard: We at Citizens Advice have always supported various proposals for creating registers of landlords, for a number of reasons. It would certainly assist local authorities and tenants to have some information about the market and to pool information. So, yes, we think it would be beneficial. I think colleagues do, too.
Jenny Holland: Absolutely. If I may come in on that, reputable landlords’ associations-I know there are representatives behind me who are going to be talking in the next session-would say that they are well placed, as indeed they are, to promulgate information to their members. Clearly, their members are identifiable as a group of landlords, but the Law Commission estimates that only 2.2.% of private landlords are members of a professional body. The Department of Energy and Climate Change says that it is a little higher-3.3%-but these are very small numbers.
We would say that a landlord’s register, far from being something to fear on the part of reputable landlords, is a mechanism that can work in a number of ways, as a means whereby landlords can be made better aware of their existing rights and responsibilities. That includes their entitlement to the landlord’s energy saving allowance. It will include, of course, also making them aware of the minimum standard when it comes into force. It is also a mechanism that enables local authorities to better make contact with the landlords in their area, and ultimately to enforce things such as the minimum standard when it comes in.
We would say that there is something that can be done in the regulations-the secondary legislation that will follow from the Energy Act 2011-which would be a very light-touch mechanism, but which would be really useful for local authorities. In other words, the tenure of a property should be listed on the energy performance certificate, and also the name and address of the landlord, with the intention, as spelt out by Greg Barker in the Energy Bill proceedings, of enabling local authorities to have access to the EPC register. That would be a means whereby they would in one place have really useful information, which would enable them both to carry out their duties and to inform landlords better of what their rights and responsibilities are.
Mr Timms: We also want to see a minimum level of non-compliance to the minimum standard, and a minimum level of enforcement. The impact assessment shows that DECC expects that landlords will act in anticipation of the regulations coming in. If landlords are not able to get clear information from a reliable source about what those regulations are and what their duties are under them, they are likely to sit on their hands until they can get that information.
It would seem that we need some form of trustworthy, reliable source of information. If we are relying on bits of post being put through the door of property it is incumbent on tenants to pass them on to the landlord-or they might not pass them on. A reliable source of information would be extremely desirable, because it would mean that we were more likely to reach a position of needing a minimum level of enforcement when the regulations come into force.
Teresa Perchard: I would underline that. In the context of having that standard for 2018, and knowing the high proportion of private rented sector property in bands F and G, it is clear that some work will need to be done to help landlords to understand, to support them and to highlight the help that may be available to them and their tenants to improve the standard of property. A register or registers, if they are local, could assist enormously with that education and information.
Q130 Chair: Would it be helpful if landlords had to disclose EPCs to local authorities?
Mr Timms: My understanding is that they will have to, and that the EPC database will be publicly available. All we are suggesting is that the landlord’s contact address should be recorded in addition to the address of the property. That might not have to be made publicly available, but, as a minimum, it should be available to the local authority to aid information and enforcement.
Jenny Holland: As I said, Greg Barker repeatedly made it clear during the Committee stage of the Energy Bill proceedings that it was his and the Government’s intention to make the EPC register available to local authorities. Once the information is recorded in the manner that we have suggested, by definition, local authorities will be able to gain access to it.
Q131 Chair: If we had a landlord rating system, in practice, would tenants actually use it?
Mr Timms: What sort of rating system would you imagine?
Chair: One that would tell them whether landlords were reputable or what their record had been.
Teresa Perchard: That would depend on who put it together and how it was promoted. This is certainly something that Consumer Focus, the organisation that you have mentioned-some of its evidence in this area is very helpful, particularly on EPCs-has been promoting the idea of rating landlords so that prospective tenants have information from existing or past tenants about how that landlord might treat them. There are lots of other private sector market rating schemes-they operate widely and are used by consumers, so why not for the private rented sector too?
Mr Timms: It also depends on which part of the market you are looking at. There are local authorities that have accreditation schemes, with varying levels of membership in different authorities. If you are looking at the bottom end of the market, where you have people on housing benefit who are, perhaps, very vulnerable, I doubt very much whether a landlord accreditation scheme would provide enormous empowerment. If you are looking at the top end, it could be useful, but we are considering those who are in fuel poverty, and I don’t think such a scheme would be a significant answer to their circumstances.
Q132 Laura Sandys: You really would like to toughen up the current proposals, wouldn’t you? In some of your proposals, you want to bring forward the introduction of the minimum standards to 2016. You have also collectively talked about raising the standard to band D. You also believe that there is a loophole in the measures funding the green deal and ECO. Could you expand on those?
Mr Timms: If I can deal with the start date and the trajectory to higher levels, when we originally came together-40 civil society organisations-to campaign for the minimum standard of energy efficiency in the rented sector, we did that around the date of 2016. We saw that as the one consistent with the Government’s legal duty to end fuel poverty by 2016 under the Warm Homes and Energy Conservation Act 2000. When we are talking about F or G-rated private rented sector properties, 42% of the households in them are estimated to be in fuel poverty, so to have a measure to tackle fuel poverty coming in two years after the legal deadline by which the Government have to end fuel poverty seems irrational.
The Government do not really have an evidence base for their decision to go to 2018. Originally, when the Energy Bill came into Parliament, it contained two measures on the private rented sector. The first was for local authorities to issue improvement notices, and the second was for tenants to be able to demand energy efficiency improvements. Both of those were down to come in in 2015.
Later, as the Bill went through Parliament, the Government delayed by a year the measures for tenants to make requests, and when they brought in the minimum standard, they went for 2018. The only reason offered for that when Greg Barker was questioned in Committee was that it gave enough time for the overwhelming majority of PRS properties to have had one iteration of turnover of tenants-he said between 80% and 90%. We went back to the English housing survey and found out that, by 2016, over 80% of those properties would have also turned over, so the key piece of evidence offered applies equally to 2016 as it does to 2018. When the impact assessment for the Energy Act 2011 came out, it turned out that the Government had not looked at any evidence whatever for 2016 as a start date. They had simply gone for 2018. One of the things that we would really love the Committee to do is to look at some of the evidence base for that. Obviously, we have all submitted evidence calling for the 2016 start date.
In terms of toughening the minimum standard over time, we were very pleased that Greg Barker said that the legislation allowed for this to happen and that he imagined it would be necessary. We certainly would very much welcome that. Our view is that it would be better to set the next tightening in law as soon as possible, because that would reduce the costs to landlords and the cost of the regulations. If a landlord is able to say, "I can improve my property up to band E" or, "I can do the additional measures and go all the way to band D", the latter means we are not having additional void periods and repeated visits to the property, so the overall cost of the regulations will be cheaper.
We will start to hard wire into the system the idea of going into whole-house retrofits. It has obviously been a bit of a holy grail for those of us when talking about energy efficiency improvements and fuel poverty reduction to go for fuel poverty proofing of properties. Giving landlords the maximum transparency and certainty about the regulations will encourage them to do that. It is also worth noting the numbers of fuel poor who can be helped by this. Consumer Focus did some modelling early on in the campaign and showed that the minimum energy efficiency standard, which took out of the system F and G ratings, could take 150,000 households out of fuel poverty. It also showed that if you increased that standard so that E, F and G were taken out of the system, you would take 300,000 households out of fuel poverty. So there is a massive prize to be gained in terms of the impact on fuel poverty.
Jenny Holland: Would you like me to say a little bit about our perception of the loophole that exists in the legislation?
Laura Sandys: Yes.
Jenny Holland: On the face of the legislation, there is merely a requirement for landlords to make relevant energy efficiency improvements. Those relevant energy efficiency improvements are defined as ones that can be made at no up-front cost under the green deal and/or the ECO, or by other means that the landlord might choose. We were assured in Committee and by the civil servants and, indeed, in the Energy Act impact assessment that the intention of the Government was that those properties, by means of those energy efficiency improvements, would be raised to band E. But, because there is no requirement on the face of the legislation for that minimum standard to be reached, we are extremely concerned and have enunciated our concerns repeatedly during the passage of the Bill that that will frankly lead to an administrative and enforcement nightmare whereby some F and G-rated properties will, in fact, be legal because landlords have done everything that they can under the green deal and/or ECO, whereas other will not have.
We have repeatedly pressed the civil servants for information as to how they see this happening in practice. Tenants will not know, when they go along to a lettings agent or to an individual landlord, whether or not a particular F or G-rated property is legal, because the landlord could have done everything he could to it. Landlords will not know exactly what they have to do to meet the so-called minimum standard.
I feel particularly sorry for local authorities. Instead of just being able to go to a lettings agent and say, "You have an F or G-rated property in your window, but you are not allowed to do that," and in come the trading standard officers, they will be forced by means that are wholly unclear at the moment to try to determine in any given case whether an F or G-rated property is legal or not. Enormous amounts of local authority resource will be deployed to try to find a way through that minefield. We see that as something that will jeopardise the success of the minimum standard and of the legislation as a whole, which we all obviously want to see.
Q133 Laura Sandys: How would you close that?
Jenny Holland: It is very simple. We tried to have an amendment that would have done that passed both in Committee and on Report stage. It merely says that those relevant energy efficiency improvements that I have described should, in every case, bring the property up to at least a band E. Clearly, if those improvements-in some cases, this will be true-can take a property higher than a band E, so much the better.
Now, the amendment would have to be done through secondary legislation, but it can easily be done through that. If that is made clear, the enormous administrative and enforcement nightmare, which sadly we envisage because of the loophole, can be completely obviated.
Q134 Laura Sandys: In my constituency, there is a ward where there is 84% privately rented properties. They are very beautiful and high-quality buildings, and very difficult to insulate. Do you see that there are going to be pockets of the country that will be blighted, in a sense, where it would be very difficult to sell or rent, and we could end up in a situation where we have empty streets that do not qualify?
Jenny Holland: No. One of the reasons why we are clear that the secondary legislation should contain the kind of amendment that I have described is because we in the campaign coalition have commissioned research on the cost of bringing properties out of F and G ratings. Such costs have anecdotally been considerably exaggerated. We found that 37% of those properties could be improved for less than £900, with things such as cavity wall and loft insulation and draft proofing.
Q135 Laura Sandys: What about Regency buildings? We are talking about really hard-to-treat buildings.
Jenny Holland: The research showed that only 5% of F and G-rated properties-I would imagine that the ones you describe might fall into that category-would cost more than £7,500 to bring up to an E rating. In the case of that 5%, it will generally be by means of the normal measures, such as cavity wall and loft insulation, and perhaps by a combination of solid wall insulation, fuel switching and solar water heating. Solid wall insulation, as the Committee knows, is the main measure that will be treated by the energy company obligation that is currently proposed. So a combination of the green deal for the so-called normal measures-cavity wall and loft insulation and so on-and the ECO for solid wall insulation will cover, in almost all instances, the kinds of measures required. Therefore, the problem of blighting that you describe will, in almost all instances, not happen, because of the kinds of cost issues that I have outlined.
Mr Timms: The only occasion where we have accepted right from the outset that there would need to be some kind of exemption is listed buildings, where you cannot make those improvements. Where those improvements can be made, as Jenny said, they are considerably cheaper than some might imagine. They are also exactly the kind of properties that ECO is supposed to be there to help pay for. The landlords, where there is solid wall needed, will not even have to pay for it themselves.
Q136 Albert Owen: Moving on, Mr Timms, your organisation and other respondents who gave evidence have suggested that the Government should continue to provide taxpayer-funded energy efficiency programmes beyond 2013 when the Warm Front scheme comes to an end. Why do you say that?
Mr Timms: Well, that is really a stark assessment of where we are in the trajectory of fuel poverty. There are at least 5.5 million households in fuel poverty in the UK. It is imagined that ECO will pick up the heavy lifting from Warm Front, but we simply do not see that ECO is anywhere near the scale that is necessary. You are losing Warm Front, so, for the first time in, I think, 30 years, there will be no centrally funded energy efficiency grants available for low-income households in the UK.
Teresa Perchard: In England.
Mr Timms: In England. You are trying to replace it with ECO. ECO is almost exactly the same size as CERT. CERT is currently £1.3 billion, yet only 25% of ECO will be ring-fenced for the fuel poor. The Government have said that they would like as much of the carbon element of it as possible to go to the fuel poor, but there is absolutely no guarantee of that. At the moment, all we know is that about £330 million a year will be available to those in fuel poverty and we see that as being completely inadequate to the task.
The problem is that, like CERT, ECO will go as a levy on people’s energy bills and it is estimated that that is about £50 a year. It is not an option, therefore, to simply turn the handle and keep cranking up the size of ECO until it reaches 5.5 million households and brings them out of fuel poverty. A lot of us have come to the conclusion that we have to see additional financing. When we are talking about tackling fuel poverty, this is something that should be at the front of the demands for Government spending. We are talking about large levels of excess winter deaths and connections with public health problems. It is estimated that the NHS spends about £1 billion a year treating the illnesses that are caused by cold housing. We have said-I think that ACE and others are supporting this-that we should look at the revenues that are available from the European emissions trading scheme and the carbon floor price, which the Treasury estimates will be worth £3.5 billion annually by 2015-16, as additional revenue which should be recycled and re-spent into helping cut fuel poverty and energy bills in vulnerable households.
Q137 Albert Owen: Would anybody else like to comment on that?
Teresa Perchard: Our primary concern is people’s ability to pay. Levies on bills are paid by people irrespective of their income, but not all the people who have contributed will necessarily benefit. Our concern is about fairness. If there is no scheme to provide tax-funded grants, as there currently is, there will be some households that are in need, on very low incomes, who are net contributors to the fund. There is a real risk of that. That is our perspective on it.
Q138 Albert Owen: Do you want to add anything?
Jenny Holland: No, not really. The only thing I would say is that I completely agree with Dave that it is not an option, because of the regressive nature of ECO, to just increase the pot exponentially, because that will just increase the regressive nature of the scheme. Just as a final point on that, the Fuel Poverty Advisory Group and we-all of us-have been saying for some time that the way in which the costs should be passed on to consumer bills should be on a per consumption basis, not on a strict per capita basis, so that there is some connection between the amount of energy used and the way in which the levy is recouped from consumers.
Q139 Albert Owen: There are two points that National Energy Action has argued. First, it argues that it is wrong in principle for taxpayer’s money to be spent on improving business assets-the assets of private landlords. Secondly, it argues that it is wrong in principle that tenants should be expected to pay for improvements that often do not meet the minimum home standards. How do you respond to those two points?
Mr Timms: In principle, the default position is that landlords should really be paying for the improvement of their own properties, but we cannot stick to that in all circumstances. If we look at those landlords who are required to install solid wall insulation, we are asking a landlord to do something that they would not be rewarded for in terms of the market rent of the property. Unfortunately, energy efficiency does not pay for itself in terms of the rent that landlords are able to get for those properties. What we are asking a landlord to do is to pay for something that is really quite expensive that they will not get back in the value of that property when they sell it or when they rent it. We are saying that we want landlords to put in solid wall insulation because there is an overriding environmental and social objective. Therefore, it seems fair to me that the state should contribute towards that-in this case we are looking at ECO, which means other bill payers. Cavity wall and loft insulation should not be subsidised by the state in the owner-occupier sector and able-to-pay sector; they should be mandatory anyway. The argument therefore is much less strong. However, when we are talking about a choice between either subsidising it or having households that are in fuel poverty with all the connected ill-health effects, I would rather see the money spent on insulating properties and bringing households out of fuel poverty because that is my primary concern.
What is interesting about the green deal is that it is not clear whether landlords will be keen to take out green deals. On paper, one would think that landlords would be very excited about this because, technically, it allows them to transfer the cost of improving their property on to the tenant through their energy bills. The quid pro quo of that is that tenants would be better off because their energy bills are lower. DECC’s consumer insight surveys, which it released with the green deal consultation, make very interesting reading. What they show is that tenants do not see what is in it for them because, effectively, they are swapping one bill for another. Landlords are worried that they will find that their properties are hard to rent.
Teresa Perchard: There is a business case for taxpayers investing in the private rented sector. First, they are an increasingly important part of our housing supply. As a sector, it has grown. We know that the private rented sector is disproportionately of poor standard and has a higher proportion of people in fuel poverty. The cost to the NHS of dealing with winter-related diseases due to cold homes is nearly £1 billion. There is also the cost of providing care and support to people who are living in cold homes. The taxpayer would save from the investment. In principle, businesses should be investing in business, but there is a public interest in improving the health and well-being of the tenants. There is also a wider public interest in reducing some of the costs to the health sector.
Q140 Albert Owen: If I could just move on to Ms Holland. Your organisation has proposed increasing the landlords’ energy savings allowance. What is the rationale for that?
Jenny Holland: We would say that there is a very clear rationale for this. Some would say, "Why do we need to continue with the landlords’ energy savings allowance after the introduction of the green deal? Won’t the green deal do everything for landlords that LESA currently does?" There is a rationale for keeping LESA in place. There are two very specific reasons. There will be cases where the green deal is impossible for landlords to gain access to, and principally in situations where consent is impossible to obtain, either from the tenant or in large blocks of flats.
If you are a leaseholder and you are renting out your property, then you will probably need to get consent from your freeholder. In large blocks of flats, there may be pretty nightmarish consent situations whereby, potentially, one or two withholdings of consent will scupper green deal activities throughout a whole block. In those circumstances there has to be an alternative incentive for landlords to make energy efficiency improvements, and in those circumstances the landlord’s energy saving allowance continues to have a key role.
Second, even in situations in which the landlord can gain access to the green deal, and potentially the ECO as well, for solid wall insulation, LESA can be used to ensure deeper retrofits in those properties-for instance, with the introduction of double glazing and other kinds of technologies such as solar water heating or whatever. So we are saying there will be situations in which it can be used as a top-up. Clearly, it will be wholly wrong for a tax break to be given to landlords for measures where there is no up-front cost to the landlord, because of the green deal and the ECO, but those are very specific situations in which we think that it can be a useful addition.
We would say that it ought to continue and that the current level ought to be raised from £1,500 to £3,500, which is the sum that would mean that about three quarters of F and G-rated properties could be brought to band E. That is a significant sum of money. We would also say that because levels of take-up have historically been extremely low-0.2% the last time it was counted-the Treasury ought to do more to promote the existence of the LESA. At the last count only about 4% of private landlords were aware, and only 0.2% took it up. So we think there is a job of work to be done on the part of the Treasury, perhaps through mechanisms such as the landlord’s register, of which we have already spoken, to make information better available.
So we think there should be more availability of information about it. An increase in the rate would make it more attractive in the circumstances that I have outlined.
Q141 Sir Robert Smith: I remind the Committee of my entries in the Register of Members’ Financial Interests. I own property that I rent out in Aberdeenshire and I am a shareholder in Shell, an oil and gas company. Also, I am honorary Vice-President of Energy Action Scotland, a fuel poverty charity.
On the energy performance certificates and their use, do any of you think that there is any reason why houses in multiple occupancy should not be included?
Mr Timms: There is an excuse for why they should not be included, but I do not think there is any reason why they should not be included. This is something that has really only come to light-certainly to my attention-as we got towards the end of the proceedings of the Energy Bill. I wish that I had picked up on it earlier. Obviously, EPCs are not required on HMOs. The previous Government consulted on this issue just before the general election. They consulted on whether HMOs should have an EPC, and 94% of the respondents in that CLG consultation said yes, they should, but then it was decided that it would not go ahead.
We have since discovered that if you look at the way the Energy Act is drafted, it says that the minimum standard will apply to properties where there is an energy performance certificate, so if HMOs do not get an EPC, the minimum standard will not apply to them at all-they will simply be excluded. My understanding is that there are about 300,000 HMOs in England. The reason this is possible is because they do not count as a dwelling under the European energy performance of buildings directive. In correspondence to me, CLG officials have said that there is no plan to include them to count as a dwelling.
The EPC regulations came in in 2007. Any HMO that was created before 2007 will have been letting out individual bedsits, each of which does not require an EPC, so the entire property never gets let out as a property that requires an EPC until it is sold. Not only will those properties never have to meet the minimum standard because they will never get an EPC, but the people looking to rent those bedsits will not be able to have the information on the EPC or, presumably, to use the tenants requests legislation to ask for a green deal, because they will not be able to have the information from the EPC.
Q142 Sir Robert Smith: So both of you share the concern?
Jenny Holland: Very much so.
Sir Robert Smith: Without the information, tenants will not be able to know whether they are getting an expensive-to-heat or cheap-to-heat property.
Mr Timms: I do not think that that was a deliberate omission by DECC when it drafted the relevant section in the Energy Act. I think it was just a mistake, which needs to be put right quite urgently.
Q143 Sir Robert Smith: Have you gone as far as to work out how it could be put right legislatively? Does it require secondary legislation powers?
Mr Timms: Because EPCs will be governed by the energy performance regulations, they are done directly from European legislation. I am sure that others will understand this much better than I do, but because it is a European directive, there is no need for primary legislation, and it can go straight into regulations. So you have the regulations on the energy performance of buildings, and changes can be made to that quite easily to require any measures.
My understanding is that it would be quite difficult to require each individual bedsit to have an EPC, but what you could do is, when the first one of those is rented out, require an EPC for the entire property. The conversation that I had with the Property and Energy Professionals Association suggested that that is technically possible.
Q144 Sir Robert Smith: Once you have a certificate, would you apply the minimum standard to the whole property rather than to the individual units?
Mr Timms: Yes. I think you would have to, because the EPC would give the entire property an energy rating. It would only be fair, therefore, to apply it to the entire property.
Q145 Sir Robert Smith: Something came up earlier. If you have a block of flats with solid walls, and some are rented and some are owner-occupied, and you cannot get agreement from all the owners to treat the property, does that mean that all the rented ones become no longer letable, and it all becomes owner-occupied?
Mr Timms: Jenny has been grappling with this quite a lot.
Jenny Holland: Yes. Grappling is the word, but I wouldn’t say terribly successfully. In a previous incarnation, I was-well, I still remain-a trained lawyer. There are more grey hairs on my head as a result of this grappling than there were before.
The situation is extremely thorny, and there are no easy answers as to what might happen in those situations. Obviously, there is a mechanism whereby reasonable exemptions can be put into secondary legislation, and I would say that this is probably ripe territory for investigation.
Q146 Sir Robert Smith: It is a bigger issue than just this issue, because there is the whole issue of the efficiency of trying to treat properties. I still remember with despair semi-detached households in the warm homes week, where they were putting a chain down the cavity to make sure the neighbour did not get any insulation. The efficiency of doing the whole property would have been greater.
Mr Timms: The questions that arise are bigger than just dealing with the private rented sector, because they arise in terms of the relationship between leaseholders and freeholders, where even those leaseholders would be generally considered to be owner-occupiers. Once you start making some of those leaseholders landlords in their own right and subletting, it becomes more complicated. It then becomes even more complicated when you try to use the green deal, because you have to get consent not only upwards from the freeholder, but downwards from all the bill payers.
That points to some of the limitations of the green deal where it applies to the private rented sector. The pay-as-you-save mechanism was originally conceived for individual households and the owner-occupied sector. There is a danger of turning it into a silver bullet, where you start to try to lever it into situations where the issue of consent from bill payers and from upwards to freeholders makes it very complicated. Hence, we come back to Jenny’s point about why it is important to provide some form of financial incentive mechanism for those situations in which this kind of complexity proves impossible.
I would like to add one thing that occurred to me about consent from bill payers. I am worried that when the Government get round to writing the regulations-they have signalled this in the impact assessment-they should not produce a situation in which, if a tenant refuses a green deal, the landlord does not have to meet the minimum standard. If the tenant refuses, the minimum standard should still have to be met. That is important.
Q147 Dr Whitehead: What is the reality of retaliatory evictions in relation to people, in general, wishing to make energy improvements to their property and also to how the green deal might be affected by this?
Teresa Perchard: This is an issue that we come across regularly in citizens advice bureaux. We give advice to many people in the private rented sector. As we have highlighted in the submission, we regularly come across cases in which people have asked their landlord to improve their property, sometimes seeking to use help from a grant scheme like Warm Front or its predecessors, but sometimes because it is damp and mouldy. They can end up being evicted for no reason. Some might have had a long tenure-in one case in our submission, someone was in a property for many years, with no debts. The tenant had finally taken action to try to get the landlord to improve the property and had involved the local authority, which issued an improvement notice. Lo and behold, the tenant was evicted. We see this a lot on our front line. What we do not see so much are the people who have thought about it but decided not to take action, because they do not want to make trouble.
There are very limited large-scale survey data on this. One of the challenges we have had with successive Governments has been arguing for action. About 10 years ago, the English house condition survey found that a quarter of tenants were unhappy with repairs undertaken by landlords, but few of them did much about it. If they did not complain to the landlord, it was because they did not want to make trouble, and some feared that they would be evicted. In local housing markets where there is a very limited accommodation supply, you can understand why people do not want to make trouble. They may decide to move on and try to find somewhere else rather than try to get something done about it.
It seems a real pity to us that we have the 2018 and 2016 standards, but no protection for tenants who might be threatened with eviction because they have taken action to try to get the property to meet the legal standard. There is such protection for tenants whose landlords have not protected their deposits, but not when the issue is to bring the property up to a minimum standard in law. We are disappointed that there is no protection there. If there were a big push to get the private rented sector particularly to improve standards up to 2016 or 2018, we might see more threatened evictions as a result. Who will take action to protect the tenants? "Anxious" is what I would say.
Q148Dr Whitehead: Could the provisions in the Housing Act 2004 be extended to give that sort of protection to tenants? In particular, the green deal might create a problem in that landlords might be encouraged to put rents up, even though the tenant has, effectively, underwritten the improvements. Could the provisions protect such tenants?
Teresa Perchard: I would have thought that if there were a will to bring about such protection, it could be achieved through a number of pieces of legislation. It is a pity it was not in the Energy Act, because it was bolted into the legislation on tenants’ deposits. We would welcome the protection coming through any piece of legislation, but if you would find it helpful to have a view from us or some suggestions, we would be happy to write to you, highlighting where it could most simply be implemented.
Jenny Holland: Can I just come in on the back of that? Several attempts were made during the passage of the Energy Act to include a provision on the face of the Bill, as it then was, giving tenants protection from retaliatory eviction in the circumstances that have been described. Unfortunately, those attempts were not successful, but all is not lost, because there would be a means whereby it could be done in secondary legislation flowing from the Energy Act. The regulations simply could include some sort of provision whereby the Secretary of State gave protection to tenants, making a request under the regulations. Again, I can send chapter and verse on that after this sitting if that would be helpful.
It has, of course, been pointed out to us by reputable landlords’ associations that they would not want to see a situation coming into being where unscrupulous tenants use that protection to afford them protection in circumstances where perhaps they were otherwise in breach of their tenancy agreement for non-payment of rent, antisocial behaviour or whatever it might be. My view is that that kind of situation could quite adequately be covered by making the protection from retaliatory eviction not come into being in circumstances where the tenant had already been in breach of the tenancy agreement or where the tenant had breached the tenancy agreement after the protection period had started. My legal skills are a little bit rusty, but I am sure that it is not beyond the wit of DECC lawyers to come up with something along those lines, which would protect tenants in the way that Teresa wants to see, but would deal with the legitimate concerns of landlords that unscrupulous tenants might use that protection in ways that were not appropriate.
It is not just Citizens Advice, which has demonstrated instances of retaliatory eviction or a fear of retaliatory eviction. Last summer, the Chartered Institute of Environmental Health, the professional body representing environmental health officers, did a survey of its members, looking at instances of retaliatory eviction or threats of retaliatory eviction where HHSRS powers had been invoked. Its members came back with some extremely disturbing tales of retaliatory eviction or the threat thereof in circumstances where these powers had been invoked.
In a couple of local authorities, as many as half of the cases that they came back to us with resulted in retaliatory eviction. Clearly, as Teresa says, there is not much data. As far as we are concerned, the case is very well made that tenants are evicted in circumstances where they complain about repairs or the maintenance of the property, and very much fear retaliatory eviction. That then prevents them from making complaints or requests that they might otherwise feel would be legitimate.
Mr Timms: Can I just add a point, which is in DECC’s impact assessment for the Energy Act 2011, which it actually wrote while the Bill was proceeding through the House? It accepts that the take-up of the tenants request measures will be limited by the fact that "tenants may not want to risk losing their tenancy by confronting the landlord". DECC themselves in its own impact assessment is accepting that its own legislation on tenants making requests will be limited by the fact that tenants do not want to make these requests because they are scared of losing their homes. It seems strange to me that DECC are accepting it itself in its own impact assessment, which was not available to us in the latter stages of the Bill going through the House, which is a shame. It then did not accept the case, which seems to me a moral one, that if you are bringing in a piece of legislation which encourages tenants to make demands of their landlords for energy efficiency, you should give them the protection that they deserve if that brings about some form of retaliatory consequence. That seems to be only fair. It is a real shame that that was not included.
Q149 Ian Lavery: The education for both the landlords and the tenants is far from desirable at this moment in time. For example, very few tenants in the private-rented sector are aware of what their rights are. What would your view be on tenants considering and choosing where to live because of an EPC rating, or does that not even come into their consideration?
Teresa Perchard: One of the best bits of research on this recently was a report, again by Consumer Focus, called "As easy as EPC?" which explored the extent to which people took any notice of the EPC and if they took any action on improving the energy efficiency. Only one in five people who were looking to buy and rent said that the EPC had any influence on their choice of property. It is not a big driver. The other elements in the research looked at how easy they were to understand, because the consumer cannot tell from the EPC what difference any one of the bands would make to the amount that their energy bill would be.
Consumer Focus has therefore recommended a number of ways that the EPC information could be made more accessible and useful to consumers, so that it achieves part of its intended purpose, which is to help people make choices. As bills rise, the possible costs of their energy bill will obviously be much more in the fronts of their minds. Supply, rent, deposit, location and décor-all of those things-will be very overriding for tenants who are shopping around, particularly if they have an opportunity to shop around. The Consumer Focus research shows that a lot more can be done to build on the EPC framework to educate and inform, so that consumers can see what the difference is between the different bands in monetary terms.
Q150 Ian Lavery: How best do you think that that can be achieved? How can the tenants be better educated on the EPC and good energy efficiency generally?
Teresa Perchard: One of the things that Consumer Focus said was very confusing was that people are presented with two bar charts. There is an environmental impact chart as well. The key thing is that the information is not telling you what your bill might be or what the average bill might actually be. It is income, budget and household budget: it needs to be expressed to people in those ways, so that they can see what the difference would be. There are some very practical suggestions that Consumer Focus has made, which is the best piece of research I have seen on how to improve things for the consumer.
Mr Timms: In addition to how that information is presented, the most important thing is that it is seen and is got into the hands of tenants. Obviously, there are parts of the market where demand is very high and supply is perhaps short. Even with that information, they will not be able to use it to pick a different property, but we should certainly get it into their hands if at all possible. Again, this is very much governed by how we implement the energy performance of buildings directive, which was recently recast. The recast directive has to be implemented. What this should do is require the energy rating of a property that is available for rent to be displayed on all commercial advertising materials and adverts. That is what it should do if it is implemented properly. If all ads had the energy rating, that would make an enormous difference. It should also require that the energy performance certificate be shown to the prospective tenant. Previously, the regulations have simply said that the energy performance certificate should be made available on request. Obviously, tenants don’t ask for them-they don’t know they exist. The regulations should have said that it is a duty of the landlord or the landlord’s agent actively to show the certificate to the tenant. Once tenants are in the practice of seeing them, they will start to notice strongly if they are absent and they will start to pay attention to them.
Local authorities also have a duty, because local authority trading standards, I think, is charged with enforcing energy performance certificates. From talking to tenants’ rights groups, I understand that local authorities are just not chasing landlords to find out whether there are absent energy performance certificates. There has been a very small number of prosecutions, if any. I will go away and check that and maybe get someone to send a note to the Committee about the level of prosecution and enforcement on EPCs. I certainly don’t think it would do any harm for a few cases to be known of where prosecutions were brought when EPCs were not provided. I don’t think that would have a disproportionate effect on their availability.
Teresa Perchard: I think you need to address two things: making sure that people have them, but also making sure that they make some sense to the consumers.
Q151 Ian Lavery: To make sure that they can understand them.
Teresa Perchard: Yes, absolutely, and to be meaningful. The Consumer Focus research shows that instead of these things, where available, operating to help people be active consumers, shopping around for a warmer, cheaper-to-run home, they just go into a pile, because people cannot figure out what they mean. They need to be developed so that they are meaningful as well widely available.
Q152 Ian Lavery: There is a huge responsibility on landlords. Do you believe that they need more education in energy efficiency savings, fuel poverty and the various funding streams that may be available? It is reported that about 63% of private landlords have no relevant experience at all, and that in itself causes a huge problem. Even if they received the education on the scheme that was just mentioned, how difficult or easy would it be to disseminate that information to the tenants?
Jenny Holland: This is precisely where the landlords register that we were advocating would come in. As I said, we do not see this as a threat to the vast majority of reputable landlords. On the contrary, we see it as a means whereby, once they have been identified, they can be told about all the existing schemes that will be of benefit to them. The landlord’s energy saving allowance is the one that immediately springs to mind. They can be told about the upcoming green deal and ECO, and their responsibilities under the upcoming minimum standard. It is absolutely the case that at the moment we rely on the landlords associations to disseminate information to their members. Again, as I said, about 3% of all private landlords are members of a professional association, so a huge number of landlords are potentially wholly unaware of what their rights and responsibilities are. That is a gap we think should be plugged by the early introduction of a local landlords register-as soon as possible.
Q153 Ian Lavery: Turning briefly to the boiler scrappage scheme, which was heralded as a tremendous success by the Residential Landlords Association, what lessons can be learned from initiatives such as that?
Jenny Holland: It was extremely popular.
Ian Lavery: That was simply because it was directly marketed by the PRS anyway.
Mr Timms: We strongly supported that. It is one of those interesting cases, because, from memory, a scrappage subsidy of about £400 was available. It fits, certainly in my head, with innovative forms of subsidy that get a disproportionate response. People are not economically rational-thank God-and they respond in interesting ways. We are still learning about what kinds of subsidies and incentives get a strong response. The other one that springs to mind is council tax rebates. Early on, when we had the old energy efficiency commitment, a number of energy companies offered a reduction in the cost of cavity wall and loft insulation, but it was not particularly taken up. However, when British Gas clubbed together with Braintree council in Essex to give £100 rebate in council tax, which was lower than the discount they had been offering, it flew off the shelves. I think boiler scrappage schemes did seem to capture people’s attention in that way and get a disproportionate response.
I know that DECC is very keen to get ideas for how it can spend this not particularly enormous £200 million that it has managed to get out of the Treasury to promote the green deal. Some of the learning that went on with schemes such as boiler scrappage-I know that some people have been keen to promote single glazing scrappage, and stamp duty or council tax rebates-should be put together and considered as a whole. We think that boiler scrappage was probably a very good success.
Chair: Good. We have some more witnesses to see, so we will have to call it there. Thank you very much for your time and contributions.
Examination of Witnesses
Witnesses: Dave Princep, Residential Landlords Association, Robert Taylor, National Private Tenants Organisation, Sue Walker, London Borough of Newham, and Tony Jemmott, London Borough of Haringey, gave evidence.
Q154 Chair: Good morning and welcome. I think you have heard the previous evidence. As we are up against a slight time deadline, I will skip the formal introductions if that is acceptable to you.
First, can I ask why, generally, you think that enforcing the HHSRS encounters such difficulties?
Mr Jemmott: I am an enforcement officer with the London borough of Haringey, and I have worked quite a lot on the English House Condition Survey for many years-since it came in-and have done a lot of work on the HHSRS.
One of the issues with the weighting system, particularly in terms of energy, is the excess cold hazard-the assessment of the hazard, in every respect, that the officers need to do. That, although not lengthy, especially for officers who are quite used to doing it, means that for every dwelling they encounter, they need to come back and work through that with a mathematical formula.
One of the issues is that we have no minimum standards. Although we have continuing worked examples, through the HHSRS guidance, it is often difficult for officers to determine how far to go in asking for measures to be taken. For example, the guidance talks about the ideal for a property in 2012. Is it double glazing, or is it the boilers, for example? The latter is quite easy, with condensing boilers and so on, but for us to ask for double glazing in pretty much every property is not on. This relates to where the property is and whether the building is listed.
Cost is a factor, although it is not necessarily meant to be. But where we are dealing with vulnerable families who are either in fuel poverty or close to it, being comfortable in the whole house is an issue. The excess cold measure deals with people-the vulnerable ages-over 60. In the private rented sector we deal with lots of families who are unemployed and have children. They are home for quite a lot of the time, and the children themselves suffer many health effects. We would like to see a system that makes clear what we can ask for in trying to bring properties up to a reasonable standard.
Q155 Chair: So would you like more guidance in that case?
Mr Jemmott: There is guidance there, but the standards we are meant to reach-there is no stat rating within the standards-are not included in the HHSRS, so when we talk about bringing properties up to at least an E or a D, there is no stat in the guidance.
Q156 Chair: Has your neighbourhood improvement zone been helpful in trying to achieve better outcomes?
Mr Jemmott: Within Newham, we have a neighbourhood improvement zone in which we have selective licensing of all the properties within the private rented sector. We have about 257 properties within that area, and there are about 600 dwellings altogether. That privately rented number fluctuates a little. The zone itself is not intended to deal with energy efficiency; it is to do with antisocial behaviour and some of the behaviours within that zone. Because we have a register of properties and details of landlords and tenants, we have been able to use that to target some of the projects we have. Within Newham, Sue has used energy schemes to target that.
Sue Walker: I am the manager of the domestic energy efficiency team in Newham. We were very interested in the idea of having a neighbourhood improvement zone that would enable us effectively to have a register of landlords when we come to do energy efficiency schemes. It is very often a big problem. Obviously, with the private rented sector you need the consent of landlords. If they are absentee landlords or difficult to trace, it can be a real problem to implement schemes on the ground. It just so happens that we have recently got some funding to run an energy efficiency scheme, and we are currently running it in that pilot area. It started before Christmas and it will run until the end of March. It is a good test of whether having this register in place will enable us to have a greater take-up of this sort of scheme than we normally have.
Q157 Chair: So it’s a bit early to judge the outcome yet.
Sue Walker: That’s right, yes. Unfortunately, we have not had one full month yet.
Q158 Chair: What do you think about this reputational regulation, if you have landlord rating systems? Would that make life better for tenants? Would that make it easier for them to judge what was going on?
Mr Jemmott: It ought to do so. That’s to do with the landlord and probably goes back to management. As for fuel efficiency and fuel poverty, an important aspect is the building itself and the rating of that building. We have within the selective licensing zones the landlords themselves, and we also have accreditation. We are linked to the London landlord accreditation scheme. Within the last scheme-if I may call it that-we have about 450 accredited landlords, but within the Newham bond scheme we have about 1,200. That is a big difference.
Through the bond scheme, we give incentives to landlords to offer properties to the borough to help us with our housing supply. So we have more there, and we have the London accreditation scheme, which provides training. That is the unique difference in the London scheme. Landlords need to go on a one-day training course to be accredited. Many of the other schemes do not have that-they are purely a register. Landlords provide names and details, and there is no requirement to have access to training and knowledge that would allow them to manage their properties better, or to get advice on some of the schemes and payback arrangements and so on. That is something I hope all our landlords will have.
In Newham, we have a large private rented sector. We have a minimum of 35,000 properties in the PRS, which is about one third of our overall stock, and that number is growing. If we look at the number that are accredited in either scheme and the number of properties that we have-not that the number of properties equates to the number of landlords, because landlords have different portfolios-we still need to reach an awful lot of landlords who operate in our area.
Q159 Albert Owen: Mr Princep, we have heard suggestions that landlords are not interested in the green deal. Is that your opinion?
Mr Princep: The problem is that like a lot of the population, landlords have not heard an awful lot about it. Certainly, I do talks for landlords and I also train landlords. When you explain it to them, they are a bit bemused. Some of them think that it is too good to be true. I cannot say that they are any less interested than the general public. Until we see the final set-up for the green deal, it is difficult to say what interest landlords will have.
Q160 Albert Owen: I am sure that your organisation is involved in the consultation. Is it not your responsibility to pass it on?
Mr Princep: Well, yes, we have passed it on to our landlords. Some of the landlords came back with their comments and experiences of the green deal, but there is still quite a lot of uncertainty around how it will operate and the procedures that will have to be followed through. At the moment, we have certainly run a lot of articles and given information to our members and there is interest there. Until we know what the final layout will be, it is difficult to say what the take-up will be.
Q161 Albert Owen: But they have an idea.
Mr Princep: Yes, they have an idea. Certainly, a lot of them have an idea of what is involved.
Q162 Albert Owen: So, their concern is over the minimum standard. They want to know what the minimum standard is so they have a benchmark to work to. Is that what you are saying?
Mr Princep: That is a major concern. At the moment, they know that enforcement provisions are going to come forward at some time up to 2018, but they do not know what will be required of them. Certainly, the idea that landlords will go out and carry out works without knowing what the final enforcement provisions will be is a little unrealistic. Landlords like to know what they have to provide before they go and spend money or carry out works, in case the goalpost changes when the regulations are put before Parliament. We would definitely urge certainty. We concur with Friends of the Earth and ACE that we need certainty about what the provisions will be. This will also make it a lot easier to inform landlords and to get their interest in it as well. If they know that by a certain date they will have to do X,Y and Z, they will take a lot more interest. At the moment they know that at some date in the future, something is going to happen.
Q163 Albert Owen: Has the RLA done a survey or any research into what proportion of properties is hard to let and how much it would cost to bring those properties up to the E rating?
Mr Princep: No, we haven’t done that. Obviously, quite a lot of research has been carried out. The Energy Saving Trust has done quite a lot of research, as have other organisations. The Energy Saving Trust showed that for 80% of the properties, the cost was a few thousand pounds. For 20% of them, the costs were liable to be quite substantial.
Q164 Albert Owen: What would you consider to be quite substantial? What figures are you taking from the Energy Saving Trust?
Mr Princep: I would think anything over £5,000 is quite substantial.
Q165 Albert Owen: And you think that 20% of properties would be hard to treat?
Mr Princep: I think that that was the figure. It has been a while since I have read the Energy Saving Trust report. Certainly, for some properties, it will be £8,000 or more to get them up to the required standard.
Q166 Albert Owen: Okay. You quoted the Friends of the Earth and ACE in the previous session. They are suggesting that minimum energy efficiency standards should be introduced in 2016 rather than in 2018. The time scale they are talking about is two years. At least we would have the certainty. Do you think that that is enough time for landlords to meet those minimum standards?
Mr Princep: The problem is that there is so much uncertainty and so little information out there.
Q167 Albert Owen: Accepting that there is great uncertainty, is the RLA aware of what the minimum standards are?
Mr Princep: Yes, but the landlords themselves are not aware so much. They have obviously read the articles and are aware that this is coming, but the general public do not know what the green deal will entail. Neither does anybody until the Government come back with their final proposals. As for the community energy saving programme, which is fully funded by the Government, the lead-in time has slipped. They anticipated that they would have most of the schemes operating much earlier than they actually came into existence. There is still a shortage of schemes. It is a brand new scheme. Industry is not set up yet to operate it at its full level. So it is going to be a long time before it is publicised and the Government decide what is going to be put in place.
Q168 Albert Owen: But with respect, landlords do understand about energy efficiency. Many of them do. They know what the E rating relates to. They know roughly what basic things they have to do, don’t they?
Mr Princep: Yes. Some of them do.
Q169 Albert Owen: If the minimum standards are to get up to the rating of E, could it be done by 2016?
Mr Princep: I don’t think that the industry could do it in that length of time. Certainly, not in four years. It is too short a period of time.
Q170 Albert Owen: Okay. Again, Friends of the Earth and other witnesses have been telling us that they want the minimum standards to be toughened over time. Do you think that, once there is that certainty, there can be general improvements up efficiency rating D?
Mr Princep: That is a decision that will have to be made about the whole housing stock.
Q171 Albert Owen: I am just asking your opinion for this sitting. It is helpful that we get the opinions of everybody. You are quoting other people. I want to know what your opinion is.
Mr Princep: A balance has to be made between what is affordable and what would be the ideal. The ideal would be for everybody to have an A-rated building. I don’t think that anybody would disagree with that, but it is the cost and the length of time that that could take.
Q172 Albert Owen: I am talking about the lower end now. I am talking about going to E ratings and up to D ratings. Do you think that that is practical? I accept that A-rating is way beyond the scale that everybody can achieve, but I am asking you, as a representative of landlords, whether that is achievable.
Mr Princep: I think for some properties it would be but, for others, it wouldn’t. Certainly for the hard-to-treat properties where there are peculiarities of construction, or for properties that are in a conservation area or off-gas, it will be difficult. In some cases, we have had landlords approach us saying that they are having trouble meeting the E rating at the moment. To then put it into a D would mean that that property basically could not be rented out.
Q173 Albert Owen: So what could be done in the hard-to-treat properties to meet those standards? What are you expecting from the green deal for that?
Mr Princep: We are hoping, obviously, to raise awareness and certainly to raise awareness among tenants, so that tenants start looking and asking landlords to carry out work. If there were a demand from tenants, landlords would carry out the improvements voluntarily. It is just that there is very little interest among tenants in energy efficiency unfortunately, and the awareness of EPCs is very poor. If we could get the tenants driving the market, that would make it much easier to raise standards. But at the moment there is very little interest from tenants in energy efficiency. The introduction of EPCs with the home information packs was unfortunate because it was just swamped by the publicity around the home information pack. A lot of landlords thought initially, when the home information pack went, that the EPCs were going. It is only now that they realise that that is not the case.
Q174 Ian Lavery: What role do you believe there is for local authorities in promoting the green deal in the private rented sector? I put that question to the representative of Newham.
Sue Walker: Obviously, it depends on the role that the local authority eventually decides it is going to perform in the green deal. We, like most councils at the moment, are looking at all the options. There are basically three options: full involvement, which would be becoming a provider yourself; partnership perhaps with a utility or, thirdly, the lesser option of just general promotion. How you actually promote the green deal to private sector tenants would depend on which role you decide on. Basically, whichever model you decide on, you still will have an awful lot of work to do in persuading those tenants.
If you look at it from the perspective of a green deal provider, it would have to make a considerable up-front investment before it makes its first visit. There will be great commercial pressure to make very quick returns. We fear, rather like with the CERT schemes that have been ongoing for a number of years now, that it is much easier to make that sort of return on larger semi-detached or even detached owner-occupied properties in the suburbs, where the jobs and profits are larger, and the residents are more credit-worthy and less likely to be in fuel debt. There are also greater opportunities for cross-selling. Quite a lot of potential providers are hoping that they might make some extra money by selling other products while they are in there for the green deal. There are a lot of reasons why a provider will not look at the typical inner-city private sector tenant, and I could go on with quite a few.
If you then go to the perspective of the private sector tenant, there are a lot of reasons why they might not be keen on the green deal. Fear of retaliatory eviction and an increase in rent have been mentioned. Also, it should not be forgotten that most private sector tenants probably live in flats, and so you are bound to encounter all the problems with flats that we have talked about earlier.
I could go on ad nauseam, but I will just say that there is a lot of work to be done in drawing private sector tenants into the green deal, particularly because we are in a very challenging environment in the rental market. Our private sector tenants are mainly vulnerable, and many are fuel-poor. They are very loth to take on the landlord, as has been discussed.
Q175 Ian Lavery: You just mentioned that you are concerned that green deal providers may overlook traditional hard-to-reach areas such as Newham and how difficult getting this improvement will be. If it can be achieved, what can we do to try to alleviate this problem?
Mr Jemmott: We talked earlier about the bottom end. We say that 95% of landlords are good and 5% are not so good. We think that in Newham, we have difficult-to-engage landlords and tenants. We have done landlord surveys-we did one in 2009, and the response was 6%. We are currently doing a landlord licensing consultation, and the response is much better than that, thank goodness!
Our tenants are also very difficult to reach. One of the problems with the green deal is getting the message to them, giving their details to energy providers and getting them to respond to requests and pass on information to absentee landlords. Many tenants do not know who their landlords are, and many are on benefits. We often have to consult the benefits database to get some details.
One of the problems that people have is making contact and trying to ascertain who the relevant people are-the leaseholders and freeholders. If many are flatted, we have freeholder issues. We also have HMOs-not an awful lot of the large HMOs, but an awful lot of two-storey HMOs. They fall outside the mandatory HMO licensing, so unless we bring in a more discretionary licensing scheme, such as additional licensing, it will be difficult to capture their details. One of the big problems is engaging and reaching the people whom we need to reach.
Q176 Ian Lavery: Can I ask Mr Taylor what appetite he believes there is for tenants to enter into a deal with the green deal? Are, for example, tenants scrambling to seek permission from landlords to enter into a deal with the green deal?
Mr Taylor: I suspect not. Where we, the Camden Federation of Private Tenants, are based, is a high-demand area. The problem is that, given the imbalance in supply and demand, people are scared. If people are scared, they will not be sticking their heads above the parapet to demand even the most basic things, such as repairs. If you take the green deal as another level away, I suspect that the way it is constructed means that it is not going to work for lots of tenants. It seems very complicated, and there is an issue about explaining-you get it added on to your bill, but you save bills.
The green deal is a good opportunity to address fuel poverty and energy efficiency, but sadly, given where a lot of private tenants are at, and the state of the market at the moment-it is not a tenants’ market-I suspect that tenants do not have the confidence to demand things of their landlords. Their main priority is to keep a roof over their head and to keep a decent or minimal relationship with their landlord rather than making big demands.
Also, as several people have pointed out, the ground issue of retaliatory eviction is always there. People are very scared. Someone came to us the other day who was living in a property with an illegal gas supply, which was installed by the landlord instead of a proper installer. It was an HMO set-up, and with everything the tenant told me about this, the warning lights started to flash. I said to her, "Given that you’ve contacted us, I assume that you want us to make a referral to environmental health. Can I have your details?" She refused to give them to me. I asked her why, and she said, "I am scared that if the landlord"-who actually lived in the property-"found out that I was the person who alerted environmental health to the problems with the flat, I would be evicted from my home."
Given that she was a 49-year-old female tenant on a low income, I think she was worried about where she was going to live. Let’s be perfectly honest, a lot of flat shares in London are not aimed at 49-year-old females; they are aimed at people in their 20s and 30s. There is an issue for people of a certain age and income. What kind of housing in the private rented sector is there for them at the moment in high-demand, high-rent areas? We are getting a sense of an increasing level of fear out there.
We should not ignore the role of letting agents. The figures show that over 60% of transactions are conducted by letting agents, not landlords. In terms of promoting the green deal and being able to explain it to landlords, for me, if they are not professional enough to understand it, are they professional enough to be providing something as key to people’s lives as housing? One of the problems that bedevil the private rented sector is that, essentially, it is a cottage industry full of amateurs who really do not know what they are doing. They are just looking to make some money out of it. They don’t understand their obligations and responsibilities and what is required to provide a professional housing management service to people.
Therefore, given the increased role of letting agents, in the calculations, we should not forget them and their ability, presumably, to educate landlords. Unfortunately, a lot of letting agents are not up to the required standard because, let’s be honest, they are not very professional, they are quite amateurish and they are in it, essentially, to make money rather than to provide a service. But theoretically, there is a key role for them to play in the process, so we need to talk about tenants, landlords and letting agents too, because they are key in the private rented sector.
Q177 Ian Lavery: That is very interesting. Will local authorities face any difficulties in enforcing the minimum EPC standards?
Mr Jemmott: I think they will. One of the difficulties will be that the enforcement itself is done by trading standards and there is some concern about how much enforcement they actually do at present. I would be concerned about that. A lot of these inspections of the private rented sector are done by environmental health or private sector housing officers. In many instances, that service is delivered separately from trading standards. They are perhaps not even under the same directorate, so we have some disconnect in the area of enforcement. There are two teams responsible for different aspects of inspecting and passing on the information and the enforcement. The priorities may be different. That is certainly one of the things: who does the enforcement, who is the responsible person? Another is whether trading standards people see themselves primarily as being interested in the private rented sector, fuel poverty, the people living there and socio-economic issues, or whether they have other priorities in the commercial sector.
Sue Walker: My concern is the increased call on environmental health’s resources at a time of local authority cuts and at a time when the private rented sector, certainly in Newham, is increasing all the time. That 35% figure is, by now, probably a conservative figure. It is probably larger than that.
Mr Jemmott: It is 42%.
Sue Walker: With the universal housing benefit changes imminent, it is likely that there will be a growth in HMOs, which the rented sector will increasingly represent. There will be HMOs for people aged between 16 and 24. It will be an increasingly complex and time-consuming role. It is difficult to have the green deal coming in when there are all these changes in the sector at the same time.
Q178 Ian Lavery: Lastly, would it present any enforcement difficulties if F and G rated properties could still be legal if the landlord carried out all available measures under the green deal and the ECO?
Mr Jemmott: It certainly would for us. We have guidance in our accommodation standards. I know lots of other authorities have standards for private rented accommodation that they try to get their landlords to reach. In our standards, we ask for a D. That is just guidance. We have already said that HHSRS does not set a rating, but it talks about the ideal. Property must meet the ideal. We still think that tenants will make complaints to us, and they do. They may say that there is no double glazing or that the property is draughty. There is a limit to how much you can ask the landlord to do, and avoid the landlord justifiably appealing to the RPT and then having to defend why you have asked for additional measures, or measures beyond what would take it up to the average for that property in the HHSRS. Do we want an A, B or C banding in the HHSRS, or do we want to bring everything up to the national average? That in itself is probably not aspirational enough, and if we do not want to have to make repeat visits to a property or have repeat complaints from that tenant, we would want to do something that is quite sustainable. While we are treating that property, we would not want to have to go back within the next five or 10 years. Under the old system, we would bring a property up to standard and not have to go back. We used to talk about a 10-year life. If we just did the bare minimum, we would have to go back and that would require additional resources.
Q179 Christopher Pincher: Continuing the theme of the green deal with regard to responsibilities of tenants, National Energy Action has said, "It is wrong in principle that tenants should be expected to pay for improvements which do no more than meet the basic minimum decent homes standard." Obviously, under the green deal, tenants will be expected, as everyone will be expected, to gain something from their energy bills. I just wondered whether you agreed with that NEA sentiment. Shall we start with you, Mr Taylor?
Mr Taylor: On the whole, I do. Tenants are already paying their rent for a service to be provided-a housing service-and we need to see it in that context. It seems a bit odd to me that they are then being asked to reach further into their pockets, in very difficult financial times, to pay for things that landlords should pay for. For me, if you are not able to rent out a property at decent standards, I would say, don’t be a landlord-get out of the private rented sector. Housing is one of the fundamentals of life. There is a responsibility on people who decide to provide housing for people, whether you are a social or a private landlord, to provide properties of a good standard for people to live in.
In London particularly, rents are high enough as it is. People question what they actually get for the very high rents they pay in certain parts of London, particularly in Camden. People tell me how much rent they pay, and then you go and see the property and you think, "My God, someone’s being ripped off quite badly." So I agree with the principle, but how do we address the problem? If we were to say that all landlords are going to have to contribute, would we get any progress on this very important issue? I suspect not. It is a far from ideal arrangement, but if it does get the energy efficiency improvements then in a sense it is something that needs to happen-albeit reluctantly for us, because I maintain the point that we are already paying the landlord for a service.
When you talk about EPCs, it is just loads of letters. I have had the misfortune of living in an F-rated property for six months, and I can tell you that it was the coldest six months I have ever spent in my life. I would never wish that on anybody. I have experienced the reality of what it is like to live in a very cold property. When the environmental health officer came round after I complained, the first thing he said to me was, "Blimey, it’s cold in here, isn’t it?" And he kept repeating that throughout the visit. At the end of the visit-this was during the winter-he said, "Excuse me, I’m going outside to warm up, because this property is so cold." For me to talk about A, B, C, D, E, F-what does it actually mean? I can convey my personal experience of what it means to live in an F-rated property, and I would not wish for anybody in this room or anywhere else to live in an F-rated property.
I am particularly concerned about older private tenants and people with families. Some of our older private tenant members say to me, "In a cold winter I literally spend my whole time fully clothed in bed, because my property is so cold." It just strikes me that in 2012, people are living in those conditions. It therefore comes back to the point that, yes, I would rather tenants not pay this, but if this mechanism enables more homes to be made more acceptable, energy efficient and comfortable for people, then maybe it is a road we need to go down, in the absence of any other options on the table.
Q180 Christopher Pincher: So, Mr Princep, F stands for freezing. Do you think that tenants should have to pay?
Mr Princep: We certainly have some sympathy with that attitude, but obviously it is important to remember that if a landlord is operating as a business and there are extra costs, in some way or other the tenant will pay, whether through the fuel bill or increased rent. Ultimately, if that business is to continue, the landlord has to make a profit. But we do have a little sympathy with that approach, and certainly we would like to see the option for the landlord, with certain tax systems, to pay for the works themselves. We think there is going to be a relatively high percentage of landlords who will be willing to self-fund it, instead of it being put on the tenant’s bill.
Research last year showed that 25% of landlords were making no profit or were actually making a loss. A report we commissioned from Professor Ball at Reading university showed that a lot of the headline figures for returns from the rental market in practice just aren’t there. A decision has to be made about how the tenant pays for the improvements: whether they pay, ultimately, through increased rent or through the fuel bill. But we think that some landlords will be willing to carry out the works themselves, which will benefit them, because any savings on the fuel bill will be in their pocket instead of being taken up by the green deal charges.
Q181 Christopher Pincher: We will come on to that. What you both seem to be saying is that in actuality, tenants will pay but they should not have to pay. So I suppose the question is: who should pay?
Mr Princep: The tenants will have to pay one way or another.
Q182 Christopher Pincher: The question is not who will, but who should. Whom do you think should pay for improvements to privately rented properties to bring them up to a decent homes standard?
Mr Princep: If additional expense is being paid, and it is a business, either the business goes out of operation and the landlord leaves the market, or the tenants-the customer-will have to pay for the improvements, ultimately. It is a fact of business life that ultimately, the tenant will have to pay.
Mr Jemmott: I see this from two fronts; I am also a member of the Chartered Institute of Environmental Health. If we take enforcement action, the notice is served on the person responsible-clearly, that is the landlord. We do not have a choice in that because it is a statutory requirement.
Within Newham, a significant proportion of our tenants are paid through the local housing allowance, and even of tenants placed within Newham from other local authorities. Given the cost of renting that they would have to pay in Newham compared with the cost of renting in central London, those tenants are exported further east to us, and we send them further down, where rents are even cheaper. In effect, they are being paid from the public purse. A lot of this is Government and public money being recycled. I know that it is a tenant’s rate, but in the end the public are also investing, and we think the landlord should use some of that investment to improve the properties.
We know that some of the rents are paid by the LHA. Under landlord licensing, if a property is licensable but is not licensed, we can-and we do-recover the money through rent repayment orders. We have done that successfully at the RPT. That is where one piece of legislation allows public money to be clawed back. I think the landlord is pretty much forced to carry out those improvements, for the reasons I have given.
Q183 Christopher Pincher: Mr Princep, you said earlier that the RLA, one of the premier trade associations for landlords, has proposed some innovative solutions to the low take-up of LESA. What is the rationale for your new proposals, and why do you think they are going to work?
Mr Princep: As has been mentioned, the take-up of LESA has been very poor, partly because its publicity has been poor. A survey by ARLA has showed that some 50% of accountants were not aware of its existence, which is a little concerning. However, we also think that a lot of landlords are not bothering to claim it, and they are just making up the allowance through their income. When they put loft insulation in, they do not look at it as an improvement but as a repair, and it is taken out that way. So I think that quite a lot more energy efficiency work is taking place in the market than LESA is necessarily showing. Certainly, the English House Condition Survey shows that the private rented sector is improving at the greatest rate of all the sectors, such as the social sector and the owner-occupied sector. So there is movement.
Q184 Christopher Pincher: Is that movement planned or piecemeal? The sense I seem to get-forgive me for repeating, Mr Taylor-is that he said that you are a cottage industry populated by amateurs. Is it the case that many landlords out there who are not associated with the RLA or the NLA know nothing about the opportunities available to them to get grants? If so, how is changing LESA going to do to alter that?
Mr Princep: I think there are a lot of landlords who do not know what is required or what the law says. Certainly, that is why we encourage landlords to become members of landlords associations and to become accredited. We would strongly urge accreditation as being a way of improving the sector.
Going back to the landlord’s energy saving allowance, what we are looking for is increasing the amount and the extent it can be claimed against. At the moment it is limited to £1,500 only for insulation. We would like to see that increased to basically cover the cost of any green deal works and extend it to cover plant like boilers and central heating equipment so that the improvements can be made, the landlord can pay for them and get tax relief from the exercise of improving their property. As I said earlier, the benefit of that is that any savings then go directly to the tenant instead of the tenant having to take them up through the Green Deal.
Q185 Christopher Pincher: I see that point, but if you are going to claim tax relief, you still have to claim it. It is not simply given to you because the HMRC knows that you have a right to it, so I still don’t understand what it is that landlords will do differently because they have a capital allowance programme available to them rather than a LESA insulation funding allowance. It sounds to me that what you are saying is that it is really to do with money available, rather than the process by which landlords can make claims.
Mr Princep: Obviously, the fact that there will be compulsion on the sector will increase landlords’ interest in energy efficiency works-that is, those who are not already interested. It is important to remember that the general research the Energy Saving Trust carried out a few years ago on interest in energy efficiency showed that landlords were more interested in it than tenants, and certainly a lot more interested than agents. In research that looked at carrying out ancillary improvements related to energy efficiency, landlords were more willing to spend more money on refurbishments to carry out energy improvement works than owner-occupiers. There was quite a significant difference between landlords and those in the owner-occupied sector who were less likely or less willing to carry out energy improvement works when they carried out ancillary works than the landlord. So there is quite a will among landlords to carry it out and quite a lot of interest in energy efficiency. It is just that we need to make sure that the mechanisms are there for them to do so.
Q186 Christopher Pincher: And yet when Newham carried out a survey of its private landlords, only 6% responded. I don’t know what that survey was about, but it suggests there is a lack of engagement on the part of landlords. Something needs to be done about that. What was the survey about?
Mr Jemmott: We just wanted a landlord survey. Questions included: how many properties do you let within the borough? Most of our landlords let fewer than three properties. We are looking at landlords who are either opportunistic or perhaps might have had a property left to them and are letting it-that sort of thing. A lot of them are not necessarily in the market as portfolio landlords. We know that. They may not be letting the property for the long term, so they are not investing any time or self-training in it. It is those people we need to reach and give advice about the industry. That survey was carried out by a research company called Quest, so it was an externally commissioned survey. Within our borough-wide licensing consultation-we have an opinion search company to do that-we asked how many of those landlords belong to a landlord group. We have some stats from that which will tell us how many of them belong to the RLA or SLA and so on.
Q187 Christopher Pincher: Is that information shared with the RLA and SLA?
Mr Jemmott: That document will come out as a public document later this month.
Mr Princep: A 6% return for landlords is not that unusual. Certainly a lot of surveys are carried out generally where 6% is not considered to be particularly unfavourable. We have to recognise that, at the moment, Newham is looking at the selective licensing of all of its landlords, so landlords in that borough may well be reluctant to have any communication with that authority. I do not think 6% is necessarily that unusual. Certainly that fares better than a lot of correspondence when it comes to looking at private rented sector tenants-getting responses from private rented sector tenants is very difficult.
Q188 Christopher Pincher: It sounds to me as though a lot of landlords just don’t care.
Mr Princep: No, I don’t say that they don’t care. I don’t think that is the case at all. They probably did not particularly want to reply to a consultation document that they could see possibly being used against them at some time. Also, a lot of landlords are very concerned about their relationship with local authorities. A lot of local authorities have changed their attitude towards landlords recently. Some of them have very good relationships, but there is certainly a history of local authorities being dead against landlords whatever, and there is a bit of mistrust on the part of landlords against local authorities. That is often misplaced. As I say, that attitude is changing, but that view exists.
Chair: I am going to have to ask Sir Robert to take over the Chair for the last few minutes.
In the temporary absence of the Chair, Sir Robert Smith was called to the Chair for the remainder of the meeting.
Q189 Sir Robert Smith: I just wondered whether any of the panel disagree with the idea that houses in multiple occupancy should also have energy performance certificates.
Mr Princep: I must admit that was one of the things that the group that I chair, which is looking at the green deal, recommended should be introduced-that HMOs should have EPCs. My understanding is that you do not need an EPC if you rent out the property, but you do need an EPC if you sell the HMO. One of the issues about the EPC generation software is that it is not designed for properties that are in multiple occupation. It is designed for a standard dwelling with one bathroom, one kitchen, bedrooms and lounges, not properties with several bathrooms, several kitchens and a mixture of shared kitchens and individual kitchens. So the results generated would not be reliable and could be challenged, because some major assumptions would have to be made about the layout of the property. But in principle we do not disagree at all with that idea because we think that the EPC is really a key to driving energy efficiency in the sector and that if we can get every tenant to start looking at their EPC, the tenants themselves will demand improvements and point out to landlords and agents that improvements need to be done at the property. That will drive improvements in the sector.
Q190 Sir Robert Smith: Is there any disagreement about that?
Sue Walker: We agree.
Mr Jemmott: Yes, we agree, but there will be issues. Obviously, it depends on the definition of an HMO. The 2004 Act goes into about three pages on the definition of an HMO. Certainly in terms of section 257 HMOs, it is not a problem. In terms of bedsit-type HMOs, perhaps there is a problem. You might have to consider the whole house as the dwelling, rather than the individual ones. Obviously, if there is a top-floor flat with a loft, that will probably have a different rating from a flat in the middle that has walls on either side and is better insulated.
The other point is that you would need to get into perhaps not all but a substantial number of the dwellings if you were to do a whole-house survey. That is a problem we find when we inspect HMOs. If you are going to do a risk assessment on HMOs and you are looking at fire, for example, you need to get into most of the properties to risk-assess the properties for the fire risk. In terms of energy efficiency, generally, for bedsit types, you will find that there is a communal heating system anyway. The landlord will provide space for that. There may not be individual key meters or whatever. Again, if you are talking about the whole property, it certainly can be done.
Sue Walker: There would also be the issue of resources; we touched on that earlier. I am talking about the growth in HMOs and the growth in the private rented sector as a whole.
Q191 Sir Robert Smith: Mr Princep, in your answer, did you suggest that the system of making energy performance certificates may need to be more sophisticated?
Mr Princep: Yes, I think it does. My understanding is that the domestic software that is used for generating most houses’ EPC is not that suited to HMOs. The commercial software that is used for commercial premises-shops and offices-is possibly more suitable for generating an EPC for an HMO, but more research needs to be done on that.
Q192 Sir Robert Smith: Mr Taylor, do you have a view on HMOs?
Mr Taylor: It seems odd to me that what is often one of the worst areas of the private rented sector, HMOs, would be excluded on the basis that there are some technical issues. We can send people to the moon, but we cannot resolve issues to do with energy performance certificates in HMOs. I find that rather strange.
One thing that is often said about the private rented sector is that it is complicated. Well, for me, why add to that complication? Let us simplify it and make the EPC apply to every property in the private rented sector. It simplifies things. If certain areas are excluded for technical reasons, that just adds to the confusion and complication that people go on about all the time as being a problem of the private rented sector.
Q193 Sir Robert Smith: As you say, when it comes to selling an HMO, you would have to get a certificate anyway, so there is going to have to be a way of doing it, and it might as well be done for the rented as it is for-
Mr Princep: I think there is just the uncertainty about the scoring, but yes, we support that idea.
Q194 Ian Lavery: The possibility of being evicted from your property for asking for energy-efficiency improvements is obviously a major concern. Mr Taylor explained earlier about the 49-year-old lady who would not report for fear of retaliatory eviction, as I think it is called. How real is the threat of retaliatory eviction?
Mr Taylor: It is extremely real. As an experienced housing professional, I have been a victim of retaliatory eviction. When I lived in a F-rated property for six months, the agent, who was a member of the London landlord accreditation scheme, issued me with an illegal notice to quit within the first two months of my occupying the property. The agent said to me, "We know this is illegal but the landlord has asked us to do it, so that’s why we have issued you with this document." That was in direct response both to the fact that I was complaining about how cold the property was, literally on the second day that I had moved in there, and the fact that I had called the environmental health officers round to come and have a look at the property. The landlord was also invited to be there as well, so they obviously knew what I was doing. Our relationship was terminated after six months by using the break clause in the tenancy agreement.
To be perfectly honest with you, I was glad to be out of that kind of place, but I know retaliatory eviction exists. As I say, I have been a victim of it myself. Four organisations make up the National Private Tenants Organisation and we hear from tenants all the time saying that this is an issue for them. For me, if you feel that you have to leave your home because you are not able to get repairs and other requests from the landlord, in a sense you are evicting yourself from that property. I would include people who decide to get the hell out of a property and move somewhere else, which again is one of the perennial problems of the private rented sector. That is why problems never get resolved, because people would rather move on than continually bang their heads against the wall trying to get things from landlords.
Everybody you speak to with some experience of the private rented sector will say that it is a mixed bag of experiences at the very best, and I can concur with that, having been a private tenant for a very long time. It is probably not so much of an issue in low-demand areas, where landlords have to do much more work to get tenants, but in very high-demand areas like Camden, where agents and landlords do not have to work particularly hard to get tenants, there is a trigger-happy tendency at the moment. If in doubt, get rid of your tenants, because it is also a good opportunity to get more tenants in and get higher rents from them.
For me, retaliatory eviction is a big, big issue. Unless we start to address the issue of the weakness of tenants’ rights and section 21 notices, where tenants can be evicted without the landlord having to offer any reason, we would say that a private tenant theoretically is only ever two months away from losing the roof over their head. Unless we address the wider issues of the lack of security of tenure in the private rented sector, tenants will never be able to act as consumers, or drivers of change. People are saying, "Why aren’t tenants driving this process?" They are not, because they are in a fundamentally weak position.
You see all the documentaries-"Dispatches", "Panorama"-about the problems of the private rented sector, but they give the impression that the only people in that sector who have problems are housing benefit claimants. Our experience indicates that private tenants across the board have problems with their landlord. Whether it is an old or young person, a student, someone who is unemployed and claiming housing benefit or someone who is working, a whole range of people come to us and say that they are having problems with their landlords.
A member of our management committee is a professional lobbyist in Westminster. She is a very articulate, well-educated professional. She told me that she’d had to move eight times in five years because of various problems with agents and landlords. We would say very clearly that the problems of the private rented sector are not limited to niche parts, although that is where the main problems are; the problems cut right across the sector. We would argue that any kind of tenants-working, old, young, whatever-can have problems in the private rented sector. On that basis, it needs to be urgently attended to.
Q195 Ian Lavery: Thanks for that. I understand and accept what you are saying about your personal circumstances. I feel very sorry for you, by the way. What hard evidence is there that this is widespread?
Mr Taylor: Landlords organisations continually raise the issue of the kind of evidence, but I have seen reports produced by Citizens Advice that show evidence. I suggest that if you go to any organisation that is giving housing advice, it would probably be able to give you evidence. As I said, the four organisations that make up the National Private Tenants Organisation-two are in London, the other two are in the northern parts of the country-have evidence that this is a problem.
If people are leaving-which I see as a form of retaliatory eviction-as opposed to being evicted, because they are not getting anywhere with the agents or landlord, it is not going to be recorded. That is one of the problems in the private rented sector. Rather than people necessarily reporting problems, they just put them down to a bad experience and hope that they will have a decent landlord or agent in the next place where they end up, and that they will be living in a decent property.
There is an issue with recording these things, but from the evidence I have seen, from my personal experience, and given that the market is skewed at the moment towards landlords, not tenants, I appreciate and understand that retaliatory eviction is a problem. The exact scale of it remains to be determined, but organisations like us and the advice organisations say that we probably see the tip of the iceberg, because a lot of the problems are not recorded and brought to our attention. That is not to say that it is not going on, because it is.
Q196 Ian Lavery: So are there any steps that the Government or local authorities could put in place to protect these tenants?
Mr Princep: The Chartered Institute of Environmental Health research was mentioned. ACE said that it showed that 50% of people who complained to one authority were evicted. That was not what the research showed; it said that almost 50% of the people who complained to that local authority dropped their complaints because of fear of eviction. It turned out that in its letter, the local authority told the tenant, "You risk losing your property if we take enforcement action," which was a little short-sighted.
Local authorities can do a lot to make it clear to criminal landlords who evict tenants that if they serve notice on them, they will continue to enforce that notice even if the current tenant leaves. Some authorities drop the enforcement if the current tenant leaves, which is wrong. It gives the wrong message to the criminal landlords and it is wrong in law. They must make it clear to the tenant and landlord that if they take enforcement action, they will follow it through, irrespective of which tenant is there.
Mr Jemmott: Again, the question was about the hard evidence around this issue. We heard earlier about the impact assessment on energy efficiency, and we are looking at the evidence leading to that. Apart from the impact assessment, we do not really have anything else. We do know about retaliatory evictions, and we have the evidence that was provided by the Rugg report-that is still out there in terms of section 21, and so on.
We also know about figures that came out at the end of last year for claims for possession in the county courts-genuine claims, not illegal ones where landlords basically just wanted the properties back-and Newham had the second highest number in London. We know that we have a high incidence of claims in any event. We also do what we call P1E returns to the DCLG, and we need to give numbers. When we inspect properties or respond to complaints from tenants, we then answer a question about whether our efforts or intervention have prevented eviction. That is another return that we can look at for further evidence.
We have looked at how many cases were reported to our housing choices team to date, from April to now. Last week, 68 tenants walked in and said, "My landlord has evicted me." That is the sort of thing you get at 2 o’clock on a Saturday morning, and it is reported to the police because no one knows what to do. Such things are grossly under-reported in any event, and in those cases we need mechanisms for injunctions, reinstatement, and for the case to be taken up. In the past two or three months we have had two successful prosecutions at Stratford magistrates court for illegal evictions, with heavy penalties and compensation given to the former tenants. Those were criminal matters. It is very difficult to bring civil matters because local solicitors will not actually take them due to problems with legal aid and so on. There are a lot of problems in dealing with evictions when they take place.
Another big problem is that this is not only about the eviction itself-the person is already out-but about the harassment that takes place. Not only will there be evictions, but tenants will be harassed while they are within the property. At the moment, we can resort only to the Protection from Eviction Act 1977, because no secondary legislation is available in the Energy Act 2011 to deal with such matters.
Q197 Ian Lavery: I am very conscious of the time, but I want to ask a brief question and I am sure that the response will be brief. Are there any lessons to be learned from regulatory measures in other countries on such matters?
Mr Taylor: In terms of tenancies?
Ian Lavery: In terms of protecting the tenants.
Mr Taylor: If you look at other European countries, you see a different private rented sector at work. There are still lots of small-scale landlords, but the system seems to work more effectively. That is because there is more intervention by the state, and much more regulation. I am afraid that you must have those kinds of things to end up with a high-quality private rented sector, and that is why we should not ever give up on the private rented sector.
The LSE did a study recently that looked at different private rented sectors in America, Germany, Switzerland and the UK, and it did a comparative exercise. Shelter has done an analysis of that, and points to how the private rented sector operates in other countries. It is by no means inevitable that we have the kind of private rented sector that exists in the UK. It is not a lost cause, and we need to take a good hard look at some of the issues involved. It is about striking a balance between the rights of tenants and the rights of landlords, but we and the National Private Tenants Organisation would argue that at the moment the system is too heavily skewed in favour of landlords. An imbalance exists that leads to all the problems to which we, and previous witnesses, have alluded. It is by no means inevitable that we carry on with the kind of private rented sector we have at the moment. If we look overseas to some of the other models, I think that we will get some very good ideas about the way things can be improved, and we will end up with a high-quality private rented sector that is fit for purpose as a major housing provider for now and the future.
Mr Princep: I think the RLA is very supportive of taking enforcement action against people who carry out illegal evictions, and it is unfortunate that some authorities will not take harassment cases because they don’t have the resources. On the issue of retaliatory eviction, the English housing survey of 2009-10 showed that only 3.5% of all tenancies were ended outside an agreement or because the landlord wanted to take their properties back. Only 3.5% of tenants were actually evicted by their landlords.
A private landlord survey of the same year showed that 13% of landlords were seriously affected by rent arrears, 10% were seriously affected by damage done by tenants, and 7% were affected by antisocial behaviour. The 3.5% of tenancies that were ended includes the 13% of tenants who were in rent arrears. Those numbers are random samples of housing across England, and only 3.5% of all tenancies were ended by anything other than an agreement between the landlord and the tenant. That 3.5% will include those who have been evicted due to non-payment of rent, damage to the property or the harassment of neighbours in that area.
Sir Robert Smith: Time is against us. I thank all four witnesses for helping us to take forward this issue, which is of growing importance. We will consider further how to take forward the evidence that you have provided. Thank you.