James Munro gave evidence.

We theoretically have until 4.15 pm, but it is unlikely that we will use all that time. If we finish earlier, we can all go off and have a cup of tea. Mr Munro, could you introduce yourself for the record?

James Munro:

My name is James Munro. I am head of the National Trading Standards estate and letting agency team. I want to put it on the record that we are grant funded by the Department for Levelling Up, Housing and Communities, and we also receive funding from the Department for Science, Innovation and Technology.

Q I have two quick questions. The National Residential Landlords Association has called for the selective licensing of landlords to be abolished. Do you think it falls away if the portal operates in a particular way, or will elements of selective licensing still need to be in place to augment the portal if the local area in question chooses that? I am thinking of space standards and other things that the portal might not necessarily cater to.

Secondly, is the Bill missing something by not incorporating any regulation of property agents? Are we missing an opportunity to incorporate the recommendations set out by Lord Best’s working group in or alongside this legislation in some form?

James Munro:

The first part of the question is a very good one, and I am not sure I am going to be able to give you an answer. I think the answer is probably yes and no, or somewhere in between. It is very difficult. It is one of those things where time will tell. Selective licensing schemes can bring benefits, but they are also a rather blunt tool in some respects, so I think it is a mixed bag. Possibly yes, that could happen.

Again, to be transparent, I sat on the working group with Lord Best where the regulation of property agents was debated. I think regulating property agents would be a good thing. When the public deal with professional people responsible for significant assets or significant issues in their life, they are, generally speaking, licensed or regulated in some way. As things stand, there is quite a mixed bag of regulation that applies to estate and letting agents—collectively, property agents. For example, the regulatory regime applying to estate agents is completely different from the regulatory regime that applies to letting agents, and I think bringing them together would be a good thing. Obviously, it would be expensive and would probably require another public body to be set up. There are issues about who would take on that role, but in theory I think that is a good thing.

Q I am interested in your view on the principle of blanket bans and the measures we are taking in the Bill to stop them.

James Munro:

Blanket bans are a good thing on paper, but in practice they can be very difficult to enforce. Obviously, the enforcement is where I am coming from with this. That is what we do with estate and letting agents at the moment, and with landlords in respect of the Tenant Fees Act 2019. We are the leading enforcement authority under the Estate Agents Act 1979 and the Tenant Fees Act. It is very tricky when you start putting blanket bans on things—for example, on saying, “No pets”, “No children”, or “No DSS”—because ultimately it is up to the landlord to decide who he or she wants in the property. It is very difficult to prove that that decision has been taken to directly discriminate against somebody with a pet, with children or in receipt of benefits.

While I am on that subject, I think the legislation would benefit from always including the words “prospective tenant” when dealing with issues around discrimination. Clearly, at the point at which someone is being discriminated against, they are not normally a tenant—they might well be a tenant at some stage, but at that point they would be a prospective tenant. It is important to have consistency throughout the legislation in that respect.

Q It seems difficult to enforce blanket bans. Is there any way forward in which these bits of information are not disclosed and cannot be asked about in any form, directly or indirectly, until after a tenancy has been verbally agreed?

James Munro:

That could be a way forward. It just goes back to the fact that it is very tricky to work out, because discrimination can be written, verbal or non-verbal. It can be incredibly difficult to prove, unless it is recorded in some way, and then it is down to the investigatory powers, the sanctions available and, ultimately, the impact of that discrimination on someone, because it will be considered in line with all the other local authority priorities.

Q On standing enforcement, a lot of local authorities use the selective licensing resource to help to pay for their enforcement. Is there an argument—perhaps the opposite argument from the one made by my colleague—that the property portal could allow the roll-out of selective licensing more freely in all places where there is then, in effect, a small charge for enforcement?

James Munro:

It could work. In theory, what we are trying to achieve is to get greater resources to local authorities. I do not really have a view of how that is done; it is more about getting those resources to local authorities and about ensuring that local authorities prioritise the work correctly. At the moment, there are huge differences in enforcement across the country—the so-called enforcement postcode lottery—and, depending on where you are, it could be a different priority for that particular local authority.

Q We touched on rent repayment orders previously, where tenants are motivated to take their own enforcement because they could receive their own rent. Could those offer an option to relieve local authorities from having to enforce some of the more minor cases and allow them to focus on the most egregious breaches?

James Munro:

I agree that that would be a way forward. It comes back to the points that have been made before: it is about the education and knowledge of the tenants, so that they understand, first, that they can take that action and, secondly, that they take the action and get the relevant support to do it. Tenants are woefully unprepared. They do not have the knowledge, the expertise or the help to take action forward where necessary. You will see examples of that being done generally, where either people have done it because they had that specialist knowledge, or they get the specialist support, which might be available in certain areas but not in others.

Q Do you think the property portal might provide an opportunity not just for information holding, but for information dissemination?

James Munro:

Yes, but the property portal will only disseminate that information to those who are registered on it, and the challenge—as with a lot of things with this Bill—will be to ensure that, in the early days, in year one or year two, everyone gets up to speed with this, and not just the landlords but the tenants and prospective tenants. It comes back down to education. The question was asked earlier, “How do we get the message out to people?” You need to teach it at school. We leave school not knowing how to buy a house, buy a car, rent a house or anything like that.

Q Some of us push very hard for citizenship lessons and wider lessons like that in schools, but that is another debate. You might not know about this, but when the deposit protection scheme was rolled out, there was a big information campaign with local authorities and with charities and non-governmental organisations to inform tenants about their ability to get rent repayment orders if deposits were not secured. That seems to me to work very well. Do you have any views on and learnings from that process?

James Munro:

Yes, that process has worked well, but I think that is because it is a process that benefits all parties. It is very strictly controlled. The sanctions and penalties are clearly set out. I think it is something that works very effectively. Redress scheme membership, for example, works very effectively. The Government obviously issue the “How to rent”, “How to buy” and “How to lease” guides—all the different how-to guides—and I think they could play a very useful part, but obviously you have to get them into the hands of the tenants. Again, it comes down to the point that was discussed earlier, especially with students. Students just want to get their hands on the property—they will sign anything just to get their hands on it. They do not necessarily understand, realise or appreciate any rights or obligations that they may have under that agreement.

Q I just want to go back to that point. Earlier, I used the word “unprofessional”. What I meant was amateur rather than negligent or wilfully reckless. There are a lot of accidental landlords out there—I am talking about people who do not use a letting agent. They will need to be aware of their responsibilities under this legislation. Who do you think is the right person to manage the information campaign to ensure that they are aware? Is that the local authority? Is it the charitable sector? Who should be ensuring that landlords are aware of their responsibilities under this new legislation?

James Munro:

I think it is a combination. You have the National Residential Landlords Association; you have various trade bodies and various professional bodies that represent landlords. They are the first port of call. I also think local authorities and charities—all those third sector organisations—could get that information out there. The challenge is that the landlords who have perhaps one property are, for all intents and purposes, treated almost like private individuals. For tax purposes, they are virtually treated as private individuals, so there is no real avenue to find out where they are. That is going to be the challenge—to reach out to them but also to get them to comply with the requirements.

As colleagues have no further questions, I would like to thank you very much indeed, Mr Munro, for giving evidence to the Committee. Your words will stay with us as we consider the Bill line by line, starting from next week.

Ordered, That further consideration be now adjourned. —(Mr Mohindra.)

Adjourned till Tuesday 21 November at twenty-five minutes past Nine o’clock.

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