Localism Bill

My Lords, I must declare an interest as a member of the London Assembly. I have also previously served as chair of housing in the London borough of Richmond upon Thames. I wish to focus my remarks on Clauses 124 and 130, and how they will relate to housing in London. The first of my remarks concerns the legal duty to the homeless. Clause 124 enables a local authority to discharge its main duty to the homeless with an offer of suitable accommodation from a private landlord without requiring the applicant’s agreement. Such offers of a private letting would require only a minimum 12-month fixed term, offering no long-term security. The Government assume that this provision will lower the cost of accommodation to the taxpayer; indeed, the cost of temporary accommodation for the homeless is unnecessarily high. However, given the shortage of housing, lower rents are unlikely. The market trend is in the other direction. Average London rents are now nearly £1,000 a month. FindaProperty and Savills both estimate that during 2010 average rents for new private sector lettings in London rose by nearly 17 per cent. I therefore find it highly improbable that private sector rents will fall as a result of this legislation. It is much more likely that the quality of private rented accommodation will decline as profit margins are squeezed. Rents will not fall but conditions might due to a lack of investment. Even if rental costs were reduced, any savings are likely to be offset by the knock-on costs of repeat homelessness due to the 12-month minimum term. The people who are becoming statutorily homeless are increasingly the most vulnerable families. Placing them in private sector accommodation is unlikely to give them secure and stable homes. Indeed, they are likely to be forced to live in substandard accommodation and, much worse, forced to move at regular intervals even if they have been model tenants who pay their rent on time. In addition, benefit changes in the Welfare Reform Bill may make it more likely that tenants are evicted for falling into two months’ rent arrears, so the Bill in effect undermines the legal duty of local authorities towards homeless people. We need proper safeguards. These could be established with a statutory accreditation system for the private rented sector rather than relying, as in London, on a voluntary one. Your Lordships may be aware that in London the mayor has established a voluntary accreditation system as part of his current housing strategy. He has set a target of 8,000 accredited landlords by the end of the year, and he is likely to meet that target, but let us put this into context; London has the highest number and proportion of privately rented housing in England. In 2009, there were nearly 700,000 private rented dwellings in London. That is 20 per cent of all London households, compared with an average for England of just under 13 per cent. Between 2001 and 2006, the number of private rented properties in London increased by a massive 25 per cent. Currently, one in five households in London are privately rented. In some boroughs, the figure is much higher. In Newham, for instance, it is one in three households. In six London boroughs, private rented housing forms more than one-quarter of all housing stock. This is a sector that we need to be reputable, to be a genuine third pillar alongside owner occupation and social rented housing, but many landlords do not behave well towards their tenants in London's private rented sector. Four out of every 10 homes are non-decent or substandard. If more people are to be placed in private accommodation, it is essential that some form of kitemark is introduced to ensure standards. My second concern is the proposal to remove security of tenure in social housing. Clause 130 proposes giving local authorities the power to offer flexible tenancies to new social tenants of not less than two years. The clause provides for the circumstances in which a new tenancy will be a flexible tenancy. The basic principle of flexible tenancies is sound, but if the minimum duration of a tenancy is only two years, that will almost certainly become the norm. That is what local authorities will offer, and the minimum will, in effect, become a target. People living in social housing are entitled to reasonable security of tenure. They need to be able to settle into communities, to put down roots and to make friends. They also need to be able to find work within reasonable travel distance and to secure continuity in their children's education. If they are forced to move continuously, they will find it harder to stay in employment, their children's education will almost certainly be disrupted, and they will have less incentive to maintain their homes in good order. As a result, we are likely to see a greater concentration of deprivation and worklessness in social housing. Surely that is the last thing that anyone wants, but it will almost certainly be the direct consequence of providing such limited security of tenure. Social housing is designed to help the most needy in our society. They must be given some form of continuity rather than a lifetime of transient housing. Transient housing serves no one well—certainly not the families, especially the children concerned, and not the local communities in the long term. I shall return to these issues when we reach Committee.