RENT ACTS (RURAL HOUSING) (Hansard, 29 October 1976)

§ Mr. John Farr (Harborough)

I wish to draw to the attention of the House this afternoon a matter of which I have given notice in the subject of my Adjournment and which I regard as a considerable wastage of homes due to the operation of current Rent Act legislation.

The background to the view I wish to present to the House relates not so much to homes and houses in built-up areas—cities, towns or suburbs thereof—though that is a problem, as to the large number of houses which are not used or which are under-used in country and rural areas.

I speak not just of my constituency but of a problem to be found wherever one goes in the countryside. As I said, I shall not dwell on the suburban problems, which are to some extent a separate subject.

All through Leicestershire and parts of the East Midlands one can go to small villages and many remote hamlets, perhaps composed of only a few houses, and see houses empty and unoccupied. When one asks why, at a time when all local authorities have long waiting lists for accommodation, houses which are structurally sound and externally most attractive are vacant and unoccupied, and in many instances have been so for some years, the owners of the properties or those responsible for handling their letting give the same answer, namely, that the landlord or the owner just cannot afford under existing legislation to place the property on the market for rent.

There are many agricultural houses which are empty and standing idle in the countryside. The agricultural work force has declined to about one-third of what it was after the war. As a result, a large number of farm workers' houses which were formerly occupied by agricultural workers are no longer 929 needed for that purpose. Farm mechanisation has proceeded apace, with the result that farmers have been able to reduce the number of their work people, and in many cases a number of houses have become vacant.

The reason farmers are reluctant to place their houses on the market for letting is that, under existing legislation, it would be impossible to regain possession after a given period. There is a remarkable change in the agricultural scene, with many houses becoming empty due to farm mechanisation. Most farmers are cautious and do not accept that there will necessarily continue to be a decline in the number of their work force, as has happened since the war. Other factors may enter into the calculation to make it necessary for them to have one or two houses on the farm available for farm workers should economic circumstances change.

Alternatively, the time may well come when a farmer feels—"I shall wish to retire from active farming. This cottage, which I own and which was occupied by a farm worker, has not been occupied for the past five years. I am now of retirement age. I want my son to take over." That thought is very likely to enter his mind under the new legislation. He may well think to himself "It will be an ideal house in which my wife and I can see out our declining years whilst another member of the family takes over the farm, under the new legislation, and moves into the main farm house."

Thousands of cottages suitable for such purposes remain empty simply because of the impossibility of the farmer gaining possession after a fixed period. I could take the Minister to hundreds of such cottages in my constituency and in the surrounding district. That is the reason the farmers give for the cottages standing empty.

There are other types of property which one sees standing empty in rural communities. Quite a large house is, perhaps, occupied by an elderly lady who thinks that the time will come five or 10 years hence when she will not be able to cope alone; she may wish to have a relative living in the house with her. The remainder of such a large house, which is far too large for the one occupant, or 930 the two occupants if they are a married couple, is inadequately used.

I have spoken to people who live in such larger houses and I know that they would be happy to contemplate providing a separate flatlet or similar occommodation if only they could be satisfied that in, say, five or 10 years they would be able to regain possession, perhaps for a relative whom they might wish to live with them when they go into some form of aged decline. The accommodation is there now and the possibilities for conversion exist. However, the owners will not contemplate making flatlets or other accommodation available for other tenants for a short fixed period, because of existing legislation.

This problem affects most rural areas. I have given the examples of farm workers' houses and under-occupied larger houses. There is an associated problem. I believe that an immense pool of additional accommodation could be made available to the nation in some country areas if the numerous outbuildings which are to be seen in villages and on farms adjacent to villages—outbuildings which were formerly used for other purposes, many of them beautifully built about 200 years ago and structurally externally sound—could be converted, with the expenditure of a certain amount of money, into flatlet or house accommodation.

The owners of these properties say that, because of existing legislation, they would prefer to try to maintain the external appearance of the building as best they can and not let a family come in at a fixed rent to convert the building into accommodation for themselves, thus turning the building into a unit of accommodation. This is because the owners know that, whatever form of agreement is entered into, should they wish to sell their property or for some other reason regain possession after a fixed period, they will be unable to do so.

I know a farmer quite well who has on his farm two beautiful 18th century houses which were occupied by farm workers until just after the 1939–45 war. He, like many other farmers, has modernised and mechanised and the cottages are no longer needed for farm workers. They are externally painted and slates are replaced if necessary. Internally, when 931 modernised and fitted with all the modern conveniences, two charming and attractive properties would be made available. But because these two cottages are in the heart of the farm and because of the risk of letting to an unsatisfactory tenant whose children cause a nuisance on the farm, the farmer could not contemplate the idea of letting the cottages without being able to gain possession after a fixed period of three or five years.

I was prompted to raise the matter by a letter which I recently received from a constituent. She has moved into the city of Leicester as a manageress of a bookshop and is a single lady of a respectable age and position. She is anxious to settle outside the city in the country and is prepared to travel into Leicester every day. She has searched all round the county within a radius of 15 miles of the city and she illustrates to me in her lucid letter the difficulties that I have described to the House.

She says that she has approached the owners of numerous properties that are suitable for conversion into flats. My constituent has met with refusal because of the reasons that I have given. She has approached the owners of farm cottages which have been empty for many years, but again she has been turned down, because the owners do not know what their plans may be for the future and fear that they might want to gain possession at a later date but be unable to do so.

Many of the people who live in large houses in and around rural villages are in straitened circumstances. They are often retired people living on an eroded income and they would be glad of the extra income to be earned by making part of their house available to a tenant. I have been told that if such people were able to gain possession after a fixed period, they would be happy to make a flatlet available, or to let a wing of their house to a couple.

I raise the matter because of the letters which I have described and because I know from my own experience that local authorities in Leicestershire, as in the rest of the country, have long waiting lists for that type of accommodation. Because of the obstinate attitude in current rent legislation, a large pool of most 932 attractive potential accommodation is going into decay and ruin. Unless the Government take steps to enable a landlord to take possession after a fixed period, I can see no prospect of this type of accommodation being put to the national use as it should be.

§ The Under-Secretary of State for the Environment (Mr. Guy Barnett)

I congratulate the hon. Member for Harborough (Mr. Farr) on his success in the ballot and I am glad to be able to be here to reply. The general theme of his speech today is of course not new. Nevertheless, in spite of the considerable airing which the subject has been given over the last two years and the continuing efforts which the Department has made to explain what the legislation on rented housing actually says, I welcome this further opportunity to put the record straight.

The hon. Member's objection to the Rent Acts is—if I may quote from the letter he wrote last week to my right hon. Friend the Minister—that they make it almost impossible for a landlord to obtain possession of his property should he require to do so with the result that useful housing is standing empty and in due course falling into ruin. He mentioned two categories of landlords in particular—farmers who own tied cottages which they no longer need for farm workers and older people who live alone in larger houses and who might be willing to let out spare rooms or flats. As I shall explain, the circumstances in which a landlord is allowed to recover possession from his tenant are considerably wider than is often imagined, and there are special provisions for the two categories of landlords that the hon. Member mentioned.

But I unhesitatingly plead guilty to the accusation that the broad policy underlying the Acts is that a landlord who is in the business of letting is not entitled to recover possession merely because it is convenient or profitable for him to do so. The Government believe that a tenant should be able to look on his home as a home and not have to live in fear of eviction or arbitrary rent increases. If one may judge by the actions of the Opposition when they were in office, they have a certain amount of sympathy for 933 this general principle. It was not a Labour Government who introduced the Landlord and Tenant Act 1954, which gave security of tenure to long leaseholders whose leases were falling in. Nor was it a Labour Government who introduced the Counter-Inflation Act 1973, which extended Rent Act protection almost to the top of the rateable value scale. I wish that those who criticise the Rent Act 1965 and the Rent Act 1974 would remember these other measures. But we accept that there are some exceptions that should be allowed to the general rule.

First and foremost, we recognise that a resident landlord—typically an owner-occupier who lets out a spare room or basement flat—should be able to recover possession from his tenant. Before our 1974 Act, the resident landlord could recover possession only if the letting was furnished. A resident landlord can now let without having to worry whether the value of the furniture is a substantial part of the rent. But for lettings commencing after the Act it does not matter whether they are furnished or unfurnished.

A resident landlord cannot of course just throw his tenant out. The tenant is entitled to go to the rent tribunal to get his notice to quit extended to give him time to find somewhere else to go. But once the extension has expired, he has got to leave. Rent tribunals have had this power for nearly 30 years. If the tenant does not pay the rent, or otherwise misbehaves while his notice is running out, his right to remain can be shortened.

It does not seem to be widely known that the Rent Act 1974 toughened up the provisions on this. The Act actually strengthened the rights of resident landlords against unsatisfactory tenants. It is fair that this should be acknowledged.

In addition to the Department's general literature on the legislation about private renting, we have prepared a special leaflet as a guide for resident landlords. It is called "Rooms to Let: some facts you should know if you let part of the house you live in". I should be glad to arrange for a supply to be sent to the hon. Member for him to pass on to any of his constituents who are interested.

934 I turn now to what the Rent Acts say about owners of houses, cottages, or flats who are not using them now but who may wish to use them again at some time in the future. The Acts contain special provisions for several categories of such owners. They can let the properties concerned and are entitled to recover possession when they need them again. Farmers who own surplus tied cottages make up one of these categories.

A second category covers owner-occupiers who are temporarily away, for example, working abroad or in other parts of the country. A third provides for people who buy homes to move into when they retire. Provided that the tenants are given due warning at the time the tenancies are granted, the owners have a right to recover possession when the properties are needed for their use.

The Department has also produced a leaflet called "Letting your own house?", which explains how owner-occupiers who wish to let their own home, or their retirement home, can be certain of recovering possession. I shall be happy to let the hon. Member have a supply of these as well.

It has been suggested to the Government that there are further categories of owners who ought to be given this special treatment and be entitled to recover possession when they need to use their property again. We are going to look at these suggestions in the review of the Rent Acts, about which I shall have more to say in a few minutes. In principle, we see no reason why new "cases"—to use the jargon of the Acts—should not be introduced for appropriate types of property.

But let me add one word of warning: we have no intention of relaxing the Acts so that owners can let temporarily until the time is ripe for a profitable sale with vacant possession. That would be going against the whole principle of Rent Act protection.

I do not want to go into detail about all the other grounds for possession laid down in the Rent Acts. Apart from the special case of resident landlords, there are 18 grounds in all. But I wish to make one thing clear: the Acts limit the rent which the tenant can be required to pay. But he must pay the rent up to this limit. A tenant who falls into arrears with the 935 recoverable rent risks losing his security of tenure. He must go if the county court thinks it reasonable that he should. Equally, he is at risk if he breaks the terms of his tenancy, or causes nuisance to the neighbours, or damages the dwelling or the furniture.

So if a tenant abuses his protection, the landlord is entitled to seek possession. The figures we have from the county courts show that over the 18 months ending in June this year some 24,000 applications by private landlords for orders for possession against their tenants were decided by the courts. Ninety-six per cent. were successful. I would not, however, wish to suggest that a county court action is the normal end of a tenancy. In only a small proportion of cases are legal proceedings necessary, perhaps only one in 15.

Having dealt with the rights which the Acts give to landlords to recover possession I turn now to the second main issue which the hon. Member has raised. This is the extent to which the Rent Acts can be blamed for houses and flats standing empty.

I recognise that the Acts cannot be said to be an incentive to letting. They were not and are not meant to be. But it is too easy to put all the blame on the legislation. One way or another, Rent Acts have been with us for a good many years now. But the census in 1911—which was before any one but a few Utopians on the Left had ever suggested rent control—recorded that 5.6 per cent. of dwellings were vacant. This is a higher percentage than in any of the five censuses since the introduction of rent control. I would not wish to make too much of a rather elderly statistic, but evidently even in the days of laissez-faire some owners were reluctant to let. No doubt there were complex factors behind the statistics then, but so there are now.

More recently, we have seen what landlords made of the opportunity to let free from restrictions. Between 1957 and 1964, many existing lettings passed out of control and all new lettings were free from restrictions. From 1964 until 1974, furnished lettings were subject only to the limited security of tenure which the rent tribunals could grant. Ever since the last war the total number of rented properties 936 has been declining. The decline was particularly rapid in the late 1950s. Although the number of furnished lettings appears to have grown during the 1960s, it is clear that many of the properties concerned had previously been let unfurnished. In the 1970s, it became apparent that the number of evictions from furnished accommodation was increasing. It was also clear that such accommodation was often being left empty, doubtless with a view to conversion and profitable sale.

It is often alleged that the Rent Act 1974—or, for that matter, the Counter-Inflation Act 1973—has dried up the supply of rented accommodation. It might be fairer to say that these Acts were introduced because the supply of rented accommodation of the particular types they dealt with was rapidly drying up. Certainly by giving existing tenants security the Acts have prevented an over-rapid contraction in the private rented sector.

It is easy to say, and it is very commonly said, that there are thousands of empty houses which could and would be let if only the Rent Act restrictions on recovery of possession were relaxed. But when one looks more closely, the position always turns out to be more complicated than that. For instance, a great many of the people who complain to the Department that they cannot let are clearly covered by one or other of the existing exemptions.

I do not blame them for making this mistake. We recognise that the complexity of the legislation is to some an obstacle to letting in itself. We shall be trying to simplify it in the present review of the Rent Acts. Equally, we know that many houses are empty because they are unfit or in disrepair, or awaiting conversion or improvement. I might mention by way of example that 40 per cent. of the vacant dwellings in the sample for the last National House Condition Survey were unfit.

When one deducts from gross totals of empty dwellings those that are empty for reasons other than the Rent Acts, and those for which special provision is made in the existing legislation, the likely effects of any general relaxation of security of tenure can be seen in a more realistic 937 perspective. It may be that a few houses would be brought into use. More probably, quite a lot of houses which would otherwise be let on protected tenancies would be let unprotected. It is clear that many houses would be taken out of the rented sector altogether, as happened after 1957. The Government have often said—and I say it again today—that this should not be allowed to happen.

I have already indicated that we do not regard the Rent Acts as perfect. They are much too complicated and they can work harshly in particular cases. Some provisions have not fulfilled the intentions of those who introduced them. That is why we have undertaken to carry out a review of the Rent Acts, and preliminary work on this review is under way within the Department. We shall very shortly be issuing a consultation paper to invite the views and comments of interested organisations and individuals. I shall arrange for a copy to be sent to the hon. Gentleman. We are prepared to consider new ideas or reconsider 938 proposals that have previously been rejected.

As I have already said, we shall be looking at the categories of landlords who are entitled to recover possession when they want to use their properties again themselves. We shall be considering both the principles and the practical procedures for rent fixing. We shall be looking at the relationship between rents and the costs of repairs and improvements. But I can hold out no hope to the hon. Member that we shall go back on the general principle of security of tenure for the tenant in his home.

For so long as large numbers of people have to live in privately rented accommodation, this principle is a necessary part of any housing policy. To judge by actions, and not by words, this view has now come to be accepted on both sides of the House.