HL Deb 01 August 1978 vol 395 cc1189-93

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are aware of the hardships which are being experienced by very large numbers of tenants of long standing owing to speculation in residential property; and whether they will take steps to help these tenants either by limiting rent increases or in some other way.

Baroness STEDMAN

My Lords, I am aware that steep increases in fair rents can sometimes cause hardship especially for elderly tenants whose incomes have not risen in line with inflation generally. However, there are three existing provisions relevant to this problem. First, the Rent Acts restrict rent increases by requiring a rent officer specifically to exclude any value attributable to a scarcity of similar dwellings to let in the locality. Secondly, tenants do not have to pay the full re-registered rent at once because it is phased over three years. Thirdly, there is a generous system of rent allowances to help tenants who have difficulty paying their rent. In addition, the Government are regularly and urgently studying the legal and financial problems involved in enabling tenants to purchase their blocks collectively in certain circumstances.


My Lords, may I first declare my personal interest in this matter? I am being asked to pay an increase of 300 per cent. in respect of rent. May I ask my noble friend whether she realises that her Answer does not really touch the position that people who have been living in flats for 30 years or more are today being called upon to pay 300 per cent. or 400 per cent. more than they have been paying? It affects many aged people, former civil servants, who in consequence of what is happening will be homeless. It is high time that this was urgently stopped, otherwise these people will have nowhere to go. The rate of inflation, of course, is not comparable with the 300 per cent. or 400 per cent. increases which are being demanded in consequence of the speculation that is going on. Will the noble Baroness give immediate attention to this? It is really a very similar situation that many of us—

Several noble Lords



Many of us were confronted with this situation at the time of the Leasehold Reform Act.

Baroness STEDMAN

My Lords, of course we are aware of the problems when rents rise as steeply as my noble friend has indicated. While I know that it will not satisfy him or console him in any way, I would point out that in many ways those tenants who were on a fixed five-year or ten-year lease which came into operation just before the new Act applied have in a sense been sheltered over the period between the operation of the Act and now. Their rents are now up for review, perhaps for the first time since the Act came in. There are problems, but we are satisfied that the Rent Act is working satisfactorily. We are satisfied that the rules and regulations and guidelines which we give to the rent assessors and to the tribunals are also being administered fairly. What we are not so sure about is whether the people who are experiencing this type of hardship are making the necessary claims for help which they can obtain. For example, a married couple with income of £5,000 a year, paying a rent of about £2,000 a year, would be eligible for a rent allowance of £15.50p a week. Many of these people are not applying for the help that is available to them.


My Lords, may I thank the noble Baroness for that reply which is most helpful? May I ask whether she is aware that as the insurance and property companies release properties into Arab hands, with the resulting demands for exorbitant rents—and I myself am not a victim, as is the questioner who has a special interest—which are outside rent control, the new owners of these properties—mostly Arabs, I understand—are harassing the tenants and debasing the services which are to be given under contract? The tenants are not entitled to justice in the courts and are leaving the properties for the owners to take them over.

Baroness STEDMAN

My Lords, of course I am aware that there is hardship when foreign or any other speculators—it is not limited to the foreign speculators—buy a property and decide they need to have a return from it. They take the opportunity to have a rent review and perhaps make a lot of money. This is not a new phenomenon. It was a feature of the property boom in the early 'seventies and, in so far as it appears to be recurring, the Government deplore it, as I am sure all Members of the House do. This is one of the reasons why we are studying means of enabling tenants to buy their homes collectively in appropriate circumstances. We are also looking at other possibilities for giving tenants and leaseholders in mansion blocks more control over the management, service charges and related issues. These things take time to sort out. Not all tenants want to join a co-operative to buy their blocks of flats. Some may not be able to afford to do so. These are the issues we are looking at now and we hope to present some future legislation to cover these matters.


My Lords, the noble Baroness does not realise that she is talking about something which is entirely different from what is actually taking place. Does she realise that in one set of flats alone the rent has been increased from £900 to £4,500? In many cases increases such as from £1,200 to £4,500 have been asked from old-age pensioners. This is the sort of thing that the Leasehold Reform Act came into force to deal with, to allow people to retain their premises. Will the noble Baroness please go into the matter so that people will not be turned out of their homes?

Baroness STEDMAN

My Lords, my Department have the matter continually under review. This Government have passed a lot of legislation and we accept that in some cases there may be some harassment of tenants and it may be difficult for them to raise the increased rents. As I have said, in cases where it is difficult for them to do so they have the right, if their income is of the appropriate level, to apply for their rent and rate rebates. If their situations are so hard and if the harassment is such that they get behind with their rent and are evicted, then we have the Homeless Persons Act, which also may come to their rescue. We have this whole problem under review; it is not an easy one. There is no easy answer. This is something we have to look at, and look at seriously.


My Lords, while agreeing with the noble Baroness that the Government have passed a lot of legislation, may I ask whether she would consider that possibly the hardship to tenants and, in some cases, to individual landlords is due to the shortage of housing accommodation? Among the various remedies which the Government have in mind, will they not study the means of increasing the totality of housing accommodation, in which case speculation would be impossible?

Baroness STEDMAN

My Lords, we are always considering the housing situation from the point of view both of the private sector and of the public sector. We want to see enough rented accommodation in this country to satisfy the needs of those who want it. In the same way, we want to make available enough houses for those who want to own their own houses to be able to do so.

Viscount ST. DAVIDS

My Lords, will the noble Baroness consider that there is one deficiency in the Act on which I should like her comment?—that is, the lack of any appeal by either a tenant or a landlord against the findings of these tribunals. These tribunals do their work very swiftly and sometimes do not manage to take all the facts into account. There is then no appeal, and the result can be very damaging. I should like her to comment on this, because I should like to give her details of some cases where this has happened, if I imagined that she was going to remain on her present seat much longer.

Baroness STEDMAN

My Lords, in response to the last point. I hope I remain on my seat for a very long time to come. So far as the rents are concerned, they are fixed by the rent officer and there is the right of appeal then to the rent assessment panel. My understanding is that only some 7 per cent. of those rents fixed by the rent officer go to the rent assessment panel. I must also say that in most cases the rent assessment panel upholds the higher rent.

The LORD PRIVY SEAL (Lord Peart)

My Lords, I think my noble friends would agree that we have had a very good innings on this Question. I hope that my noble friends will understand.

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