Cllr Tom Smith is a councillor in Barnet and former Conservative parliamentary candidate.
To state the obvious, we need to do something about housing. As a newly-elected councillor in Barnet, it wasn’t long before housing casework started appearing in my inbox. It has brought home to me the scale of the housing shortage facing the UK, and particularly London, and confirmed my view that the private rented sector is in need of reform to give tenants a better deal.
Tackling our housing problem is, of course, far more complex than just talking about renting. Home ownership is obviously a major concern. Figures from the Institute for Fiscal Studies (IFS) show that just 27 per cent of 25-to 34-year-olds earning between £22,200 and £30,600 per year owned their own home in 2016, down from 65 per cent two decades ago. In recent weeks, we’ve seen a number of innovative policy proposals being floated that might address this, such as Onward’s recent report proposing tax incentives for landlords to sell to their tenants. I also welcome the Prime Minister’s announcement that the cap on local authority borrowing against the value of their housing stock will be lifted.
But I want to hone in on the private rented sector, because we need to be realistic. While it is essential to boost home ownership, the fact is it will take quite a long time to reverse the current trend. In the meantime, millions of people will rely on the private rented sector to put a roof over their and their family’s heads, and I believe that means we need to tackle some issues head on.
In particular, I am concerned by the growing problem of estate agents who have imposed bans on renting properties to people in receipt of housing benefit. Research by Shelter and the National Housing Federation earlier this year showed that one in ten of the letting agents who were surveyed had a branch policy to prohibit anyone claiming housing benefit – whether they could afford the rent or not (known as “no DSS” in shorthand).
This is an appalling, and probably discriminatory, practice that should be stopped. It cannot be right that a prospective tenant, who may be perfectly able to afford the rent and have no history of missed payments or poor behaviour, could be refused access to the private rented sector just because they are in receipt of benefits. This almost certainly increases homelessness, with the people affected likely to need temporary accommodation provided by local authorities, pushing up their costs as well.
Local authorities can do a certain amount to deal with this. In Barnet, we have established a service known as Let2Barnet which links prospective tenants with landlords who are prepared to let their properties out to them. The service even provides financial incentives for landlords to do so. As a result, the number of affordable private sector lettings to homeless households in Barnet has increased from 328 in 2013/14 to 649 in 2017/18.
But I believe we need national action. I believe the Government should legislate to make it illegal for estate agents to refuse to offer their services to people purely on the basis that they are in receipt of benefits. It may be the case that the Equality Act already prohibits this, but if so this is not being properly applied and the law should be clarified.
I also think the Government needs to stand firm on its previous commitment to introduce minimum three-year tenancies for renters. There have been worrying signs this plan might be watered down. This would be a shame, as this idea would give greater security to tenants and change the current situation in which 81 per cent of rental contracts are assured shorthold tenancies with a minimum fixed term of just six or 12 months.
In seeking to reform the rental market, we do need to be mindful about getting the balance right between the rights of the tenant and the landlord. I believe the changes I have talked about do get this balance right and would be sensible, proportionate steps we could take to support tenants. They would not be damaging or disruptive in the way that Corbyn’s Labour would be if they implemented counterproductive policies like rent controls.
I believe there is also a strong Conservative case for taking this action. As Conservatives we are unashamedly the party of business, and believe passionately in a market-based economy in which businesses thrive. But, as the Prime Minister has said, Conservatives should also be prepared to challenge business when we see practices that are unfair. That’s why I think we should reform the private rented sector, and in the process demonstrate that we as a party have the ideas and determination to ensure that people get a fair deal.