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Baroness Gardner of Parkes: My Lords, several points have been raised which I feel I must respond to. One is the suggestion that rent assessment panels do not really assess quality. My husband sits regularly on a housing benefit committee. The information that is submitted to that committee by rent assessment personnel is amazingly detailed. Charts are drawn up. If there is any doubt about the quality of accommodation, the members of the committee go to view it. For example, there is a range of assessments from A to D for a studio flat. The committee will determine a fair and appropriate rent for a property within a particular area. Obviously, rents vary according to the area in which a property is located, as well as being affected by other factors. The other point--
Lord Dubs: My Lords, I may have misled the noble Baroness. I drew a distinction between the power and the practice of rent officers, and of rent assessment committees. I said that rent officers do not have the opportunity of looking into the quality of accommodation, but rent assessment committees do.
Baroness Gardner of Parkes: My Lords, I thank the noble Lord for those comments. I thought it was the noble Lord, Lord Strabolgi, who made the point that quality was not assessed. I was responding to that point. My other point is that I cannot accept that a tenant has no negotiating position. As regards this amendment, some people overlook the fact that the greatest desire of a landlord is to retain a good tenant. Therefore, such a tenant has a strong negotiating position. We have
Earl Ferrers: My Lords, one of the major factors in the revival of the private rented sector--I am sure the noble Lord, Lord Dubs, will agree that there has been a considerable revival since 1988--was the removal of rent control and the introduction of market rents. There is always a danger that people will think that if market rents are introduced, rents will fly up. But, of course, if one does not introduce market rents, houses do not come on to the market. One always has to strike a balance here.
Under the existing legislation, shorthold tenants have a right to refer their rent to a rent assessment committee for a rent to be set during the initial fixed term of the tenancy. The two amendments in the name of the noble Lord, Lord Dubs, would extend the period during which a tenant could apply to the committee for a rent to be set. The difficulty is that it would impose new rent controls on landlords. I suggest to your Lordships that that would be a retrograde step and would undermine the progress that we have made since 1988. It would work against the provisions in the Bill which are designed to give further encouragement to property owners to let out accommodation that would otherwise remain empty.
Under Clause 99 a tenant would still have the right to refer a significantly high rent to a committee within a six-month period. Six months provides a reasonable opportunity for the tenant to make an application while giving the landlord the certainty that an appeal cannot be made after the deadline has passed. If the noble Lord's amendments were accepted, the landlord, having had a tenant for six months, during which time the tenant appeared to be happy with the rent, would continue to face the risk that the tenant might suddenly refer the rent to the committee and have it reduced. If the tenant has not challenged the rent in the first six-month period and is reasonably content with it, not having challenged it, it is reasonable to assume that he is happy that the rent is a fair one.
If the noble Lord's amendment were to be accepted, one could have this position. A person had a flat or a house for six months. He was content with it. He had three children. He had a job. Suddenly he is out of a job. He might find it difficult to meet that rent. I do not think that that would be an excuse for taking the rent to the committee saying, "After all, I'm now out of a job and I cannot pay that which I paid when I was in a job." That is the responsibility and liability, unpleasant though it may be, of the tenant and should not be passed on to the landlord.
The point was made in Committee that very few tenants use the existing right of referral. The point was made by the noble Lord, Lord Strabolgi that only 1 per cent. do so. The figures show that in 1990 there were 140,000 assured tenancy and 400 referrals. That is less than 1 per cent. The position now is that there are
Because tenancies are already at market rents, there is little scope for the landlord to hike up the rent at the end of the original tenancy. This is particularly unlikely with the current low level of inflation. The average weekly shorthold rent increased by £1 between 1993-94 and 1994-95. If a landlord tries to charge an excessive rent he is likely to find that he has no market for his property. Nor is a landlord likely to go to the trouble of replacing a good tenant with a new tenant simply to increase his rental income by a few pounds.
The noble Lord, Lord Strabolgi, queried whether the tenant had any bargaining power. I think that he has. The bargaining power is that the landlord will not be able to find someone else to pay the increased rent if it were above the market level. If the landlord can find someone else to pay it, it is presumably a market rent. These are always difficulties. When people leave a house, the rent often goes up. But one cannot have the rent moving up the whole time during the passage of a tenancy. That is why one comes to an agreement beforehand.
The tenant will have the opportunity to negotiate with the landlord the new rent for any replacement tenancy. He will be able to negotiate on the basis of any determination by the committee during the original tenancy. If the original tenancy lapses into a periodic tenancy and the landlord serves notice of a rent increase, the tenant will have another opportunity under Section 13 of the Housing Act 1988 to apply to the committee for a determination. Any such determination will have effect for at least a year. If the landlord serves a further notice after a year, the tenant can apply to the committee again. I believe that those safeguards should satisfy the problem.
The noble Lord, Lord Dubs, made much of housing benefit. If I may say so, I thought that the noble Lord's argument was not particularly good. The rent officer already checks whether it is reasonable for the benefit system to meet the rent which is requested. He will take into account the rent level and, for example, the size of the family. On the other hand, if the tenant willingly paid the rent out of his own earnings, that makes it a market rent.
The noble Lord, Lord Dubs, said that the rent officer does not look at individual people and houses. But I understand that rent officers do exactly that. They look at the characteristics of individual properties. As my noble friend Lady Gardner of Parkes said, they often visit the properties, in particular if they feel that the rent is high.
There are those safeguards. To include the amendment suggested by the noble Lord, Lord Dubs, would curtail not just those safeguards but the whole operation of the rented sector. A rise from 140,000 to 800,000 assured tenancies indicates that the system is working, and working well.
Earl Ferrers: My Lords, we always try to take these matters into account. One of the difficulties is that the noble Lord, Lord Strabolgi, seems incapable of taking account of the other side of the argument: that by having a free rented sector with certain restraints more houses are available. It is all very well to say that one or two people can obtain houses at conveniently low rents. The fact is that other people do not have the houses that are now available to them because it is not in the landlord's interest so to let them. The difference is that there has been a great increase and many people have benefited from the change.
The noble Lord, Lord Strabolgi, says that the Government will not understand the basic fact that there is no equal bargaining power. It is difficult to know what "equal" means. There is bargaining power on both sides. On the one side one has the landlord unable to let houses if he charges absurd prices. That is a basic fact of life. On the other, certain constraints are available to prevent the landlord from being unfair and unjust. That is the reason for the Housing Bill and earlier housing legislation.
We seek to free the situation so that more houses will become available. Where people are subject to housing benefit, the Housing benefit ought at least to pay most of the rent required, provided that the rent is reasonable.
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