Contribution
My Lords, as this is the first time I have spoken at this stage of the Bill, I ought to declare an interest. I am a landlord of private rented residential property, but I think that all—both—the renters concerned would agree that I am not somebody who sets out to extract the last penny from them; in fact, quite the opposite. More particularly, I stand here with some 50 years’ professional experience of property, not least of the private rented sector.
The noble Baroness, Lady Grender, is the cause of me getting to my feet—I give her that credit. She referred to rent affordability as security. Although I get that particular line of argument, the two things differ somewhat. All the amendments in this group relate in some way to control of rent, something the Government have always said they would not do. I listened very carefully to my colleague, the noble Lord, Lord Best, but say to him that a deferral or reduction in the receipts on a like-for-like basis is, none the less, a form of rent control. I do not think I can make any concession on that point. The noble Lord, Lord Young of Cookham, said that the amendment of the noble Lord, Lord Best, was less bad than what might be in the Bill. I am not sure that that particular line of argument commends the broader principle to me in general.
A recurring theme is this business of the affordability of rent to renters, but that actually is not the purpose of the private rented sector; that is the purpose of the social rented sector. If we are somehow transferring something which occurs in and is a feature of the social rented sector to the private rented sector, then a much bigger debate needs to take place—apart from this Bill—on precisely what that means. I do not believe that that debate has been entered into, nor do I believe that there is any substantial investigation or research into what that might mean in practice.
If we are in fact faced with that change, I predict the same outcome as occurred after 1965. The noble Lord, Lord Young of Cookham, referred to the rent control of the 1960s and his role in undoing that. I mentioned at Second Reading that the combined effects of security of tenure and rent control in the 1960s caused a fall from 30% of housing being in the private rented sector in 1961 to about 10% some 30 years later. Even after that freeing-up process which the noble Lord referred to, it was still under 10% in the year 2000. That is how durable the process is. It is very difficult to get confidence back once it has been severely damaged.
We must also bear in mind the progressive changes in the tax treatment of private rented sector landlords and what that has meant. It may be different when it is being dealt with at corporate level, when all sorts of things can be offset against a larger pool of property. For the 80% of private rented sector landlords who have five or fewer residential units, that does not look like the same thing at all. Ultimately, the test will be whether we generate competition in the market through an increase in supply. However, everything I have heard this afternoon, particularly from those who tabled the amendments in this group, has been about guarding against precisely that outcome that would be a failure of the intentions that sit behind this Bill. So we have to be very careful.
I do not take a moral stance of any sort on this. I stand before your Lordships as a technician, not a politician. I come with an economic view. However, if we are making a transfer of liabilities from one sector that has a considerable amount of government, financial and in many cases registered provider charitable support, to the private rented sector, which does not have that support, I predict a very significant failure in the outcomes of this Bill.
That would be a tragedy, because this Bill contains an awful lot of stuff that is very good indeed, I would like to see a successful private rented sector. I would like to see renters treated with humanity and civility and not exploited endlessly in the way that they have been. However, if we end up with reduced supply, and with those who show no civility or common decency towards their renters somehow still there, operating in some subculture or other, we will not have succeeded in dealing with this matter at all.
I wrote to the Minister recently. She has not had a moment to reply. I cast no aspersions at all, because she is extremely busy with this Bill. However, there is a need to look closely at the probable outcomes. If we do not, we will walk blindly into something that we would rather had not happened.