Wednesday 15th May 2024
(2 weeks, 3 days ago)
Lords ChamberRenters (Reform) Bill 2022-23 View all Renters (Reform) Bill 2022-23 Debates Read Hansard Text Watch Debate Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)
My Lords, I thank those Peers who have already taken an interest in this Bill and those who have worked to improve the private rented sector over many years. The Renters (Reform) Bill brings forward the most significant changes to the sector in 30 years.
For England’s 11 million tenants, representing some 4.6 million private rented sector households, the Bill provides the robust protections needed to increase security and standards, helping people to put down roots in their communities, keep jobs and build careers in their local areas. We are also supporting England’s 2 million landlords and recognising the importance of privately rented homes to our economy. The Bill will give good landlords the confidence to let their properties, equipping them with the tools needed to charge a fair rent and reclaim their properties when they need to, while driving out rogue and bad actors who undercut the majority. The Government have worked closely with those across the sector and across political parties to ensure that our measures strike the right balance. I will now move to the specific content of the Bill and outline the ways in which, when taken together, this package of reforms will support responsible landlords and tenants alike.
The measure that noble Lords will be most familiar with is the abolition of Section 21 evictions. We know that the threat of a Section 21 eviction can make tenants feel very insecure in their homes, with good reason. Unexpected evictions can cause real financial difficulty and interrupt employment and schooling for parents and children. By removing Section 21, we are helping tenants to feel settled and to challenge poor practices if their landlord is not meeting their basic responsibilities. We recognise that the vast majority of landlords provide an excellent service. In the absence of Section 21, it is important that they have the confidence that they can get their properties back. That is why, alongside abolishing Section 21, we will strengthen Section 8 possession grounds.
Landlords will be able to get their properties back if their circumstances change—for example, when they are selling or moving into their property. We are also protecting landlords and expediting their ability to evict those who disrupt neighbourhoods through the evils of anti-social behaviour, as well as introducing new grounds for persistent rent arrears. To protect tenants where there are more complex circumstances, such as a breach of tenancy conditions, the grounds will remain discretionary so that judges can consider whether it is reasonable to evict them.
After listening to concerns from the sector, we have also made changes to protect the functioning of the student market by introducing a new ground for possession to ensure that student landlords can continue to offer tenancies which align with the academic year.
To further protect people from homelessness, as well as abolishing Section 21, we will make sure that tenants still have certainty that a homelessness prevention duty will be owed when a valid Section 8 possession notice is served. This means that vulnerable households will continue to receive support while the threat of homelessness remains.
The strengthened grounds are fair, comprehensive and efficient. It is reasonable for landlords to regain their property when they need to, but they should rightly give tenants a specific reason for ending a tenancy rather than securing possession simply to avoid the responsibilities of being a good landlord.
We are also simplifying the tenancy system by abolishing fixed-term tenancies and moving to a system of periodic tenancies. Fixed terms lock in both tenants and landlords, even when their circumstances change, on a property of poor quality. Much has been said and written about fixed terms, and not always accurately. It is important to acknowledge that under a fixed term, tenants cannot end the tenancy and landlords cannot evict them using Section 21. However, at the end of a fixed-term contract, a tenancy does not automatically end, and to regain possession a landlord still needs to issue a notice and apply to the court if the tenant does not leave. In the new system, after the minimum six-month initial period at the start of a new tenancy, either party will be able to end the tenancy when they need to.
The Government are also exploring potential exemptions to the minimum six-month initial period where it is absolutely necessary for the tenant to end the tenancy early. This could include, for example, where a tenant has died, instances of domestic abuse or where a landlord has not remedied a serious health hazard such as severe damp or mould. We remain committed to abolishing Section 21 as quickly as possible. However, we should be clear that delivering a smooth transition to the new system is essential so that tenants understand their rights and landlords have the confidence to remain and invest in this important sector. That is why we have committed to ensuring that county courts are ready to deal with our tenancy reforms so that landlords and tenants can benefit from a modern, efficient possession system. To ensure the courts are ready, we will work with the Lord Chancellor to assess the readiness of the county courts ahead of abolishing Section 21 for existing tenancies.
To help illustrate this, it may be helpful for me to explain what needs to happen to prepare for the new tenancy system. Following Royal Assent, a raft of secondary legislation is needed to switch on the Section 21 ban, alongside important consequential amendments to other legislation. Guidance is being developed so that the sector is fully prepared for the new system. Court rules and systems need updating to reflect these new rules, and we have already committed to aligning changes to the tenancy system with improvements in the courts. We are working closely with the Ministry of Justice and His Majesty’s Courts & Tribunals Service to digitise the county court possession system, and we are investing some £11 million this year to design this new digital system. Other target areas for improvement include the prioritisation of certain serious cases such as anti-social behaviour and improving bailiff enforcement by enhancing recruitment and retention practices. We will also provide early legal advice and better signposting for tenants.
Although we know that a majority of landlords provide an excellent service for their tenants, the Government are committed to providing tenants with free and easy access to redress where their complaint has not been dealt with as it should be by their landlord. That is why the Bill allows for a new private rented sector landlord ombudsman. The ombudsman will have strong powers to support tenants, including being able to compel unscrupulous landlords to take or cease action and issue an apology or an explanation, and to award compensation where needed. For the vast majority of landlords who provide a quality service, the ombudsman will have the power to protect them by dismissing vexatious, malicious or unfounded complaints. It also means that fewer cases will need to be dealt with in the courts, further reducing burdens on the judicial system.
In the other place, we set out that the Government’s preferred provider for this service is the existing Housing Ombudsman, which already provides redress for the social rented sector. Although no final decision has been made, the Housing Ombudsman is uniquely placed to deliver a single streamlined service for both social and private tenants.
Home should be where we feel comfortable and safe but, for some tenants, the rooms and homes they live in, the stairs they climb and the air they breathe can be a clear and present danger. To improve quality and drive up standards, we are introducing a decent homes standard in the private rented sector for the first time. This will ensure that all tenants have access to the safe and decent homes they deserve. It will also support the Government’s aim to reduce the number of non-decent homes by 50% by 2030. We know that the vast majority of landlords already provide decent housing and a good service for their tenants. The decent homes standard will help good landlords by simplifying and clarifying requirements, while providing local councils with effective and proportionate enforcement powers to deal with the minority—I stress that it is a minority—who do not meet their obligations. It is imperative that we get the new standard right, ensuring that it is proportionate and fair. We are working closely with the sector to co-design it and make sure the balance is right between landlords and tenants. We will set out our proposals in due course.
The Bill will also introduce a new property portal, which will set out landlords’ responsibilities clearly in one place and support tenants to make more informed choices. It will also support local authorities by providing them with the information and tools they need to support enforcement and drive out the bad actors from the private rented sector. To ensure the new property portal works with existing requirements, we will review how it interacts with selective and HMO licensing. This includes how we can reduce administrative burdens and make the system more effective for landlords, tenants and local authorities.
Blanket bans on letting to families with children or people who receive benefits have no place in a fair and modern housing market. People are much more than their benefit status, and no two families are identical. Everyone in the private rented sector is entitled to access a safe and decent home, and landlords should consider prospective tenants on their individual basis. That is why the Bill will also ensure that no family is unjustly discriminated against when looking for a place to live. We are making it illegal for landlords and agents to have blanket bans on renting to people who receive benefits or to families with children. The Bill will address overt discriminatory practices, such as “No DSS” adverts, and indirect practices designed to intentionally prevent someone entering a tenancy. Working with the devolved Administrations, we intend to extend these measures to Wales and Scotland, further protecting vulnerable tenants from discrimination.
Everyone has the right to make the house they rent into a home and, for many, pets are part of that, which is why we are making sure that private landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home. We will give tenants the right to challenge unreasonable refusals. We know that some landlords are concerned about potential damage caused by pets, so landlords will be allowed to require insurance covering pet damage. This will provide landlords with reassurance that any damage caused by a pet can be taken care of, with the responsibility for damage caused by a pet falling explicitly to the tenant.
All the changes I have set out today must be underpinned by a robust, proportionate and effective enforcement framework. That is why we are extending councils’ powers to collect and retain revenue for future enforcement work from financial penalties against landlords who flout the rules. Local authorities will be able to issues fines of up to £30,000 in the most serious cases, with the alternative of a criminal prosecution. We are also introducing enhanced investigatory powers that will make it easier for local councils to obtain financial information from bad landlords when seeking to build a case against them for suspected abuse.
We understand that supporting local authorities to deliver these functions is critical. That is why we will ensure that additional burdens created by the new system are fully funded and that local councils are able to keep the revenue they receive from civil penalties ring-fenced for further enforcement activity.
I hope we can bring to scrutiny of this Bill a shared perspective that, when it works best, the private rental sector can deliver both a stable home and a healthy return for investors. The Bill seeks to support these aims by providing a comprehensive, balanced package of measures that will meet the needs of the sector for the 21st century. The Bill will give tenants the protections and security they need to feel truly at home in their communities, and give landlords the confidence that, if they do the right thing, they can be rewarded for providing those very homes. I beg to move.
Lord Frost (Con)
My Lords, I begin by thanking my noble friend the Minister for her comprehensive opening statement and for the time that she has already devoted to discussing the provisions of this Bill privately.
I think that I am the first speaker in this debate not to have to declare a relevant interest. I do not have any institutional housing interests, social, private or any other. I own one house and I live in it. If I do have an interest—and it is the reason that I speak today in this debate—it is the interest in living in a country that one day has a minimally functioning housing market. Unfortunately, we do not have that in this country. That should be the starting point for discussing the Bill.
We have an utterly dysfunctional housing market. We have far too little supply, as has already been noted. We last met the 300,000 building target in 1977 and, if we had been building at the same rate as the French over the past few years, we would have 4 million more houses than we do now. It is therefore not surprising that house prices are at nine times incomes—a historic high. Most policy has focused on Help to Buy schemes rather than expanding the supply.
Ideally, we would want a policy approach that involved building more houses of all kinds by liberalising planning, expanding supply in the rental market and, meanwhile, trying to make the market that we have work better and reducing the dysfunction. In fact, we are seeing that housebuilding is falling further. Last year, we built only 189,000 houses and, in the first quarter of this year, we are building at a rate of only about 100,000. There has been an attack on private landlords through the tax regime and the rental sector is shrinking. That, plus anticipation of the measures in this Bill, is taking private rental property off the market. It is therefore no surprise that, while sale prices for houses are flat, we are seeing rental prices in the private sector accelerate by 9%.
Now we have this Bill. I have philosophical concerns—that I think it is fundamentally unconservative, speaking as a Conservative politician—and I have practical concerns; namely, that it ties up and restricts the market still further and the practical effect will be to make things worse, not better. I regret that I must speak in these terms of a Bill that my own Government are bringing forward, but I think it is extremely problematic. If we want to help people—as has been said—into safe, secure, sound housing and reliable tenancies, we need to produce a better housing market and not distort it still further.
I have four specific concerns that I will briefly outline: first, the nature of the Government’s manifesto commitment and, secondly, its extent; thirdly, the restrictions that the Bill brings in on the use of property; and, fourthly, its developing complexity.
First, on the nature of the manifesto commitment that the Conservative Party and this Government made, I entirely accept that we committed to abolishing no-fault evictions—Section 21 evictions—but we also set in the manifesto a
“target of 300,000 homes a year by the mid-2020s”,
which has not been met, and promised to
“make the planning system simpler for the public and small builders”,
which also has not been met. We made an effort in the early years of this Government; it got blocked and, since then, we have given up the attempt.
These two things go together: one liberalises supply; the other constrains the market. I wish we had focused only on building houses and reforming the planning system, but at least together, there is some sort of balance. Now, we have dropped the commitment to build more houses and liberalise the system, but we are pushing though the provisions that tie up the market still further. This will only damage housing affordability further.
My second point concerns the extent of the manifesto commitment. As I said, we committed to abolish no-fault evictions. We did not commit to end fixed-term tenancies, and they are not the same thing. Section 21 is a way, among other things, of ensuring that landlords can reliably get possession, after the first 12 months in an AST, at two months’ notice. If we abolish Section 21, another way of providing some certainty for landlords that they could get their property back would be to leave open the option of agreeing another fixed-term tenancy, for another year or whatever. The Bill removes that option. It scraps fixed-term tenancies entirely and makes every tenancy rolling, bringing in the possibility that landlords will have to go to court much more often to recover their property. I repeat: one commitment is in the manifesto and another is not. That is why my honourable friend Anthony Mangnall MP tabled Amendment 10 in the Commons providing for the maintenance of fixed-term tenancies, and I am ready to table it again to ensure that we can have some debate on the subject and so that the Government can explain why they have expanded their commitment to take in fixed-term tenancies.
My third concern is philosophical. The Bill takes another step away from normally understood property rights. Even if both parties want to, they cannot agree a fixed-term tenancy; it is illegal. A landlord may no longer choose who they want to rent to. Landlords must accept pets. They cannot simply recover their own property but must persuade the courts—the state—that they have a justifiable reason for doing so. We are already too far down the road, as a Government and as a country, of accepting that people enjoy property rights only at state whim, and only in line with the purposes of the state. I am afraid that the Bill takes us a step further down that road.
My final concern is practical. Looking at the way the Bill has evolved in the Commons, I cannot avoid the impression that, in their heart, the Government know it is a bad Bill and are trying to mitigate it, under pressure. They have realised, for example, that the redress schemes, the decent homes standard and the PRS database, all of which may be good things in themselves, will reduce flexibility and push up costs. The Government have realised the risk that restrictions on long-term lets might bring in a shift to short-term ones, so they have brought in some rules to cover that situation too—though I note that these too will now require further mitigations to deal with special circumstances.
Of course, as has been noted, the Government have had to accept that the court system is not ready to deal with the abolition of Section 21 in full, and they have had to delay its introduction, so we are not even getting credit from our political opponents for the one thing that was supposed to be the purpose of the Bill in the first place. Everything that has happened in the Commons has brought in complexity, cost and delay to the system, and these are the very things that will drive more landlords out of the market, push up prices further and make the market even more dysfunctional than it is now.
To conclude, and I am sorry to conclude in this way —noble Lords will know that it is with great reluctance that I criticise the policy of my own Government—it is a poor Bill and I do not think it is getting any better as it proceeds through the Commons and through this House. It is inevitably going to make the private rented sector smaller and more expensive. It is pursued from the best of motives, but its consequences will be that housing supply shrinks and the cost of housing goes up. It will generate more social problems rather than mitigate them. I am sorry that the Government are pursuing it, but I hope that it will still be possible in Committee to improve on some of the fundamental points that I have mentioned, and in particular to retain fixed-term tenancies as an option. I hope some noble Lords will join me in that effort.
Baroness Swinburne (Con)
My Lords, it is a pleasure to close this debate and to reflect on the thoughtful contributions that we have heard. I should first perhaps disclose that I have been a very happy tenant for many years, with successive landlords who have welcomed my dog, cat and children—so, for me, the private rental sector plays a valuable role, and the Bill’s intention is to make the system work better for both landlords and tenants.
I am grateful for the diverse, wide-ranging and sometimes contradictory contributions that have been made today, and I will attempt to address the points raised in turn—although they may not be in order, because my papers seem to have got a little jumbled.
I turn first to the abolition of Section 21 and court reform, raised by the noble Baroness, Lady Taylor of Stevenage. She raised the issue of Section 21 being abolished immediately following Royal Assent. Our priority remains ending Section 21 as soon as reasonably possible. As these are the largest changes to the private rental sector in over 30 years, it is critical that we introduce them in a way that both protects tenants’ security and retains landlords’ confidence in the new system. As I stated in my opening remarks, there is a raft of secondary legislation that will be required to achieve that; therefore, it cannot be done at Royal Assent.
The reforms in the Bill will need to be supported by a robust and efficient court system for possession. While the vast majority of tenancies end without any need for court action, an effective and efficient court system must be available for landlords and tenants who need it. We are committed to ensuring that the reforms in the Bill are appropriately supported in the courts. We have already invested £1.2 million in the Courts and Tribunals Service to deliver a new end-to-end online possession process. On top of that, this financial year we are investing a further £11 million to deliver the digital architecture for a new, fully digitised system going forward.
The analogue system is being worked on now to help process the new Section 8 possessions on new contracts as soon as possible. The digitisation of the processes will follow as soon as possible for the existing contracts, provided that the Lord Chancellor’s court assessment suggests that the system can cope. The noble Lord, Lord Carrington, and other noble Lords asked about this; I will attempt to supply a visual chart for setting out indicative timelines for the Section 21 phases and the total abolition as we discuss this over the coming weeks.
With regard to abolishing the fixed terms, noble Lords raised concerns about the shift to periodic tenancies and the removal of bilaterally agreed fixed-term contracts, and we have had two sides of the House completely disagreeing on how this should be carried out. As noble Lords suggested, we have introduced a restriction on the tenant giving notice to leave within the first six months. That will ensure that landlords have a sufficient guarantee of rent and enough notice to find new tenants, and will stop tenants using rented properties as short-term lets. After six months, tenants will be able to serve two months’ notice at any point, which is a significant improvement in flexibility compared with the current system. Of course, we expect many to stay for the long term.
Lord Cromwell (CB)
I think the tenant can serve notice after four months but they leave after six months. Can the Minister confirm that that is correct?
Baroness Swinburne (Con)
I will check that but my notes tell me that it is six months before they can serve their notice.
I reassure the House that we are exploring potential exemptions to this six-month period in extreme circumstances, such as where there are serious health hazards, the death of a tenant, for victims of domestic abuse, and other such important issues. We will bring these forward as the Bill progresses.
With regard to domestic violence, as many noble Lords raised, we recognise that domestic abuse can be interpreted as anti-social behaviour by neighbours—for example, frequent shouting and intolerable noise. It would be wrong to evict victims, which is why it is important that the judicial discretion is used in ground 14 eviction cases. To consider eviction would be a reasonable step in these circumstances.
Many noble Lords raised the issue of a longer notice period for possession grounds, and powerful arguments for that have been made today. However, we believe that the notice periods for the grounds are set at a length which balances the needs of both tenants and landlords. They give tenants time to find a new home while ensuring that landlords can manage their assets when they need to.
Noble Lords have called specifically for tenants to be protected from the moving and selling ground for a longer period at the start of their tenancy, and we are already protecting tenants’ security by ensuring that landlords will not be able to use these grounds in the first six months of a tenancy. We believe that six months strikes the right balance between improving security and, of course, allowing landlords to continue to feel confident in the market.
The Government are committed to preventing homelessness before it occurs. The Bill will help to do that by abolishing Section 21 evictions, giving tenants greater security of tenure and, we hope, reducing the risk of homelessness. We are also providing total support of £108 billion over 2022-25—an average of £3,800 per UK household—to help households with the high cost of living. This includes increasing the local housing allowance to the 30th percentile of market rents from April, which will mean that 1.6 million low-income households will be around £800 a year better off on average in 2024-25, and over 740,000 have been prevented from becoming homeless or supported into settled accommodation since 2018 through the Homelessness Reduction Act. Between 2022 and 2025, we are investing over £1.2 billion into the homelessness prevention grant, which funds local authorities to work with landlords to prevent evictions and offer alternative sources of accommodation.
With regard to Awaab’s law, I am grateful for this being raised. We agree that no tenant should have to live in dangerous housing conditions. We are taking steps to ensure that hazards in rented homes are dealt with, but how we achieve this needs to take into account the differences between the private and social rented sectors.
Awaab’s law was developed for the social housing sector, in which landlords manage large portfolios of usually between 1,000 and 10,000 properties, and have dedicated repairs and maintenance teams. We believe that it is not the right approach for the private rental sector, in which 82% of landlords have fewer than five properties. Instead, we are strengthening enforcement against hazards in private rented homes. Local councils will be able to issue immediate fines of up to £5,000 if a dangerous hazard is present in a privately rented property and the landlord has failed to take reasonably practical steps to address it. We are also introducing the decent homes standard in the private rental sector for the first time, providing local councils with enforcement powers to require landlords to remedy failures to meet requirements.
Lord Khan of Burnley (Lab)
We had all these enforcement measures in the social rental sector but we still brought in Awaab’s law. The argument is for enforcement and the decent homes standards, but in the social housing sector we had all the support mechanisms in place—I understand the difference between large social housing and houses for couples or mum-and-dad families—so why the differentiation? Why could we not have Awaab’s law? The Minister says that this is a different situation, but there is still the opportunity to enforce and fine social housing landlords, so why differentiate?
Baroness Swinburne (Con)
The difference, as I have just alluded to, is between one person having to get external maintenance people in, and so be at the mercy of their agenda, and maintenance crews that can be sent to those areas that need prioritising. I have a huge number of questions to get through, so I apologise for being abrupt.
Many noble Lords raised concerns about the impact of reforms on the student market. Since introducing the Bill, we have heard from across the sector that, as originally drafted, the Bill would have interrupted the student housing market, reducing the supply of vital properties in university towns and cities. We have listened to these concerns and have introduced a new ground for possession which will allow landlords renting to students to seek possession ahead of each new academic year, facilitating the yearly cycle of short-term student tenancies. The ground has been carefully designed to balance the needs of both landlords and students. It will apply to any property that is let to full-time students, as long as the landlord gives prior notice to tenants at the start of the tenancy that the ground will apply.
Regarding different dates being used rather than the traditional academic year, there is nothing to stop landlords renting properties in January to students starting their studies at that time. Most students will continue to move in line with the traditional academic year. This ground provides a backstop for the majority of students studying from September. The alternative would be to allow the ground to be used at any point in the year, which would give tenants no certainty.
Baroness Taylor of Stevenage (Lab)
I asked whether the Minister would talk to the universities sector about this. It has made very strong representations and knows far more about this than I do, and noble Lords around the Chamber have mentioned that as well. Will the Minister please meet the universities sector to understand properly its concerns before we go much further with the Bill?
Baroness Swinburne (Con)
I assure the noble Baroness that those discussions are already ongoing. The department is in intense discussions with that sector, and has been since the introduction of the Bill in the other place.
Regarding MoD accommodation, as a result of discussions in the other place we are looking to apply the decent homes standard to homes for service personnel and their families. Service personnel and their families deserve homes that are safe and decent, just like everybody else. While 96% of service family accommodation already meets the decent homes standard, it is right that we explore whether we can put in further safeguards on housing quality for this sector. However, there are features in service accommodation that mean that we must consider carefully the approach that will work best in practice. This includes the fact that significant proportions of this accommodation are located on secure military sites. The department is therefore working closely with the Ministry of Defence and local authorities to urgently explore these matters and work out how this can be done.
The noble Baroness, Lady Pinnock, and others raised local authority funding. We are fully aware that local authorities need to prioritise taking enforcement action against criminal landlords and that it is essential to the effective implementation of the reforms. We are taking steps to facilitate and resource action against landlords who flout the rules. The new property portal will support local authorities in their enforcement action. It will provide information sources to enable local authorities to take action, and we are extending ring-fenced penalties to support a “polluter pays” approach. We will also ensure that net additional costs that may fall on local authorities are fully funded, and we have already taken action to support local authorities now. Our pathfinder programme has allocated £14 million to test innovative ways to create sustainable enforcement teams that can be shared across all local authorities. In addition, our healthy homes project provides funding for local authorities to test ways of increasing the compliance of landlords in tackling damp and mould.
On pet notice periods, while I appreciate that tenants will want their requests answered as quickly as possible, 28 days seems to be too short, following discussions. A landlord could be on holiday or there may be other reasons why they have not responded within a 28-day period. Therefore, we suggest that 48 days gives reasonable time for landlords but prevents them delaying indefinitely.
Regarding affordability, the local housing allowance and rent increases, some noble Lords rightly highlighted concerns about the affordability of housing; others expressed their concern about being able to charge market rates—I will try to try cover both of those points. We recognise the cost of living pressures that tenants face and that paying rent is likely to be a tenant’s biggest monthly expense. The Government are investing £1.2 billion in restoring local housing allowances, and raising them, and that significant investment means many of these low-income households will gain a significant amount of money to help them towards their rental costs. For those most in need, discretionary housing payments are available to help meet housing costs, and the household support fund has been extended to March 2024 to help with the cost of essentials. I will check those dates for the House—I just said March 2024 and we are beyond that, so I will check and make sure we correct it.
Baroness Swinburne (Con)
I thank noble Lords.
Some noble Lords were concerned that the Bill restricts landlords’ ability to charge a market rent. I will be very clear: this Government do not believe in rent controls, unlike the noble Baroness, Lady Jones. Nothing in this Bill prevents landlords increasing rents to the market rate each year or dictates what rent they can charge at the start of a tenancy. Tenants can appeal above-market-rate increases to the First-tier Tribunal, which will make an objective assessment and determine whether to raise, or indeed lower, the proposed rent. The noble Lord, Lord Marlesford, referred to the First-tier Tribunal—I think he wanted it to go. We are working closely with the Ministry of Justice and the judiciary to assess the impact on the First-tier Tribunal of this new Bill. We anticipate that the reforms will lead to an increase in cases, but we will ensure that the tribunal has the capacity to deal with these cases.
Regarding overall supply, noble Lords asked what measures in the Bill will mean for supply in the private rental sector. I will try to reassure noble Lords—if not today, maybe as we go through the Bill—including the noble Lords, Lord Frost and Lord Carrington, and the noble and learned Lord, Lord Etherton, that there is no evidence to suggest that a fairer private rental sector for tenants and landlords will lead to a reduction in supply. The statistics I have from the department suggest that the sector doubled in size from 2004, peaking in 2016, and has remained roughly stable since then; we will continue to monitor the impacts. New costs to landlords are expected to amount to a tiny fraction of average annual rents, at approximately £10 per landlord in England. We are by no means complacent and recognise the vital role that good landlords play in providing homes for millions of people across the country. That is why the Bill requires the department to provide an annual update to Parliament on the state of the private rented sector, to include stock, size and location of properties.
With regards to social housing supply, noble Lords have heard me talk at this Dispatch Box, on a number of occasions, about the affordable homes programme of £11.5 billion. I will not rehearse those arguments today in the interests of time, but they underpin the supply part of the equation. Since 2010, there have been an additional 482,000 affordable homes for rent, of which 172,600 are for social rent.
On retired clergy, the right reverend Prelate the Bishop of Chelmsford raised concerns that the Church of England Pensions Board will no longer be able to evict existing tenants to house retired clergy. The way this has been achieved until now is through the use of Section 21, which we are abolishing. Ground 5 allows landlords to evict tenants from properties which are usually held to allow ministers of religion to perform their duties when needed again for that purpose. She is therefore correct that the ground will not apply in situations where they wish to house retired clergy. We have carefully considered the needs of tenants and religious organisations when reviewing the grounds for possession, and we believe that the ground balances the unique needs of the sector—ensuring that religious ministers can occupy properties where needed to carry out their duties—with the rights of existing tenants.
I will write to the noble Baronesses, Lady Pinnock and Lady Warwick, about the ground 1B impact on social landlords and how we will select the administrator for the PRS ombudsman. I bow to the experience of ombudsmen of the noble Baroness, Lady Warwick, which is much greater than mine, but I can tell her that the Bill allows for government either to select a scheme through an open competition or to appoint a provider to deliver a designated scheme. To reiterate, we have not made a final decision on what is happening, and we are not ruling out the possibility of delivering this through alternative provision. Our priority is choosing a provider that offers a high-quality, value-for-money service. I will seek the clarification that she has asked for and will revert with more detail on the process being used as discussions continue on the Bill.
On the cost of the ombudsman, which the noble Lord, Lord Marlesford, raised, it is right that the landlords pay for this scheme. It is in line with common practice for funding other redress schemes, including for social landlords, who pay some £5.75 per unit for membership of the Housing Ombudsman scheme. We will ensure that the fee for private rental is proportionate and good value.
On portal offences, local authorities will have a duty to enforce where landlords fail to comply with their portal obligations. Tenants who become aware that a landlord is, for example, not registered on the portal or has provided inaccurate information can contact their local authority so that they can take the appropriate enforcement action.
I reassure the noble Lord, Lord Truscott, that we recognise the importance of having a healthy supply of private rented homes at affordable prices in all parts of the country, which is why we are taking decisive steps to stop short-term lets undermining the supply of long-term homes for local people. This includes abolishing the furnished holiday lettings tax regime, introducing a national mandatory register of short-term lets, and introducing a new planning use class for short-term lets.
On the suggestion by the noble Lord, Lord Adonis, that we should introduce a specialist housing court, we do not think that this is the best way to improve the court process for possession. This view is shared by the judiciary, which responded to our call for evidence. A new housing court would not address the concerns raised by landlords, such as the timeliness and complexity of the processes. We are committed to reforming the court system instead. Indeed, the majority of tenancies end without ever going to court. For those that do, where court reform is necessary, we will make sure that the system is working. The new system will have great new training for the analogue system to do the immediate new contracts, followed by digitisation. I am a lot more optimistic that new, large digitisation projects can now be delivered on time, and I am confident that we will be able to scope and deliver this as quickly as needed.
If it is okay with the House, I will continue, as there is not much left. On the portal duplicating the work of selective licensing, unlike the property portal, selective licensing schemes aim to target specific local issues by enabling more intensive, proactive enforcement strategies. The two are therefore complementary and do not prevent each other from working.
The question from the noble and learned Lord, Lord Etherton, was very detailed and, I am sure, very precise. I will write to him on it once my department’s legal experts have had time to consider his points—otherwise, I am in danger of stepping into waters that I cannot.
With regard to the comments on guarantors, we recognise that some tenants have difficulties in meeting such requirements. The use of guarantors and upfront rent can give landlords confidence to rent to individuals they might otherwise not choose to, but we will continue to carefully monitor both practices, to ensure that they are not having an adverse effect on the market. We have already committed to limiting upfront rent through the Tenant Fees Act if necessary.
With regard to the death of a tenant, we are extending the period for ground 7 to be used. The Government are aware that tenants who have been living in a property for a while may reasonably believe that they have a right to remain living there, which is why we have introduced an extension from 12 to 24 months to help resolve cases where disputes might arise, particularly for grieving tenants.
With regard to legal aid, which was mentioned by the noble Baronesses, Lady Thornhill and Lady Lister, the Ministry of Justice is investing an additional £10 million a year in housing legal aid through the non-means-tested Housing Loss Prevention Advice Service—HLPAS—to give people the best chance of keeping their home when they fall into difficult financial times. Through this scheme, tenants can receive free, non-means-tested advice as soon as they receive written notice that their landlord is seeking possession of their home. The MoJ is funding a panel of specialist legal advisors to provide grant funding for the recruitment of trainee solicitors to support that endeavour. Free on-the-day legal help will continue to be available when a tenant is facing the loss of their home at a possession hearing in the county court.
It is true that private landlords must meet existing minimum efficiency standards—the MEES regulations—which are set at EPC E. Although we will not tighten that requirement, as we have in the social sector, we will work with landlords. We are currently investing some £6 billion this Parliament and a further £6 billion to 2028 on making buildings cleaner and warmer; this is in addition to the £5 billion that will be delivered through the energy company obligation, ECO4, and the Great British insulation scheme up until March 2026. Landlords can and should participate in these schemes to upgrade their properties.
In conclusion, I thank all noble Lords—
Baroness Warwick of Undercliffe (Lab)
My Lords, I do not wish to prolong this. In relation to the comments that the Minister made on ongoing discussions about the role of the landlord ombudsman, could she undertake to ensure that the following is taken into account? The Cabinet Office guidance makes clear the importance of avoiding
“multiple redress schemes within individual industry sectors”,
and goes on to note that this is best achieved
“by utilising existing Ombudsman schemes”.
I hope she will take that into account, or ensure that it is taken into account.
Baroness Swinburne (Con)
I will take that into account, but I also extend an invitation to the noble Baroness to meet my team to discuss this in more detail.
Lord Cromwell (CB)
Just before the Minister sits down, I have a very simple and short question; it is the one I raised right at the beginning of my contribution. Is it the Government’s view that this Bill will increase the availability of rental accommodation, or not?
Baroness Swinburne (Con)
As a quick answer, I cannot give the noble Lord that clarification. The intention here is to improve the quality of private rental sector stock, improve tenants’ rights and make sure that landlords have the ability to get back their property when they require it. With regard to the numbers, I will go back to officials in the department and ask for an assessment of whether they think that it will increase the supply. They tell me they do not think it will decrease the supply; I will now go back and ask whether it might increase it.
Lord Cromwell (CB)
I thank the Minister for that very worthy answer; these are very worthy objectives. I think the answer she is giving me is: “No, it’s not going to increase”, but I appreciate that she is not quite vocalising that. I think all the indications are that it will decrease it, but we shall see.
Baroness Swinburne (Con)
As I said, there will be an annual report, which will monitor in detail the impact of the Bill, and going forward we will have the data in granular detail as a result of the private rented property portal, once it is established.
Lord Frost (Con)
I apologise. I too do not want to prolong this, but I and a number of noble Lords mentioned concern about the abolition of fixed-term tenancies. The Minister mentioned that briefly at the start of her summing up. Will she undertake to set out in a little more detail—not now, but on a future occasion or in writing—the Government’s reasoning as to why it is necessary to abolish fixed-term tenancies, as well as Section 21, as an option?
Baroness Swinburne (Con)
I undertake to do that. I invite all Peers who would like to do so to come to discuss these things in detail over the course of the passage of the Bill. I will put further dates forward ahead of Committee, so please make use of them. I am available to have those discussions throughout.
I believe the Renters (Reform) Bill honours the Government’s 2019 manifesto commitment to create a private rented sector that works for everyone and to level up housing policy in this country. The reforms in the Bill will give tenants greater security in their homes for generations to come. The Bill will also support landlords, ensuring that they have the confidence to invest—to invest more, we hope—in the private rented sector in England. I look forward to working with noble Lords during the passage of this important Bill.
Baroness Swinburne
That the bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the bill in the following order:
Clauses 1 to 4, Schedule 1, Clauses 5 to 26, Schedule 2, Clauses 27 to 65, Schedule 3, Clauses 66 to 90, Schedule 4, Clause 91, Schedule 5, Clauses 92 to 138, Schedule 6, Clauses 139 and 140, Title.