Renters (Reform) Bill
Monday 23rd October 2023
(1 year ago)
Commons ChamberRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
I beg to move, That the Bill be now read a Second time.
Before I get into the detail of what the Bill allows for and the reforms that it portends, may I say a few words of thanks? In particular, I thank my hon. Friend the Member for Walsall North (Eddie Hughes). During his time at the Department, he was responsible for the White Paper that essentially did the groundwork for the Bill, but prior to working in the Department, he worked for a variety of third sector and voluntary organisations, helping the homeless and standing up for those in poor-quality housing. His foreword to the recent report by the Centre for Social Justice on the importance of reform in the private rented sector is both eloquent and effective. May I take this opportunity to thank him for his excellent work?
I also thank the Centre for Social Justice, which was founded by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) some time ago. The report that it has prepared makes a compelling case for reform in the private rented sector, in order to help those most in need. May I also thank those organisations, including Shelter and the National Residential Landlords Association, that have supported me and the Department in framing this legislation?
May I also thank the Levelling Up, Housing and Communities Committee and its Chair, the hon. Member for Sheffield South East (Mr Betts), for the recommendations in its report on the need to reform the private rented sector? There were a series of recommendations in the report, upon which we have acted. It is the case that we will bring forward changes to ensure that the student market, which operates differently from other aspects of the private rented sector, is regulated in a different way; it is the case that we will bring forward details of a decent homes standard in the private rented sector, as requested by the Select Committee; and it is the case that we will ensure that the justice system, which is controlled by the Ministry of Justice and His Majesty’s Courts and Tribunals Service, is fit for purpose before we move ahead with some of the reforms in the Bill.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I add my thanks to my right hon. Friend for finally publishing a response to the Select Committee? He will recall that, as Chair of the Liaison Committee, I wrote to him last week—he responded very promptly, for which I am grateful. However, the Government’s response was published only on Friday, more than six months after the Committee published its original report, yet it is de rigueur in the civil service code that responses should be published within two months. Will he explain to the House why it took so long, can he give an assurance that it will not happen again, and will he say what measures are being taken to ensure that such delays will not recur?
Michael Gove
My hon. Friend makes an important point, which gives me an opportunity to apologise to the House, on behalf of the Government, my Department and in particular myself, for the delay in responding to a number of Select Committee reports that have been put forward. The Chairman of the Select Committee knows that I hold him and his Committee in the highest regard. I deeply regret the delays in responding to the many excellent reports that the Select Committee has put forward. The reasons for that relate to policy discussions within Government. We wanted to make sure that we had a clear and settled position in response, but that does not excuse us of the need to do better. I have discussed with Ministers and others in the Department the vital importance of responding quickly and showing respect for this House, so may I again apologise to my hon. Friend and to the Chairman of the Select Committee?
Tim Farron (Westmorland and Lonsdale) (LD)
The delay has cost hundreds of families in my constituency their homes. Section 21 evictions have been carried out on so many families, as the sector has moved into the Airbnb short-term let market. Will the Secretary of State apologise to those families? Will he also very quickly bring in the change of use designations that I know he is considering, to ensure that short-term lets and also second homes are separate categories of planning use, so that we can protect our lakes and dales communities and ensure that they can survive?
Michael Gove
As the hon. Gentleman knows, I have an enormous amount of respect for the work that he does in this area. I would draw a distinction between the response to the Select Committee’s report and the bringing forward of legislation, but he is absolutely right to draw attention to the fact that we need to consider—and we are—our responses to the consultations on registration and on changes to planning use requirements in the short-term let market. We hope to come forward shortly with our response to those consultations. I should also say that I had the opportunity last week to talk to the founder of Airbnb, and I outlined concerns very similar to those that the hon. Gentleman has outlined.
Michael Gove
I will not give way at this stage; I will make a wee bit of progress, then I hope to give way shortly.
I want to emphasise that a healthy private rented sector is in all our interests. Making sure that both landlords and tenants have a new deal and a fair deal is critical.
Michael Gove
Not for the moment.
The private rented sector has doubled in size since 2004, to the point where it now constitutes between 19% and 20% of the total housing stock in our country. Given the number of people in the private rented sector, it is absolutely vital that we ensure that tenants have the rights that they deserve, while also recognising the importance of the private rental sector to our economy and the fact that the overwhelming number of private landlords provide an excellent service. It is also important that we provide them with the rights to redress required when dealing with antisocial tenants, tenants in arrears or other factors that may mean that they need to have recourse to securing vacant possession of a property.
The private rental sector is vital for reasons of labour mobility and personal convenience and, overall, because of the different ways that we respond to the labour market and other pressures at different points in all our lives. We need a healthy private rented sector. I would like to place on the record my thanks to Ben Beadle and the National Residential Landlords Association for the work they have consistently done to ensure that the voice of landlords is heard and to ensure, as Ben Beadle has made clear, that landlords, the overwhelming majority of whom provide a good service, can be certain—because of our property portal, the ombudsman and the other changes in the Bill—that the small minority of poor landlords who victimise tenants can be driven out of the system and the good name of those in the private rented sector upheld.
Several hon. Members rose—
Michael Gove
I am very happy to give way to the hon. Member for Brighton, Pavilion (Caroline Lucas), then to the hon. Member for Strangford (Jim Shannon), then to the hon. Member for Chesterfield (Mr Perkins) and then to the hon. Member for Enfield North (Feryal Clark).
Caroline Lucas
There is plenty to welcome in this Bill, but it should have been an opportunity to increase minimum energy efficiency standards. When the Secretary of State for Energy Security and Net Zero last week tried to defend the scrapping of energy efficiency standards for the PRS, she essentially said, on the Floor of the House, that it was because they could cost property owners up to £15,000. The right hon. Gentleman will know that the regulations include a £10,000 cap, so the cost cannot possibly be £15,000; indeed, according to the Government’s own assessment, the average cost of upgrading homes to an energy performance certificate rating of C would be less than £5,000. Will he please correct the record, apologise on behalf of his colleague, who has misled the House, and put it on the record that it could not possibly cost £15,000? His own assessment suggests that it costs less than £5,000.
Michael Gove
I am grateful to the hon. Lady; no one could doubt her sincerity or her commitment to making sure that we improve the condition of homes and that we deal with energy efficiency. The first thing to say is that the cost will be determined in the market. The amount that an individual might have to pay can be capped by legislation, but the cost is a function of the market. The second thing that it is important to stress is that the decent homes standard, and indeed the work we are doing on retrofitting overall, will improve, and has improved, energy efficiency, but we need to balance the improvement of energy efficiency against the costs that individual landlords and tenants face in a cost-of-living time that is challenging.
Jim Shannon
The Minister is right to say that the encouragement of private landlords is important to ensure that rental properties are available, but it is also incredibly important that unscrupulous landlords are not facilitated in avoiding their obligations. In relation to the obligations, Citizens Advice has recently announced some figures, which show that 48% of evicted tenants have been told that their landlord wanted to sell. This is a common reason for ending a tenancy. With respect, nothing in this legislation suggests that landlords must give evidence that they have followed through on their intention to sell. Will the Minister rectify that?
Michael Gove
Of course, landlords and any property owner must have the right to sell their home if they need or wish to do so; nothing should interfere with that. None the less, it is the case that there may be circumstances in which there will be some landlords who use an attempt to sell, or a claim to sell, as a feint in order to evict a tenant. In Committee, we will explain how we will ensure that, in those circumstances, the situation is effectively dealt with.
Mr Perkins
I thank the Secretary of State for giving way. This weekend I was out meeting flood victims in Chesterfield. The flood damage of one of them was up to 3 feet high in their front room. They were told by the landlord, who was busy as I arrived, hoovering the carpet, which had sewage and river effluent all over it, that they must accept that the landlord would attempt to clean the carpet rather than a renter expecting a new one and that if they would not tolerate that, she would end their tenancy and throw them out. Does that not demonstrate how the balance of power between landlords and renters is totally skewed? Is there not all the more need for the strongest possible legislation to ensure that we do take action against those rogue landlords?
Michael Gove
I agree with the hon. Gentleman up to a point, but I would not characterise it in quite that way. On the basis of everything that he has said, that was completely the wrong response from the landlord concerned, but I would stress that there is only a minority of bad landlords and also that the law clearly delineates, and has done so for some time, the responsibilities for repair between the tenant and the landlord. It is important that we always strike a balance between the need of landlords to ensure that their business is effective and the protection that tenants enjoy. If the hon. Gentleman writes to me about that specific case, I will see what I can do to help.
Feryal Clark (Enfield North) (Lab)
I am grateful to the Secretary of State for giving way. My constituents, Esther and Fred, lost their son two weeks ago in the most horrific of circumstances. The very week that they lost their son they were served a section 21 notice, despite the landlord knowing their circumstances. What message does it send to renters like Esther and Fred that the Government are yet again delaying the abolition of section 21 evictions?
Michael Gove
I am deeply sorry to hear about the personal tragedy that the hon. Lady’s constituents have suffered—please do pass on my sympathy and condolences. I would say, though, that this Bill leads to the abolition of section 21, and it does so in a way that I believe is right and proportionate. I will explain why I think it is necessary, but before doing so I must give way to the right hon. Member for Islington North (Jeremy Corbyn).
Jeremy Corbyn
I thank the Secretary of State for giving way. I noted he said that, nationally, around 20% of the population live in the private rented sector. In constituencies such as mine, the figure is 30% to 35%, and many people feel very insecure in their lives. For those on universal credit and housing benefit, the problem is that the local housing allowance does not meet their rent needs. Therefore, they are actually subsidising landlords through their benefits and living in desperate poverty as a result of it. In turn, this forces people in mainly ex-council properties to leave the borough, so we end up with a sort of social cleansing of our inner cities all over the country. Does the Secretary of State understand that we need rent control, so that those people who cannot afford to remain in their own home get some comfort and are allowed to continue being a valuable part of our local communities?
Michael Gove
Although the right hon. Gentleman and I have had many disagreements, there is no one who doubts that he is a very assiduous constituency Member, and he is right that the pressures faced by a number of people in the private rented sector are significant. The principal reason for those rental pressures is inflation. We can debate the causes of inflation, but this Government are determined to do everything possible to halve it. and I believe the steps that we are taking have shown progress so far.
Michael Gove
Please forgive me; I am just responding to the right hon. Gentleman. It is the case that our effective system of tribunals ensures that excessive rents that are way out of kilter with the market can be dealt with. However, one of the challenges of rent controls of the kind that I believe he is advocating, and that have been advocated by others on the Labour Front Bench, is that they are proven to reduce supply overall, and a reduction of supply on the scale that an intervention of the kind that he puts forward would only increase rents and reduce the capacity of people to be able to live in the private rented sector.
Mr Marcus Fysh (Yeovil) (Con)
Does my right hon. Friend not agree that the Bill would do exactly what he has just been saying is the problem with rent control, which is to drive private landlords out of the market? Is that not entirely contrary to the Government’s main aim right now, which is to bring down inflation? Private rents are the key cause of core inflation, and this is a disastrous Bill for every renter in the country who wants to see a well-supplied housing market.
Michael Gove
I am very fond of my hon. Friend, but that is just not true. We have seen an increase in the number of homes in the private rented sector recently, not a reduction. [Interruption.] As we say in Scotland,
“facts are chiels that winna ding.”
There is no evidence at all that the abolition of section 21, and at the same time the enhancement of section 8, will lead to any reduction in the number of homes in the private rented sector. However, let me say to him, and to the whole House, that what we need is not so much an arbitrage between the private rented sector and the number of homes available for private ownership, or indeed the social rented sector, but more homes overall. It is that which is at the root of our challenge, and we will solve it with our long-term plan for housing, which was outlined in July of this year.
Several hon. Members rose—
Michael Gove
No, I have been generous so far. Every intervention only takes time from those who wish to contribute to the debate. Let me develop my argument and then I will give way to some other colleagues—but perhaps not all.
I just wish to stress what the abolition of section 21 involves. Getting rid of section 21 means that a weapon used by unscrupulous landlords can no longer be in their hands. Essentially, section 21 no-fault eviction is used by that small minority of bad landlords to intimidate tenants. It is the case that a significant number of tenants have concerns about the quality of their home, or indeed about excessive rent rises, but section 21 has been used to silence those who have complained about the quality of their property, to intimidate them into accepting excessive rent rises, and in certain circumstances it has been prosecuted anyway, leading to a significant number of people—20,000 in the past year—finding themselves rendered homeless, and therefore the taxpayer and local authorities having to pay for their accommodation.
It is in nobody’s interests to allow unscrupulous landlords to continue to behave in this way, to allow vulnerable people to be rendered voiceless in this way, and to force the taxpayer to pick up the bill. The idea that abolishing section 21 is somehow un-Conservative is to me absolutely nonsensical. Conservatives exist to protect the vulnerable in society, to make sure that markets work and to save the taxpayer money. I have to say to any hon. Member who thinks that such a policy is un-Conservative that they should consider the Conservative record. The artisans’ dwellings Act 1875, the Law of Property Act 1925, the Leasehold Property (Repairs) Act 1938, the Landlord and Tenant Act 1954, the Landlord and Tenant Act 1985—when Margaret Thatcher was Prime Minister—the Housing and Planning Act 2016 and the Tenant Fees Act 2019 were all Conservative measures introduced by Conservative Prime Ministers in order to ensure that the private rented sector could work better and, critically, they all make provision for the rights of tenants.
Mr Deputy Speaker (Sir Roger Gale)
Order. I think that I am right in saying that the hon. Lady has only just entered the Chamber. She should wait for a wee while before she rises to intervene.
Several hon. Members rose—
Michael Gove
I will give way to colleagues in a moment. The key thing to consider when thinking about how those in the private rented sector live is that the overwhelming majority of landlords do a great job, but we know that, because of section 21, 23% of tenants in that sector who wished to complain about conditions chose not to do so, and 31% of those who did were subsequently evicted under section 21. As I mentioned, 20,000 people were assessed as homeless as a direct result.
I am absolutely committed—as was the right hon. Member for South West Norfolk (Elizabeth Truss) when she was Prime Minister, as was the former Member for Uxbridge and South Ruislip when he was Prime Minister, and as all Conservative Members were when we put it in our 2019 manifesto—to getting rid of section 21, but it is important to recognise that in so doing we need to strengthen the provisions that landlords have in order to deal with those tenants who, for whatever reason, need to be evicted from their property.
We are outlining an extensive range of provisions under section 8. We are moving to ensure that antisocial behaviour is dealt with more effectively by making it mandatory grounds for removing a tenant. We are lowering the threshold so that it is easier to establish antisocial behaviour. We are dealing more effectively with rent arrears, and the way in which some unscrupulous tenants have hitherto manipulated the system on rent arrears. We are making it clear that anyone who wishes to occupy their property because they need to sell it, repair it, or have family member within it, or for any other reason, can do so. It is about strengthening both protections for tenants and powers for landlords in the cases where they need it.
Several hon. Members rose—
Michael Gove
I am now more than happy to give way to a range of colleagues.
Mr Deputy Speaker (Sir Roger Gale)
Order. I will allow the right hon. Gentleman to do that in just a moment, but first let me set the record straight. The Clerks have informed me that the hon. Member for Twickenham (Munira Wilson) was in the Chamber from the start. I apologise. I would not wish that to influence the decision of the Secretary of State on who he gives way to.
Sir Desmond Swayne (New Forest West) (Con)
I accept entirely the force of what the Secretary of State has said, but clearly under section 8 many landlords will, for perfectly legitimate reasons—to get rid of a tenant for antisocial behaviour or whatever—have recourse to section 21 simply because of the convenience and ease, particularly in the face of tenants who make particular difficulties. That is why the provisions that he is making in respect of the courts being able to deal with such things effectively and efficiently are vital as part of the reform that he is bringing forward.
Michael Gove
Actually, I agree with my right hon. Friend. It is vital that we ensure that the courts system is reformed and that we have end-to-end digitisation. We have seen section 21 abused, but if a determined tenant wishes, for whatever reason, to ignore section 21, that ends up in the courts anyway.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
My constituent Jan Childs rented a property in Much Wenlock to an individual she got into a dispute with. He has now scarpered, owing my constituent £10,000, and nobody seems to be interested in helping her to retrieve the money—neither the police nor the local authorities. How will this Bill help my constituent Jan Childs to retrieve her £10,000?
Michael Gove
It is not so much this Bill; it is more the steps that we are taking in order to improve the justice system that will help, but I would be grateful if my hon. Friend would write to me about that particular situation. It is always the case, no matter how well framed any piece of legislation might be, that if we are dealing with unscrupulous characters who seek to evade justice, we have to rely on the agencies of the criminal justice system to pursue them.
Sir Desmond Swayne
On a point of order, Mr Deputy Speaker. I apologise; I should have referred to my entry in the Register of Members’ Financial Interests when I intervened.
Michael Gove
My right hon. Friend is nearly always right and always honourable.
Wera Hobhouse (Bath) (LD)
I, too, put on the record my entry in the Register of Members’ Financial Interests. Some months ago, I raised with the hon. Member for Kensington (Felicity Buchan), who is present, my concerns about the illegal eviction laws, which are over 40 years old, complex and difficult to understand. Unless we reform illegal eviction law alongside section 21, I worry that bad landlords will take matters into their own hands. Has the Department taken into account the concerns that I raised with Government officials about reforming illegal eviction law at the same time?
Michael Gove
I know that my colleague the Housing and Planning Minister has met the hon. Lady, and we will respond in further detail about the steps that we propose to take.
Munira Wilson
Given that the Secretary of State is getting quite a few pot shots from behind him, let me help him out by saying that I welcome the ban on section 21 no-fault evictions. It is sadly very overdue, and I hope that he will not delay in implementing it, because as a London MP I have had countless people in my surgeries and contacting me via email who have been evicted under section 21. A most egregious case involved a father of two young children, both of whom were gravely ill. He had to tackle the mould in his home himself because the landlord was not dealing with it. Then the landlord evicted him for making the repairs. Will the Secretary of State commit to implementing the reform without delay?
Michael Gove
Absolutely. The sooner the Bill is on the statute book, the sooner we can proceed. Alongside that, we of course need to ensure that the justice system, as my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) made clear, is in a position to implement it effectively. That is why the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), is present. He and I, and the Minister for Housing and Planning, are working to do just that.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
On the enhanced grounds for antisocial behaviour, I have one constituent who has been evicted because their baby was crying too much, and another who has been evicted because her husband was beating her too loudly. Does the Secretary of State not recognise that the grounds need to be discretionary ones on which the courts can deliberate, not mandatory ones? Otherwise, it will be a handle for abusers to use.
Michael Gove
I very much take the hon. Gentleman’s point. I do not believe that either of those two cases would count as antisocial behaviour under our proposals, but we need to ensure that we are clear about what constitutes antisocial behaviour liable to lead to eviction and what is, as in those cases, either a preposterous claim or an example of domestic abuse that the police should be investigating.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I, too, welcome the intention to scrap no-fault evictions. A year ago I asked about the matter at Prime Minister’s questions, saying, “It’s going to be winter. It’s cold.” As 2019 was a long time ago, I welcome the proposals, although some detail is needed on the burden of proof.
Under Thatcher, from my recollection, the Conservatives were the party of the family, so why has the blanket ban on unscrupulous landlords saying, “No children,” vanished, as has the no-people-on-benefits stipulation? A I know from my weekly surgery, landlords who say, “No DSS” are the big barrier to unlocking this part of the market, because pensioners and others are excluded. Have the Conservatives done away with Thatcher, or is their tail being wagged by all the people—apparently one in five Tory MPs is a landlord—making declarations of interests?
Michael Gove
First, we will be clear that landlords cannot have blanket bans of the kind that the hon. Lady rightly draws to the House’s attention. Secondly, colleagues will declare interests, but landlords are good things. We need landlords to provide homes. It is nothing to be ashamed of to be in the business of providing a safe, warm and decent home for someone, and there is nothing wrong with people who have saved and work hard investing in property. You do not need to be Margaret Thatcher to believe that that is right.
Mr Clive Betts (Sheffield South East) (Lab)
The Levelling Up, Housing and Communities Committee raised the need for an effective and efficient court system to deal with such matters. Evictions will now have to go to court because they will not be automatic under section 21. Also, many more tenants may go to court over landlords refusing to do repairs, because they will no longer fear retaliatory evictions.
Officials in the Department have suggested that the delays in implementing the Bill came about because of the need to reform the courts, and that that is down to the Select Committee. As I am sure the Secretary of State is aware, the Select Committee actually recommended a specialist housing court—we did that several years ago. If the Secretary of State had agreed to that at the time, there would no longer be any need for delay. The court would be up and running, and be effective and efficient in dealing with cases in the future.
Michael Gove
I am grateful to the Chair of the Select Committee, but the view of the Ministry of Justice, His Majesty’s Courts and Tribunals Service and others involved in the court system is that the creation of a specialist housing court would divert resources from the effort to make the existing system work better. But good people can disagree on that point.
Eddie Hughes (Walsall North) (Con)
I rise as what is known as an “accidental landlord”, who conveniently owns and rents out a property in Tamworth. Speaking as a landlord, I welcome the Bill—particularly the property portal, which will allow councils to focus their resource better on landlords who provide poor-quality accommodation and give councils the opportunity to drive them out of business.
Michael Gove
My hon. Friend is absolutely right. Two of the less conspicuous but important parts of the Bill are the creation of the property portal and the role of the private rented sector ombudsman. If they work effectively, both should obviate the need for the court processes that the Chair of the Select Committee and my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) have mentioned. The property portal should ensure that we can identify properties in the private rented sector whose landlords have not registered, and we can focus our enforcement action on them.
Selaine Saxby (North Devon) (Con)
I welcome better protections for renters; in my constituency, swathes of constituents have been evicted so that landlords can flip their properties to become short-term holiday lets. Nationally, there may have been a growth in landlord numbers, but the Country Land and Business Association and the English housing survey both report that rural seats have seen a demise in landlord numbers of about 24%. In my constituency, we have lost 67% of our long-term landlords since the end of the pandemic. What steps will be taken to reverse the trend, so that long-term landlords come back into constituencies such as mine?
Michael Gove
What I would like to see in my hon. Friend’s constituency and so many others is an increase in housing overall—houses for social rent, for private rent and, above all, for people to own. As the hon. Member for Westmorland and Lonsdale (Tim Farron) pointed out, there is a particular challenge in the very attractive parts of the country, such as those my hon. Friend represents, that attract tourism.
There has been a phenomenon whereby houses that would have been available for rent to the local community have been Airbnb-ised, although not just through that company. They have been turned into short-term lets and effectively been operating as shadow B&Bs or shadow hotels. There is nothing wrong—there is everything right—with making sure that we utilise property as efficiently as possible, but that has created percussive and deleterious consequences in some areas. That is why we are consulting on both using the planning system and also, with our colleagues in the Department for Culture, Media and Sport, a form of registration to ensure that the situation works. Ultimately, however, the challenge is increasing supply overall.
Sir Stephen Timms (East Ham) (Lab)
The Secretary of State has just mentioned the private rental ombudsman, a post that I welcome. Is he considering the case for giving that job to the existing housing ombudsman, who supports the social housing sector at the moment?
Michael Gove
Yes, we are. There is a case for both a separate organisation and for having the issue fall to the existing ombudsman—who, I have to say, has been doing a very effective job.
I must draw my remarks to a close shortly so that all colleagues who wish to contribute can, but the right hon. Gentleman’s intervention provides me an opportunity to suggest that the condition of housing in this country—particularly housing built in the ’50s, ’60s and ’70s—is a profound cause for concern. Many of those homes are reaching the end of their natural lives. As a result of how they were built, we are seeing not just building safety issues but children in particular living in homes that are not decent.
The tragedy of Awaab Ishak’s death reminded us that damp, mould and other poor housing conditions can have a deleterious effect not just on life chances but on lives themselves. That is why the Social Housing (Regulation) Act, the actions of the housing ombudsman and the actions that my Department has taken have been focused on ensuring that registered providers and social landlords live up to their responsibilities.
What we seek to do in the Bill is ensure that the small minority of private sector landlords who also need to up their game do so. We are not targeting any one sector. We are not targeting registered providers of social housing while leaving the private rented sector off the hook; nor are we directing particular attention to the private rented sector and letting registered social landlords off the hook. What we are doing is ensuring that citizens, who deserve a warm, decent, safe home, get one. That is what the establishment of the decent homes standard through this legislation will do.
Marsha De Cordova (Battersea) (Lab)
The Bill would have been a good opportunity to bring forward provisions ensuring that homes are kept at a decent standard. Will the Secretary of State assure the House that he will bring forward measures before the next election that will address decent home standards for the private rented sector?
Michael Gove
At the very beginning of my introduction to the Bill, I stressed my gratitude to all those who had worked to shape the measure and make recommendations on how we could improve it. I am sure that in Committee we will hear representations from different Members and different organisations about how we can improve the Bill further. I am open-minded about that: my aim is to ensure that we get a new deal and a fair deal for both landlords and tenants.
I have listened to representations from the National Residential Landlords Association and others about making sure that the overwhelming majority of landlords, who do a great job, are able to deal with a small minority of tenants who behave badly. I have also listened to representations from individual tenants and those campaigning for them, who want us to move ahead with the abolition of section 21 and the establishment of the portal. The establishment of the portal and the existence of the ombudsman will, I believe, ensure that landlords are on firmer ground and no longer undercut by rogues, and that tenants get a better deal. It is because the Bill provides both landlords and tenants with stronger protections for the future that I commend it to the House.
Angela Rayner (Ashton-under-Lyne) (Lab)
It is a pleasure to open this debate on behalf of the Opposition. I start by saying that we on these Benches will not oppose the Bill today—that may be more than can be said for some on the Benches behind the Secretary of State. After nearly five years of foot dragging, it appears that they need to be appeased with yet more delays. We disagree. Renters are at the sharp edge of the current housing crisis and urgently need the protections and support in the Bill—protections that, unfortunately, are just too late for many renters struggling right now in this cost of living crisis. But as they say, better late than never.
I welcome the Bill. In fact, I welcome much of what the Secretary of State said in his opening remarks. We have been calling for such measures for some years. We will be pleased to finally see the abolition of section 21, whenever that actually comes. Labour also welcome the simplification of tenancies, which will give renters more flexibility and rights. It is right that periodic tenancies should become the norm, meaning that renters can give two months’ notice and get out of a tenancy at any point.
We further welcome the creation of a new ombudsman; that has the potential to be an essential part of the redress system. For too long, renters have lacked basic power and control over one of the fundamentals of life: their home. Tenants have struggled to challenge unfair treatment without undergoing lengthy and expensive court proceedings. If this ombudsman is given the proper teeth and resources, they will have an important role to play in levelling the playing field. I think the Secretary of State agrees.
We are pleased that the Tory rebrand of Labour’s proposed landlords register has made it into the Bill, too. The register is good for landlords and tenants. Finally, it is good to see the Government build in provisions to make it easier for renters to have pets. As I am sure the Prime Minister agrees, pets are an important part of the family, just as long as we remember not to let them off the lead illegally.
After four and a half years of foot-dragging, there can be no more dither and delay in ending no-fault evictions. The Secretary of State made strong points in his opening remarks, but I am afraid that he did not see the faces behind him—I can see why he has spent years arguing with the landlords on his Back Benches. Tenants across the country have been wrongfully evicted, kicked out of their homes and made homeless. In fact, since his Government first announced the end of no-fault evictions back in April 2019, a total of 71,310 households have been kicked out on to the street. That is more than 70,000 families put at risk of homelessness since this Government first proposed to protect them. Every single day another person suffers the same fate. According to Shelter, private renters over the age of 55 are served a section 21 eviction notice every 16 minutes. It has taken the Government four and a half years to reach the Second Reading of the Bill.
Mr Perkins
The Secretary of State was at pains to stress that the majority of landlords are good ones. It is almost like saying that there has been a delay to murder legislation because most people do not kill people. The reality is that we need legislation because there are some bad landlords, and the imbalance between renters and landlords is huge. Does my right hon. Friend agree that, although it is welcome that we have finally got to Second Reading, many people have been let down by how long it has taken? It is now the responsibility of us all to get the legislation moving as quickly as we can.
Angela Rayner
I agree. I hope I can bring the House together when I say that it is right that we get moving on this issue. The Secretary of State has made it clear that the Government will move on it, but I am concerned about potential delays. I will come to those points in more detail.
Jim Shannon
There may well be consensus in the House—I hope there is; we will see how it goes later on. A major issue that comes to my attention and that of many others is mould, condensation and damp in houses, about which tenants tell me regularly. Does the right hon. Lady feel that the Bill can satisfactorily address that to ensure the health and safety of tenants and their families?
Angela Rayner
We need legislation for decent homes alongside these provisions. I hope that we can get into that, and how we can protect people, in Committee. As the Secretary of State acknowledged, at the moment many families face a situation of inadequate housing, which goes beyond the scope of the Bill. I think we all agree that that needs to be addressed as soon as possible.
Caroline Lucas
On decent home standards, would the right hon. Lady support the integration of Awaab’s law into the Bill? We are talking about delays, but my concern is that if those provisions do not make it into the Bill right now, our constituents, including some of mine in Brighton, will still be living in absolutely atrocious accommodation, with water streaming down their walls, mould and kids getting ill.
Angela Rayner
If we can address that in the Bill, we should push for it, but we should also push to ensure that, whether in social housing or private rentals, people should have confidence that their homes are safe. Homes should be a safe place, but at the moment, that is not the case for too many.
Huge swathes of renters have been left paying a heavy price for the Government’s inaction on section 21. This is real for people such as the Brady family, who live in Wiltshire and have experienced two no-fault evictions in the past two years. Mr Brady is a gardener and Mrs Brady works full time. After being forced out of their home, where they had lived for 15 years, they have resorted to living in their van. The family are able to bid on council houses when they become available, but so far, everything has been at least an hour away from where they live. Mr Brady said:
“There is a housing crisis and there are reasons behind it—you can use whatever excuses you want but it is a political decision. It was a political decision not to build enough houses, it was a political decision to sell off the social housing stock.”
Those are not my words but the words of a man who would still have a roof over his head if the Government had not dragged their feet.
I feel that more delay is inevitable. Conservative Members threatened in the newspapers this weekend to choose their self-interest over the national interest by opposing or delaying the Bill. They do not want to see these changes enacted. Then, on Friday evening, the Department snuck out the suggestion that section 21 changes are dependent on court improvements, which could take years to complete. Today we discovered—not from an announcement to the press, to Parliament or to the public, but from a leak—that that is indeed the core part of a grubby private deal that the Secretary of State has struck behind closed doors with his own Back Benchers. So the Government who broke our justice system are now using their own failure as an excuse to break their own promises.
Just how long will it take? Can the Secretary of State promise that the Government will meet the pledge they made at the last general election, which he mentioned, before the next general election? Renters simply cannot afford any more excuses or delays; he must provide clarity on that. [Interruption.] I know that he is a confident Secretary of State—he says so from a sedentary position—and I have confidence in his abilities, but people who are facing section 21 notices cannot afford any more dither and delay. He will get support from those on the Labour Benches in enacting this legislation to protect families who need protection.
We think that the Bill is a good starting point. We fear that a number of loopholes have been left in it, however. One such loophole is the commencement clause, which leaves Ministers the power to decide when—or, perhaps, whether—to actually bring an end to section 21. But that is not the only loophole. I hope that the Minister will engage with us constructively in Committee to close all those loopholes and strengthen the Bill in a range of areas.
For example, the new grounds for and protections from evictions are a welcome step, but the details on those grounds remain vague. On evictions, there remains a loophole by which renters are protected only for the first six months of their tenancy if their landlord decides to sell the property or move back in. That time limit needs to be increased as part of the Bill to give renters proper protection.
On section 21, it is not just a question of when the law is implemented but of how. Every household threatened with homelessness by a section 21 notice has the right to assistance from their local council to prevent them from becoming homeless, but the Bill removes that right to immediate help. That loophole could lead to a huge spike in homelessness and must be closed.
Matt Rodda (Reading East) (Lab)
My right hon. Friend is making an excellent speech. I am grateful to her for highlighting that point; I have come across such cases, and it is an absolutely appalling situation. Often young families are thrust out of their homes with very little notice, and local authorities struggle to cope. At the moment, many such cases that I have come across involve people being moved to B&Bs out of the area.
Angela Rayner
I thank my hon. Friend for highlighting that concern. To be fair to the Secretary of State, he acknowledged the challenges in his remarks—not just the housing challenges but all the challenges faced by families. People are scared and live insecure lives because of the devastation and ripple effect of the challenges they face.
Kerry McCarthy (Bristol East) (Lab)
My right hon. Friend is right to highlight the human cost of those evictions, but there is also a financial cost to councils. Bristol City Council pays exorbitant amounts to put people into emergency and temporary accommodation, which it should not have to do, so does she agree that, on top of helping people by ensuring that they do not have to go through the pain of eviction, the Government have a financial interest in resolving the issue?
Angela Rayner
I absolutely agree. I also think that, as the Secretary of State mentioned, most private landlords want to do the right thing and are a good part of our housing mix. They should therefore welcome the fact that we are doing our best to ensure that their good name is upheld and that they are not stained by the tiny minority who do not do the right thing, who are the reason why these protections are so overdue.
We are also concerned that the changes to antisocial behaviour grounds are, as they stand, ambiguous and open to abuse. Mental health needs and domestic abuse are sometimes reported as antisocial behaviour, so that definition must be made more pragmatic and focused on genuine antisocial behaviour. The Secretary of State made reference to this issue, and I heard what he said; I look forward to working with him in Committee to address it, because it is important.
The Bill is also silent on the issue of economic evictions. While it strengthens the law to ensure landlords can only increase rents once a year, which is welcome, the mechanism for tenants to contest excessive rent hikes is not strong enough, giving people little real protection against so-called economic evictions.
Lloyd Russell-Moyle
Is there not a particular problem with the evidence that the rent tribunals will look at? The proposal is that they will look at the average market rents, but the local housing allowance is set at only 30% of the local average, meaning that rents could increase above the LHA and no one would be able to complain about it.
Angela Rayner
It is absolutely right that we get into these challenges, because I do not think people feel that the current situation provides redress for the challenges they face. I hope that in Committee, the Secretary of State will listen to points made by Members across the House to ensure that people get the redress and support that they need, and that we strengthen tenants’ rights in this area.
Mr Betts
The Bill does not really deal with the issue of affordability at all. One of the big issues is the freezing of the local housing allowance: some 90% of properties in the private rented sector are not affordable with the amount of LHA that is payable. The Select Committee recommended that we go back to the 30% figure, as was previously the case, so could we push for that to happen? Currently, many people simply cannot afford anything at all in the private rented sector.
Angela Rayner
We have to get into that issue, but we also have to deal with the root cause, which is that we do not have enough adequate social housing in this country. We do not have enough housing, and that is because of 13 years of the Tories’ failure to build the housing that we need and to challenge Members on their Back Benches. The Prime Minister has failed to challenge those on his Back Benches who have delayed house building in this country when we need it so desperately.
The Secretary of State mentioned the hon. Member for Walsall North (Eddie Hughes) and the White Paper, but I am disappointed that many of the proposals in the Government’s White Paper have since been dropped. The Secretary of State said that he is open-minded, and I am glad about that, because the Bill is silent on proposals to make blanket bans on renting to families with children or those in receipt of benefits illegal. That sort of unacceptable practice must be stamped out, and I hope he will work with us to make sure the Bill does so. In the White Paper, the Government also promised to introduce the decent homes standard to give renters safer, better-value homes and remove the blight of poor-quality homes in local communities. That standard is missing from the Bill, but I did hear what the Secretary of State said in his opening remarks. I gently say to him that we cannot miss an opportunity to give private renters the protection—the long-term security and better rights and conditions—that they deserve.
Wera Hobhouse
To ensure that tenants have that safety, does the right hon. Lady agree that we need a new regulator for all private rentals with the power to subject landlords to regular inspections?
Angela Rayner
The Bill talks about the ombudsman. We need to make sure that landlords understand their obligations, and where they do not, we need to ensure that there is redress. As I mentioned earlier, that ombudsman must have real teeth, and I hope the Secretary of State understands that. While I respect the landlords who are in the Chamber and those who are listening to this debate—I know many of them do a good job and are trying their best—we have to have a minimum standard. We cannot have circumstances, as we have seen in Greater Manchester, where children are living in very poor conditions. It is really important that we have regulation and, where people are in accommodation that falls below those standards, we have redress.
After four years, the clock is ticking. There can be no more delay, but the Government’s track record does not instil much confidence. On the Tories’ watch, mortgage bills and rents are soaring, fewer people are able to buy their own home, and over 1 million people are stuck on social housing waiting lists. Those problems are only going to get worse because the Prime Minister could not stand up to his Back Benchers on house building targets. Now it appears that once again, he is caving in to them, rather than keeping his promises to the British people.
This Bill is an important step forward, supporting renters at the sharp edge of the cost of living crisis, so Labour will work constructively throughout its passage. We will not be the cause of delay—I hope the Secretary of State can say the same about his Back Benchers. If they cannot act in the national interest and support a renters’ reform Bill worthy of its name, let me make clear that our offer is to do so instead, because over the course of our proceedings today, 33 renters will have been put at risk of homelessness because they were issued with a section 21 notice and 11 will have got a visit from the bailiffs evicting them. Every single one of those people will be faced with anxiety about the future—anxiety about having to pay eye-watering moving costs and about whether they will be made completely homeless. They cannot afford to wait for the Prime Minister to find a backbone and stand up to his party. They cannot afford to wait for the Secretary of State to buy off his Back Benchers, and they cannot afford to wait yet more years for this Government to keep the promises they made to them.
We stand ready to work in the national interest, and will do so with anyone else who is prepared to join us. I urge the House not to waste this chance.
Madam Deputy Speaker (Dame Eleanor Laing)
It will be obvious to the House that a great many people want to catch my eye. We have a long time—we have three hours ahead—but I want to be fair in the way that that is divided up, so we will begin with a time limit of seven minutes.
Mrs Natalie Elphicke (Dover) (Con)
In 2014, fellow housing expert Calum Mercer and I published a then-seminal paper called “Nation Rent”. That paper challenged what was then the status quo, which was that generation rent affected only younger people and would be a passing phase. “Nation Rent” set out that it was a changing structural environment in the housing and financial markets that had occurred since 2003, which saw a rapid acceleration of the private rented sector—overtaking social rent—together with a fall in home ownership. That structural change started long before the credit crunch and financial crash, but accelerated after them.
A decade on, little has changed in structural terms, and it should concern Members of all parties that generation rent has now become nation rent. The percentage of people aged between 35 and 44 and between 45 and 54 who are renting privately has tripled over the past two decades, and has more than doubled for those aged between 55 and 64. Nation rent is now embedded, not just in the younger generation but through the generations. As I set out in my 2018 paper with the Housing and Finance Institute, “A Time for Good Homes”, that structural change towards private renting affected around 2.4 million homes, or around 6 million people.
The need for legislation reflects that long-term structural shift. The private rented sector is no longer a flex or transitory tenure: it is the main tenure for millions of people for much, if not all, of their lives. The current legislative framework—a short-term tenure for long-term living, one person’s pension pot but another person’s only home—is not fit for that purpose. That is why there is tension and strain, which is reflected in the design of the Bill and the comments that have been made about it. There is a need to find a new balance that reflects this new reality for millions of people in our country, acting in a way that is fair and responsible to those who are being housed as well as to those who house them.
It remains my view that although the principle of the Bill and its measures are very welcome, they do not go far enough in dealing with the fundamental challenges of an overweighted private sector. There needs to be a long-term plan for housing that rebalances the housing tenure mix—a plan to boost home ownership and expand affordable rented housing substantially; one that unblocks the financial and regulatory constraints on affordable home ownership and professional renting, and one that builds more homes. I continue to work cross-party and cross-industry, inside and outside of this place on those priorities, as I have done for many years and as is reflected in my entry in the Register of Members’ Financial Interests.
Given my long-term campaigning for housing, I was pleased to stand on a manifesto to build 1 million homes this Parliament, work towards 300,000 homes a year by the mid-2020s, and scrap section 21 evictions. We have done well on the first, the second is a work in progress and the third manifesto commitment is why we are here today. I know at first hand the personal commitment that the Secretary of State and the Housing Minister bring to this matter, and how hard their commitment to it is.
This is a vital piece of legislation, because it seeks to provide greater security and stability for renters. This matters—and it should matter to everyone on the Conservative Benches—because housing instability destroys wealth creation, damages life chances, restricts educational prospects and harms health. I see this in my constituency inbox, as I am sure do all Members. In my MP surgery, I had a mother who had spent hundreds of pounds of her own money over many years building a comfortable home for her and her disabled daughter, only for them to be turfed out by their landlord with nowhere to go. Recently, I had to discuss with Ukrainian refugees how someone had complained to their landlord about the heating not working, only for them to find themselves served with a section 21 eviction notice. How do you begin to explain that that is just how things work in our country? They should not work like that; this needs to change.
That is why this reform is so important, but we cannot allow any delay, and that includes the proposed delay because, supposedly, repossession is taking too long. That is nonsense. There is already clear court guidance to deal with repossession claims in a timely manner, as set out in civil procedure rule 55.5, which states that the hearing must take place between four and eight weeks from the claim. Although there have been some spikes in court hearings over the covid pandemic, the timeliness of possession claims has remarkably improved. The latest available figures from the Ministry of Justice show that the average time between claims and orders is now back to under eight weeks. The average time between claims and warrants is the same as it was in December 2019, when the Conservative commitment was made to the nation. The repossession figures have collapsed from the post-covid high of 69 weeks, and are back on track to pre-covid levels. For landlords, every single median metric—be that for orders, warrants or possessions—has dramatically improved on the latest Government data.
Therefore, this landmark section 21 reform should not be delayed on the basis that court improvements are required. That was a concern of our Select Committee, and I think it has now been met in part by the improved data. Any change to the Bill that delays the implementation of these vital reforms cannot be supported. This issue affects millions of people in our country. That is why renters reform—specifically the abolition of section 21—was in the 2019 manifesto, on which all of us on the Conservative Benches stood. It was a manifesto that put the Conservatives on the side of the people, and a manifesto that secured such a huge majority. It would be a grave mistake not to honour that commitment, or to stifle it by delay.
To conclude, the Renters (Reform) Bill will provide security and stability to millions of renters across the country. It should be passed by Parliament without any further delay, but we must also do more to continue to unlock home ownership and other housing to deliver the homes and the housing stability that our nation needs.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the Chair of the Levelling Up, Housing and Communities Committee.
Mr Clive Betts (Sheffield South East) (Lab)
First, I put on record that I am a vice-president of the Local Government Association.
Having considered the White Paper and then the Bill, the Select Committee welcomes in principle the proposal from the Government to abolish section 21. We heard evidence in a number of sessions from organisations such as Shelter, looking at the interests of tenants, and from the National Residential Landlords Association, and they all accepted that this was the right way to go and engaged constructively with the Select Committee on that.
People’s homes can be taken away from them just like that when they have paid their rent and observed their tenancy conditions, and in principle that simply cannot be right. When a home is taken away, people have to move somewhere else, and their children have to uproot themselves from their school and be taken to another school. Members of the family who work may have to find another job somewhere else, because their home has moved and they can no longer get to their place of employment. That simply is not right in this day and age.
We recognise as a Committee—I made this point in an intervention—that there will be added work for the justice system, because evictions will now require a decision from the courts and more tenants may feel empowered to go to the courts. I am really disappointed that the Secretary of State is not going to indicate when he thinks the reforms to the court system will be in place to allow the legislation to be enacted. I think we need assurances today about when that will be. That cannot be an excuse for delaying something that has already been delayed for far too long.
I want to point out one or two other issues. I welcome the Secretary of State’s welcome for the work that the Select Committee has done, even though his response was a little late; I accept his apology for that. We said very clearly in our report that enforcement by local authorities will be absolutely key in making these changes work. There has to be proper funding for local authorities, as the Local Government Association has said today, to enable that work to be carried out properly. We want assurances from the Secretary of State on that as well.
One of the really good ideas is the property portal, so that tenants and all of us know who the landlords are. We have suggested some changes and some improvements, on which I think the Secretary of State will come back to us, to make sure that the property portal is comprehensive. It should cover things such as when the property last had a gas safety certificate and when the electrical systems in the house were properly inspected, and information of that kind, including whether it complies with the decent homes standard. All those things are important, and tenants should be able to access that quickly. The registers should be updated and digitised, which we are encouraging the Secretary of State to do. We hope he will come back positively on that.
The cost for tenants is important. We welcome the Secretary of State’s saying that rent increases cannot take place more than once a year, but we have concerns about the overload on the tribunal system and the way that those arguments will be played out, often with the landlords having a great advantage. We are not quite sure why the Secretary of State is saying that a tenancy agreement could not have a yearly update of rents in line with inflation, with no need for argument. That is actually the case in many rent agreements now. While it has been difficult in the last couple of years with hyperinflation, historically—with inflation at about 2%—that has not been an issue and it gives some certainty to tenants. We are not sure, and we have not had an explanation, why the Government have ruled that out completely.
Coming back to the point about tenants on benefits, why can we not have a ban on landlords automatically prohibiting tenants on benefits from renting? Surely the Secretary of State should do that, and should indicate very quickly that he is prepared to accept that as an amendment to the Bill.
Munira Wilson
I strongly support the point that the hon. Gentleman has just made about the importance of the Government outlawing these blanket bans on renting in the private sector by those who are in receipt of benefits. I have been seeing a double whammy in that, in a constituency such as mine in Twickenham, rents have gone up by over 12% in the past year and, as he said, local housing allowance has not gone up, so people are evicted and banned from renting if they are in receipt of benefits when they try to find a new place. I pay tribute to the work of Citizens Advice Richmond, which has been running a campaign on that. We need to see the ban on such practice in place soon.
Mr Betts
I completely agree with those points, and I hope the Secretary of State responds positively to them. I think the situation is of real concern, and there is no reason why the ban cannot be enacted.
I have already made the point about local housing allowance. It is not part of the Secretary of State’s Department, but it is part of Government policy. It is always going to be a challenge for tenants to pay their rent in the private rented sector given the rise in rents recently, but people on the lowest incomes and on benefits are now being excluded from most properties because they simply cannot afford it, because their local housing allowance has been frozen. The LHA needs to be lifted. Even if the Secretary of State cannot say so today, I hope he is encouraging those behind the scenes who can make the changes to make them in a proper and timely way.
I have a couple of other points. Student housing is different. The difference in student housing has been recognised where it is purpose-built student housing in that it will be exempt from the ban on periodic tenancies. That is entirely sensible. Recently, we have seen some real pressures on student accommodation in some university cities. Last year, Manchester students were actually being encouraged to live in Liverpool, because there was not enough housing in Manchester for them. That is just one of a number of examples in relation to protecting the student market, including non-purpose-built accommodation.
Michael Gove
Briefly, I wish to declare my interest. As the parent of a daughter who is currently at Manchester University, I know exactly what the hon. Gentleman means. We will be doing everything we can.
Mr Betts
I recognise that the Secretary of State has responded to the Committee’s report, and while not allowing a complete reversal to periodic tenancies for non-purpose built student accommodation, landlords will have the right to terminate the tenancy in line with the university year—I think that is the basis of the proposal he is suggesting. That might well be a good compromise to take things forward, and I am sure the details of that will be tested further in Committee.
On the proposals for the ombudsman, the suggestion in an intervention from my right hon. Friend the Member for East Ham (Sir Stephen Timms) about having one housing ombudsman, and incorporating the private sector role into the social housing ombudsman role, is very sensible. Why do we need two separate schemes for letting agents? Why can we not have just one ombudsman covering the whole of that area? At least everyone could understand it, rather than having to think, “Which bit do I go to in order to get this grievance raised?” I hope the Secretary of State will reflect on that point, which was simply made, to ensure that the process of redressing grievances works better.
Members of the Committee welcome the basic principle of the changes proposed by the Secretary of State, and we want them to be implemented as quickly as possible. We hope he will continue to listen to those recommendations that he has not yet indicated a willingness to accept.
Craig Whittaker (Calder Valley) (Con)
Everybody agrees that people deserve to live in rented homes that are safe, warm, free from damp and mould, and in which they can feel secure. Nobody doubts that intention, or the fact that rogue landlords should be clamped down on and be made responsible. However, rogue landlords are the minority—the Secretary of State has said that on the Floor of the House—yet despite that, the Government seem to be tarring every landlord with the same brush with the Bill. The ironic fact is that there is already a plethora of legislation that allows local authorities to clamp down on every housing issue, including the scourge of the rogue landlord. One issue is that councils themselves are often the rogues, citing resources as an excuse for inaction, and with private landlords they already take action, or at least have the powers to take action if they so wish.
Without wishing to pinch the TV advertising slogan, this Bill does not do what it says on the tin. It should be renamed the “rogue landlord and nightmare tenants Bill”, because all it does is force good landlords to take action that they would not normally take. To highlight what I mean, this is what has happened in the past. The Government forced landlords to put deposits into a Government-approved scheme, which landlords did. Any landlord who has tried to get money back from that scheme when tenants have caused damage will know that it is nigh-on impossible. So instead of putting money into deposit schemes, many landlords now do not take deposits. Instead, they have increased rents in order to cover the cost.
The Government do not treat private landlords as sole traders, but instead treat the whole income from rents as taxable, whether someone has a mortgage on the property or not. The result of that is increased rents. The Government stopped paying landlords directly when tenants on benefits are in arrears, instead saying that the contract is with the tenant and not the Government. As a result, good landlords are now forced to take rent in advance—in the old days they used to take it in arrears as those tenants on benefits were paid by universal credit—and they have increased the rents because of the higher risk. Many, many landlords do not take people on benefits as a result of that. The Government say that they will legislate to make it illegal for landlords to discriminate against those on benefits, but when landlords have between 20 and 50 applicants for each house, all the legislation in the world will not make a ha’porth of difference, because the landlord will always take the most risk-free option.
One key component of the Bill is the removal of section 21 “no fault” evictions—because of the time limit I have had to strip loads out of this speech, Madam Deputy Speaker. Leaders Romans Group is one of the UK’s largest property maintenance companies. Indeed, it has a landlord client base of more than 65,000. It took a sample survey from those landlords and found that section 21 of the Housing Act 1988 is rarely used, rarely overused, and even more rarely misused. Of all those who responded to the survey, 80% had never used section 21. Of those who had, a significant majority—over 60%—did so because the tenant was in breach of the lease. The English Housing Survey 2021-22 found that only 6% of tenancies ended at the landlord’s volition. Both figures demonstrate the fact that the vast majority of landlords do not evict tenants on a whim. To end no-fault evictions through the abolition of section 21 is extreme, unnecessary and damaging to both landlords and tenants.
Let me give a couple of examples about using section 8 evictions to replace section 21. Ground eight is currently the most heavily relied on ground for landlords trying to gain repossession, and it currently provides a two-week notice period. It applies where the tenant is two months in rent arrears at the date of the section 8 notice and the date of the possession hearing. In the Bill, the notice period has been extended to four weeks. Also, any outstanding universal credit payments that the tenant is due to receive are not to be included when calculating the arrears, if the universal credit payment would reduce arrears below the two-month threshold. The Government cannot say to landlords on one hand that the contract for UC is between the landlord and the tenant, but in the Bill say that the landlord has to take off the pending UC payments for rent. It is a nonsense.
I am short of time, so I will briefly mention expanding the powers for antisocial behaviour under section 8 of the Housing Act 1988. It is unlikely to change the effect of ground 14, which—I think this question was asked earlier—is not mandatory but discretionary. That means that the judge has to consider whether it is reasonable to make a possession order, even if a tenant is guilty of the alleged conduct. It is very unlikely that any court would consider some trivial conduct to justify a possession order.
As has been mentioned several times, the real issue is the inaction in building more houses for people to live in—that is not just this Government but successive Governments. The market will not change until a Government grasp the nettle and literally put spades in the ground, as Macmillan did in the 1950s. There is a reason why we have the Homes for Ukraine scheme: it is because we do not have any houses to put people in. There is a reason why over 100,000 young men are staying in hotels in this country: it is because we have no homes to put them in. The Bill will do absolutely nothing to improve the rental market. It will drive more landlords from the system. The Secretary of State said earlier that the number of landlords in this country has stayed static since 2016, but I would like to know exactly where he gets that information from as it is not the information coming from the market.
Mr Fysh
Is my hon. Friend aware that just five days ago Jones Lang LaSalle, one of the biggest property consultants in the world, published a report that analysed Rightmove evidence of rental market availability? It shows that in the south-east and south-west of England, rental availability is down by 32% on 2019. Is that caused by some of the things my hon. Friend has been talking about?
Craig Whittaker
My hon. Friend is absolutely right. This is a problem right throughout the country, not just the south-east. It is happening in the north in Calder Valley—wherever people are, there is an absolute shortage of homes, whether socially or privately rented. The Bill will do nothing to improve the rental market. It will drive more landlords from the system, and because of those shortages of homes to rent, where dozens of people apply for any homes that are available, the Bill will also do nothing to curb the rogue landlord element.
Ms Karen Buck (Westminster North) (Lab)
It is genuinely hard to overstate the scale of the housing crisis that we are in, in 2023. Every element of this crisis interacts with every other element, and they all feed off each other, driven—I agree with the right hon. Member for Calder Valley (Craig Whittaker) on this one point—by the failure to build enough homes, as well as: the decline in home ownership, particularly among the young; the shrinking of the social rented sector; the growth of the private rented sector, especially, as has been pointed out, given the many different housing markets within the private sector; the growth of the private rented sector for those who are least able to afford that; the growth of homelessness; the pressures of housing costs, driven particularly by the shortfall between the housing element of the social security budget and actual housing costs; the collapse in legal aid and the advice sector; and the pressures on local authorities across the board. That has led to a perfect storm, at the sharp end of which is homelessness.
It is a relief to have this Bill with at least the promise that section 21 will end, because the section 21 powers are used for the most vulnerable and poorest and drive people directly into the homelessness sector. As an MP whose borough has the largest proportion in the private rented sector anywhere in the country, I feel strongly about that. It is profoundly worrying to hear that the Government have backtracked four years after they first promised to abolish section 21. The caveat we now have before us will mean in effect that there will be no progress on protecting tenants over the coming years.
It will be years before those powers are brought into effect, because one of the other elements of this omni-crisis is the shambles that is the courts system. We know that the Ministry of Justice took the single largest proportion of all spending cuts in the post-2010 austerity budget, and it is struggling to cope with the current system. The sector has no plans and no provision to make the changes that the Secretary of State is relying on as a preliminary for abolishing section 21. Every day that goes by means that more people—many highly vulnerable—will face eviction.
On average, 290 London renters a week have faced no-fault evictions since the Government promised to bring an end to them in 2019. Citizens Advice said that it has helped 10,600 households with section 21 cases since this Bill had its First Reading. A six-month delay would mean almost 15,000 more Londoners facing no-fault evictions, and a third of all no-fault evictions in England in recent years have been in the capital. It is London—the most expensive place and the place with the greatest homelessness crisis—that will bear the heaviest burden as a result of further delays by the Secretary of State.
At the heart of all this is the tenants themselves. For many people, insecure tenancies are a nuisance—often an expensive one—that keep them in a state of permanent instability. High levels of population turnover are not good for strong communities. They are linked to low levels of participation at every level of civic society, and they place a particular strain on public services such as GPs and schools. For the most vulnerable, the private sector is a living nightmare, damaging their physical and mental health. All too often, insecurity, unaffordability and poor standards of accommodation come as a single package, placing the greatest strain on those who can cope with it least.
My casework—like that of many other Members, I am sure—is full of examples like these. One constituent wrote to me:
“We have been issued with a section 21 eviction letter by the landlord. I suffer from severe depression and recently had a cornea eye transplant and am still undergoing treatments. My son has autism, asthma, is non-verbal with severe sensory needs and also struggles with change, and we have both suffered serious mental health breakdowns due to our current living conditions.”
These constituents have to wait until the court issues a bailiff warrant for them to be moved into alternative accommodation, but due to the high level of backlog that the courts are experiencing, that will not be any time soon. As she writes:
“This whole process has been severely detrimental to my mental health… My concern is that our current property isn’t safe as the kitchen ceiling is about to collapse in on us”.
Another constituent wrote:
“This miscreant of a landlord sent me a section 21 notice for possession of my apartment. I have been a tenant there in good standing for three years. Rent is always paid on the due date. Rent is £850 for a tiny room…with a shared toilet and shower with 17 other tenants. The landlord informs me today that he wants to raise the rent to £1,516…an 80% rent increase out of the clear blue sky!”
A third constituent wrote:
“Today my wife and I were served with a no-fault eviction…principally for refusing to agree to an almost 20% rent increase. This was particularly galling, because in February we had already had an increase of almost 10%. We now have just eight weeks to find a place to live, but as you…know, there is a dearth of properties…not just in this area but other parts of London.”
They think it highly unlikely they will be able to find somewhere to live. They continue:
“I am utterly disheartened that we live in a country where this is possible. It is nothing short of an outrage.”
There is much in this Bill that is good. There are elements promised for this Bill that are not here and that we will want to press on, and there are a number of concerns we will want to press on in Committee to probe the Government. The central point is this: tenant insecurity is extremely damaging. It is bad for mental and physical health, it is expensive and it places pressure on local authorities. The longer that measures are delayed, the worse it will be. The Government have broken their promise, and we will be holding them to account for that failure.
Ben Everitt (Milton Keynes North) (Con)
This is without doubt a significant Bill, which shows that the Conservative Government are serious about delivering our manifesto commitments and delivering for the British people. In my constituency, tackling homelessness and rough sleeping is a key priority. To make in-roads, we must reform the private rental market. Many of my constituents and people across the country are trapped in high rental spirals, with little or no other viable options available to them. On that basis, the Bill’s proposal to enable tenants to appeal excessive market rents designed to force out tenants could be an important step, but we need to ensure we see more detail on how that would work in practice.
On top of that, and more broadly, we must go back to these proposals and make sure that they do not let up on the delivery of more affordable housing and social housing. The Housing Minister, my hon. Friend the Member for Redditch (Rachel Maclean) has heard me say that time and again. I believe there is a consensus across the House on that point. As the Bill progresses, I will be keeping a strong look-out for the appropriate protections for renters, but we cannot forget that without landlords, we would not have a rental market at all. That is why we need to strike the right balance between assurances for landlords and protections for renters. The tendency to vilify landlords is not just unhelpful to our public discourse; it is unhelpful to how we are developing legislation. We must make sure that we look after landlords in this process; they form a critical part of the housing ecosystem, and scaring them off would set us back even further, so we must tread carefully.
Through my role as chairman of the all-party parliamentary group for housing market and housing delivery, and from meeting landlords and tenants in my constituency, I have engaged with a huge range of stakeholders, including professional landlords such as Grainger and charities such as Shelter. Through those discussions, I am aware of the sticking points that we need to resolve as we progress this Bill through its remaining stages.
To get into just one of the details—I know we are pushed for time—Grainger and others in the industry favour the idea of introducing the ability for landlords to request a six-month minimum tenancy length. Once that period is over, renters could issue a two-month notice. Responsible landlords such as Grainger—and many others; in fact, the vast majority of them—want to build communities and have lasting bonds with the people they house, which is an often forgotten point in these debates. Conversely, charities that I have been talking to that fight for the side of tenants and renters, such as Shelter, want to see a longer protected period for tenants, with a focus on open-ended tendencies. They want to see the protected period lengthened from six months to two years to give renters more certainty and security. In the light of proposals to introduce comprehensive possession grounds for landlords, we need to be careful that we find a compromise between the two positions.
The reforms proposed in the Bill are promising, and I think we can all accept that they are a step in the right direction. However, there is more work to be done in finding the right balance between the needs of renters and landlords and successfully integrating the rental market with our levelling-up plans and the need to deliver more affordable housing across our country.
Madam Deputy Speaker (Dame Eleanor Laing)
I call Feryal Clark—not here. That is a shock.
Kim Johnson (Liverpool, Riverside) (Lab)
I join colleagues across the House in welcoming this long-overdue Bill and share their dismay at the delay in implementing a ban on no-fault evictions. Renters have been left with soaring rents and disrepairs, and are at the complete mercy of landlords, powerless under the current system of no-fault evictions to demand fair rents and humane living conditions.
This is a massive housing emergency. Across the country, renters of all ages and backgrounds—from students to families, young couples and single retirees—are struggling to pay their rent, let alone save for a deposit to buy. Only half of private renters have any savings in their name. With a desperate lack of social housing, Liverpool alone has more than 15,000 applicants on the council’s housing register and almost 1,000 households in temporary accommodation. The frontline housing options and homelessness service is seeing nearly 400 new approaches a month. Councils are relying on the private rented sector as the only way to ease the pressures on the system, and renters are left with no viable options.
An entire generation have been betrayed by the Tories, with 13 years of austerity and rising rents, frozen wages and diminishing opportunities. On top of that, they have faced unprecedented challenges caused by the financial crash, recessions, the pandemic and, now, the cost of living crisis. Thirteen years of Tory attacks on workers’ and tenants’ rights have left renters facing soaring insecurity and plummeting conditions. We urgently need the Bill to be passed into law to begin to redress some of the worst impacts of the deregulation.
Nearly five years since the Government proposed to outlaw no-fault evictions and give renters desperately needed protection from exploitative landlords, some 70,000 households have been threatened with homelessness by section 21 notices. Homelessness has skyrocketed during the last year, with the number of households in England who became homeless or were at risk of homelessness up 7% in the year to March. Each day that we delay, 172 families are handed a no-fault eviction notice. We cannot wait for improvements in the courts; renters need protection now.
In my constituency, as across the country, we have increasingly seen private landlords using no-fault evictions to turf out tenants on fixed-term contracts in order to hike up rents in line with soaring market rates. Not content with waiting out one-year or two-year-long contracts to raise rents and bolster profits, landlords are taking advantage of the cost of living crisis to line their pockets while tenants are turfed out with nowhere to go. Citizens Advice has found that a shocking 46% of renters who complain about their conditions receive a section 21 notice within six months. Research by Shelter supports that, with its findings showing that private renters in England who complain about poor conditions are 2.5 times more likely to be handed an eviction notice.
Ending pernicious section 21 evictions is a major step in rebalancing power in favour of tenants, but there are a number of areas where we need to go further to ensure that the Bill’s measures have their intended consequences, as called for by the Renters Reform Coalition of the 20 leading housing organisations. First, we must increase the notice period from two months to at least four months: a move that will drastically reduce the number of people made homeless as a result of evictions. We must also protect renters from eviction for the first two full years of tenancy, not the six months proposed. We must introduce strong safeguards to prevent abuse of the new grounds for eviction, including a financial incentive for tenants to prevent abuse, and a one-year ban on re-letting a property after invoking new landlord circumstances on the grounds for eviction. Courts must be given maximum discretion to identify reasons why an eviction should not take place, and a cap on in-tenancy rent increases in line with inflation and wage growth must be introduced to prevent unaffordable rent increases being used as a way to evict tenants via the back door. Lastly, we need action to raise local housing allowance in line with inflation to prevent renters on benefits from being penalised by rising rents, and local authorities must be given extra financial support to take action on rogue landlords.
Everyone deserves a safe and secure home. The Government must bring the Bill into law immediately, with the additional safeguards that Members have outlined, to deliver desperately needed robust legislation that protects renters.
Mary Robinson (Cheadle) (Con)
I am pleased to rise to speak on Second Reading of a Bill that fulfils a manifesto promise and introduces a number of measures ensuring that renters get a fairer deal and more protections while maintaining landlords’ essential control over their properties. Acknowledging that there are both good landlords and tenants—there are problematic ones as well—we must strike a careful balance. Therefore, as well as abolishing section 21 evictions and moving to a simpler structure where tenancies are periodic to empower renters and provide them with more certainty, the Bill introduces reforms to ensure that repossessions where tenants are at fault are easier, such as in cases of repeated, frequent arrears or antisocial behaviour.
The majority of landlord-tenant relationships work well, but, where they break down, early and effective dispute resolution is crucial. The new private rented sector ombudsman will be able to provide impartial and binding resolution to issues. However, it is not a full replacement for the court system. Therefore, His Majesty’s Courts and Tribunals Service must be ready for the changes. I welcome that some of that has already been raised, indicating that there will be: more digitising of the court process to make it simpler and easier for landlords to use; prioritising of certain cases, such as those including antisocial behaviour, which can be a significant issue for landlords and tenants alike in my constituency; and the provision of early legal advice and better signposting for tenants, including to help them find a housing solution that meets their needs. I urge the Minister to work at pace with the Justice Secretary so that we can bring forward these measures as soon as possible.
My constituents in Cheadle are animal lovers, so I welcome that the Bill will give tenants the right to request having a pet in their property. Landlords will be required to consider those requests and unable to refuse them unreasonably.
Anna Firth (Southend West) (Con)
My hon. Friend is making an important point. The people of Southend West are great animal lovers, and many have written to me to say that they have not been allowed to have a pet in a private rented property—what a terrible thing that is for their mental health. In Southend, I have met the Royal Society for the Prevention of Cruelty to Animals and been told heartbreaking tales of people having to give up their pets. Like her, I welcome the provisions in the Bill such that landlords cannot unreasonably refuse a request for a pet, but, likewise, landlords can demand that the tenant takes out insurance against any damage that a pet may do—a good balancing act. Does she agree that, given how important pets are to our physical and mental health, those provisions are to be much welcomed?
Mary Robinson
I certainly agree, and my hon. Friend has pre-empted many of my comments. It is heartbreaking for many people to part with their pets in order to have a roof over their heads. However, as we know, pets can sometimes cause damage and deterioration to a property, so it is important that landlords can insist on pet insurance to cover any damage caused as a result. However, for clarity, I would be grateful if the Minister could clear up a query from a constituent who expressed concerns to me about allowing pets in shared properties. In those circumstances, what will constitute a reasonable refusal—for instance, what if another resident with allergies or difficulties with animals complains? Will the Minister make sure that acceptable reasons for giving that refusal are made clear?
As the Secretary of State mentioned, the proposals have been examined in Committees. As a member of the Levelling Up, Housing and Communities Committee, I have had the opportunity to look closely into reform of the private rented sector, examining the Government’s proposals as set out in the White Paper, “A fairer private rented sector”. We heard from a wide range of stakeholders with views across the spectrum. The Committee found that there was considerable support for the proposal of introducing an ombudsman for the sector. Further, we heard evidence that many rogue landlords are not intentionally malicious but unaware of their obligations. We heard that supporters of the Bill hope it will be an effective place for resolution. Equally, there were concerns from landlords that it might create additional bureaucracy, and concerns from tenant groups that it may take away the ability to go to court. Reassurance about the ease of use of the dispute mechanism would be welcome.
Getting the balance right is crucial. Over the summer I met tenants, landlords and letting agents, such as Cheadle-based Stuarts Homes, which facilitates tenants and landlords on a daily basis. I am grateful to all my local residents, tenants and businesses for giving me their views. As with any legislation or policy, we must consider any unintended consequences and seek to balance the protection of tenants with the rights of landlords. I heard about potential issues with the debt respite scheme, also known as “breathing space”. It was introduced in 2021 to help those experiencing debt, and provides individuals with a 60-day period in which interest and charges on their debts are frozen and enforcement action from creditors is paused. That is paired with a requirement to seek professional support to create a repayment plan. The scheme will have come as a relief to many. However, I have listened to concerns that some tenants have misused it to prevent evictions in cases of long-standing non-payment of rent. The stress of non-payment of rent—sometimes for months on end—affects landlords, who are unable to take possession of their property and are owed thousands of pounds in rent, which they fear they will never recoup.
Meanwhile, I have constituents in Cheadle who are landlords operating student lets. They have expressed concerns about the abolition of fixed-term lets. I was told that it may prevent landlords from securing tenants ahead of time for the next academic year, thereby taking away certainty and security for both landlords and students, who want to know their housing situation is sorted ahead of time. I was given an example by a constituent of where rental agreements are shared and if a student leaves, the others are—in theory—liable for the extra share of rent. However, in practice, the student leaving finds a suitable replacement, the lease is transferred and the departing resident gets their deposit back. As such, my constituent feels that a move to rolling tenancies, as the Bill proposes, would be unsuitable for student lets. I am reassured that that is being considered again.
We also heard during sessions of the Levelling Up, Housing and Communities Committee that the changes could negatively impact the rental market, making it unattractive for landlords to let to students. I understand that the Secretary of State has plans to introduce a new ground for possession, which will facilitate short-term student tenancies, but the Committee—and my constituents —recommend giving consideration to retaining fixed terms for the student rental market. Although I am pleased that the Government recognise the unique position of student accommodation in the rental market, I ask them to look at doing that.
The Bill makes some much-needed changes, but I ask the Government to listen to the outstanding concerns raised by those directly affected—the tenants and the landlords. We must ensure that we do not create unintended negative consequences or further problems that negate the good work of the Bill. In closing, I reiterate my overall support for these measures, and I look forward to following the Bill as it moves through the legislative process.
Paul Blomfield (Sheffield Central) (Lab)
Almost 40% of my constituents are private renters, and I am pleased to have the opportunity to reflect their concerns. Of those, many are students—I think I have the largest number of students of any Member in the country—and I want to raise their concerns as chair of the all-party parliamentary group for students.
I was one of a cross-party group of 60 parliamentarians who wrote recently to the Secretary of State urging him to bring forward this legislation, so I am delighted that we have it. I did so primarily because of its promise to fulfil the Government’s pledge to end no-fault section 21 evictions, so it is a bitter disappointment that the Government appear to have frustrated the hopes of tenants by kicking the abolition of section 21 notices down the road to some potentially distant future, after further changes to the courts system—something that I saw that the National Residential Landlords Association has celebrated in a statement today, as a result of its “extensive lobbying”. I hope that the Government will think again, or at least give us an assurance this evening of the date when they plan to fulfil the ambition for no-fault evictions.
I hope the Government will go further in delivering the promised new deal for private renters in other areas, because I share the concern of the Renters Reform Coalition that the Bill needs amending to ensure that the proposed “landlord circumstances” grounds for eviction do not become the new section 21. The tenant should be given four months’ notice rather than two. There should be a one-year ban on re-letting after invoking the new landlord circumstances, rather than the proposed three months. We need stronger mechanisms than those proposed to stop unaffordable rent increases—of which we have heard examples already this evening—pricing tenants out and becoming the new section 21. We need to ensure that tenants can be confident in raising issues and making complaints without fear of retaliation. I hope that those issues will be considered seriously in Committee.
I want to raise the concerns of student renters. There is an exemption for purpose-built student accommodation, but many students live in the parts of the private rented sector that are covered by the Bill—around 45% of them, or 600,000 across England and Wales. Their voices have not been fully heard, which our all-party group has been trying to address. In May, we held a roundtable with student representatives from most of our major cities and many of our smaller towns. They agreed that there were many positive elements to the Bill, but raised issues that needed further clarification if it is to succeed for all renters.
I see that in his response to the Select Committee, the Secretary of State accepted the argument of landlords that
“the student market is cyclical and…landlords must be able to guarantee possession each year for a new set of tenants”.
He went on to state that
“we will introduce a new ground for possession to facilitate this.”
I understand that case, and it was reflected in some of the student voices that we heard, but we need to take care about how we do it because there is an underlying false assumption in the discourse around the issue that all students fit a traditional stereotype: on three-year undergraduate courses, wanting a 10-month contract and leaving their university town when they finish their studies. However, students are not homogeneous. Undergraduates and postgraduates have different requirements; there are 30-week programmes and 52-week programmes; some courses start at different times of the year and have a different cycle. There are mature and part-time students, students with families, estranged students, international students, graduate apprentices, those who stay on to study or work during vacation while their friends do not, and those who want to make their university house a permanent home.
Many students live in mixed households, with recent graduates or other non-students. It simply would not work to have people in a mixed household on a shared tenancy with different rights. A grounds for possession clause might protect the market, but a one-size-fits-all approach will not address the fact that not all students want properties that are cyclical with the standard undergraduate year. So we need a clear definition of a student and how grounds for possession will be implemented. I would welcome some acknowledgement from the Minister, in winding up this evening, that the Government have given consideration to those complexities in their proposals in relation to students.
We also have to recognise that the student market differs greatly across the country. Large cities are different from smaller towns, and urban and rural-based universities are different again. The Higher Education Policy Institute’s study of the Scottish experience highlighted the risk in tourist areas, or in other areas with low supply and high rents, that not exempting students will encourage landlords to move out of student accommodation. Student representatives expressed concern to us about being priced out in some areas by young professionals. On the other hand, there are worries that exempting students in some areas will risk them becoming second class renters, attracting less scrupulous landlords into student accommodation because they are relatively unprotected tenants.
Student renters face many of the same issues as other renters and they deserve the same broad protections. They face specific issues, too. The raised with us the growing pressure they are under to view and sign tenancy agreements for a property earlier and earlier each year—often in this term, early in the academic session, before friendship groups are formed—leaving them locked into unwanted contracts. The Bill does not address that, but students felt that it should. There are other questions that need addressing if we are to exempt students. What happens if a renter’s student status changes during the tenancy? How will the Bill address the issue of joint tenancies?
To conclude, I simply say to the Minister that we should not rush to exempt students from the protections in the Bill relating to no-fault evictions and keep them uniquely locked into fixed-term tenancies without careful consideration of the impact on all types of students in all parts of England and Wales. Even then, we need to ensure they continue enjoy the protections in the Bill. I hope the Minister will agree to meet the all-party parliamentary group for students, and student representatives, to hear our concerns.
Duncan Baker (North Norfolk) (Con)
I must declare that I own half of a rental property with my wife and should therefore refer the House to my entry in the Register of Members’ Financial Interests.
I want to start by talking about one of my favourite subjects in this place. I have often spoken in the House about the impact of second homes in my constituency. While they bring many economic benefits, we must also face the fact that quite often they turbocharge the market, pushing up prices and making home ownership simply a dream for many local people. It is no big secret that North Norfolk has the highest proportion of second homes in the country outside London. In addition, one in five properties are private rentals. However, with an increasing number of holiday lets and second homes for many local people, the availability of secure, long-term rentals is diminishing year on year. That is particularly worrying in a constituency such as mine.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am very grateful to my hon. Friend, whose area I know well because—I declare an interest—I farm in his constituency. I also have rental properties. What he is saying is absolutely correct. The Bill will have a disastrous effect on areas such as his and mine, reducing the number of rental properties and therefore increasing the price of rent. For youngsters, that is really serious.
Duncan Baker
I thank my hon. Friend for intervening. I do not agree at all, actually. In constituencies like mine, people have a real problem with the security of rental property. If they are evicted, it is virtually impossible for them to find somewhere else to rent in a short space of time at the moment. I deal with queries about that all the time, but I will come on to that in just a moment.
It is worrying that for so many who are looking to settle down in a family home of their own, renting is becoming the only option due to rising house prices. For example, on Friday I bumped into a local estate agent in one of my biggest towns, North Walsham. He told me he has 25 applicants for every rental property that comes on to the market. The demand is just off the scale. Clearly, that is a really huge problem. There is simply not enough rental market security when demand is rising as it is.
Now, clearly I am a Conservative and I am not against people wanting to purchase property in Norfolk as a second home. If one works hard in life, one should have the choice to spend one’s finances as one wishes. But I also believe that when the market begins to fail, intervention is sometimes necessary and that is where we are at the moment. Many second homes, for instance, are left vacant for large parts of the year, reducing the property pool and once again reducing the availability of homes for residents to rent. Although holiday lets and vacant second homes are not the focus of my speech today, following conversations I have had with many of my constituents, especially Jane Platt, whom I met when she came all the way from North Norfolk to Parliament back in March, I know how unsettled and insecure tenants can feel in the sector as it currently stands. That fear is exacerbated in areas such as North Norfolk, because if a landlord decides to serve an eviction notice, given everything I have just said, there would simply be so little choice available for renters who need to find a new home quickly. Indeed, sadly, just in the four years I have been in this place, I have tried to help many desperate families find a suitable home to rent. That is at the pinnacle of why I support the Bill.
The Government are trying to help. Many initiatives have come forward; I was a Parliamentary Private Secretary in the Department for Levelling Up, Housing and Communities for a short period of time. Doubling council tax on second homes, planning changes for short-term rentals and now this Bill show that the Government are committed to fulfilling their manifesto commitment to introduce reforms that will provide families across the UK with that extra reassurance that they will be able to settle into a family home and be free from, in certain cases, unfair evictions and, in very limited circumstances, landlords who do not act in a correct way. Many landlords and tenants are good, honest and decent people; they are the norm. The private landlord is, in my view, the answer to the rental crisis we face, but only if they are incentivised properly, for example with tax reforms. I gently suggest that in some regards we could go further with some of the Government’s proposals to ensure that good and decent tenants feel secure in the private rental sector and feel they can put down roots. It might not be a big issue for some Members, but as others have said, enabling someone to have a pet in their home, as I allow, is certainly right in the 21st century when so many people treat a family pet as a part of their family.
There is large support across the board for the Government’s current proposals, and I am not suggesting that they are materially changed. However, I believe there are some valid conversations to be had around increasing notice periods from two to four months to give people time to find a new home. I have said it before, but in my constituency and in many others—for instance, in the south-west—I doubt anyone could find another rental property in two months, such is the enormous shortage. In addition, I would potentially improve the protected period at the start of the tenancy from six months to at least a year, as well as making all grounds discretionary rather than mandatory so that a court can take into account a tenant’s circumstances before granting possession. Above all—I have said this to various Ministers before—why can we not incentivise long-term landlords to return to the market by offering mortgage interest relief on long-term tenancies? In a constituency such as mine, so many people offer short-term rentals in their holiday cottages and on Airbnb, but if we could switch those people to offering long-term tenancies on their properties by giving them mortgage interest relief, it would fundamentally change the situation overnight and give more renters market security. It would seriously improve the amount of rental stock we have available.
I appreciate the need to safeguard landlords from antisocial tenants and to allow them to get their properties back when needed; we have heard that this evening. However, the tightening of some of the Government’s proposals would not cause an exodus of landlords from the sector or prevent them doing what they wish with their asset. As I said before, I own a part-share and I do not have any fear at all. When a landlord has a good relationship with their tenant, that is how it works—operating good relationships. Generally, people who are trying to rent are decent people. Creating a fairer, more secure and thriving rental sector is achievable, and this Bill is the first step.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Just for the sake of clarity, let me say that I am grateful to the hon. Member for North Norfolk (Duncan Baker). He took the correct allotted time. There seems to be a mistake with the clock, but the hon. Gentleman has done the honourable thing, and I thank him very much for that.
Helen Morgan (North Shropshire) (LD)
Let me first draw Members’ attention to my own entry in the Register of Members’ Financial Interests. I am also half a residential landlord.
The Bill has taken far too long to reach this stage. It is more than four years since the Government’s manifesto pledge, and now, in the dying months of the current Parliament, the Bill has only just reached Second Reading. Broadly, however, my Liberal Democrat colleagues and I support it, and will vote for it this evening. Any legislation that paves the way towards a fairer situation for both renters and landlords must be welcome. Most important is the end of no-fault evictions, and I shall say more about that shortly. We also welcome clauses that will allow renters to keep pets in their homes, and the creation of a housing ombudsman, which will enable decisions to be made more quickly and cheaply for tenants and landlords.
Security for both tenants and landlords is vital, and it is essential that in providing that security for tenants, we do not inadvertently cause an exodus of landlords from the rental market. The Country Land and Business Association has found that 44% of landlords plan to sell or change the use of their rental properties in the next two years, which is cause for concern because at the same time we are seeing an increase in the number of people entering the private rental market. Rightmove estimates that for every property advertised for rent there are 24 applicants, whereas there were just eight in 2019. We need to ensure that we are incentivising landlords to stay in the market and to give renters security once they manage to become that one person in 24 to secure a property to rent.
The length of rental tenancies is an important element in that regard. In its current form, the Bill introduces rolling tenancies without specified end dates. That provides considerable security for tenants, but the six-month protected period is potentially too short. Meanwhile, 43% of landlords do not have a portfolio of properties; they have just one, so the risk of empty months is significant for them. Providing longer-term tenure might alleviate that risk and remove an incentive for landlords to exit the market. The Liberal Democrats’ proposal is to extend the default tenancy from one to three years, and, during that three-year period, only to allow rents to increase by the rate of inflation. That would give both renters and landlords greater stability.
As I mentioned earlier, the Liberal Democrats welcome the banning of section 21 or no-fault evictions. I am sure that Members on both sides of the House have had an enormous amount of casework featuring, for many renters, a sudden and drastic upheaval in their everyday life caused by a section 21 eviction. Such evictions leave people stressed about their security of tenure and worried about not having somewhere to call their home, and can pull the rug from under their feet. They can require people to move to a new area, forcing them to find new schools for their children or new jobs for themselves and try to settle into new communities. That is particularly significant at present, because more families than ever are living in private rented accommodation, and, according to the Renters Reform Coalition, 1.8 million renter households include children.
The Government’s commitment to abolish those types of eviction and legislate for landlords to be able to evict only in “reasonable circumstances” is therefore a welcome step towards ensuring that renters’ rights are protected in law. It will also ensure that tenants living in properties suffering from disrepair or even infestation can report such issues to their landlords without the fear of a “revenge eviction”. It should drive up standards, particularly if coupled with longer tenancies. As always, however, there is a balance to be struck between providing security for tenants and ensuring that the legislation does not cause an exodus of landlords from the sector. It remains important for landlords to be able to remove tenants who are genuinely damaging their property or the surrounding community, but I hope that the Minister will make the definition of what will enable that to happen absolutely clear. It is also important to guard against landlords being able to use flimsy excuses to evict tenants, allowing section 21 evictions to continue in all but name.
I hope that the Minister will elaborate on the reform of the legal system that will be necessary to allow landlords to evict when there is non-payment of rent, unreasonable damage to property or clearly defined antisocial behaviour, or a genuine change in a landlord’s circumstances. A prompt and fair court process is obviously essential to retaining landlord confidence in a reformed system, but delays in that process should not be used as a mechanism to kick this important legislation into the long grass.
The quality of rental housing must also be considered. Black mould, damp, faulty boilers—I am sure we are all aware of the difficult conditions that some rental properties are left in. I say “some” with great seriousness, because not all private landlords leave their properties in disrepair, but we must make the Bill robust enough to challenge those who do. The Government have previously promised to introduce legislation at the earliest opportunity to apply the decent homes standard to the private rented sector. I find it concerning that that legislation has not been introduced, and the Government have instead announced that they will delay the requirements that will force private landlords to meet energy performance certificate standards.
I understand the cautious approach in ensuring stability of supply in the private rented sector, but responsible landlords should not baulk at taking measures over a reasonable timescale that will enhance the value of their asset. I also understand the concern about the usefulness of the EPC, but it should be possible to revisit that and phase in a more effective measure of energy efficiency rather than abandoning it altogether, providing certainty and a fixed timetable that landlords should be able to work to. Without such measures, the Bill risks offering rogue landlords an easy escape route when it comes to improving the quality of the properties.
The Bill is better late than never, but I urge the Government to revisit the issue of length of tenancy, to clarify the circumstances in which, and the legal process through which, a landlord would legitimately be able to evict a problematic tenant or sell the property, and to consider including a decent homes standard so that those renting privately can be sure of a safe and warm home for themselves and their families.
Let me end by calling for a rapid increase in the building of social housing, because a shortage of supply is behind all these issues in the private rented sector, and it leaves far too much power in the hands of landlords.
Sir Edward Leigh (Gainsborough) (Con)
I have no financial interest in the Bill. I am not a landlord, have never been one, and have no desire to be one. It sounds like a very stressful job. However, I do declare a personal interest, because I am the father of young people in their 20s and 30s, and I am increasingly worried about their lack of opportunities to buy their own home, or indeed rent a home. My generation was fortunate in experiencing full employment, a buoyant housing and rental market, and low levels of net migration. I was able to buy my first house—although it was a bit of a struggle—for £25,000.
The opportunities for young people are so difficult now. and I think they should be at the forefront of our thoughts. They are overwhelmingly reliant on the rental sector for accommodation. The housing crunch means that they have to rent for a larger proportion of their lives, and the Government benchmark for an “unaffordable” level of rent is 30% of income. As of last year, four in 10 under-30s in England, Scotland and Wales are now paying rents that the Government consider “unaffordable”. The crisis is driven by a massive shortage of supply. Policies such as Help to Buy only help to increase demand, while doing nothing when it comes to supply. Only massive, comprehensive planning reform can solve this problem. We have to build many more houses, and we have to free up the rented sector.
We need a public-spirited mentality. Many older people have worked hard and have purchased their homes, but they are undermining the ability of younger people to do the same by objecting to new housing proposals—and, of course, when they object, they are also objecting to the ability of their own children and grandchildren to get on to the housing market. Much opposition to new housing is due to the fact that it is often poorly built, and developments lack the upscaling in infrastructure that is needed to support it. We need to adopt a holistic approach. The housing shortage means that first-time buyers have little to choose from, and delays them from getting on to the property ladder. Young people’s wages have not kept up with the rising cost of living and housing. They are forced to spend more and more of their money on rent, leaving less room for savings, paying off debt, and spending money which will flow into the general economy. Rent increases are outpacing wage growth in most of the UK.
I know that many Members, and rental reformers, have argued in favour of getting rid of no-fault evictions to help give renters security, but I believe the reality is the opposite. Banning no-fault evictions will make the rental market even more stagnant, and will lead to its drying up further. I urge the Government, if the Bill becomes law—as I am sure it will, with Labour support—to allow a cooling-off period so that over the next year, more and more landlords do not just get out of the sector altogether. Apart from adding to the burden of landlords, we do not want to see what happened when Ireland did this. The regulatory burden on landlords there was such that the rental sector shrank massively and Governments have paid the price in terms of popularity. The number of available properties for rent in Ireland has shrunk to a record low. A temporary eviction ban there ended at the end of March this year and did nothing to alleviate the shortage.
No-fault evictions are in some sense a legal fiction. Evicting a tenant for fault is a complex process and the burden is on the landlord to prove a breach of tenancy, arrears of rent, nuisance or antisocial behaviour, criminal activity or substantial disrepair. Depending on the tenancy, the notice period could be as short as two weeks or as long as several months. Notice procedures are highly regulated and must observe the prescribed format. Failure to observe this down to the letter of the law can render a notice invalid, delaying eviction. If the premises are not vacated, it is up to the landlord to initiate costly legal proceedings.
Let us look at what happened in the past. In 1952, under Harold Macmillan as Housing Minister, more than 270,000 new dwellings were completed. In 2019, the year before the pandemic, just 213,000 new dwellings were built. In the statistical year ending March 2019, 612,000 people came to live in the UK, with 385,000 emigrating from the UK. That is a net migration figure of 227,000 people, on top of the housing shortage that already existed. The post-covid statistics are even worse. The Office for National Statistics estimates that net migration to the UK in 2022 was 606,000. The same year, energy performance certificate data suggests that just 252,000 homes were built. The number of people we are letting into the country is 2.4 times the number of new dwellings we are building. This is a crisis and it needs to be addressed.
This does not take into account the fact that even without these newcomers there is already a squeeze on housing. We welcome the fact that we had 174,000 Ukrainians coming here, and perhaps we have not done enough but we have also welcomed people from Afghanistan. No one is claiming that we should not have taken in these refugees in genuine need, but we need to be realistic. If we are letting in these people in need, we need to severely curtail other migration—not just illegal migration but legal immigration—in order to stay afloat and give our own young people a chance to buy and rent houses. Younger and less well-off people are being left to shoulder the burden.
House builders face complex and lengthy planning processes that slow down development, and I cannot agree with the Government on removing housing targets. We need to reimpose housing targets on local authorities and we need a massive house building drive. We need to give many more people the opportunity to rent and we need to control net migration. For all these reasons, I cannot support the Bill tonight.
Marsha De Cordova (Battersea) (Lab)
Today’s Second Reading of the Renters (Reform) Bill is long overdue but, as many have already said, it unfortunately does not go far enough in many areas. Since the Government first promised to end section 21 no-fault evictions, 70,000 households have been evicted or threatened with homelessness. Everybody deserves to have a safe, decent and affordable home, but sadly, on the Tories’ watch, mortgage bills and rents are soaring, fewer people can buy their own home and over 1 million people are still stuck on social housing waiting lists.
My constituency is one of the youngest in the country and has a higher number of private and social renters than the national average. Average house prices are more than £675,000, which is around 15 times the average annual salary, making it much harder for many to get on to the housing ladder. All too often, that leaves them trapped in the private rented sector. The Renters Reform Coalition has rightly asserted that:
“The private rented sector in England is characterised by poor standards, a lack of affordability, discrimination and”—
most importantly—
“insecurity.”
I regularly receive correspondence from constituents complaining about the poor living standards and eye-watering rents that they are facing. That is why I asked the Secretary of State earlier why he would not bring forward provisions in the Bill to address the issues around decent standards. Renters have never been so exposed or so desperately in need of Government action to establish a fairer, more secure and more affordable private rented sector.
In London, private rents rose by over 6% in the year to this September, which is the highest for over a decade. The average rent in London is the equivalent of 40% of the average household income, compared with just 26% across England. The lack of protections for renters is playing a huge role in these trends. That is why reform of this sector is vital, but more needs to be done to protect renters and to ensure that they can live in a home that is safe, decent and affordable.
The Bill as it stands does nothing to address the cost of renting, which has skyrocketed. It contains no requirements for privately rented homes to meet the decent homes standard or provisions to increase councils’ investigative and enforcement powers. The Bill will eventually remove section 21 no-fault evictions, but it still has many issues. Renters will be protected from eviction only for the first six months of their tenancy, rather than the two years that many across the sector have been calling for. They will be entitled to receive only two months’ notice of an eviction rather than four months, which would give them more security, and landlords will be banned from reletting a property after evicting tenants on new grounds for only three months rather than for a year. While the Bill strengthens the law to ensure that landlords can increase rents only once a year, the mechanism for tenants to contest increases that are too high is not strong enough. We need to see a cap on tenancy rent increases at either the lowest end of inflation or wage growth.
I also want to touch on pets in private rented homes. This is an issue I have been working on with Battersea Dogs and Cats Home in my constituency, and an issue that many of my constituents have been writing to me about. It is something that they care about. For many people, their pets bring them physical, mental and social health benefits as they are an integral part of many family units. It is vital that we ensure that clauses 7 and 8 are protected in the Bill, so that tenants have a legal right to request a pet in the property and the landlord must consider that request and not refuse it unnecessarily.
This Bill alone will not solve the housing crisis in the private rented sector, and the Government must look at wholesale reform of the sector. Labour has committed, once in government, to increasing the affordable housing supply, and the Mayor of London has already invested over £3 billion in building genuinely affordable homes. There is so much more that the Government can do. They could look at unfreezing the local housing allowance and restoring the link between the LHA and rising rents. It has been frozen for too many years and it is totally out of step with the cost of renting for many in this sector. Shelter has shown that low-income renters are being forced to find, on average, an additional £648 for a one-bedroom property, which is virtually impossible for many.
This Bill only scratches the surface on fixing the housing emergency created by the Conservatives. To protect our constituents, more needs to be done in every way to ensure that everybody has a safe, decent and affordable home to live in. This is the level of ambition that we need, but unfortunately it has been missing from this Government.
Sir Robert Syms (Poole) (Con)
I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Looking at the housing market, we know that the problem is when people feel insecure. Generally speaking, those who own their own home or who are in council housing feel secure, but the private rented sector, because it is focused on very short-term lets, causes a problem. A one-year tenancy is not a problem for a mobile young man, but if he has a family, with children at school and work in the locality, and if he is unlucky enough to have gone from one private landlord to another, over half a dozen years, before being evicted, it will have a major effect on the family’s life chances. The kids might not be able to go to school, they might have a longer bus ride, and sometimes their exams might be affected. Sometimes parents have to change jobs.
It is laudable for the Government to try to lengthen tenancies in order to provide a little more security for those in the private rented sector, but I am not sure whether the formula in this Bill will actually do that. Like some of my colleagues, I am somewhat sceptical. There is quite a lot of room to improve the Bill.
As my hon. Friend the Member for North Norfolk (Duncan Baker) said, the Bill would probably be more effective if landlords were incentivised to keep tenants for longer by being able to claim their mortgage interest against tax. We would then end up with a market that is much more logical and better for tenants who want a long-term, secure tenancy. In other words, a fiscal intervention would be more likely to succeed than many of the interventions the Government are currently suggesting.
Of course, as many Members have said, one solution is to build more houses—more for people to buy and more for council housing. It is bizarre that some local authorities have got into trouble buying shopping centres and PV farms when, actually, the money would have been much better spent on providing people with a decent home. We all know that our local authorities spend a lot of money on putting people in temporary accommodation, with possibly only a microwave to heat their food. Investment in homes, which is good for people’s mental wellbeing and their children’s upbringing, should be the priority of any Government, rather than being a question of right or left. As a Government, we ought to focus more on building than on messing about with managing the housing market.
I am concerned that some things in the Bill may well put off private landlords. I sometimes feel that private landlords have a thankless task. They tend to get kicked by everybody, even though they are trying to do the right thing. Fundamentally, if we make it more difficult for landlords to get their property, they will think twice before renting it out. We have to be extremely careful when we legislate in this area, because the consequence of making it more difficult for private owners is that we may well end up with more people being evicted and more people falling on the council for a home.
The Secretary of State introduced the Bill with his usual panache, but I was amazed that two large areas have not really been included. First, the Bill will not work for student accommodation and, in fact, could have very perverse incentives. The hon. Member for Sheffield Central (Paul Blomfield) is an expert in this sector, and he made some interesting observations. He asked what would happen, if we had this system and tried to introduce a separate system for students, where a student lives with somebody who is in work. There are all sorts of difficulties that the Bill will have to iron out.
It is vital that those who have invested in property near our universities—our universities seem to be property companies, as far as I can see—have the certainty of one year moving on when another year comes in, in good time, so that people can sort out their accommodation. We really should tell people what we are doing when we introduce a Bill, rather than waiting for what might come out during the Bill’s passage.
My other concern is about moving from section 21, which is clearly a blunt instrument, to the courts. We currently have a major backlog in our courts, on which I think they are making some progress, but the Bill will inevitably slow down the process for landlords. The Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), suggested that perhaps there ought to be property courts to fast-track the complaints. There are all sorts of issues.
Throughout most of my parliamentary career, when people have come to my surgery to say that they are going to court, I have tended to say, “Don’t do it.” In this instance the Government are trying to get people to go into the legal system, and I worry that it will take longer. I worry whether this is the right solution for either tenants or property owners. Have the Government done a proper assessment? Are we confident that the system will work? The Bill has been introduced on a promise that it will be sorted out, but the courts are the responsibility of another Department, not the Department for Levelling Up, Housing and Communities. I worry about that.
This Bill is not fully formed, but I think it could be improved. It is one of those Bills for which Committee consideration will be vital. I will support the Government tonight, but I will be looking very carefully at how the Bill is improved as it goes through this House.
Ian Byrne (Liverpool, West Derby) (Lab)
For my constituents in Liverpool, West Derby, and for millions across the country, the private rented sector is the only housing option available because of the disastrous turning away from the post-war mass council house provision. Those long-term political decisions have led us to our current crisis.
The private rented sector has utterly failed to provide homes that are decent, affordable and allow people to live in safety, security and dignity. More than one in 10 privately rented homes contains a category 1 hazard that could kill or seriously maim, and tenants who raise complaints are two and a half times more likely to be handed an eviction notice, which often leads to a forced move that is disruptive to the family and to children’s education.
Local authorities have had their resources and capabilities decimated under the Government’s austerity programme. This morning alone, three families in West Derby have contacted my office after being given an eviction notice by a private landlord, with housing provision scant in Liverpool.
I have previously raised in the House the case of my constituent with asthma whose landlord left him in a damp property with no gas supply in the middle of winter. I have raised the cases of constituents, including children, who were hospitalised and suffered serious health impacts as a result of disrepair in privately rented homes, and cases of families living in fear of bailiffs, having been served a section 21 notice by their landlord after complaining about terrible conditions in their home. One constituent said, “Section 21 takes the humanity out of the situation and that’s precisely the problem—we are humans and our lives are being carelessly destroyed!”
Since I raised these cases a year and a half ago, my constituents have seen no changes to the law, so we finally welcome the Second Reading of the Renters (Reform) Bill, which we hope might at least bring an end to the nightmare of section 21 no-fault evictions. The delays to the Bill have been shameful. Nearly a quarter of a million private renters have been served with no-fault eviction notices since the Government first pledged to ban them in April 2019. During the delay between First Reading and Second Reading alone, Citizens Advice has had to help more than 10,500 people with section 21 evictions.
The Secretary of State has now said:
“Implementation of the reforms in this bill won’t proceed until further improvements are in place and HMCTS is fully prepared for these changes.”
How long will that take? Can the Secretary of State explain how this commitment will be reflected in legislation?
My constituents and hundreds of thousands of others have zero faith that they will ever see a ban on section 21 evictions under this Government, because they have seen 13 years of the Government’s complete destruction of the justice system, which has caused so much damage to those seeking justice in so many sections of society, including housing. I sit on the Levelling Up, Housing and Communities Committee. From the Secretary of State’s response to the Committee’s report, it feels as if the ideological destruction of the justice system by his Government is now being used as a cover to bow down to the lobbying from landlords—many of them seem to be on his Back Benches—and to kick the ban of section 21 into the long grass.
Added to that are the concerns of tenants, unions and charities, who welcome the ban on section 21 evictions but are concerned that the Bill will replace section 21 with potential loopholes for landlords to evict tenants under other terms that are unfair or extremely vaguely defined. They are also concerned that landlords will continue to be able, in effect, to evict tenants by raising rents to unsustainable levels. I hope that the Secretary of State will address those fears and loopholes when the Bill is in Committee.
This Bill should be an opportunity to empower tenants and hardwire social justice into the system. So many people are looking to the Bill to rebalance the scales of justice, which are weighted so heavily against tenants and so in favour of profit. Any delay in bringing in a no-loopholes ban on section 21 evictions really is unforgivable. A nation awaits.
Nick Fletcher (Don Valley) (Con)
I refer hon. Members to my declaration on the Register of Members’ Financial Interests. I have been a landlord for 20-plus years. I should also note that I have been a tenant, too.
A wise man once said:
“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it.”
He also said:
“The first lesson of politics is to disregard the first lesson of economics.”
Whenever this is the case, there are disastrous consequences. We see this every time Labour is elected. Who among us will ever forget the note that Labour left us in 2010? It said:
“I’m afraid there is no money. Kind regards—and good luck!”
As Conservatives, we understand the importance of sound economics and trying not to interfere with the market, yet I am concerned that this Bill may be guilty of just that. The Bill could well result in fewer properties to rent, and in sky-high rents.
I thank the Secretary of State for meeting me in Edlington in my constituency. I showed him at first hand the problems that landlords and constituents are facing as a result of the decades of neglect that the area has faced under Doncaster’s Labour-controlled council. I am still hopeful that levelling-up funding will help to transform this part of my constituency. I have written a plan for Edlington, which I know my right hon. Friend has read. On a positive note, he will be pleased to know that his visit has bucked up all the stakeholders: they are now beginning to address issues that I have raised. My constituents are very grateful, as am I.
I also thank the Secretary of State for his recent letter to me, in which he announced changes that he has made to the Bill. They were needed. That proves that the Secretary of State is willing to listen, but there remain many issues that need addressing. The simple fact of the matter is that the more bureaucratic and difficult we make renting for landlords, the more incentive they will have to sell up and reduce the number of properties on the market to let. With fewer properties for rent, scarcity means that rents will increase. Is that what tenants want? We should be helping landlords and tenants equally, not one over the other. Savills has carried out research on the issue, and tens of thousands of landlords are doing just that: selling up. More are expected to follow.
There are those who say, “So what if the landlord sells? What is all the worry? The house is going nowhere. If it is sold, an owner-occupier or another landlord will buy it.” They are right—and if an owner occupier does buy it, that is fine. But if good landlords cannot make a property pay, they may just sell to an unscrupulous landlord who will make it pay. Is that what we seek to do: to make the property market so costly and so bureaucratic that only the cowboy landlords can make it pay? I do hope not.
By bringing this Bill forward, the Government will inadvertently increase the rents that many of my constituents are paying. No doubt that will reduce the quality of the properties, too. That cannot be right. Trying to protect any increases in rent by allowing only annual increases will no doubt result in landlords putting up the rent each year. It makes sense: that is what happens when the market is interfered with. Yet, prior to the scheme coming into effect, many landlords have allowed good tenants to pay rent at the same rate, year on year.
Rolling tenancies give neither the landlord nor the tenant any security. To allow notice to be given from day one is, I am afraid, nothing short of ludicrous. I am not sure whether the Secretary of State has ever had to try and find new tenants. Tidying up a property after the last tenant absconded is a job in itself, and then there is advertising the property, dealing with scores of viewings and dealing with agreements, deposit schemes and so on. To go through all that and then allow a tenant to give notice on day one and leave after two months is, as I say, ludicrous.
I can understand the attraction of an ombudsman and a database, but we must be realistic: this will only add costs. Either that will be another reason for a landlord to quit the sector, or it will increase the tenant’s rent. Tenants should see that these proposals will end up costing them hundreds of pounds every month.
I am sure the Government’s intentions are honourable, but the fact remains that although the Bill may initially look favourable to many, it simply is not. We should be careful not to follow the socialist path. Many socialist policies look good for politicians; that is why they win elections, but that failure to understand the market and basic economics is why they always end up bankrupting the country. Conservative Members understand economics and want to do the right thing for the right reason, no matter how it looks. That is the reason I am a Conservative.
I ask the Government again to listen to the industry and to meet me once more. Let us not do what that wise man Thomas Sowell said of politicians, and disregard the first lesson of economics. The outcome will always be worst for those who can least afford it, which will be many of my constituents.
Zarah Sultana (Coventry South) (Lab)
The housing system is rigged against renters. In Britain today, on average, private renters spend about a third of their incomes on rent—on properties that are disproportionately in shoddy conditions, where problems such as damp and mould are rife—and things are getting worse. Rents have soared to record highs and have gone up 33% outside London in the past four years. Homes in England are, on average, not only the smallest in Europe, but in the worst condition and among the least affordable.
The rights that renters have to live in these often overpriced, overcrowded and unsafe homes are pathetically weak. With a no-fault eviction notice handed to a private renter every three minutes, many renters are forced into homelessness. Research shows that renters are so worried about the risk of being evicted that they often do not ask their landlord for vital repairs or challenge grossly unfair rent hikes.
In my constituency, I recently had a case that highlighted the need for stronger renters’ rights and the abolition of no-fault evictions. Having lived in her home for 15 years, Mandy and her two sons were issued with a no-fault eviction, giving them just two months to find a new home. As Mandy said,
“the threat of eviction is so stressful. The thought of having to move my family into temporary accommodation away from our community has kept me up at night.”
This was particularly difficult for one of her young sons, who is disabled and has complex needs. With the family on the brink of homelessness and bailiffs turning up, the community tenants union ACORN stepped in and supported Mandy and her family, which allowed more time to find a new home. I am pleased to say that, with the eviction delayed, they found a new home, but not everyone is so lucky.
That is why no-fault evictions need to be banned. Although on paper that is what the Bill says it will do, I share colleagues’ concerns. Not only is the Bill filled with loopholes, giving unscrupulous landlords opportunities to get round the scrapping of no-fault evictions, but today it was revealed that the Government will indefinitely delay introducing the ban, promising that it will come into effect only after court reforms have been implemented —and who knows when that will happen? Of course, this delay has been welcomed by the landlord lobby—and no doubt by many landlords on the Government Benches.
The Government promised a new deal for private renters, with quality, affordability and fairness at its heart, but this Bill is far too little, far too late. Renters do not just need a real, watertight ban on no-fault evictions; they need rent caps and an end to ever soaring rent rises. They need an end to the Thatcherite right to buy and the privatisation of council homes, which has seen two thirds of council homes sold off and almost half being bought up by private landlords, only to be leased out again at far higher rents. Renters also need a Government-led council house building programme to build hundreds of thousands of high-quality new homes—owned by the council, obviously—every year. Ultimately, we need a Government who shift the balance away from bad landlords and big property developers, in favour of renters and working-class communities.
Angela Richardson (Guildford) (Con)
We have a mandate from the British people to deliver this Bill, and I know that passing it into law will be warmly welcomed by renters in the 4.6 million households who are renting nationwide. Support and fairness is what this Bill delivers, to both renters and landlords alike.
Last year, the English housing survey identified that 23% of privately rented properties do not meet the decent homes standard. The consequences of unsafe rental properties cost the NHS £340 million each year. I am sure that we can agree that this is an unnecessary cost, but it is made up of thousands upon thousands of individual stories of miserable living conditions.
From day one in this job—and sadly, week in and week out—much of my casework has involved poor housing conditions. Resolving these issues gives my caseworking team, Diana, Mollie and me, enormous satisfaction, but it is distressing to hear of the health impacts on vulnerable constituents. That was brought to the fore for all of us with the news at the beginning of the year of the death of two-year-old Awaab Ishak in Rochdale from respiratory issues caused by exposure to mould. I hope that we can all agree across the House that no family should suffer the loss of a child in that way. Fear of eviction should not be a reason for not asking for repairs to be done.
Since assured shorthold tenancies were introduced, renters have been offered no long-term security of tenure, and private landlords have been able to repossess their properties without any establishment of wrongdoing by the tenants. However, that is not to say that many landlords do not do an excellent job in delivering good-quality housing and support to their tenants, while exercising their rights properly and with good intention. The goal is to increase their number and for more landlords to follow their example.
A large number of my constituents in Guildford have written to me in support of the Bill, for many reasons, including the provisions that will give tenants the right to request a pet in their property and enable landlords to require pet insurance to cover any damages. My constituents think that is a great idea. As a pet owner, I wholly agree with them.
I have also been considering the issue of tenancy length, with students in Guildford in mind. There are some fundamentals that we need to get right. Landlords need full access to their properties after term finishes in the summer, to prepare them for their next tenants in the autumn. I am pleased that the Secretary of State gave reassurances on student lets in his opening speech.
Between 2010 and 2020, the Conservative Government reduced the number of non-decent private rental homes by 16%. The Secretary of State thinks we can go further, and so do I.
Helen Hayes (Dulwich and West Norwood) (Lab)
I see the impacts of the lack of regulation in the private rented sector in my constituency every single week. In Dulwich and West Norwood, rents have been spiralling for many years, and all too often the quality of accommodation falls way below what any tenant should be able to expect.
I have in my constituency a landlord who owns 90 homes in a development called Dorchester Court. The landlord is on the Sunday Times rich list. Their properties are in an absolutely dire state. Wooden props support the window frames. Plastic sheeting acts as an ineffective shield against moisture penetrating the walls. The heating is unreliable in the winter. The water pipes are made from lead, which contaminates the water supply to a level that is not safe for human health. The council has been trying for a number of years to take enforcement action against this landlord, but it has been waiting many months for a court date. In the meantime, the same landlord has used section 21 eviction notices—in a way that, in my experience, is entirely common—simply to ratchet up rents. Tenants are served with a section 21 notice terminating the tenancy, alongside an offer of a new tenancy at a higher level—often a significantly higher level—of rent. If any Member doubts the need for additional regulation of the private rented sector, they should visit Dorchester Court in my constituency, and, in five minutes, they will see how the regulatory framework is failing tenants across the country.
Section 8 allows for landlords to get their property back when they have a legitimate reason to do so. Section 21 is a pernicious, destabilising force in the housing rental market and there is no place for it. The consequences of section 21 are more than simply contractual. They are found in poor mental health and anxiety, in increasing homelessness and financial hardship, in children living in accommodation that no child should have to live in, and in children having to worry about the anxiety that their parents are experiencing because of the possibility of losing their home at any time. It is very disappointing that the Government are delaying the ban on section 21 evictions by allowing a loophole in this legislation. I sincerely hope that, in Committee, they will reconsider their position.
I turn now to an amendment to the Bill that I plan to table. Earlier this year, my constituents lost their son, a first year university student, to suicide—a devastating loss for any parent to bear. Their son had signed a tenancy for his second-year accommodation and his parents had signed a guarantor agreement. After their son’s death, they discovered that the guarantor agreement applied even in the event of his death, and the letting agent began pursuing them for the rent. It was rent for a tenancy that had not yet started and a tenancy that he would never take up. This is a shockingly punitive act against parents who were already suffering the worst possible loss.
In extensive correspondence with the letting agent on my constituents’ behalf, it refused to budge, simply stating that the rent was a contractual obligation and, although it was unfortunate, my constituents were bound to its terms. I am grateful to the Minister for meeting me to discuss the issues raised by this case. She has explained that the Bill will enable any tenant to terminate a tenancy with two months’ notice, but two months’ rent is a financial penalty that no bereaved guarantor should have to pay. This type of clause is not in every guarantor agreement, and it is not necessary. Insurance policies can cover loss of rent in the event of the death of a tenant. I ask the Government to reconsider their position and, in Committee, to accept my amendment, which would straightforwardly outlaw the pursuit of guarantors for rent owed by a deceased tenant and stop any other family having to suffer this egregious additional pain, anxiety and hardship at a time of great sadness and vulnerability.
Anthony Mangnall (Totnes) (Con)
Listening to this debate, I am surprised that we are being accused of dither and delay when 13 years of Labour government never produced a Bill such as this. However, that is for Labour Members to discuss and to wrestle with on their own terms.
I welcome the Bill and support its sentiment, but, as with all pieces of legislation that pass through this place, the devil is in the detail. The Minister and the Secretary of State have a trifecta on their hands. They must reassure Members in this place and in the House of Lords; reassure tenants; and reassure landlords, because, at the moment, I am not entirely sure that we are there. Just as not all tenants are bad tenants, not all landlords are bad landlords. We must make sure that what we provide in the Bill today, in Committee and on Third Reading will reassure both tenants and landlords and take them with us. As many Members have said, it is a balancing act of ensuring the rights of property ownership along with the rights of good, firm tenancies.
I have three areas on which to focus my remarks. The first is the removal of fixed terms—following the brilliant speech of my hon. Friend the Member for Cheadle (Mary Robinson), I shall also mention the unforeseen consequences, which she talked about. Perhaps I can give an example. My constituency has one of the largest second home and Airbnb markets in the country. Under the Government’s proposal that tenants will be able to hand back a tenancy with a minimum of two months’ notice, someone could come down, pretend that they are going to rent a house on the long-term rental market, go there for June, July and August, and then hand back the tenancy. With this clause, we would completely obliterate the long-term rental market because people would take advantage of it as a short-term letting market and then hand the property back.
The disparity in prices between the short-term let market and the long-term let market is unbelievably significant in south Devon. I hope that the Minister can reassure me on that point, because that is exactly what people will do. They will rent a house on the pretence that they will stay in it for a significant period, they will be there for the summer, and then they will give it back. That is what the clause allows. We have to ensure that the unforeseen consequences are addressed.
Unless the Minister can give me some reassurance, I worry deeply about what the long-term rental market will look like. At the moment, across south Devon only 70 homes are available for people to rent. We do not demonise landlords without risk. We need to incentivise people to put their houses into the long-term rental market so that they can provide that social value. That is exactly why the Country Land and Business Association has said that it thinks that the rural private housing sector is set to shrink, with 44% of landlords either selling their property or changing its usage class.
My second point is about court reform. I am distinctly uneasy about voting for a Bill that does not come with enforcement and arbitration measures. We have been here before. It is all very well to give a brilliant speech in this place, and clip it and put it on YouTube or Instagram, but if we do not address the legal mechanisms that are needed to enforce the measures, we do our constituents a disservice. It is part of the process in this place, and it worries me that the Government are suggesting that we vote blindly on a piece of legislation that does not have that enforcement mechanism in it.
As I have said, the devil is in the detail, so perhaps the Minister could tell us what the timeline will be for the full creation of the court system or arbitration system. How quickly will we see judgments come along? How will we look to expand the wording on antisocial behaviour, and what will the actual terminology be? When considering a Bill a few years ago, we had a very vague term for the acceptable level of noise. The people who had to enforce that were the police.
If we do not have specifics in our laws they end up being interpreted, sometimes for the better but more often for the worse. Again, I ask the Government to be clear about their laws and language, so that we can ensure that the Bill is drafted in the right way to help both tenants and landlords. I do not feel that this is particularly party political, or that many people from across the House would disagree with those points; it is about having good law and good legislation, and we are all part of that system.
My third point is about the social value of landlords. Both the shadow Minister and the Secretary of State made exactly the same point: they expressed the value of landlords in the housing mix. We have to remember that, because without landlords out there providing houses, our housing market would be a lot worse off. We therefore also have to ensure that under the rights of property ownership, which this place has protected over the years in many different forms, we are clear about the grounds for eviction. I do not think that it is controversial to ask for evictions on the basis of a breach of contract, persistent late payment or damage to property. We have to be clear about those things.
No Member who has spoken in the debate, which has been broadly co-operative, wants people to be homeless or to live in bad housing, but we have to be absolutely clear about what we are asking of tenants and landlords. We have to provide reassurance and ensure that we are incentivising the long-term rental market. By the way, we could also look at reinstituting section 24 mortgage rate relief, but that may be a debate for another time. We have to ensure that we are not pushing houses back into short-term lets, that we are creating a transparent legal system, and that we are looking after the value of tenants and landlords in equal measure. As I said at the beginning, this framework is welcome, but unfortunately there is more work to be done.
Andrew Western (Stretford and Urmston) (Lab)
Like my hon. Friend the Member for Sheffield South East (Mr Betts), I begin by informing the House that I am a vice-president of the Local Government Association. I am also a parliamentary ambassador for PricedOut, the campaign for affordable housing.
Let us give credit where it is due: the Government deserve praise for bringing the Bill forward at last. It has the potential to be transformational, bringing renters much needed additional security. However, if, as the Government statement on Friday seemed to suggest, Ministers are planning to delay indefinitely introducing the ban on section 21 evictions, the Bill will be a huge missed opportunity. Regardless of that issue, if the Bill is to reach its full potential, it must be strengthened significantly and its many outstanding loopholes must be firmly closed.
One such area of concern is notice periods. As we have heard, the Bill retains a two-month notice period when tenants receive an eviction notice on the grounds of landlord need. But with rents at their highest levels since records began and housing in chronically short supply, it is, as Shelter has argued, almost impossible for many tenants to find a suitable property to move into in just eight short weeks.
We must also remember in this debate that, according to the charity Crisis, the loss of a private tenancy is the leading cause of homelessness in the UK. Short notice periods—along, of course, with no-fault evictions—contribute to that, resulting in a disastrous situation for the individual involved and huge expense for the taxpayer. I hope to hear from the Minister why she believes that two months is enough time for tenants to relocate in such a difficult housing market.
I turn to fault-based evictions. I have significant concerns, which I hope can be addressed during the passage of the Bill. One is ground 14, which, as it stands, proposes widening the definition of antisocial behaviour to cover any behaviour capable of causing nuisance or annoyance. Mr Deputy Speaker, every Member of this House has the capability to cause nuisance or annoyance—and many of us do it frequently in this Chamber. How on earth could we stop a rogue landlord from exploiting such an extremely broad definition? They could make a false claim about a tenant’s capacity to cause antisocial behaviour and evict them simply to hike up the rent.
Protections must be built into the system to avoid section 21 evictions through the back door. What safeguards are in place specifically to stop victims of domestic abuse from facing eviction on antisocial behaviour grounds? Do we really want those who suffer at the hands of their abusers to lose their homes as well? There is much work to be done in this area.
Another reason for fault-based evictions, of course, is rent arrears. Again, no one denies that such evictions can be reasonable in certain circumstances, but safeguards for the vulnerable are vital and a sensible balance is needed. Ground 8A means that someone needs to have been in two months’ worth of rent arrears for just one day on three occasions to be liable for eviction. As we all know from our own casework, rent arrears can arise for a variety of reasons: unexpected bills, illness, redundancy. In a cost of living crisis, tenants could well find themselves falling foul of ground 8A through no fault of their own.
I will be interested to hear from the Minister what assessment the Government have made of the impact of making ground 8A evictions discretionary rather than mandatory, so that, as in Scotland, the case would come before a judge who could evaluate whether the eviction was justified or a resolution between landlord and tenant could be found. That could help someone to stay in their home, protecting them from the devastation of homelessness.
The headline measure of the Bill should be the long-overdue ban on section 21, but delays in the court system will hold up that important measure for some time. None the less, other potentially positive steps include the proposed introduction of a private rented sector ombudsman and a property portal to which landlords must be signed up. Crucial to the effectiveness of those measures is the capacity of local authorities to enforce them. That is a significant concern given the cuts to local authority budgets since 2010 and the resultant hollowing-out of non-statutory services.
That is not the only area in which the capacity of local authorities is a significant worry. The Local Government Association has raised specific concerns about local authorities’ ability to enforce compliance with the ban on landlords re-letting or remarketing their property within three months of using “landlord need” eviction grounds, as it appears in practice that that system would be wholly reliant on former tenants noticing that the property is back on the market after they have been evicted. Many landlords will surely chance their arm in that situation and put their property back on the market within the re-let period, so I encourage the Minister to consider whether that period should be longer, and what steps she might take to ensure that such a period is effectively monitored without tenants and former tenants having to put their head above the parapet and report a landlord who fails to comply with the law.
Notice periods, fault-based evictions, the use of ground 14, the rigidity of ground 8A—there is much work still to do on the Bill. I support it in principle, but I hope there is significant movement in Committee.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Let me first refer the House to my entry in the Register of Members’ Financial Interests and declare that I am the co-chair of the all-party parliamentary group for renters and rental reform and am supported by Generation Rent.
It is almost hard to believe that the words “ban on no-fault evictions” will not be in the next Tory party manifesto. Those words have been in Queen’s Speeches. The Tories have promised, but they have not delivered. Now we know, of course, that that is because there was an almighty fight on the Conservative Benches—a fight that is still going on by the sounds of it. To all the dodgy landlords and vested interests watching this debate, I say that if they delay the Bill and its implementation further—as has been rumoured today—the result will be rental reform at the very core of the next general election campaign, and when Labour is in government, legislation might well go even further beyond what some of those vested interests want.
Enough about the politics; let us get down to the Bill itself. Central to this legislation is the abolition of section 21 no-fault evictions, which have been the blight of renters for many years. The aim is to provide safe homes that allow renters to establish roots in the community and start families—that is lacking at the moment. I am concerned, however, that the vastly expanded grounds for eviction might undermine the very concept of the Bill. Under schedule 1, grounds 1 and 1A remain no-fault clauses. They are for the landlord moving themselves in or selling. To prevent potential abuse of those grounds, it is crucial that landlords provide unequivocal evidence of their intentions, including through solicitors, agents’ letters or sworn statements to the court. After using those grounds, landlords should submit another statement within 16 weeks of possession, for example. Landlords who genuinely need to possess under those grounds have nothing to lose in making such legal declarations, and the clauses are useless without them.
There may be legitimate circumstances in which a ground is no longer relevant—someone might have been evicted but the landlord no longer wants to sell the property or have a family member move in, for example. Should that happen, reasonable compensation should be offered to the person who has been evicted. It is not fair to use the grounds and then say, “Whoopsie-daisy, I didn’t realise that I couldn’t sell.” There must be redress for the tenant who has been harmed.
Ground 6 allows for an eviction when the landlord is found to be at fault. Although I do not think that people who are unfit to be landlords should remain landlords, this ground penalises the tenants by discouraging them from co-operating with enforcement action. As such, we need either compensation for any no-fault eviction, or an administrative mechanism that keeps the tenant in the property but removes the landlord’s day-to-day control for as long as that tenant wishes to remain.
Grounds 8 and 8A deal with tenants who are in arrears. While there are some protections for universal credit payments, there are no protections where the arrears are irregular under ground 8A. Arrears might be repeated but very short, and the Domestic Abuse Housing Alliance has highlighted the risk that this poses to victims of domestic abuse. The courts need to have discretion; these clauses cannot be mandatory.
Lastly, ground 14 is one I have raised with the Minister. We need to ensure that antisocial behaviour is not an excuse for a section 21 eviction by the back door. Equally, the idea of a student eviction clause is very worrying; the National Union of Students does not support it, and I do not see how it could be practically enforced. I would want to see that idea fleshed out in Committee, or a pledge that it will be ditched.
I welcome the Government’s inclusion of two methods of enforcement. The first is local government; the second, which is more encouraging, is the ombudsperson. I am pleased that the Secretary of State has agreed to look at merging the ombudspersons—we have too many at the moment—but we need to make sure that that ombudsperson has the authority to rectify matters in a timely manner, one that still allows people to go to the courts if they wish to pursue that method of redress.
It troubles me that the landlord’s notice period has not been changed from two months. In my view, that notice period should be four months, and importantly, tenants should have the flexibility to move out during a notice period: if a tenant is given notice and moves out the next week, they should not be liable for two months’ worth of rent. That seems wrong to me.
Turning to protection periods, tenants will have protection from eviction for the first six months of their tenancy. Currently, they have six months after they sign each new assured shorthold tenancy, meaning that long-term tenants might have fewer protections than they do at the moment. Renters need to be protected: one proposal is to give them two years’ protection, which is a very good idea that we should explore in Committee.
On rent increases, we must ensure that we do not face a wave of economic evictions. Otherwise, what will happen is that the landlord will whack up the rent, and someone will have to move. The rental tribunal’s decisions being tied to markets means that an increase will be considered valid if the final rent aligns with market rates in local areas. That is clearly unaffordable for the LHA rate, which is under 30%—I remind colleagues that in 2010, that rate was 50%. It has been decreased year after year, and we need to address that. The Bill is also in danger of failing to address the “no DSS” benefit discrimination and the rampant guarantor discrimination that happens all the time in the rental sector, as well as affordability checks, which are used as methods of economic discrimination. Those problems also need to be addressed in the Bill.
I am a fan of the theory behind the property portal, but I fear that it might end up being like the bad landlords list, which never really worked and was never enforced. I appreciate that there are fines for not registering a property, but those fines should be paid to the tenant, as is the case with the deposit protection schemes. That would encourage tenants to make sure that their landlord is registered—they would receive recompense if the landlord was not. We cannot have local authorities doing all the checking: they just do not have the resources at the moment. We need everyone to be able to support these reforms.
Mrs Elphicke
My co-chair of the APPG on this subject is making some very important points. Could he further develop the important principle of the tenant being compensated for some of the no-fault or other fines that he has mentioned?
Lloyd Russell-Moyle
I would love to, but we do not have much time. However, there needs to be some discussion about what compensation someone will be given if they are no-fault evicted: for example, should they be given two months’ compensation, which could pay for a deposit and the first month’s rent in their new property? If the landlord has not registered, and the tenant is then evicted because their landlord has failed to be a good landlord—which is, of course, one of the grounds—what compensation will that person receive, enabling them to move into new, decent accommodation? Their money is tied up in the deposit and in having paid the rent. There needs to be some serious thought about how we compensate tenants so that they can move on in the private rented sector. Some people have also said that the property portal might be a back-door way of getting rid of selective licencing, which would be a great mistake.
The real story of these reform methods is the work of tens of thousands of hard-working activists, advice workers, policy leaders and organisations up and down this country, many of them in the Renters Reform Coalition, to which I give much praise. We are close to significant reform, but we must be vigilant.
Liz Twist (Blaydon) (Lab)
Never a day goes by without a constituent, or more than one constituent, contacting me about problems they are having with their housing. In particular, my caseworkers and I have been startled in recent months by the number of people coming to us who have been served with section 21 notices. I will give just one example.
I was contacted just a few weeks ago by a family in my constituency who had been served both a section 21 notice and a section 13 notice of increasing the rent. The son in the family has epilepsy, asthma and autism, and he attends a local school where he has an education, health and care plan in place. The family cannot afford private rent, but with the social housing stock under so much pressure, they were terrified they would not find a home close enough to his school and to much-needed family support.
Many of my other constituents’ stories reflect this one—families with disabled members who are distraught at losing their homes to landlords who are putting up the rents, making them beyond their reach. These are just some of the 70,000 households that have been unfairly evicted since the Government first promised that they would take forward this legislation. How many more of my constituents will be served a section 21 notice before this legislation not only gets on to the statute book, but becomes effective with the reforms to the justice system and the courts?
I have had so many constituents write to me asking us to press for this Bill to come forward, but I fear we will not have met their expectations and their hopes for the protection of tenants in the future, particularly in relation to section 21. There is no doubt that passing the Bill into law will be a vital step forward, but it needs to be effective as well. So the issues about the courts need to be resolved as a matter of urgency, and I hope that the Minister will address those in her closing comments.
I have some other serious reservations about how some of provisions will work in practice. Just on the issue of section 21 evictions, the new grounds for landlords to reclaim possession make it clear that they will be banned from re-letting their property only for three months after evicting a tenant. The kind of rent increases we are seeing today may well mean that repossession is still well worth it for a landlord, I am afraid. Furthermore, many of the families that come to me after receiving a section 21 notice are currently able to receive priority assistance from the council due to their risk of homelessness, but this Bill appears to remove the right to immediate help if families are served with a possession notice. In the absence of section 21, we desperately need this right to assistance to be reinstated as the Bill passes through its many stages.
Moving away from the specific issue of no-fault evictions, I am concerned about the Government’s U-turn on the promise they made in the White Paper to introduce a requirement that privately rented homes meet the decent homes standard. There was some discussion of this in the opening statements, but I would like further assurance from the Minister in her closing remarks that the issue of decent standards, which are so much needed in private rented housing, will be urgently addressed and brought forward in this Bill.
Earlier this year, I heard from a constituent renting from a private landlord who was left without a cooker for three months of his tenancy, as well as having ongoing issues with his boiler and with rising damp, all of which he had attempted to take up with his landlord. We of course took up these issues locally to try to resolve the problems. In fact, he left the property before they were resolved, leaving the problems for the next tenant, as I understand it. However, at my constituent’s request, I wrote to the Department on 8 August to ask what was being done to stop private landlords from leaving families in homes that are not up to standard, so he was sufficiently concerned to see this as a policy issue, not just an issue for himself. Unless councils are given greater enforcement powers to tackle a wider range of standards breaches, and the resources to deal with those in practical terms, I am concerned that renters such as my constituent will not be protected from landlords who fail to fulfil their responsibilities.
My constituents have also been writing to me about pets, and it is positive that there will be a right to request to have a pet. I hope that during the passage of the Bill we can define the phrase “unreasonably refused”, or I fear that too many renters will find it to be a right in name but not in practice.
The provisions in the Bill are desperately needed by my constituents and those of all hon. Members. I urge the Government to end the dithering and delay in enabling this Bill over the past five years. I also hope they will take the further steps that so many Members have identified and that are required to protect our constituents from homelessness and poor-quality housing.
Caroline Lucas (Brighton, Pavilion) (Green)
It is about time. It is nearly five years since promises were first made to tenants facing soaring rents, huge energy bills, cold and damp homes, and limited rights. We are now on our 15th Housing Minister since 2010, and the Government are fast running out of time to make good on the promises in the Bill. Unforgivably late though it is, the Bill is important and provides a genuine opportunity to move towards the most basic goal of creating fairer, greener homes. It is clear that the market has become over-commodified and grossly distorted. We have a generation who will never be able to earn enough to have a mortgage, and cannot even afford their rents now. Key workers are being forced out of the places they work in, families uprooted, children forced to move schools, revenge evictions for those who complain—the list goes on.
More people are becoming homeless following rising evictions from the private rented sector. Annual Government figures released recently show a 23% increase in people at risk of homelessness because of a section 21 no-fault eviction. I welcome this delayed but essential Bill, not least because Brighton and Hove is one of the most expensive cities to rent in outside London, with a large proportion of renters being ripped off on a long-term basis with no end in sight. Recent analysis shows that in our city rents have jumped by 47% since 2011, and wages have risen by 35%. To put that another way, since 2011, renters in Brighton and Hove paid £530 million more to landlords than if housing costs had matched wages.
There are some good principles and useful changes in the Bill, such as measures on security of tenure, a new ombudsman and so on, but there are also glaring loopholes and big omissions. In particular, the measures on rent increases are inadequate and rely on a resource-intensive and time-consuming appeals process that could see tenants worse off at the end of it, as the tribunal process includes a power to impose a higher rent than the one the tenant is appealing. At the very least that power needs to be removed. Indeed, Ministers need to go further and get to grips with the fact that many people simply cannot afford their rent as it stands.
Many of my constituents are paying massively more than 30% of their gross monthly income on housing costs. That is unsustainable and we need a conversation about a national system for rent controls with local flexibility. Such a system will need to be both bold and implemented gradually and fairly, introduced alongside a suite of policies to address the housing crisis, including a major increase in social house building and real support for community-led housing.
As well as tackling demand and sky-high rents, dealing with insecurity of tenure is vital, so it is right that the Bill contains measures for periodic tenancies, and to ban section 21 no-fault evictions, and that students in the general PRS are also included. As many have said, it is deeply concerning that last Friday the Government appeared to have kicked that part of the Bill down the road—who knows how long for?—by saying that they first need to fix the mess that they have made of the court delays. We need to know exactly when we can expect that part of the Bill to come back.
Even before last Friday’s attack on the section 21 provision, there had been noises about a possible Government amendment to exclude students from the reforms. I remind the Secretary of State of his own White Paper, in which he says:
“It is important that students have the same opportunity to live in a secure home and challenge poor standards as others in the PRS.”
Well, I agree with that.
As well as ensuring that students remain included, we need to firmly shut another glaring loophole in the no-fault eviction ban. In the Bill, if a landlord seeks to sell or to move in themselves, they can issue a no-fault eviction notice and the no-let period after they use that exemption is just three months. That is too short and could easily be abused. For example, a landlord could evict tenants by saying they want to move in and re-let just 12 weeks later. That no-let period should be nearer 12 months. Good landlords genuinely using these exemptions would have nothing to fear from that.
I welcome the proposals for the portal, although I would like to see far more issues covered on it. That portal has real potential to improve enforcement of energy-efficiency standards and to ensure warm and dry homes. I was dismayed when the Prime Minister announced last month that he would be scrapping the updated minimum energy efficiency standards for private rented homes under the pretext of saving people from expensive upgrades. It is not hard-pressed tenants and families who will be required to upgrade their homes, but the landlords who would no longer be allowed to rent out cold and inefficient homes.
Private renters live in some of the leakiest homes in the UK, with more than a quarter of households living in fuel poverty. As the Climate Change Committee has observed, these regulations would have cut energy bills significantly—by around £325 a year on average at current prices. Ministers need to stop this false dichotomy between climate action on the one hand and costs on the other, and admit that, in cutting our emissions, we can also deliver warmer and more comfortable homes. The Government need to bring forward an amendment in Committee to require all privately rented homes to be energy performance certificate grade C by 2028 at the latest.
Finally, we know that the UK’s inadequate housing stock is eroding not only people’s budgets, but their health and wellbeing. The death of two-year-old Awaab Ishak in 2020 as a result of prolonged exposure to mould in his home environment was a terrible tragedy and an utter scandal in the social housing sector. It is frankly shocking that the decent homes standard still does not apply to private rented homes, with the Government admitting that almost one in four of those homes in the private rented sector would not meet this most basic standard.
The vague commitment for jam tomorrow while children breathe in dangerous mould today is simply not good enough. It is not good enough for the mum in Brighton who emails to say that her daughter has been coughing for two months because of the leaky, unsafe, insecure flat that she is desperate to leave. It is not good enough for my constituents who are ill from long-term exposure to mould, living with walls that are dripping wet and a permanent cough, or those whose rented accommodation was so bad that it was recently filmed by the BBC for their “Rip Off Britain” feature. Again and again in my constituency casework I hear about landlords who blame tenants for the problems caused by structural issues that the landlords have themselves ignored, such as the landlords who kept one family’s £1,730 deposit to pay for mould removal and redecoration. That is frankly outrageous.
Will Ministers give us a timeframe for decent homes legislation and confirm that it will be in the King’s Speech next month? Will they explain how the Government can possibly justify failing to ensure that all landlords are compelled to act on health hazards, such as damp and mould, in a timely manner? Will they act with urgency to apply Awaab’s law to the private rented sector?
Fleur Anderson (Putney) (Lab)
The rights of renters is one of the biggest issues in Putney, Southfields and Roehampton, where the average rent for a two- bedroom flat is £3,900 a month. That is nearly £47,000 a year. Having a safe, secure and affordable private rental property is vital for Londoners, but the current broken system leaves too many renters insecure and powerless if they have an unscrupulous landlord. For too long there has been a power imbalance in favour of landlords over tenants, which is abused by bad landlords, and the Government have done nothing to fix that.
This market failure affects teachers, nurses, doctors, police and prison officers that I have spoken to. They find it very hard to live in south-west London under the current rental market, which makes it hard to recruit into our public services. The effects of this market failure are spilling out into all parts of our life. I thank the London Renters Union, Generation Rent, Shelter, Crisis and the Renters Reform Coalition for their tireless campaigning work to stand up for renters. It is appalling that it has taken so long to bring in this Bill. Since the Government first announced that they would take this legislation forward, people in 70,000 households have been unfairly evicted and threatened with homelessness because of the Government’s delays.
I welcome the measures in the Bill that I believe will make a real difference to renters and start to fix the broken system. I welcome: ending all fixed-term tenancies and replacing them with periodic open-ended tenancies; the creation of an ombudsman that all private landlords must join; the property portal database to better inform landlords and tenants; the duty to provide information to tenants; and the right to request a pet—the most British of rights. But what I want to see most of all is the end of section 21 no-fault evictions, which are used by bad landlords to kick out tenants who ask for repairs or to hike up rents unjustifiably. I was kicked out of my own accommodation by a landlord who said he was going to sell off the property. After huge upheaval, I drove past a couple of months later to see that he had rented it out to different tenants.
Recent research from Citizens Advice found that a shocking 46% of those who complain about their conditions receive a section 21 notice within six months. That reminded me of a family whose door I knocked on, who were moving out. They said, “Goodbye—we are moving out of the area.” Their father, who was clearing out the house with them, said he was absolutely furious. They were a policeman and a nurse, and they had to leave our area because they had complained about the poor state of repair of their house and had been served with a section 21.
I think of another family with children aged six, 12 and 15 who have spent the past four years in a flat that has been damaging to their health, suffering from structural damage, deep-rooted mould and a growing mouse infestation. They asked their landlord to carry out essential repairs and were served with a section 21 notice in return.
Alex Sobel (Leeds North West) (Lab/Co-op)
One of my constituents was served with a section 21 no-fault eviction notice on their house: a single parent to two vulnerable children with additional needs whom she had adopted from care after being removed from a situation of domestic abuse. She could not afford to rent any other private property on her single income as she found them to be far too expensive. She has been left to join the council waiting list and been rendered homeless. Is that not exactly why we need to deal with this issue in the Bill?
Fleur Anderson
We absolutely do. I very much welcome that intervention. We all have so many stories and know so many families for whom the Bill and ending section 21 evictions would make an enormous difference. It would also make for a more level playing field for those good landlords who are doing the right thing. I am therefore appalled that the Secretary of State is potentially pulling the rug from under the Bill by saying that no-fault evictions can only be ended once the courts are reformed. That is Conservative failure in the justice system compounding Conservative failure in housing. Who loses out? It is hard-working, rent-paying British people. I urge the Minister to give a clear timetable for putting those legal reforms in place so that the can is not just kicked down the road.
While I am pleased that the Bill sets out new stricter grounds for eviction, I remain concerned that it does not go far, or fast, enough. First, the Bill has taken too long; the Government must speed up its delivery. About 290 Londoners face no-fault evictions each week, so every six months of delay in the Bill will mean another 15,000 more Londoners will face no-fault evictions. We do not have time. Secondly, there should be a requirement that private rented homes meet the decent homes standard. I have been calling for a Minister for mould for a long time.
Thirdly, provision to increase councils’ investigative and enforcement powers is necessary. There needs to be funding for that as well; otherwise, we are shifting the problem from national to local government, which will need to shift around its resources and take funding from other areas.
Fourthly, there are loopholes that must be closed. Otherwise, section 21 could just continue by another name. Unscrupulous landlords could game the system and exploit the new grounds to sell an occupied property, so it is vital that a high level of evidence is required to demonstrate the intention to sell or occupy a property. The change to discretionary grounds from “likely” to “capable” of causing antisocial behaviour is open to so many varying interpretations that it will lead to inconsistent, unfair application, so it will not be the game changer in getting rid of antisocial behaviour that it could be.
Finally, preventing homelessness by preserving the private renter’s right to access to homelessness assistance from their council as soon as a possession notice is served would be an essential addition to the Bill.
The Bill is a first step that only scratches the surface of what is needed to fix the housing emergency that the Conservatives have created. Mortgage bills and rents are soaring, fewer people are able to buy their own homes and more than a million people are stuck on social housing waiting lists, compounded by the threat of no-fault eviction were they to move into the private rented sector. More homes must be built.
While the Government have promised a rebalancing of the relationship between tenants and landlords, unless we see several amendments, the current crisis looks set to continue. The Bill is a good launching point, but Labour would significantly strengthen protections for private renters beyond its scope, so that good landlords can be assured of being on a level playing field, bad landlords will stop misusing their powers and tenants will finally be able to get the long-term security, rights and conditions that they deserve.
John McDonnell (Hayes and Harlington) (Lab)
As the hon. Member for Strangford (Jim Shannon) and I know, always being called last means that we have the enjoyment of listening to the whole debate. Today’s debate has been extremely valuable across the House, going into forensic detail on the Bill.
I want to make a plea for urgency, that is all. I welcomed the inclusion of this issue in the Conservative manifesto. In fact, I congratulated my then constituency neighbour, the right hon. Member for Uxbridge, on bringing it forward. I also accused him of plagiarism, because it was in our last two Labour manifestos. I congratulated him because, as many have reported today, my constituents are in a housing crisis. Most of the council housing has been sold off. To go on the housing waiting list, they must have lived in the area for 10 years, and they have to prove that with documentation, which many people cannot. Once on the housing waiting list, they will wait between three and five, maybe seven, years. Their children will have grown up by then.
Four thousand new properties are being built in the middle of my constituency, but there are barely any that my constituents will be able to afford, because the prices are so high and the wages in my constituency—despite high employment levels—are relatively low. Since 2010, rents have gone up on average by three times the rate of wage increases. In London alone, rents over the last year are up 15% on average. In some areas, they are up 20% to 25%. Basically, that means that people struggle to get a roof over their heads, whether from the council or rented, and certainly struggle for owner occupation. I do not know any firefighter, teacher or NHS worker in my constituency who lives there any more—they commute for miles because they cannot afford accommodation in the constituency.
People live in my constituency in slum conditions: damp, cold, unsafe and mouldy, as we heard from my hon. Friend the Member for Putney (Fleur Anderson). I have the phenomenon of beds in sheds. In my office, we have a moral dilemma about whether we tell the council that someone is living in a shed, because we know that if we do, enforcement comes in and that person is then homeless, with nowhere to go whatsoever.
As has been said throughout the debate, as soon as people complain about the conditions or rents, the landlords bring in section 21. That is why it was right for the Conservatives to include the Bill in their last manifesto, and I welcomed it. Landlords always use the excuse that they are moving in a relative. We would need genetic link mapping to identify the relationship between some of the tenants who move in and the family. Landlords might say that they are selling the property but, as has been said, when we tour around, we see that in fact they have not: within days, the “To let” board goes up. They scam us all the time.
My constituents live in fear of complaining at all because they know that if they do, many of them will lose their properties. It is correct that the majority of landlords are good, but it is the rogue landlords that I fear the Bill does not address.
Mr Fysh
Does the right hon. Gentleman accept that, in London, part of the problem is that the amount of rental property available for new renters on the market is 20% down? It is important to encourage good landlords, as he talked about, to have longer rental periods. Should we incentivise them to do that through things such as tax breaks?
John McDonnell
Look, the major problem is that we are not building enough council houses. On the Conservative Benches a couple of Members referred to Harold Macmillan. Harold Macmillan took on from Clem Attlee a huge housing programme and built council houses. My family was a beneficiary of that. We moved out of a slum and into a council house. We just need to build more council houses. We cannot rely on the private market, because it profiteers. In my constituency, landlords can make a profit by leaving the property empty because the price will always go up, and sometimes they do not want to be encumbered by a tenancy. When tenants complain, they get kicked out and are made homeless. In my constituency, people have been pushed all around the country. I have people living in a Travelodge in Slough. They have to bring their children into Hayes each day, which takes an hour and a half. Then there is temporary accommodation with poor conditions and hostels. We have children being brought up in temporary accommodation. I looked at the figures: 131,000 children are now living in temporary accommodation.
I fully support the Bill’s getting rid of section 21, but the problem is exactly as my hon. Friend the Member for Blaydon (Liz Twist) said. The sanctions and conditions will render it totally ineffective. Landlords will simply take a three-month hit and then rent it out straight after that. And to rely on the court system! We have to be honest with one another. The Government have closed 300 county courts. There was a cut of 35% in the Justice budget over the last period. In addition, if we are looking to local authorities to enforce, nearly 20 local authorities are under section 114 notices. In other words, they are bankrupt and do not have the staff to do the enforcement. To be frank, in many areas now the lack of access to basic legal advice—not legal aid, but basic legal advice—from local law centres is non-existent. My citizens advice bureau, bless it, works so hard, but it is rushed off its feet so it cannot provide sufficient advice on the scale that is needed.
My plea is for urgency. We have had a really good debate, a forensic analysis of the Bill: the detail and the beneficial elements, but also the gaps and the need for change and amendment. I hope the Committee will, on Report, bring back a significantly amended Bill that will scrap section 21—that is what both parties promised in our manifestos at the last election, and I believe that other political parties did exactly the same. There is unanimity in this House to scrap section 21, but we must do it with a sense of urgency and we must do it effectively.
Mr Deputy Speaker (Sir Roger Gale)
I call the Opposition Front- Bench spokesman.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to close this Second Reading debate for the Opposition, and I thank all hon. and right hon. Members who have spoken in it. It has been a good debate and one defined by a great many thoughtful and eloquent contributions.
As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) so rightly argued in her remarks at the outset, this is a piece of legislation that is shamefully overdue. As she and other speakers pointed out, not only is it now over four and a half years since the Government first pledged to abolish section 21 no fault evictions, but, for reasons that now appear quite clear, Ministers sat on the Bill for a further five months subsequent to its publication in May. Drawing attention to the lengthy delay in bringing the Bill forward is not simply a parliamentary debating point. As many of my hon. Friends, including my hon. Friends the Members for Putney (Fleur Anderson), for Liverpool, Riverside (Kim Johnson), for Liverpool, West Derby (Ian Byrne) and for Blaydon (Liz Twist) pointed out, it has had very real consequences for private renters across the country.
During the years that Ministers prevaricated and the months this year they clearly spent negotiating with the discontented on their own Benches, tens of thousands of renters have been pushed to financial breaking point by multiple rent rises or threatened with homelessness as a result of being served a section 21 notice. We will continue to justifiably bemoan the fact that the Government have not acted with the urgency that was required, but we do welcome the Bill’s finally progressing. I want to take the opportunity to thank once again, on behalf of those on the Labour Benches, all organisations, particularly the 20 that comprise the Renters Reform Coalition, for not only making the case for change over many years, but for joining Labour over recent months in urging Ministers to get on with the process of turning the Bill into law.
The case for fundamentally reforming the private rented sector is as watertight as they come, and Labour has called for it for many years. More than 11 million people in England—not just the young and the mobile but, now, many older people and families with children—live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction. Such a situation cannot possibly be justified.
The sector should have been transformed a long time ago. Its regulation should have been overhauled to level the playing field between landlord and tenant decisively. The Bill is a good starting point to that end, and, as the debate has made clear, the principle of it enjoys broad support across the House. General support has been expressed today for the White Paper proposals that have found their way into it, including a new property portal and ombudsman, a simpler tenancy structure, the end of rent review clauses, prohibitions on multiple in-year rent increases, the right to request keeping a pet, and, of course, the abolition of section 21 notices.
However, as nearly all Opposition Members mentioned, a significant degree of uncertainty now surrounds the implementation of the promised section 21 abolition as a result of a concession made by Ministers to appease a minority of disgruntled Conservative Members—seemingly without complete success, given the tone and content of the contributions of the right hon. Members for Calder Valley (Craig Whittaker) and for Gainsborough (Sir Edward Leigh) and the hon. Members for Yeovil (Mr Fysh) and for Don Valley (Nick Fletcher).
As we have heard, the Government have made it clear in recent days—although it would seem that Members were told two weeks ago—that section 21 notices will not be phased out until Ministers judge that
“sufficient progress has been made to improve the courts.”
Explicit reference was made to end-to-end digitisation of the process, which could well take a great many years to achieve. Private renters across the country, who have been assured repeatedly by Ministers that the passage of this Bill will finally remove the threat of a section 21 eviction, have no guarantee whatsoever that the concession made does not amount to an effective deferral of that change well beyond the phased transition already provided for by the Bill.
If this sounds all too familiar, that is because it is. The Secretary of State has form when it comes to acquiescing in damaging concessions rather than facing down the unruly Benches behind him, with future housing supply in England a notable past casualty.
After 13 years of Tory government, the courts system is on its knees. The Government have had more than four and a half years, since they committed themselves to abolishing section 21 evictions, to make significant improvements to it in order to support good-faith landlords, and they have not succeeded. As things stand, HMCTS does not expect to be able to deliver even the reduced-scope reform programme to its current timetable. Given this Government’s record, why on earth should renters take it on trust that things will improve markedly any time soon? The inefficiency of the courts system is a huge problem, and action must be taken to address its lack of capacity so that landlord possession claims can be expedited, but the end of no-fault evictions cannot be made dependent on an unspecified degree of future progress subjectively determined by Ministers. In the absence of very clear commitments from the Minister on metrics and timelines in this respect, we will seek to amend the Bill in Committee to ensure that it is not.
While Ministers face the prospect of having to give further ground as the Bill progresses to keep their Back Benchers onside, Labour will work in Committee to see it strengthened so that it truly delivers for tenants. We will press for clarification of the new grounds for possession for students’ landlords to ensure that they are not too expansive, and will probe the Government’s intentions in respect of dealing with the complexities of the student market. My hon. Friend the Member for Sheffield Central (Paul Blomfield) and the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), rightly called for that.
We will put forward a number of sensible changes, including an increase in the proposed notice periods from two months to four months to protect renters better. I am pleased that my hon. Friends the Members for Stretford and Urmston (Andrew Western) and for Brighton, Kemptown (Lloyd Russell-Moyle) argued for that. We will press the Government to reconsider their position on a range of White Paper proposals that did not make it into the Bill. They include measures to strengthen councils’ enforcement powers—I thank my hon. Friends the Members for Battersea (Marsha De Cordova) and for Blaydon for raising that point—along with powers to limit the amount of advance rent that landlords can ask for, and provisions to expand rent repayment orders to cover repayment for non-decent homes.
We will explore why essential reforms that were outlined in the White Paper, including the proposed legally binding decent homes standard and the proposed ban on landlords refusing to rent to those in receipt of benefits or with children—a point powerfully made by my hon. Friend the Member for Sheffield South East—are not on the face of the Bill. We will explore what more might be done to ensure that the separate measures that have been promised to enact each of those reforms are passed and applied quickly and effectively. We will also look to amend various provisions in the Bill relating to new and revised grounds for possession, including the far too sweeping and punitive proposed new mandatory ground 8A and the proposed change to discretionary ground 14 relating to antisocial behaviour, so that blameless and vulnerable tenants are properly safeguarded.
Perhaps most importantly, we will seek to close the numerous loopholes in the Bill that would allow the minority of disreputable landlords—such as the unscrupulous owner of Dorchester Court mentioned in the powerful contribution of my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes)—to exploit tenants and jeopardise their security of tenure. Let us take two examples that are featured prominently in the Bill. Even with the proposed expanded right to challenge, it is far from clear that the tribunal system would prevent significant numbers of tenants from being evicted by means of an extortionate rent hike. We need to explore what more can be done to put in place genuinely effective means of redress for them. Similarly, the proposed three-month ban on landlords re-letting properties they have taken back to sell or move into themselves is not only insufficient but appears not to apply in some circumstances and will almost certainly be impossible to enforce even when it does. We need to tighten it.
The Bill is shamefully overdue but imperative. We support it in principle and are pleased that it will progress today, but it needs to be enhanced rather than undermined by concessions aimed at placating a minority of Members. Private renters deserve a piece of legislation that will ensure that they have real security and enjoy better rights and conditions in short order. We are willing to work constructively with the Government on the Bill, but make no mistake, we plan to do everything in our power to see it strengthened to the benefit of private renters who have waited long enough for meaningful change.
The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)
It is a huge pleasure to deliver the closing speech today on the Second Reading of the Government’s Renters (Reform) Bill, and I begin by thanking Members across the House for their valuable, thoughtful and knowledgeable contributions to the debate. I have enjoyed and noted the contributions from my hon. Friend the Member for Dover (Mrs Elphicke), the hon. Member for Sheffield South East (Mr Betts)—the Chair of the Select Committee —my right hon. Friend the Member for Calder Valley (Craig Whittaker), the hon. Member for Westminster North (Ms Buck), my hon. Friend the Member for Milton Keynes North (Ben Everitt), whom I thank for all his work across a range of all-party parliamentary groups, the hon. Member for Liverpool, Riverside (Kim Johnson), my hon. Friend the Member for Cheadle (Mary Robinson), the hon. Member for Sheffield Central (Paul Blomfield)—I would be very happy to meet him and his APPG—and my hon. Friend the Member for North Norfolk (Duncan Baker), who will know about all the work we are doing to help address the second home issue in his constituency. He has spoken to me about that on a number of occasions.
I also thank the hon. Member for North Shropshire (Helen Morgan) for the support from the Liberal Democrat Front Bench. I declare an interest similar to that of my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), as I have four children in their 20s who are renting in London. I know at first hand of the issues that they and their friends face, and that is why I am so convinced that this Bill is the right thing to do for the next generations of our children and grandchildren.
Rachel Maclean
I will come on to that precise point, if the hon. Member will allow me.
I want to thank the hon. Member for Battersea (Marsha De Cordova), my hon. Friend the Member for Poole (Sir Robert Syms), the hon. Member for Liverpool, West Derby (Ian Byrne) and my hon. Friend the Member for Don Valley (Nick Fletcher), whom I will be happy to meet again, as requested. I also thank the hon. Member for Coventry South (Zarah Sultana), my hon. Friend the Member for Guildford (Angela Richardson) and the hon. Member for Dulwich and West Norwood (Helen Hayes). I am deeply concerned about the case she has raised with me and will continue to work with her. I thank my hon. Friend the Member for Totnes (Anthony Mangnall), the hon. Members for Stretford and Urmston (Andrew Western), for Brighton, Kemptown (Lloyd Russell-Moyle), for Blaydon (Liz Twist), for Brighton, Pavilion (Caroline Lucas) and for Putney (Fleur Anderson), and the right hon. Member for Hayes and Harlington (John McDonnell).
It is right to say at this point that we are committed to honouring the manifesto commitment that we made in 2019 to create a private rented sector that works for everyone and to level up housing quality in this country. I am grateful to all hon. and right hon. Members who continue to engage constructively with us on the provisions in the Bill so that we can deliver the change needed to create a fairer rental market for both tenants and landlords. Of course, I echo the sentiment of my right hon. Friend the Secretary of State, who said in his opening remarks that we will continue to work closely with Members to further hone and refine this legislation as it is put on the statute book.
Several hon. Members rose—
Rachel Maclean
I will make progress, because I have limited time and I must address the points that have been put to me.
First, it is right that antisocial behaviour is a discretionary ground. Judges must decide on the circumstances of a case. Having formerly been Minister with responsibility for safeguarding and domestic abuse, I completely understand the importance of taking such serious issues into account and striking the right balance between tenants and landlords. I was asked whether local authorities will have funding to carry out their enforcement duties. Of course they will have that new burdens funding, as they would with any Government legislation.
I was asked about blanket bans on benefit claimants and families with children, and I make it very clear that we are committed to outlawing the unacceptable practice of such blanket bans. We are carefully considering how to get these measures right. This is a significant reform, as I think all Members understand. We must do it in the right way, while ensuring that landlords rightly have the final say on who they rent their properties to.
Rachel Maclean
I will give way to Members if I have time, but please allow me to make my points.
There have been many questions about the ombudsman. We need simplicity and clarity for landlords and tenants. It is important to say that this Bill does not, in itself, establish a new ombudsman. An existing ombudsman could do the job and, again, we are looking at that very carefully to make sure we get the right solution for this vital part of our regulatory reforms.
I am grateful that many Members have welcomed the point about pets, and I agree that we are a nation of animal lovers. Again, this is about reasonableness. My hon. Friend the Member for Cheadle is exactly right—the circumstances she set out would constitute a reasonable ground for refusal, but we need to look carefully at how this works.
The decent homes standard has been raised again, and it is a key part of our reforms. We must make sure that the new system we introduce means people are living in decent, safe and warm homes. Everyone in this House will be under no illusion about how importantly this Government take this issue, as they can see the work that has been introduced by my right hon. Friend the Secretary of State to tackle these issues, which have laid unresolved for many years. This Government brought in groundbreaking reforms in the social rented sector, and we will do so in the private rented sector to give tenants the same protections.
It is important to note at this point that the vast majority of possession claims do not end up in the courts—only something like 1% of claims go through the courts. In my capacity as Housing Minister, I work closely with the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), who is responsible for His Majesty’s Courts and Tribunals Service. There is a wide-ranging programme of reform in the court system.
The courts have already made huge improvements. It is worth saying that over 95% of hearings are listed within four to eight weeks of receipt, and of course the ombudsman will encourage the early dispute resolution process, taking a lot of claims out of the courts and freeing up court time for more complex processes. When we bring in this reform, however, it is right that we ensure landlords have confidence in the justice system because, as everybody has pointed out, if we do not have good landlords in this country who have confidence in the systems that underpin the justice system, we will not have the rented homes in every constituency that our country needs.
We have always committed to aligning and synchronising the reform of the private rented sector with the court system; we note that that was a recommendation of the Levelling Up, Housing and Communities Committee. We do not think that a housing court is the right way to do that; nor is that the view of the sector or of the stakeholders, with whom we have engaged in huge detail. This work remains a priority for our Department and for the Ministry of Justice. We want to see landlords being offered a digital process for possession on all grounds.
Richard Graham (Gloucester) (Con)
If the Bill’s Second Reading receives widespread support because it will rightly ditch no-fault evictions of tenants without triggering an exodus of private sector landlords, that will in no small part be down to the hard work, for which I am very grateful, of Ministers including my hon. Friend. While she is looking at what is a reasonable speed to resolve antisocial behaviour claims in the courts, will she confirm that it is the Government’s firm intention to fulfil our manifesto commitment and implement the Bill as soon as possible?
Rachel Maclean
I thank my hon. Friend very much. I can absolutely give him that assurance.
Mr Fysh
Does the Minister accept that if the Country Land and Business Association’s estimate is correct that the Bill may reduce the available private rentals by 40% in rural areas, that could have a completely deleterious effect on the Prime Minister’s main pledge, which is to get inflation down? Core inflation is driven by rentals. Will the Minister work with me to fix the Bill and ensure that that does not eventuate?
Rachel Maclean
I am very happy to work with my hon. Friend on this and many other issues, but it is important that I say that we have done considerable analysis. There is no evidence, such as the estimate that he has just pointed to, that the Bill will lead to landlords leaving the sector, but it is right that any policy that the Government bring in is based on evidence. That will always be our approach.
Rachel Maclean
I want to wind up now, because I cannot detain the House any longer. I assure right hon. and hon. Members that we are focused on introducing this groundbreaking once-in-a-generation reform. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Renters (Reform) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Renters (Reform) Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 5 December 2023.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Renters (Reform) Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by the Secretary of State; and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Renters (Reform) Bill, it is expedient to authorise:
(1) the charging of fees under or by virtue of the Act; and
(2) the payment of sums into the Consolidated Fund.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Carry-over)
Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),
That if, at the conclusion of this Session of Parliament, proceedings on the Renters (Reform) Bill have not been completed, they shall be resumed in the next Session.—(Andrew Stephenson.)
Question agreed to.
Petition
Renters (Reform) Bill (First sitting)
Tuesday 14th November 2023
(1 year ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 November 2023 - (14 Nov 2023)
The Chair
Welcome to you all. Our proceedings are now public. We have to go through some formalities; we will then invite members of the public into the Committee Room, so we will be truly in public at that stage. Date Time Witness Tuesday 14 November Until no later than 10.10 am Shelter; Citizens Advice; Joseph Rowntree Foundation Tuesday 14 November Until no later than 10.55 am National Residential Landlords Association; Propertymark; The Lettings Industry Council Tuesday 14 November Until no later than 11.25 am The Local Government Association; Housing Ombudsman Service Tuesday 14 November Until no later than 2.30 pm Generation Rent; Renters’ Reform Coalition Tuesday 14 November Until no later than 2.45 pm Crisis Tuesday 14 November Until no later than 3.00 pm British Property Federation Tuesday 14 November Until no later than 3.15 pm National Housing Federation Tuesday 14 November Until no later than 3.30 pm Chartered Institute of Environmental Health Tuesday 14 November Until no later than 4.00 pm Dr Julie Rugg, Reader in Social Policy, Centre for Housing Policy, University of York; Professor Ken Gibb, Professor in Housing Economics, University of Glasgow Tuesday 14 November Until no later than 4.30 pm JUSTICE; Professor Christopher Hodges OBE, Emeritus Professor of Justice Systems, Centre for Socio-Legal Studies, University of Oxford Tuesday 14 November Until no later than 4.45 pm Chartered Institute of Housing Thursday 16 November Until no later than 11.45 am Country Land and Business Association Thursday 16 November Until no later than 12.00 noon Grainger plc Thursday 16 November Until no later than 12.30 pm The Law Society; The Law Centres Network Thursday 16 November Until no later than 12.45 pm Advice for Renters Thursday 16 November Until no later than 1.00 pm Advocats East Mids Thursday 16 November Until no later than 2.45 pm Housing Law Practitioners Association; Giles Peaker, Anthony Gold Solicitors; Liz Davies KC, Garden Court Chambers Thursday 16 November Until no later than 3.00 pm ACORN Thursday 16 November Until no later than 3.15 pm The National Union of Students Thursday 16 November Until no later than 4.00 pm The Nationwide Foundation; DASH Services; Safer Renting Thursday 16 November Until no later than 4.15 pm National Trading Standards Estate and Letting Agency Team
First, let us go through a couple of technicalities. If you read something out from notes, it helps to let Hansard have your notes if at all possible. I am an old-fashioned Chairman and I treat Committees in precisely the same way in which Mr Speaker treats the main Chamber: the rules on wearing jackets and not drinking coffee, and all the other formalities, courtesies and everything else, apply here just as if we were in the main Chamber. I think some other Chairmen are a bit more informal and modern than I am, but one thing I am not is modern, so we will treat things traditionally.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 14 November) meet—
(a) at 2.00 pm on Tuesday 14 November;
(b) at 11.30 am and 2.00 pm on Thursday 16 November;
(c) at 9.25 am and 2.00 pm on Tuesday 21 November;
(d) at 11:30 am and 2.00 pm on Thursday 23 November;
(e) at 9.25 am and 2.00 pm on Tuesday 28 November;
(f) at 11:30 am and 2.00 pm on Thursday 30 November;
(g) at 9.25 am and 2.00 pm on Tuesday 5 December;
2. the Committee shall hear oral evidence in accordance with the following Table:
3. proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 3; Schedule 1; Clauses 4 to 20; Schedule 2; Clauses 21 to 51; Clause 53; Clause 57; Clause 52; Schedule 3; Clauses 58 to 63; Clauses 54 to 56; Clauses 64 to 67; Schedule 4; Clauses 68 to 69; new Clauses; new Schedules; remaining proceedings on the Bill;
4. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 5 December.—(Jacob Young.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Jacob Young.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Jacob Young.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated by email to Committee members.
The Chair
Welcome to the first evidence session of the Renters (Reform) Bill Committee. In particular, I welcome our first panel: Polly Neate, chief executive of Shelter; Dame Clare Moriarty, chief executive officer of Citizens Advice; and Darren Baxter, the principal policy adviser on housing and land for the Joseph Rowntree Foundation. Let me say in passing, so that we are all aware, that the first panel has to end by 10.10 am.
Polly is online. Polly, if I ignore you, can you please make yourself known by waving at me or something? It is rather hard to communicate online sometimes, so if I am not calling you to say something, please let me know plainly.
Perhaps it would be helpful if the witnesses introduced themselves for the record.
Dame Clare Moriarty: I am Clare Moriarty, the chief executive of Citizens Advice.
Darren Baxter: I am Darren Baxter, principal policy adviser for housing and land at the Joseph Rowntree Foundation.
Polly Neate: I am Polly Neate, the chief executive of Shelter. Thank you very much for letting me join virtually; I really appreciate it.
The Chair
Before I forget, let me ask members of the Committee whether they have any interests to declare. I am not sure whether the Chairman has to do so, but I own two buy-to-lets, not that that particularly matters.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I declare an interest in that I receive support, in particular as set out in my entry under category 2(a) on the Register of Members’ Financial Interests, from individuals with an interest in this area.
Helen Morgan (North Shropshire) (LD)
I am a joint owner of a property that is let out for residential rent.
Eddie Hughes (Walsall North) (Con)
I am also the joint owner of a property that is let out for rent.
Craig Tracey (North Warwickshire) (Con)
I am an owner of a property let out for commercial rent.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
As per my entry on the register of interests, I receive some support from campaigning organisations that support my office and that campaign on this issue; and I have lodgers at my house.
Anna Firth (Southend West) (Con)
Can I declare that I am also the joint owner of two properties that are let out, but are held in trust?
Mike Amesbury (Weaver Vale) (Lab)
I am a vice-president of the Local Government Association.
Dean Russell (Watford) (Con)
I do not know whether I need to declare this, but I rent, so I am not a homeowner. Hopefully, that means that I have a particular interest in this.
The Chair
I think we all do, in one place or another, but that is probably not an interest to declare: it costs you money, rather than getting you any money.
The Chair
There being no further interests to declare, we will crack on with the evidence. I call the shadow Minister.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
I will start with section 21. This was the Government’s manifesto commitment and is in many ways the centrepiece of the legislation, but clause 67 of the Bill has always given Ministers discretion as to when the system is introduced. A two-stage transition has been advertised, but the Government have recently made it clear that they will not abolish section 21 until unspecified court reforms are in place. Could you give us your views on those? Specifically, have the Government been clear enough about what they mean by court reforms? What are the criteria by which improvements will be judged?
The Chair
I should say at this stage that it is not necessary for all witnesses to answer all questions. Just answer those questions that you feel particularly interested in.
Dame Clare Moriarty: The thing we really want to underline is the urgency of passing this Bill, introducing it and allowing tenants to benefit from its provisions. We are currently helping nearly 100 people a day with section 21 evictions. The longer the current situation continues, the more problematic it will be. We are seeing a very consistent rise in the number of people coming to us with homelessness issues.
Anything that looks at what needs to be put in place before the provisions can be brought into force, assuming they are enacted, needs to be looked at against that background. There may well be issues with the court system. It is worth remembering that only a minority of section 21 evictions actually go to court, because the majority of tenants leave at the point of getting a notice. It is an important symbolic issue, but it is not the biggest practical issue. Having looked at what is available and at what the Government say they plan to do on court reforms, I do not think it is very precise at this stage, but I am sure that work is going on in the background.
There is, in any case, an implementation timetable that will extend beyond Royal Assent. A reasonable thing to do would be to set that as the timetable for making court reforms, rather than making the provisions’ entry into force conditional on rather imprecise commitments about court reforms.
Polly Neate: This is a once-in-a-generation opportunity and has been years in the making. At Shelter, we support thousands of renters every year face to face and millions digitally. Without question, we are seeing increased homelessness as a result of section 21 evictions, so I really want to stress, first of all, the urgency of ending section 21 evictions—it is the most urgent thing in the Bill. A tenant is served with a no-fault eviction every three minutes. In our view, there really is no need to delay ending no-fault evictions because of the reform to the justice system. We agree that court proceedings could be made more accessible and more efficient, and that that could be beneficial to tenants, but we do not think that the vital reforms in the Bill should be held up.
In fact, we believe that a robust Bill would reduce the number of evictions by increasing security to renters, rather than causing a significant increase in the burden on the courts. It simply is not the case that all evictions that now occur under section 21 will in future be heard in the courts as section 8 evictions. Many tenants—probably most tenants—will continue to leave before the end of their notice period, and therefore before court proceedings. Also, many evictions that now occur under section 21 would not meet the threshold for eviction under the new eviction grounds.
The Government were always going to have to hold their nerve over this Bill. This is a brave and reforming piece of legislation, so there was always going to be lobbying for delays and for watering down. That was always going to be the case; I think the Government always knew that. We urge the Government to hold their nerve and not to hold up the vital provisions in this Bill, which will reduce homelessness, for the sake of much more minor reforms that are massively less urgent.
Darren Baxter: To build on what has been said, it is clear that this delay is unspecified. It is not clear at what point the Government would determine that sufficient reform had taken place in order to enact section 21: whether that is having put in place a process of digitalising the court system, or whether it is more of an “outcomes” measure with respect to caseload or waiting time being reduced. If this is the reason for delaying, there is an urgent need for clarity.
I absolutely back up what has been said so far: there is no need to delay this legislation. For landlords to go through the court process is fairly rare. Most tenants leave at the point at which they are sent a notice. In 2022, about 11,000 or 12,000 repossessions went through the court system in England and Wales. That is less than 1%: it is about 0.3% of all households who are renting privately in England and Wales. I understand why this is an anxiety for landlords, but we have to keep that anxiety proportionate to the great harms that an insecure private rented sector is doing. We have to move quickly to reform, particularly given that the consultation was in 2019. We have already been waiting a long time for reform to take place.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
Polly Neate: The connection is not brilliant, but I hope I heard the question correctly.
There are reasons why landlords might be facing difficulties, particularly due to mortgage rates, but we do not believe that there is evidence that these reforms will, in themselves, influence the PRS supply. In fact, the Government’s own work shows that the impact on supply will be minimal. We are not overly concerned about that. The evidence from Scotland is that there was not the promised mass exodus of landlords: data from the Scottish landlord register indicates that there has been no quantitative evidence of an impact on supply of PRS accommodation since the reforms there were introduced.
The most recent English housing survey data tells us that the private rented sector is still increasing in size. Some landlords may well be selling up or retiring, but we do not think that there is evidence that this is happening in the unprecedented numbers that people are suggesting. We just do not believe that is taking place. We certainly do not believe that this Bill will impact it significantly.
Darren Baxter: I would back that. Various forms of data—the English housing survey, a comparison of stamp duty at the higher rate against capital gains tax on people selling properties, and other sources—show that over the past few years the private rented sector has grown. More landlords might be selling up in any given year, but there are still more who are buying. That has been against the backdrop of tax changes and various forms of regulatory reform over time that has tightened up the responsibilities on landlords.
I do not think we can draw a conclusion that that landlords are selling up. It is kind of the opposite. If that has changed—and the data is unclear—it has changed since interest rates increased significantly. That is because the cost of borrowing is a really significant variable for landlords. That should give you, as legislators, more confidence about this reform. It is not going to be this reform that pushes landlords out; it will be the responsibility of the independent Bank of England. That should provide sufficient confidence.
Blanket bans are important but not perfect. If we think of “No DSS”—discrimination against people who claim benefits—there are all sorts of ways in which people who are in receipt of social security benefits might be discriminated against by landlords at the point at which they apply for a house. Income checks, for example, might push them out of the market.
Fundamentally, unless you increase people’s income, they might struggle to rent privately, but it is an important signal to the market that you cannot discriminate against a group of people just because they receive benefits. The same goes for families with children: it is important to say that if you have kids you should be allowed to rent a property, and that if you are putting a property on the market you should be open to who lives in it. These measures will not solve 100% of the problem, but they are really important signalling devices that this legislation can provide.
Dame Clare Moriarty: On the supply question, it is worth looking at the international angle. The Social Market Foundation has done some quite interesting analysis. First, England is an outlier in still having no-fault evictions. Most countries do not, and many of the countries that do not have them have much larger private rented sectors. There are all sorts of different reasons for that, but there does not appear to be a correlation between reduced size of private rented sector and the banning of no-fault evictions. That is just to add to the important points that Darren and Polly have made.
On the point about blanket bans, that is something that we see coming through quite a bit, including with people who would not fail to be able to rent on the grounds of income alone. They are either told that they cannot rent or possible conditions are put on them, including six to 12 months’ rent up front, just because they are in receipt of benefits. Those are really serious points. I know that the Government have made a commitment to table an amendment to deal with that, which we would very much welcome.
The Chair
Before we go on, may I reiterate that we will finish at 10.10 am precisely, even if someone is mid-sentence? Questions and answers should both be brief and to the point.
Ms Karen Buck (Westminster North) (Lab)
Q
Dame Clare Moriarty: I will leave the question of antisocial behaviour entirely to Polly, but on the question whether we think there is a risk that there could be no-fault evictions by another route: yes, we definitely do. There were two time limits in the original consultation, including one for the period before which grounds 1 and 1A would apply, for people reclaiming a house to move family into it or in order to sell it. There was an initial period of two years before that could be effected, which has been reduced to six months. The original consultation also included a period of 12 months after those grounds had been used before the property could be re-let. That has been reduced to three months.
Both of those are problematic for different reasons. First, even the most exemplary tenant could rely on only six months before they might be removed from their home on a no-fault ground. That does not deliver the security that the Bill is designed to give people. Secondly, if the grounds are invoked and people are moved out, saying that the property could be re-let three months later does not give the impression that this is being taken seriously. If the ground is only ever used for people to move family in to sell the house, there should be no question about the property being back on the market. There may be circumstances in which that happens, but three months is not enough for people to feel that this is a serious intent. I am not saying that this is something that people would be looking to get round, but if there is only a three-month empty period before they could re-let the property, that does not give confidence that this is a piece of legislation providing that security.
Polly Neate: I absolutely agree with all those points; I will not bother to repeat them. The antisocial point is really important. I absolutely understand why landlords are anxious about antisocial behaviour, but it is already covered by two different grounds for possession under section 8. Those will continue to be grounds for possession once section 21 is scrapped. Without the proposed changes, landlords would still be able to evict tenants engaging in antisocial behaviour—and they should be able to.
The big worry is the wording change from “likely to cause” nuisance to “capable of causing” nuisance or annoyance. That widens the definition of antisocial behaviour. There is a real worry—and I have seen this in several roles in my career—that domestic abuse, serious mental health issues and some forms of learning difficulties can easily be misinterpreted or targeted as being antisocial behaviour. There is a real risk with this change that people will be evicted unjustly, when what they really need is help and support; they are not antisocial tenants. That is the worry. We would say that there are already ample means to be able to evict for antisocial behaviour, and it is quite right that that should happen, but we really need to not risk widening that net and catching people in a wholly unjust and even dangerous way.
Darren Baxter: I have just a couple of points. On the ground that Clare mentioned—selling or moving back in—we need to recognise that this Bill is about improving security for renters. There is legal insecurity that comes from section 21; there is also a structural insecurity, which is that the sector is made up of lots of small-scale landlords churning in and churning out. That leads to people being kicked out because landlords sell. It is the most common reason why section 21 is used, and it is the most common reason why a no-fault eviction leads to homelessness, which has a huge impact on households and on councils’ finances, public spending and so on. We should be using this Bill to think about different forms of security, and the amendments that Clare mentioned would not only address the abuse of that ground, but give a more general security to tenants.
The other risk is no-fault evictions through the back door, through rent rises or so-called economic evictions: jacking up the rent to an unsustainable level, which then forces a tenant out so the landlord does not have to use the court process. We think you could amend that by having a limit on in-tenancy rent rises, capping at, say, the consumer prices index or wage growth—whichever is lower in any one year. That would stop landlords using that as a route for driving tenants out.
Nickie Aiken (Cities of London and Westminster) (Con)
Q
Polly Neate: May I start, as you specifically mentioned Shelter? What we are seeing is an overall increase in no-fault evictions, partly because of deteriorating standards within the private rented sector. We are seeing tenants who complain about the poor conditions in which they are living then being subject to a no-fault eviction. As standards are becoming worse in the sector, we are seeing that happening much more.
There is also an increase in no-fault evictions because the landlord wants to put the rent up. Again, that is partly because of the shortage of accommodation. It is partly because there is now such overwhelming demand that that is possible. We hear a lot in the news about how many hoops tenants are being required to go through, even including bidding wars for properties. If a landlord believes that there is an opportunity to make a lot more from a property, there is a temptation to get the current tenants out in order to be able to do that.
Those are two of the main trends that we are seeing. The point about standards is particularly important, because this goes to the root of the greater security that the Bill is intended to introduce. It is not only about no-fault evictions being used when tenants complain; there is an even bigger problem, which is that the threat of a no-fault eviction stops tenants complaining about poor standards in the first place. That increases the risk of poor standards within the sector. It stops people complaining. It means that more and more families are living in conditions that are potentially damaging to their health. Part of what this Bill is intended to do is improve the entire sector. The point about the relationship between no-fault evictions and poor standards is really central to that aim.
Dame Clare Moriarty: In terms of data, we are seeing larger numbers of section 21 evictions. It is a big increase, with 45% more people coming to us for help than at the same time last year. In terms of homelessness issues generally, we have seen a steep rise—a really consistent rise from early 2020, which amounts to about 25% year on year and 35% year on year for people in the private rented sector. It is worth recognising that there is a real increase in homelessness. There will be lots more data, which we will be happy to share with the Committee afterwards.
As for reasons why people are coming to us for section 21, I do not have detailed data at my fingertips. I will certainly ask whether there is more that we could analyse and share with you. I completely agree with Polly: we certainly see what are called retaliatory evictions. We are helping about 180 people a month who are being evicted after they have complained about conditions. We are certainly hearing from people the pattern that when the landlord presents a rent rise and people say, “We can’t afford that—a £500-a-month rent increase is just not absorbable,” they will then be threatened with section 21 eviction. As I say, I am happy to dig out more from our data to see exactly what is going on.
The Chair
If you can dig out that data and let the Committee have it formally, that will be very helpful.
Lloyd Russell-Moyle
Q
Polly Neate: I don’t think so, no. I think the provisions in the Bill will make renting so much more secure that it will make sure that people are much less likely to have recourse to all forms of the courts—the rent tribunal and so on. The objective of the Bill will be effective in reducing the burden on all of that.
Lloyd Russell-Moyle
Q
Polly Neate: Yes, exactly.
Lloyd Russell-Moyle
Q
Dame Clare Moriarty: We would say that six months is simply not long enough. If you are moving into a property, you want to make it your home—we hear from tenants the idea that you can only feel secure there for six months does not allow people to do that.
Lloyd Russell-Moyle
Q
Dame Clare Moriarty: The original proposition was two years, which we think is a reasonable amount of time. Whether you would restart the clock at a rent rise—that is an interesting proposition. It is not something we have worked on ourselves. I don’t know whether you have at JRF?
Darren Baxter: Our position is similar—the initial period should be longer. Two years or beyond is an interesting idea and one I would not reject out of hand, but it is not something we have worked out.
To jump back to your previous point about the rent tribunal, the risk you identify is valid. Polly’s point about better security giving people a chance to exercise their rights is true, but if you have a rent tribunal where you can challenge your rent, but that rent might go up, there is a risk that people see that as rolling the dice on potentially having to pay even more than they faced originally. Capping that, so that effectively the rent can go down but it cannot go any higher than the landlord was asking for, would be a reasonable reform that would encourage people to use the tribunal.
Lloyd Russell-Moyle
Q
Dame Clare Moriarty: The property portal could be really helpful for tenants in understanding what has happened with the property in the past. Previous rents would certainly be interesting. Also, there is the issue of whether or not the landlord has previously used the available grounds for what are effectively still no-fault evictions. While the design of the property portal is about landlords, if it had the right information and was properly regulated, it could be a real benefit for tenants and give them more confidence, at the point when they enter into a tenancy, so that they know a bit more about who they are dealing with. Tenants are often dealing with letting agents, and it is only when they have signed the contract that they actually have any contact with the landlord. The quality of the landlord is incredibly important to their quality of life.
Lloyd Russell-Moyle
Q
Dame Clare Moriarty: Again, this is not something on which I would like to get into too much detail, because I do not have the knowledge. Certainly, the point about a tenant, at the point where they commit to a tenancy, not doing that blind to information about the landlord is really important. Whether the only way of doing that is by making it public, or whether at a certain point in the process there are ways in which they could be given access to information, is probably in the detail of the property portal.
Polly Neate: What is important is that people have access to the information at the right point. This will also be of benefit to local authorities when they are trying to regulate private renting. There are lots of issues around that at the moment. Some of them are about resources, but the property portal would make it much more straightforward and less resource-intensive to be able to properly regulate standards in private renting. That is another important benefit.
Mike Amesbury
Q
My second point is about prevention. What more needs to happen regarding the duties of local authorities and councils to people who are not evicted, given some of the current holes in the Bill?
Polly Neate: Yes, it would be very beneficial to have a clear timetable. I cannot stress clearly enough my previous point: this was always going to be subject to lobbying for delays and it is really important that the Government hold their nerve. We need clarity about when this will happen, because we also have a commitment to reducing homelessness and this is a really important way of doing that. When people get the eviction notice, for whatever reason, it is really important that they still have the right to access homelessness assistance from their local authority. It is really important that that right is not watered down as a result of the Bill.
Helen Morgan
Q
Darren Baxter: We know from the data that local authorities capture why households come to them reporting homelessness, and why they then have a duty to house them, and section 21 no-fault evictions are a really significant part of that. Anything that reduces that flow will inevitably take some pressure off local authorities, so the more quickly you do this, the more quickly you stop one of the really significant drivers of homelessness.
Dame Clare Moriarty: We need to recognise that there is a whole range of problems with the housing market, including the extent to which rents are simply not affordable for many people. The local housing allowance is now seriously out of kilter with what people are paying for rent. That means that if you are on benefit in the private rented sector, a big chunk of your living costs go just on paying rent.
There are lots of broader questions playing into the pressures landing on local authorities. Having said that, section 21 evictions are definitely part of the problem, but they can be addressed, and the Government are committed to addressing them. As Darren was saying, this Bill has been a very long time in the making, and addressing the issue of insecurity for tenants, and the number of evictions that that is driving, has to be helpful. We should not kid ourselves that it solves the whole housing market problem, but it would make a real difference to people.
Polly Neate: I agree with all that. The Government have decided to remove the prevention duty and not replicate it for section 8 evictions, leaving it to the discretion of local authorities to decide when a duty is owed to tenants. Given the resource constraints and the issues in local authorities, there is a real risk that people just will not get the homelessness support that they need, so we urge that that be changed in the Bill.
It is absolutely right to say that no-fault evictions are not the only reason local authorities are overwhelmed by homelessness. The freezing of housing benefit and of local housing allowance is another major reason, and of course the really serious lack of social housing stock is at the root of this. This is not a magic bullet to resolve these issues, but the Government can remove a really significant factor contributing to the overwhelming pressure on local authorities.
Matthew Pennycook
Q
The Chair
We have two minutes left. Who can do this in two minutes? Polly.
Polly Neate: Answering as quickly as possible, we think it should be removed from the Bill.
The Chair
And the others?
Dame Clare Moriarty: Yes, it feels like something that is targeting a group of people who are probably in crisis. It is a very specific set of circumstances that applies if you fall into arrears three times in two years, but not to the point at which the serious rent arrears ground comes in. These are people who are either suffering multiple adverse life events or possibly trying to avoid losing the roof over their head by borrowing in insecure ways, but they need help and advice, not to be evicted.
Darren Baxter: We also do not think it is necessary. Adding to that, I think it is punishing people for doing the right thing. This is a group of people who have fallen behind, but then ultimately paid that money back, which is what this system is encouraging people to do. It is effectively punishing people for putting the situation right.
The Chair
That brings us to the end of our first panel of the morning. I thank Polly Neate, the chief executive of Shelter; Dame Clare Moriarty, chief executive officer of Citizens Advice; and Darren Baxter, principal policy adviser on housing and land for the Joseph Rowntree Foundation. Thank you all very much for giving evidence to the Committee; it will be extremely useful and will be borne in mind during the Committee sittings that lie ahead of us.
Examination of Witnesses
Ben Beadle, Timothy Douglas and Theresa Wallace gave evidence.
The Chair
May I welcome our second panel of witnesses? For the record and for Hansard, can I ask you to introduce yourselves?
Timothy Douglas: Good morning, Chair. I am Timothy Douglas, head of policy and campaigns at Propertymark. Propertymark is the UK’s largest professional membership body for property agents, with 17,500 members working across the UK. That includes agents working in residential sales and lettings, commercial valuers, auctioneers and inventory service providers.
Theresa Wallace: I am Theresa Wallace. I am chair of the Lettings Industry Council, founded back in 2015. It is made up of stakeholders across the industry, including agents, professional bodies, tenant groups and so on. I have been in the lettings industry for more than 30 years. I have been a landlord for a few years and a tenant for many years, and I am now a homeowner.
Ben Beadle: I am Ben Beadle, chief executive of the National Residential Landlords Association. We are a campaigning and support organisation for property owners, and our members provide just shy of 1 million properties across the private rented sector.
The Chair
We have until precisely 10.55, at which stage we will call the session to order even if you are mid-sentence, so please be aware of the time.
Matthew Pennycook
Q
“Actually the truth is that while some landlords are leaving the sector, this sector is actually still increasing. That’s not terribly helpful to our argument, to be honest with you. But in the context of cost of living and rising costs we have to tell that story and link the two.”
Is it not the case that all the evidence would suggest that the sector is relatively stable, at about 20% of households, over recent years, and that it may even have grown, and that there is no evidence to suggest that we will see, as some claim, an exodus of landlords from the sector?
Ben Beadle: I am not going to sit here and say that after looking at the Bill, everybody is going to sell up. We are not scaremongering here. We are saying that some nips and tucks are necessary to give responsible landlords the confidence to deal with the reforms. As far as the webinar is concerned, I have been very clear that the sector is growing, but the reality is that whether landlords are exiting or not—and I would point to the Bank of England, which says that they are, and is a pretty reliable source for the most part—our members tell us that they are reducing their supply, rather than investing.
The reality is that although the sector might have grown, we still have 25 people, on average, applying per property. We have a massive demand and supply imbalance. Is that a result of renters reform? No. Is it a result of a lot of factors, including renters reform? Yes. I can point you towards the uncertainty about energy changes; I know that that has been dealt with, but it might be only a year or so before that comes back. I can point to taxation changes that are punishing individuals and forcing them perhaps to sell, and putting them between a rock and a hard place for their tenants. I can point to mortgage costs, and I can point to the fact that, I am afraid, we are all getting a bit old, and some of my members are selling off their stock because it is time to do that. It is a mix of those things.
Matthew Pennycook
Q
Ben Beadle: We have been very clear on this. We have not sought to block, or say that section 21 abolition will destroy the market, but we have been very clear that responsible landlords need alternative grounds on which they can rely, and need confidence in the system that underpins them. I sit as a magistrate, and I would be loth to compare different areas of the justice industry, because it is such a low bar that I don’t think it is worth comparing.
We have very grave concerns about how things are recorded. Although you can point to some of the statistics, a lot will depend on how cases are logged and when they come in. I have been involved in a number of discussions with senior members of the judiciary who have exactly the same concerns. Something may have sat in a post tray for three months but get logged as having come in today, for example, and that impacts the overall timings. The overall timings are worsening. I believe that there is a quid pro quo to some of this stuff. I am as frustrated as you that court reform has not happened, because I am very clear: Government should get on with it. They need to deliver something that feels like renters reform. There are lots of issues in the sector. Broadly, there is stuff in this Bill that we can support, but I cannot support section 21 abolition when the courts service is in such a state.
Matthew Pennycook
Q
Ben Beadle: I want timings to be much, much faster, and that needs to be supported by digitalisation. To deal with this, we need significant investment in the support team and additional judges. In London, we have seen evictions not take place because the right sort of stab-proof vests for bailiffs were not procured. That does not give me a great deal of confidence that Government is all over this like a rash, and we need to have confidence. Section 21 was brought in to give landlords the confidence to bring their properties to the market. The vast majority of our members can live without section 21 provided the alternative is fit for purpose, but until we see these things come to fruition, I do not think I can recommend that. That is not to say that section 21 should not be abolished. It is just that the alternative needs to work, because otherwise it will hurt the very people you want to protect: the renters.
Timothy Douglas: First, we have a demand crisis. If we are not looking at supply, we certainly have a demand crisis. Looking at our member data from August 2023, year on year demand is up 32%, based on tenants registering with properties. It is a demand crisis and a housing crisis. It has to be about the tax, social housing, people being able to buy homes and energy efficiency legislation. These are all part of a wider housing strategy. You cannot look at the private rented sector in isolation.
On the courts, bailiffs are an issue; certainly in London, there is an issue around not being able to get personal protection equipment, and that has spread to other parts of the country. It delays proceedings. Should we look at privatising that service—the county courts service—in order to almost remove that funding element from the Ministry of Justice and ensure that we have enough bailiffs? I think we need to provide landlords with an automatic right to a High Court enforcement officer. That is part of the process. Normally, if you cannot get the bailiff, they will have that. We have worked with officials on integrating mandatory notices for possession into the possession claim online. We have also looked at improving the Money Claim Online website and that process, which is important.
I have two final points. There are things in the Government’s antisocial behaviour action plan. The courts need to prioritise dealing with antisocial behaviour; that would help. If that were a directive from the UK Government, that would be helpful. We also need to define low-level antisocial behaviour in statutory guidance, or any guidance, so that courts can see that, deal with the behaviour and get evidence of it.
Theresa Wallace: I agree with a lot of what Timothy and Ben have said. They have covered a lot of the points that I would have made. There is no question but that we have a shortage of stock. We are experiencing that on a daily basis. More than a million tenants in the private rented sector who are in receipt of income support and benefits to pay their rent should be in social housing. We need to address that to solve the housing crisis.
We need to instil confidence in our landlords. It takes time for trends to feed through, but we are definitely seeing landlords leaving the market. We have a lot more at the moment sitting on the fence, waiting to see what this Bill brings in, before they make their decision. It is crucial that we keep those people in the market. Build to rent fills a gap, but we cannot build in the places where the demand is, because that does not work for the model. We still need the private landlord to provide properties.
There are two recent surveys. A Royal Institution of Chartered Surveyors survey came out last week, which showed that overall there were 43% fewer homes available to tenants to rent in the first 10 months of this year. Research by Hamptons came out yesterday and also showed the 43% reduction. RICS says it is definitely seeing a fall in instructions of minus 18%. We want to find a balance. We want to find more security for tenants; I do not think abolishing section 21 will do that, if I am honest. We still need some fixed-term tenancies for those tenants who really want to stay in a property for three or four years because their children are in school, and where the landlord is happy to grant a tenancy for that length of term.
We could even include a break clause for the tenant, whereby for a month, or throughout the whole time, they could terminate, if their circumstances changed. If the property is not fit for purpose, the local authority should be able to visit quickly and make a decision, and the tenant should be able to get out. That way, we are giving the tenant much more flexibility and security. We still need to let landlords know that they can get their property back if they need it, but many are very happy to commit to a longer term, and I think they should be allowed to.
Timothy Douglas: I think clause 1 should include the option of fixed-term tenancies. We are not saying that it should be one or the other; I totally agree with Theresa on the option of the fixed term. The previous panel talked about the insecurity of tenants who can be evicted after six months. If a tenant has a 12-month fixed-term tenancy, they have that guarantee at the start of the tenancy that they will be in place for 12 months before a decision can be made on eviction from that property. That is vital for guarantors. If you are going to be a guarantor for a rolling periodic tenancy, you are not sure how long you will be a guarantor. How can you have rent in advance if the tenancy is not for a set period?
The fixed term is a vital point, and we need to bring that in as an option. It should not have to be one or the other. There could be the option of a periodic tenancy or a fixed-term tenancy. That will be vitally powerful in the student market as well, for any household with a student—and for non-students. Even if the student leaves after 10 months, the tenancy could stay as a fixed-term tenancy until month 12. It could either be renewed for another 12 months, or roll on to the new periodic. We need that flexibility in the system.
Jacob Young
Q
Timothy Douglas: I think we need more detail on that ground. I have not seen it, I do not know what it looks like and I do not know how it will work in reality around when it is served at the time of the year. There are myriad student semesters, term times, different types of students and mixed properties. Defining a student let is really difficult. You can do it under an HMO because the licence conditions will be in place, but a lot of students these days rent in a high-rise modern flat. How do we define them as students?
From the point of view of our members, if we retain that fixed term, you have the clarity. A UK student—this is important as well for rent in advance for UK students—can have a letter from the uni. For overseas students, it is the right-to-rent check, the visa and the share code. On the students, we remain sceptical about how that ground works. The simplest and easiest way would be to retain fixed-term tenancies as an option for any household that is either a student or mixed student household, to give that flexibility as a fixed term for 12 months as an option.
On the antisocial behaviour ground 14, I am not sure what the difference between “capable” and “likely” is. That is why I reiterate the point that local partnerships between police and councils will be really important. The guidance, defining antisocial behaviour and prioritising it in the courts will be important for that ground to work.
Ben Beadle: We like the suggestion around antisocial behaviour. The Secretary of State has been very clear that managing antisocial behaviour is important. This is one of the challenges in section 21 being abolished. Like it or loathe it, section 21 allows landlords to deal with antisocial behaviour effectively. What we are trying to do is to not end up with just the perpetrator of antisocial behaviour in the property.
I would take issue with the comments that were made in the previous session. This will be tested by a judge. It is a discretionary ground. Although the wording is wider, I think that is absolutely right. It goes before a judge to assess the merits of it, and it succeeds or fails based on judicial discretion. That sounds like something that we can all support, because it means that antisocial behaviour can be dealt with. No politician wants to write back to constituents in their area to say, “That noise that is waking your kids at night cannot be dealt with because of this, that or the other.” This strikes a balance, to coin a phrase, between protecting those who are at the hands of antisocial behaviour and not making it too easy so that it is a back door to section 21, which I absolutely get.
The second thing came up around domestic violence in the previous session. I see this as quite different. We have ground 14A, which allows social landlords to evict the perpetrators of domestic violence. I suggest that something like that is more clearly made available to the private rented sector. What happens in practice is that the landlord is working closely with the victim and wants to keep—I would say “her”, but it does not have to be—the victim in the home and to deal with the perpetrator. Anything the Government can do to make that clearer would be very helpful.
The third point is on the student market, which is an area we have been campaigning on vigorously. We support the ground, obviously, and think that it can work, but a lot of good things come as a pair—Ant and Dec, strawberries and cream—and what is missing from the ground is that it does not fully protect against the cyclical nature of the market, which Tim spoke about.
We propose an amendment that would deal with a whole range of matters. In the first six months, landlords cannot give a no-fault reason for repossession; we propose that that moratorium be extended across the sector, to deal with issues in three or four areas. First, it would provide for a fixed period, and that would deal adequately —but not fully, granted—with the need to keep the cyclical nature of the student market, because it is not broken, and we want to protect it, in the interests of both renters and landlords.
Secondly, more widely, outside the student sector, it is a possibility that a tenant will give two months’ notice on day one, and set-up costs hurt landlords. In my briefing, which I sent round to you, I gave an example of that.
Thirdly, the amendment protects against the creation of an “Airbnb lite” in the sector. We do not want the private rented sector to become Airbnb by the back door, and there is a real risk of these periodic tenancies creating that.
Fourthly, the Bill is about fairness, and striking the balance between protecting tenants from bad landlords, and landlords from bad tenants, so there is no justification for us not being treated in the same way, through that moratorium.
There is a fifth thing: this is quite easy to do through an amendment. For those five reasons, I think that we can make this work.
Lloyd Russell-Moyle
Q
Ben Beadle: To turn that on its head, why have the clause one way in the first place? Why not let the market talk for itself? If a landlord wants to sell, why not let them?
Lloyd Russell-Moyle
Q
Ben Beadle: I think the Bill is about fairness, striking a balance between the reforms that we all want, and all the things that have been said about not causing a crisis of confidence in the sector. I do not think that it has to be quite as easy as ordering something from Amazon and sending it back. The reality is that it costs a lot of money to set up a tenancy and get the property in the right condition. Of course, energy performance certificates and other regulatory mechanisms are available, which allow tenants to make a very informed decision about the property that they are moving into. That will be supplemented by the property portal and the register. All that information is available, as it will be in future.
The Chair
No, we do not want a dialogue. I am the Chair. We ask questions; witnesses answer questions. We take evidence. The arguments come later in Committee.
The Chair
No, let us not tease anything out. Mr Douglas.
Timothy Douglas: To build on the points that Ben made, in any legislation, we have to be careful about unintended consequences. In the student market, there would be the option for landlords to rent on a licence or give individual tenancies. That would potentially mean more student properties being rented on a room-by-room basis. If a student leaves within the term, any non-student could come in to fill the property. I am not convinced that all students would be happy with that. If we are talking about reasonable costs for re-let, that is covered by the Tenant Fees Act 2019. We have been through those arguments, and that is already in legislation. There is enough protection for tenants in place, and it is clear there for landlords as well.
Theresa Wallace: I have just two quick points. First, if the property is not at the correct condition and that is why the student wants to leave, that should be dealt with under the property portal. If the property portal is built correctly, with the right objective or end in sight, and it can ensure that a property is safe to rent, that should take care of that side of it.
We also have to remember that students are often sharers who have come together for the first time. They move into a rented property and some of them very quickly—within the first couple of weeks—think, “Oh my goodness. I don’t like the people I’m sharing with. I’ve made a mistake. I want to get out.” They serve notice, and that serves notice for everybody in that tenancy, so all the students would then have to leave. But I have also found that they can settle down, and after another week they get to know the people they are sharing with, and they end up staying there for that tenancy. I think we have to take that into account as well.
Mike Amesbury
Q
Timothy Douglas: I will come in on the ombudsman first. I think the UK Government are trying to run before we can walk. I think there has been a misunderstanding of the current redress arrangement for property agents. Whether you are a sales agent, a letting agent, a managing agent, a business agent or an auctioneer, you have to belong to a redress scheme. We have to be very careful about meddling with that current structure. We have a lot of multidisciplinary practices as well—70% of sales agents do lettings. If we are taking lettings out and creating a private rented sector ombudsman, we are meddling with a system that already exists.
I think what we need to look at first are the existing arrangements for redress, and there are gaps in the current arrangements. There are two redress schemes. One works to a code of practice, and one does not; it works to another code of practice and adjudication. The existing adjudication is not there, and it needs more teeth. I think the largest fine the TPO gave last year was £13,000. It needs more teeth in order to enforce.
Before we look at bringing in landlords, we need to sort out the existing redress system for agents. Actually, before looking at conversations with the housing ombudsman, I think we should be looking at the capacity of the two existing schemes in the private rented sector to bring in landlords, because they understand the issues, they understand the sector, and I think that would be a more positive way to go.
There is then another conversation, which is littered across the legislation, about who manages the property. There has to be a greater understanding of the three or four different management types and of who is the primary contact that the tenant is going to complain to. Is it the letting agent that is fully managing the property? That is easy to do. But what about that landlord-letting agent relationship where it is let only and rent collection? They might do other services, or they might just do let only.
This is a really complicated area. It is not simply about bringing landlords into the redress schemes and giving it to the housing ombudsman. We need to sort the existing schemes first—strengthen them, give them teeth, adjudication, and a statutory code of practice for the sectors—and then we need to look at the management practices of landlords and letting agents and those relationships in order to build in a complaints function that can happen.
Theresa Wallace: I agree with a lot of what Tim has said, but we actually support an ombudsman for landlords. We have the ombudsman for agents at the moment, so if a landlord or a tenant wants to complain about their agent and the service they are receiving, they can go to the ombudsman. If they have a complaint about their landlord, they cannot. They need to go to court, and that costs money. I can see that there is a place for a landlord ombudsman for a tenant to refer their complaints to. Dealing with it and resourcing it will be the biggest issue, because they will need to qualify exactly what a complaint is to be able to deal with it.
Ben Beadle: I just want to touch on what Mr Russell-Moyle said about students, and then I will come to this question. If a student leaves a property, and that property is re-rented to a family, for example, you lose your status as an HMO, and you have to reapply, typically through article 4. This is a very heavily regulated area; it is not quite as simple as is made out.
As far as the ombudsman and the PRS portal are concerned, we are very supportive. With anything that can help reduce the flow to the courts and resolve problems informally, I am like a rat up a drainpipe. It is absolutely, exactly what we need. The overriding issue, though, is that all those things need to join together. At the moment, I cannot quite see how the existing schemes will work with the landlord scheme, how the mediation service will fit into this and how the courts will fit in if there is a breach.
With the portal and the different elements of licensing that exist, we must not fall into the trap of thinking that, somehow, the private rented sector is the wild west. There is a lot of regulation and enforcement, but that enforcement requires investment, and we have grave concerns about the things that underpin some of this stuff. It is all well and good to have lots of rules and regulations but, at the end of the day, if we do not have the means to enforce them properly, that is problematic. We know from our research that over half of local authorities are not using the powers that they have.
There are no issues from our side, but we want to have some comfort and a bit more of a vision about how these things fit together and how it will be priced, because that is a sensitive issue and there has been no detail about it so far.
Timothy Douglas: Just to come back in on that quickly, the key point is that, in the current redress system for agencies, the consumer has to go through the agent’s complaints procedure first, but it is not mandatory in the regulation to have a complaints procedure. All complaints procedures are different, and there are no set timescales for responding to those complaints. That is the first issue.
The second issue is that, yes, we can bring in landlord redress and the ombudsman, but are we expecting the 50%—as quoted in the levelling-up White Paper—of landlords who do not use an agent to have a complaints procedure and to be able to respond in a timely way? There are lots of avenues, as Ben alluded to. We have simply said that, with landlord redress, there are layers and layers of complications involved in making sure that the consumer knows where and how to complain and that issues are dealt with. There are lots of issues to be looked at.
Mike Amesbury
I did ask about housing courts.
Ben Beadle: Let me deal with that. We like the principle of a housing court, and the Select Committee obviously likes it as well. Given where we are, I guess there is a realism in terms of what we can do with the existing system to improve it rather than carving out a new housing court. We support the concept, but I think we might be able to do a number of things that end up meaning we see change more quickly. That includes playing with the civil procedure rules, for example. Those are things that can be done and timed so that we can assess improvements. Rather than having one measure of an element of a possession case, there ought to be different measures. Everybody ought to know what the measures and targets are. Otherwise, how do we know what reform looks like and whether it has worked?
So there are things that we would—not necessarily substitute—for a housing court, but there is not a lot of money to go around. Although we love the idea, we are pragmatists in the sense of asking, “What would a housing court do differently that we could not do with the existing regime?” That is where we are focused.
Timothy Douglas: I would certainly agree with that and would also perhaps move towards a tribunal structure, which is less intimidating, less informal and does not necessarily have to use court buildings—any public building can be used across the country. But essentially, in an ideal world, this needs to incorporate the powers of the county court and the first-tier tribunal. You would then be able to appoint specialist judges, surveyors and so on. In an ideal world, yes, we totally need to get there, but I agree with Ben that it is about perhaps looking at a dispute resolution and those sorts of issues within the existing system before we get to the ideal. But that certainly would be welcome in the long run.
Helen Morgan
Q
Theresa Wallace: I think so, because I do not think we are giving them any security with the current proposals because a landlord can serve a notice either to sell their property or move back into it. The majority of section 21s are served for rent arrears, or because the landlord is selling or they want to move back in, or for antisocial behaviour. You do not have to give a reason but those are the main reasons that section 21s are used.
We will still continue to have those reasons, and by starting off with periodic tenancies with no fixed term at all, okay, the landlord cannot serve a notice for six months, but that is the most that tenants are being told that they will be secure for. Last week, I had tenants saying to me, “I want to be able to secure a long-term tenancy. My children are in the local school. I don’t want my landlord to suddenly say that he is going to sell the property or move back into it.” There are definitely tenants who want longer secure terms and there are landlords who want to do that for their own security. As I said earlier, I still think that they would be happy to include the two months’ notice for the tenant from six months in case the tenant’s circumstances changed. That gives the tenant the flexibility of knowing that they can have the tenancy for however long they agree to it, but if their circumstances change after six months, they can also move out.
Helen Morgan
Q
Theresa Wallace: No, they would be committed for the entire term.
Timothy Douglas: I totally agree with that, and I think it is not an either/or, as has been stated. Let us have the option. The beauty of the private rented sector is that it is built on that flexibility. Without the flexibility of that option, we are closing that down. Of course, you can have a fixed term for up to three years—otherwise, it then becomes a deed, as we understand it. You can have it for longer. So in theory, it is already there and that 12-month fixed term, or longer, with break clauses could offer lots more flexibility and the security that certain tenants want, and we know that agents are hearing that.
Lloyd Russell-Moyle
Q
Theresa Wallace: If it were rent arrears, that would be different. Landlords cannot afford to keep properties when they are not receiving the rent. For rent arrears, I am saying that the landlord would not be able to serve the notice to either sell the property or move back into it.
Lloyd Russell-Moyle
Q
Theresa Wallace: It is an option, yes. I still believe that there should be a minimum term of six months with any tenancy to make it financially viable for landlords. That is why we have so many landlords waiting to hear what the Bill will bring, and more of them will exit the sector if they are going to have only periodic tenancies from day one. I have landlords telling me that.
Lloyd Russell-Moyle
Q
Ben Beadle: With this Bill, we have to strike a balance between giving confidence to both sides. The more you tinker and the more you meddle with things like this, the less confidence there is. I cannot see why on earth you would want to do that.
Lloyd Russell-Moyle
Q
Ben Beadle: Bluntly, it sounds like you want to have your cake and eat it there. You want all the benefits of a fixed term and all the benefits of a periodic tenancy.
Lloyd Russell-Moyle
Yes. If we can get that, yes. [Laughter.]
Ben Beadle: Well, from our side, it is no—absolutely not.
Lloyd Russell-Moyle
Ah, okay.
Theresa Wallace: Just to add to that, at the moment you do not always have a fixed term. You can have a periodic tenancy, and you can put the rent up annually. That does happen, and it continues as a rolling tenancy, so we do have that at the moment.
The Chair
Unless there are any further questions from colleagues, I thank our three witnesses for their evidence, which will be very useful to the Committee in the deliberations that lie ahead.
I will ask the last set of witnesses to take the stand as soon as possible, without too much further delay, but just before our next panel, I ask Dean Russell to make a wee declaration of interests.
Dean Russell
Thank you, Chair. I just want to declare that my wife works part time at an estate agent that also does lettings.
Lloyd Russell-Moyle
Mr Gray, I should also have said that I sit on the legal working group for a radical housing co-operative association.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
What is the radical bit about?
Lloyd Russell-Moyle
That is its title; I did not choose it.
Examination of Witnesses
Paul Dennett and Richard Blakeway gave evidence.
The Chair
I am delighted to welcome our next panel to give evidence to us on this important Bill. Perhaps I could ask you both to introduce yourselves.
Richard Blakeway: I am Richard Blakeway. I am the housing ombudsman for England.
Paul Dennett: Hello. My name is Mayor Paul Dennett. I am the Mayor of the city of Salford, the deputy Mayor for the combined authority in Greater Manchester, and a member of the Local Government Association’s local infrastructure and net zero carbon board.
Matthew Pennycook
Q
Paul Dennett: In terms of local authority capacity, I think it is well known that 13 years of austerity have had a profound impact on local government. In the case of my local authority, we have seen a reduction of £240 million as a cut to the revenue support grant and also unfunded budget pressures. An example of that would be—
The Chair
We need to remain within the terms of the Bill.
Paul Dennett: Absolutely. From a capacity point of view, we do not have capacity and that has impacted regulatory services. That is relevant to the Bill. You will be aware that we are asking for a whole range of things—the establishment of a portal and the enforcement powers for local authorities to uphold this legislation, when it is brought forward, and that will require significant investment in workforce. I say that because we have lost a lot of people who work within housing enforcement, over many years. Such things as Grenfell and what has happened in terms of housing standards has brought all that to the fore more recently. So to be able to enact some of the duties in here will inevitably take time, because we will need to develop the workforce of the future to support tenants and, ultimately, landlords in enacting the legislation as it stands today.
For me, though, there are a lot of requirements here for local government. At the moment, the legislation does not adequately respond to how local authorities will be resourced to meet some of those requirements.
Matthew Pennycook
Q
Specifically, in clause 29, there is a requirement to set out guidance on how the ombudsman redress scheme would work alongside local authorities, so that they have complementary but separate roles. What do you think that memorandum of understanding, as I suspect it will be, needs to look like? How do those roles not overlap in a way that duplicates duties?
Richard Blakeway: I think that is a very important question. This is a thoughtful Bill, but to fulfil the ambitions set out in the Bill means real operational challenges. The first challenge speaks to the first part of your question about how you design a system where the ombudsman has sufficient teeth to be effective. That is one of the reasons why we have said that creating, or enabling, an ombudsman through the Bill does not necessarily mean that people will access redress. That in itself can be a real barrier for people when navigating a system where they may be passed from pillar to post. That is exactly the reason why the Cabinet Office guidance on the creation of ombudsman redress is explicit that you should build on existing schemes.
At the moment, we are the only approved scheme that does landlord and tenant dispute resolution. I heard some of the evidence in the previous session and think we need to really distinguish between agent and landlord redress, where the responsibilities of agents are very different from the landlord’s. The Landlord and Tenant Act sets out clear obligations that rest with the landlord and cannot be delegated to the agent.
What we are seeing is a convergence in policy, which I think is welcome. You already have some of those building blocks in place. The Landlord and Tenant Act is universal; it does not distinguish between social and private. The decent homes standard potentially extends that. The health and safety rating system is, again, universal. What we need is to bring that together into a single scheme. Otherwise, regardless of the powers of the ombudsman, people are going to struggle to access the system.
In so far as the powers of the ombudsman are concerned, overall, the Bill is quite effective at setting out role of an ombudsman without being overly prescriptive. You have to avoid compromising the independence of the ombudsman to make independent decisions and to have integrity, and also agility, by being independent. The Bill is responding to a private rented market which was not envisaged 30 years ago, so you need to enable the ombudsman to be able to produce guidance and codes of practice that can respond to a changing market and changing circumstances, without being overly prescriptive in the legislation.
On clause 29, that is a really important point, because there is a risk of duplication between the role of a council and the role of an ombudsman. Again, there is a lack of clarity for residents—tenants—about which route to take. An ombudsman does not operate in isolation—it will not operate in a bubble—so the relationship between the ombudsman and the courts will be critical, as well as the ombudsman discharging its own functions.
We currently see cases in which someone has gone through environmental health, and a local authority might even issue an improvement notice, and then someone is coming to us for redress—those are two distinct roles. Any information-sharing agreement needs to be really clear that when an ombudsman sees concerns that may indicate there is a category 1 hazard, for example, that information is provided appropriately to a local authority for potential enforcement. Also, the local authority needs to be able to signpost very early to a resident who has approached it through environmental health that they may have a right to redress.
The crux of this, alongside the memorandum of understanding, is the portal or database. Part of the problem is that there are a large number of landlords and there might not be clarity about which parties are subject to the Bill—subject to enforcement and redress—and then it is about being able to access that information easily so that compliance can be met. I agree with your point: there has to be a framework for operation and a clarity about roles, but both local authorities and the ombudsman will want access to the database so that they can be effective.
Jacob Young
Q
Richard Blakeway: That is a really good question. An ombudsman is not a surrogate for an effective landlord-tenant relationship and effective dispute resolution at source, done locally by a landlord. One thing that we have sought to introduce through our work on social housing is our complaint handling code, which has set out how to create a positive complaint handling culture and resolve disputes as early as possible without having to escalate them to the ombudsman. We have done a significant amount of work with landlords to implement that code and to avoid a postcode lottery whereby, depending on your landlord, different approaches might be taken, and some of those approaches were not promoting natural justice at a local level.
For me, although an ombudsman might be conceived as the potential stick—there is an element of that, which is important—another part of an ombudsman’s role is to promote effective complaint handling locally and support landlords. There are a lot of landlords who want to get things right—they are not rogue landlords—but sometimes they may not be aware of all their responsibilities, or they may struggle to engage the resident effectively or to discharge their responsibilities. That role is important for the ombudsman. It is something we have done in social housing and, were we to be appointed as the ombudsman, it is something we would certainly seek to do with landlords in the private rented sector.
Lloyd Russell-Moyle
Q
Paul Dennett: Selective licensing is very interesting for Salford, because I think we were the first local authority in the country to pilot the new legislation at the time. Selective licensing schemes will inevitably continue to be an important tool for councils to manage and improve the private rented sector properties in their area. In our opinion, local areas should have the flexibility to employ selective licensing schemes to meet local need, as we determine that. We are calling on the Government to amend the Housing Act 2004 to remove the requirement for councils to seek approval for larger selective licensing schemes. You will be aware of the 20% threshold—
Lloyd Russell-Moyle
You could do ward by ward.
Paul Dennett: Absolutely. People ultimately have benefited from that. We have evaluated that and renewed selective licensing, certainly in Greater Manchester. Having that flexibility at a local level would aid the legislation and ultimately our approach to regulating the private rented sector.
Eddie Hughes
Q
If I remember correctly, you and I met at a social housing decarbonisation fund demonstrator. With your decarbonising hat on, surely now you could have the opportunity to be able to communicate directly with landlords. You do not know who they are or where they are at the moment. You would be able to communicate with them directly and say, “The Government have this scheme. We can help you improve and replace your boiler,” and so on. There is no end of benefits, yet you seem to focus only on the negatives. Why is that?
Paul Dennett: I am definitely not only focusing on the negatives.
Eddie Hughes
You certainly did in your opening comments. It was all doom and gloom.
Paul Dennett: I was asked about resources.
The Chair
Order. Mr Hughes, we are asking questions; witnesses are giving evidence. We are not arguing.
Eddie Hughes
I am sorry, Mr Gray—no hectoring.
Paul Dennett: Renters should welcome the property portal, as it will inevitably create a more transparent system for tenants and provide a single place to check what is important information for tenants and also for local authorities about the properties. For the portal to be effective the Government must also require landlords to display eviction notices on the portal. That would support local authorities in enforcing the prohibited letting period associated with the new eviction grounds. For example, were a landlord to evict a tenant on a legitimate basis covered by the Bill, but then sought to re-let the property, logging that eviction on the portal would make it clear whether the property was within the prohibited letting period or not. Obviously that requires the portal to operate in real time, which is something we would certainly support in the Local Government Association.
What is absolutely critical to the success of the portal, and to secure its longevity, will be for the Government to commit the resources, both financially and non-financially, to the portal, and ultimately how that then interfaces with local government from an enforcement point of view.
Lloyd Russell-Moyle
Q
Richard Blakeway: A couple of thoughts. In direct response to your question, I think the ombudsman has been developed partly in the context of pressures and backlogs in courts. In designing the role of the ombudsman you need to give consideration to how that ombudsman’s jurisdictions could go further in relieving those pressures on the courts, not least so that the courts can focus on section 21, which in itself will be essential to give residents confidence to use the complaints process. There is plenty of evidence out there to suggest that until section 21 is removed, residents will be cautious about using the complaints procedure.
You give a compelling example of where an ombudsman’s jurisdiction might go beyond what is envisaged, albeit in a way that is trying to bring coherence to the system. Rents might be another area to look at. As an ombudsman, we currently look at aspects of rents and charges, and there will be other aspects for the tribunals, given some of the potential reforms to rents. You could consider the ombudsman’s role in considering what are often quite technical aspects, rather than things going to the courts.
If I may briefly answer on the context of the question and our being ready and willing, given the complexities of the system, which benefit neither the landlord, the provider, nor the resident—nor indeed the other bodies involved in this jigsaw—what the housing ombudsman can provide is one front door, one back office and one coherent approach to dispute resolution in the rental market. Given the policy convergence and the clear evidence that the more fragmented the process is, the more people will fall between the gaps and the more duplication and confusion there will be, building on our scheme would be the most effective way to deliver the ambitions of this Bill.
However, we should also do so at pace, because there is no one who can move faster than us to implement this. Therefore, you could implement the redress scheme before the removal of section 21, before some of the courts reforms that have been talked about. To enable that, we need a clear and unambiguous statement from Ministers during the passage of the Bill, and ideally in Committee, that they will appoint the housing ombudsman on Royal Assent to deliver the redress scheme.
Mike Amesbury
Q
Paul Dennett: Obviously we need to fully understand, from an evidence and empirical point of view, whether the courts issue is a legitimate concern, because at the moment we do not have the evidence to corroborate that. We are being told that this needs to be halted, but no definitive time has been given for the abolition of section 21 until the courts issue is resolved. For us, it seems as though this could be indefinite—there has been no definitive date. We know that there are lots of issues with our courts—we see that day in, day out—but we really need clarity on when the Government will introduce this legislation. We also need the evidence for whether the court delays issue is justified and warranted, because at the moment we do not know. We are hearing a lot about this, but we are not seeing the evidence to corroborate it, which is a concern for us. We are asking the Government to commit, in law and in timescales, to abolishing section 21, and to do that publicly.
Richard Blakeway: I agree with the thrust of that response. From a redress perspective, as I alluded to, clearly some residents will not exercise their right to redress because of a fear of eviction. The analysis by Citizens Advice, for example, says that it probably reduces tenants’ willingness to use the complaints process by about 50%, so about one in every two tenants will not exercise their right to redress. Obviously we will hear more about the timetable for removing section 21. What would be unnecessary, in addition to that, would be a delay in redress, whereby redress through an ombudsman and section 21 have to be removed or reformed at the same time. I think the redress can come first. I would not want to see a delay on redress. Even if fewer people might use the complaints procedure, some clearly will, and it is therefore important that they have that right.
Mike Amesbury
Q
Richard Blakeway: The courts themselves, or some aspects of the courts, have talked about the simplification of the courts and the creation of a housing court. My assessment of that is that an ombudsman is an alternative to the courts. Therefore, you need to be clear about why you might use the redress route, depending on what outcome you are seeking, alongside the court route, and a simplification of the court route, potentially through the creation of a single housing court, for example. That would be really beneficial, by making clear people’s rights, so that they can consider, “Do I want to go through the courts process, because this is the outcome I am looking for? Or do I use the ombudsman process?”
One thing I would stress is that an ombudsman should not be perceived as dealing with leaky taps or broken windows. These are not low-level disputes; we deal with some complex disputes in our current casework, as Committee members will have seen through our decisions. That approach needs to be applied here. The more you can apply that approach, the greater confidence people will have in a free and impartial alternative to the courts, or a free alternative to the courts, rather than feeling that their only effective route to redress is the courts process, given all the pressures on it.
Paul Dennett: Just to respond to the point about a housing court, we have to be careful that it is not a distraction from getting on with legislation. First, we do not believe the court backlogs are severe enough to warrant a delay in making progress with this legislation. We are therefore calling on the Government to publish that evidence, based on the court backlogs, in order to inform how best we implement the abolition of section 21. If courts are found to be in sufficient need of improvement to delay the ban on section 21 evictions, we call on the Government to commit in law to delivering a strategy based on evidence to reduce the backlog, backed up by sufficient funding and a specified date. To go down the road of considering a housing court would delay all that, and would be of real concern to many people in the country.
Matthew Pennycook
Q
The White Paper also committed the Government to exploring and bolstering local authority enforcement to tackle a wider range of standards breaches. That is not in the Bill. We have a commitment in the King’s Speech, as one of three areas for the Government to bring forward amendments to make it easier for councils to target enforcement action and arm them with further enforcement powers. Could you speculate on what we might expect the Government to bring forward in that area? What would you like to see? Should we seek to weave into the Bill the more expansive measures outlined in the White Paper?
Paul Dennett: The Bill deals with enforcement for local authorities quite adequately. It is about how we resource that and develop the workforce within local government, and how we ensure that this legislation is genuinely resourced and empowered to deliver on what we are setting out here. At the end of the day, any legislation and regulation is only as good as our ability to enact it.
To enact it requires a trained, skilled and developed workforce. I say that against our losing many people from regulatory services, certainly since 2010-11. It also requires the resources to employ people to do the work, gather the data and intelligence, prepare for court and, ultimately, work with landlords, ideally to resolve matters outside of the courts, if we can do that. That is the LGA’s position on all this.
We would like to be in a position of having a working relationship whereby we resolve matters outside of complaints systems, outside of courts, working through local authorities. Nevertheless, if that is required, it is important to have a skilled, resourced workforce. I stress the importance of resource, because local authorities spend an awful lot of money these days on children’s services and adult social care. Those are responsive budget lines that ultimately consume a lot of our budgets and that therefore diminish our ability to get on and do some of that regulatory activity in local government. The legislation is there for enforcement; we just need the resources to get on and do it, and we need the workforce strategy to train the people of the future to enact this and, ultimately, to prepare to support landlords and tenants in this space.
Richard Blakeway: That is a really interesting question, Matthew; I have a couple of thoughts in relation to it. It is perhaps worth testing—if, for example, the ombudsman is seeing repeated service failure in a particular area—what powers there might be to address those kinds of recurring systemic issues, and whose role and responsibility it should be. That goes to the heart of your question about clause 29 and the relationship between the various parties.
The second thing, which goes back slightly to your first question, is how redress is scoped in the Bill. The one area that I would highlight—I can understand why it has been introduced, but it might not stand the test of time—is the cap on the financial compensation that an ombudsman can award. At the moment, we do not have a cap. The Bill proposes a cap of £25,000. I can understand the motivation there and, as an ombudsman, we are always proportionate, transparent and clear about the framework in which we work when awarding compensation. None the less, in time to come, £25,000 might not seem an appropriate sum. It also slightly incentivises people to think of the courts, which do not have a cap, to solve their dispute, rather than using an ombudsman.
It is critical that the ombudsman has sufficient power to enforce its remedies, as well as the council being able to enforce its role and responsibilities, but the cap might be something to re-examine.
Lloyd Russell-Moyle
Q
Richard Blakeway: There is a term that may be in the statute or scheme of an ombudsman called “own initiative”, which allows them to initiate an investigation without a complaint whenever they have a strong sense that there might be service failure. That is not currently explicitly in our scheme. However, three years ago, we had scheme amendments that allowed us to investigate beyond an individual member of our scheme, or beyond an individual complaint, if we had concern that there may be repeated systemic failure. That is something that is exercised.
The Chair
Unless there are any more questions from colleagues on either side, I will thank the two witnesses on our final panel: Paul Dennett, the Mayor of Salford and member of the Local Government Association’s local infrastructure net zero board, and Richard Blakeway, the housing ombudsman for the Housing Ombudsman Service. Thank you both very much for your evidence.
Ordered, That further consideration now be adjourned—(Mr Gagan Mohindra.)
Renters (Reform) Bill (Second sitting)
Tuesday 14th November 2023
(1 year ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 November 2023 - (14 Nov 2023)
The Chair
We will now hear evidence from Ben Twomey, director of Generation Rent, and Sue James, chair of the Renters’ Reform Coalition. For this panel, we have until 2.30 pm. Can the witnesses please introduce themselves?
Ben Twomey: Good afternoon, everyone. I am Ben Twomey, the chief executive of Generation Rent. We are a campaign group campaigning for private renters across the UK to make sure that every renter lives in a safe, secure, affordable and quality home.
Sue James: I am Sue James, chair of the Renters’ Reform Coalition, which is a coalition of 20 organisations, including national charities, national organisations, think-tanks, renters and unions. My background is as a housing lawyer for 30 years, and I have been at the coalface of the possessions duty scheme for that time. I have worked out that in the past 10 years I must have represented on at least 5,000 cases, so I come with some experience of the courts system as well. At the moment, I am the chief executive officer of the Legal Action Group, a national charity that campaigns on access to justice.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
Ben Twomey: Thank you, shadow Minister. On the grounds, it is important to think about the question of what actually changes for the renter experience if the Bill passes in its current form. We welcome the Renters (Reform) Bill and think it is an important piece of legislation, but on some key areas not much will change.
The Government promised to abolish no-fault evictions. The Bill does not do that. It removes section 21 no-fault, or no-reason, evictions but introduces new no-fault grounds. Particularly on grounds 1 and 1A, which are where a landlord can move a family member in or may sell the property, it is important that we put ourselves in the renter’s shoes when that happens. A no-fault notice is given. That could happen to me or any renter across England. Right now, I could go home and find one of those notices on my doorstep. I would have to be out of my home within two months. Given the current economic climate, it is going to be difficult for me to find a new home quickly, so the risk of homelessness—no-fault evictions are one of the leading causes of homelessness—is very great.
In the current wording, that situation does not change for renters, and their experience does not change. A renter receives a no-fault notice and is out within two months. We think there should be better protections there. It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live. That saves the Government money because they do not then have to support people who are in temporary accommodation or are otherwise homeless. That is one of the key areas we want to change in respect of the grounds.
Similarly, I currently have a fixed-term contract that will move under the Bill to a rolling tenancy. The minimum fixed term is six months, and as soon as that ends I can receive a no-fault eviction. Within the rolling tenancy, under the wording of the Bill, once the six-month protected period ends, again, a renter can receive a no-fault eviction. It is important that there are better protections so that there is more security for renters. We say that period should move to two years instead.
Finally, on the no-let period, if the grounds are to be introduced, they need to be enforced. It needs to be clear that they cannot be abused by some landlords. At the moment, if someone says that they are moving a family member in or that they are going to sell the property, there are three months during which the property cannot be re-let. We think that should move to one year to make sure we rule out the idea that some landlords could still do retaliatory evictions or abuse the grounds in other ways. By moving that, we make sure that tenants have that greater protection and can enforce where local authorities may not be able to. If we can put that information on the property portal in the Bill, which we welcome, it will be much easier for tenants to play a role in the enforcement and scrutinise what is happening.
As I said, I could go home today and receive a no-fault eviction. The Bill could pass and I could go home and find one and the same thing could happen. I would be out within two months and it could happen after six months of my having a tenancy. That is a big problem. If you want to reduce one of the leading causes of homelessness and save the Government money in doing so, you need to address those factors.
Sue James: What we are talking about today is someone’s home. Over the past 20 years we have seen a huge increase in families who are living in the private rented sector, and we are talking about having enough protection for them. The private rented sector has doubled in size, so we do need to pay attention to it.
At the moment, the new grounds are all mandatory grounds, and we say they should be discretionary grounds. We want the court to make an order that will take into account the circumstances of the tenant and of the landlord. Grounds 1A and 1B, as they are currently written in the Bill, will essentially be a back door for section 21. I agree with what Ben said about improving the notice periods that are outlined in the Bill.
We also have a problem with grounds 1A and 1B in relation to the evidence. At the moment, it does not look like the landlord will have to provide much evidence. We want that to be strengthened so that you would have to have evidence that the landlord required the property for a member of their family or wanted to sell it.
The problem also is that once a landlord takes possession on that basis, or tells the tenant that they are going to seek possession on that basis, you have just a three-month period in which they are not allowed to let. That needs to be much longer—at least a year—in order to protect the tenant from unscrupulous landlords taking back their premises. Three months is not a very long time at all.
The other issue relates to enforcement. Currently, that rests with the local authority and the ombudsman. The tenant must have the right to challenge that and to take action against the landlord, including when the landlord has taken possession in court, because at the moment it is only if the tenant voluntarily leaves. It needs to be a bit more joined up in terms of having that protection.
The biggest problem is ground 8, and ground 8A in particular. I know you heard some evidence on that this morning. It is a particular problem: basing it on three times in three years when someone is at least one day in arrears is going to cause grave hardship. It has a perverse incentive, because the final time that the tenant is in arrears, a possession order will be made and they will not have an incentive to make that payment. That seems really perverse. All of that needs to be discretionary. The court absolutely has to have a look at that.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
Ben Twomey: We absolutely welcome the end of section 21 no-fault evictions—it could not come soon enough. We were promised it some time ago. For renters, that is one of the biggest insecurities we face. That is why I talk about the experience needing to change for renters. In Generation Rent, we love it when renters are aware of their rights and when they know what the system is like, yet those renters who discover they have received a section 21 suddenly become aware that the rights they have do not mean much at all, because they will be out in no time and there is not much they can do to challenge it.
One of the saddest things I have heard from renters we support is that insecurity follows them into the next home. Even when they are trying to feel settled and comfortable and to build their lives again, they are in constant fear that another no-fault eviction notice could come. It needs to be really clear that the new no-fault grounds do not keep that insecurity in the system.
We welcome the end of section 21 and we welcome the property portal. It will be really good to finally have a register of landlords. We hope to be able to put things into that portal that are not yet in the Bill: we hope that we will be able to track evictions, so that they are enforceable around the no-let grounds, and that we will be able to look at actual rents and properly monitor what goes on. One of the big advantages of ending section 21 will be that finally a reason is given for every eviction, so we can understand when things start to go wrong that lead to homelessness. At the moment, quite a lot of guesswork is happening to prevent that problem.
We also welcome an ombudsman coming into the sector, to have an equivalence with the social housing sector. As much as possible, in any way we can, we think renters should have the same rights across social housing and private renting. When the experience can be very similar, and the risks, insecurity and unaffordability are still factors across the piece, there is no reason to have a two-tier system. In fact, I would go further and say that we will have reached our goal only when homeowners start to kick themselves and say they wished they were renting because there are so many rights available, so much security of tenure and so much flexibility, and because they have organisations such as mine and Sue’s to inform people. We look forward to working with the Government to see how that ambition can happen.
Sue James: I agree. The property portal has such potential if we get the information in there right so that there is transparency around renting. That would be amazing. We absolutely love the fact that this has been brought in. There are some changes that we think need to be made. The fact that you are looking at delaying action on section 21 is something I would love to talk about, if you would like to hear that.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
With Ben, I would like to probe no-fault evictions, which are very expensive for the person who is not at fault. They have to pay for removal costs, a new deposit and, very often, a month’s rent up front, which is very difficult for people. Are there any ways that could be ameliorated when it is no fault and the tenancy is being curtailed early, within two months?
Sue James: Shall I go first? You also heard this morning that the Government need to hold their nerve, and I absolutely reiterate that. The Bill has been a long time coming, and we have a crisis out there. Colleagues of mine who are at law centres have queues of people coming to see them because of this, and we absolutely need to get it right.
The county court is not the experience I have been hearing about in some of these conversations. You heard this morning that the county court is pretty much getting it right: it is not one of the courts with a huge backlog of hearings and stuff like that. When you start a possession claim, there are fixed rules around that. The case has to be listed within eight weeks, and it is usually listed in six to eight weeks. You then have a hearing before a judge, so it is not actually taking that long. You have the hearing and the court has to apply strict criteria on whether it is just and proportionate, and whether there is a reasonable defence that can be pursued.
In the court, we have a fantastic duty solicitor regime that has just been improved to include benefits advice beforehand. So you already have judges who are experienced in housing, you have duty advisors who are very experienced in housing, and then you have income officers who are at the same courts all the time. You build these relationships, and as duty solicitor, you are working out a plan where you can get the arrears paid off and get the stuff sorted out. We now have crisis navigators in law centres, and they resolve the benefit issues that are sitting behind it. Of the rent-arrears cases I have ever seen, I would say that probably about 60% to 70% have been a benefit-related problem. I think those issues are different from the issues around the court.
The only thing that you could invest more in—well, obviously if we invested more in the court that is brilliant, but I do not think we need to wait for that—is the bailiffs and the end period. Sometimes, with a bailiff’s work, it can take up to eight weeks to fix a date. That is just about money. If you address that, you do not have these problems. That is why I am saying that discretionary is the way to go, because it provides fairness.
You already have a housing court sitting there. It could do with some tweaking, but you are already there with that. I think we are good to go. Given that section 21 is the biggest cause of homelessness, you would rebalance in the way that you want to, so I would say, “Hold your nerve and go with it.”
Ben Twomey: I have two very quick points on the court reform before I go into your other question, Lloyd. First, in quarter 3, the latest data from the Ministry of Justice shows that the median time it took for a repossession case was about 22 weeks in both section 21 and in section 8. The idea that section 21 is much quicker is not true. With section 21, more people move out beforehand because there are fewer ways in which you can legitimately challenge it. There is a problem if you are setting up the court system to say that we want to basically stop tenants having their rights and a way in which they can challenge an eviction. That is a really important point: it does not actually lengthen the time that will be taken. That is not true.
Secondly, I will talk quickly about Jasmine, a renter who very recently challenged an eviction because she could not move in time. She was given two months to move under a section 21, but she could not move in time, so she challenged it and it took up the court’s time instead. If you extend the notice period to four months, that challenge would potentially never happen, the court never has to see Jasmine, she finds a new place and is comfortable and able to move out in good time. She is happy, and potentially the landlord is happy too.
On the cost of no-fault evictions for renters, we estimate that the average cost to a renter of an unwanted move is £1,700. For a renter to be able to save, it is really important that they are able to find some way in which, when the move is through no fault of their own, they can make those savings quicker in order to be out of the home. We think the best way to do that—rather than, for example, thinking about repayments from the landlord—is just to say that the final two months of renting will have no rent cost attached. The tenant then has time in that space to save in order to find a deposit and the first month’s rent, for example, and they are able to move out with the savings they have made because of the two months’ lack of rent.
It potentially means two months out of pocket for the landlord who has chosen to do a no-fault eviction, but if it is a no-fault eviction for a sale, they are potentially getting a big windfall through that anyway. The two months out of pocket can be balanced against the fact that otherwise it would be two months in which the tenant is likely to find themselves as one of the record number of homeless people we have at the moment. It is an important balance to strike, and that is one of the ways in which you could do it.
Mike Amesbury (Weaver Vale) (Lab)
Q
Ben Twomey: Thank you, shadow Minister. On the point about being “capable of causing” a nuisance, the previous language in the Housing Act 1988 was “likely to cause” a nuisance. It would be difficult for me to prove that you are “likely to cause” a nuisance, but it would be a lot easier to say you are “capable of causing” a nuisance—as it would be for me, you or anybody else here. I think that change in language is potentially dangerous, particularly when you think about antisocial behaviour being relatively difficult to define.
I know that others in these sessions have expressed serious concerns about domestic abuse victims, how domestic abuse could be mischaracterised as antisocial behaviour, and how that may be a reason for eviction. Obviously I do not need to emphasise how difficult that would be—having the punishment of homelessness potentially layered on to a domestic abuse situation, where that is happening. It is important that we differentiate between criminal justice matters and housing matters.
However, the need to deal with antisocial behaviour, when it causes a real a nightmare for neighbours and other tenants, is important, but the local authority has a duty to prevent homelessness as well. They enact that duty with two months’ lead-in time. You cannot do that if the ground says that a tenant could be out of their home in two weeks. Within those two weeks, the possession proceedings can begin immediately as well. The approach does seem reckless. Are we just talking about moving a problem, which is currently in a home, on to the streets rather than addressing the fundamental issues? Is it going to catch within it some serious victims of domestic violence?
Sue James: I would agree with all of that, but I add that I have dealt with many antisocial behaviour cases in my time as a solicitor and they are complicated. They are not quite so straightforward, and there is often a mental health issue or a vulnerability at the heart of them. I think we absolutely need to keep the original language rather than change it. And I agree with Ben on the importance of the domestic abuse issues; there are going to be women facing eviction and having to experience that as well.
Nickie Aiken (Cities of London and Westminster) (Con)
Q
Sue James: We think it is a great idea.
Nickie Aiken
Good.
Sue James: But it needs more.
Ben Twomey: I would add that it lacks detail at the moment, and we are very keen to see that detail. I mentioned that we are particularly interested in eviction notices and the outcomes of evictions being logged there; otherwise, there is not really much improvement in the way you monitor and enforce against abuse of some of the new no-fault grounds. So eviction notices are really important. Getting the rents charged on there will be really important, and we should think about energy performance certificates going on to the portal so that they can be enforced. When I talk about enforcement, I think it is really important that local authorities are empowered and have the necessary resources to enforce against bad practice—the kind of practice that can lead to people being unsafe in their homes.
It is also about having a place for tenants to access this information, as they have a vested interest in what happens afterwards. The only way to give them a vested interest is to have an incentive, and we think that is through rent repayment orders. We would encourage the portal to be made accessible to tenants. For example, where they can see that no-let periods have been abused, there should be a rent repayment order. If the landlord is not compliant with the portal, there should be a rent repayment order. Also, if the landlord is not compliant with minimum energy efficiency standards, we think that there should be a repayment—you would equalise it in that way. At the moment, where licensing schemes exist, for example, and the local authority pursues landlords for a fine, often that money does not actually get back to the person who has lost out—the tenant. It is important that rent repayment orders go directly to the tenant wherever possible.
Sue James: I totally agree, and I would like to pick up on the issue around the basic requirements of gas safety and stuff. At the moment, that is a huge protection in section 21; a landlord cannot get a possession order unless they have all those protections, and that does not appear in the Bill. We absolutely need to have them included, and the portal could be a place to put them. We would then have transparency; a tenant knows when they are looking in the portal that this is a good landlord and that they have complied with everything. I think that is so fundamental to changing the nature of the private-rented sector.
Matthew Pennycook
Q
Ben Twomey: The question of guarantors is really important. Usually, there would be a guarantor if you are not earning a certain amount to cover the rent—usually, you should have an income that is two and a half times the rent and, if not, you require a guarantor. For younger people, for people on low incomes, that can be quite difficult, so they would need a guarantor.
We have been working with the National Youth Advocacy Service to look at the barriers facing care leavers when they access private rented homes. This has been a major barrier for care leavers. At the moment, 60% of local authorities do not offer people the ability to be a guarantor for care leavers. Local authorities are the corporate parent for care leavers, so they are basically taking on parenting duties. We think that is a big problem. The 40% that offer the guarantor scheme in principle vary in the way that they do so. We think that it is for the Government to step in and say, “If, as a state, you are going to take on parental responsibility, you should be a guarantor to make sure that young people who are care-experienced are not being locked out of rented accommodation, compared with their peers.” That would be a major step forward.
To touch on bidding wars, we have found in our research at Generation Rent that there are seven times more bidding wars than there were just five years ago. We have gone up from 3% of tenants experiencing this to 21%, from our research. I experienced it when I moved down to London relatively recently. I was asked how much more I would want to give and how much longer I would want to stay in the property as a fixed-term tenancy. It is very, very common now. We think that the issue needs to be addressed. There is nothing in the Bill at the moment, but there should be some consideration given to this. When a landlord offers a price for rent, they are almost, by definition, offering a rent that they are comfortable with. Just because of the changes in market forces—that is a change not to their costs, but to the number of people queuing round the block for them—it should not be that they can then increase the rent as they please and encourage others to enter into these kinds of bidding wars, which basically pit tenant against tenant. The only one who is benefiting from this is the landlord.
Sue James: To pick up on that point, this is not in the Bill, but the position of the Renters’ Reform Coalition is that, at the moment, unless you restrict the amount that landlords can put up rents, you potentially have an economic eviction, and we would suggest that you restrict that to the lowest of either inflation or wage growth.
To touch on what is in the Bill, section 14 of the 1988 Act allows the tenant to apply for the tribunal to have a look at the rent. Originally, it was restricted to whatever the landlord was requesting, but in the Bill it is now the market rent. That would potentially have a chilling effect on tenants who want to challenge the rent that has been set. As an adviser, I might say, “It is limited to what your landlord has suggested,” but at the moment, with the way Bill is, that could be the market rent if the landlord has asked for less than that. Does that person then challenge it? That could have a chilling effect. When thinking about rents and, as Ben said, bidding wars, that absolutely needs to change, because it is really difficult. There are queues of people for every tenancy and the protection needs to be there, so thoughts around that would be really welcome.
Helen Morgan (North Shropshire) (LD)
Q
Ben Twomey: It is really important, if you are thinking about a private rented sector that is attractive to tenants, rather than something that we feel trapped in. It needs to be something that recognises that there are 11 million private renters across England, and that, for many of us, we are here to stay in the private rented sector. It is no longer just a quick in and out—a temporary thing—while we save enough money to buy our own home. The protection is important, knowing that you can be in your home for a certain period of time—unless, of course, you do something seriously wrong, in which case there are protections in the grounds for landlords to act on that. At the moment, there is only a six-month protected period in which you are safe from a no-fault eviction, within the Bill’s wording. As I said, that does not really change the situation we are currently in, so it is not actually ambitious towards a fairer private rented sector.
We believe that the period should be two years. That would mean the landlord—if they are taking housing seriously and recognising that homes are the foundation of our lives—would be comfortable knowing that they can hold off selling the property and moving a family member in for two years. If they need to do some of those things afterwards—which would be a great shame, because the tenants are probably enjoying the property—they can still do that after that period. Six months feels far too short; it treats it like temporary accommodation—
The Chair
Order. I am afraid that brings us to the end of the time allotted to the Committee to ask questions. I thank the witnesses, on behalf of the Committee.
Examination of Witness
Francesca Albanese gave evidence.
The Chair
We will now hear oral evidence from Francesca Albanese, director of policy and social change for Crisis. We have only until 2.45 pm for this panel, so please can we have short questions and shorter answers? Please can the witness introduce herself for the record?
Francesca Albanese: I am Francesca Albanese. I am the executive director of policy and social change at Crisis, the national homelessness charity.
Mike Amesbury
Q
Francesca Albanese: We welcome the abolition of section 21. I think we have heard from others giving evidence today that it is one of the leading causes of homelessness, so that is definitely welcome. However, there are still some areas of the Bill that cause us concern with regard to homelessness. One is not automatically carrying over some of the areas of section 21 into the new ground 8. That would decouple the link around automatically triggering a homelessness prevention duty, which is currently in the Homelessness Reduction Act. We are concerned about that area—if we abolish section 21, we do not want to then disproportionately increase the risk of homelessness in other areas.
There is also an issue about the repetition of some of the rent arrears grounds. Ground 8 covers fault evictions, but ground 8A also looks at rent arrears. We do not see the reason for having both; there are suitable protections just in ground 8. The other area—which we have heard about from previous evidence—is antisocial behaviour, and making sure that the wording is tightened so that it does not cause further issues for more vulnerable tenants, and does not affect them disproportionately.
Mike Amesbury
Q
Francesca Albanese: We at Crisis recognise that changes do need to be made to the courts. Obviously, that is one of the central themes in this Bill and it is about making sure we get that right. But the problem is that if you bring in the court reforms first and then make the changes around abolishing section 21, you are effectively creating a two-tier system. For us, that does not protect tenants in the right way, so we would argue that both need to be brought in at the same time.
Jacob Young
Q
Francesca Albanese: To clarify, are you referring to ASTs, and their length?
Jacob Young
Yes.
Francesca Albanese: We would welcome longer-term tenancies. We know through our services—this is increasingly so at the moment—that people come to us who may have had their tenancies shortened for a reason that is not of their making. Being able to have longer-term tenancies in the private rented sector gives more stability for tenants. Equally, if you look at where rent increases can happen, this also manages that part of the market—making sure that there is proportionality in terms of when rent increases are made, as well as stability for tenants through longer-term tenancies.
Jacob Young
Q
Francesca Albanese: I think they certainly help. If we are looking at longer-term tenancies, I suppose it is about having more emphasis on longer-term tenancies being used more regularly. Going back quite a lot of years of working in this space, I know that there are ways you can do that now, but it is not the norm. Most tenancies that are given are six or 12 months with a rolling period or a fixed term.
I would also go back to the points made at the beginning: this is helpful, but there are other areas that we are concerned about, such as ensuring that people getting served notice on the kind of grounds that were under section 21 and which will now go over to section 8 are protected sufficiently. Even though longer-term tenancies can give tenants more protection, from the perspective of Crisis, which works with people at the lower end of the private rented sector market, where there is often a higher turnover of tenancies, we would want to make sure that those protections are still in place so that we do not end up pushing more people into homelessness as an unintended consequence.
Lloyd Russell-Moyle
Q
Francesca Albanese: I might make a broader point first and then come back to that. At the moment, as you will all be aware, the local housing allowance does not meet rents. It has not done so for a long time, and it has been frozen since 2019. That decoupling of rents from local housing allowance levels is causing huge problems. We did some research six months ago—I would say the situation has probably got worse since then—that shows that only 4% of the market in England is affordable to people on local housing allowance. In some areas of the country, that drops to 1%, so it is a massive issue. That needs to happen now, and it is something that the Government can do now. They can give broader access to the private rental market. There is obviously a longer-term issue: we need more social housing. Where private rental sits within the broader housing market is really important.
On the point about discrimination, we do not want tenants to be discriminated against because they are in receipt of welfare benefits. Anything that prevents that is welcomed. The problem at the moment is that quite a lot of tenants are not getting anywhere near properties within the private rented sector. We are seeing record levels of people trapped in temporary accommodation and local authorities are very stretched. The point about the private rented sector is that quite a lot of people are not even getting access to it, let alone being discriminated against because of being on welfare benefits.
On the more specific point about tribunals, that is not my area of expertise, so I do not want to comment on something where I would be giving an opinion rather than factual evidence.
The Chair
If there are no further questions from Members, I would like to thank our witness for her evidence. We will move on to the next panel.
Examination of Witness
Ian Fletcher gave evidence.
The Chair
We will now hear oral evidence from Ian Fletcher, director of real estate policy for the British Property Federation. We have until 3 o’clock for this panel. Could you introduce yourself for the record, please?
Ian Fletcher: Hello. I am Ian Fletcher, a director of policy at the British Property Federation. Thank you very much for the invite this afternoon.
Matthew Pennycook
Q
Ian Fletcher: Build to rent is something that started over the past 10 years. It is trying to encourage institutional investment into market rented housing. It is not pitched at high-income earners. We do a survey each year that looks at the demographics of the build-to-rent sector, and I would say it is catering for medium earnings—often key workers and people of that nature—and supporting our core cities particularly, as a lot of investment has gone into a number of the core cities across the UK.
In terms of impact, a lot of the things we very much welcome in the Bill have, to some extent, been pre-empted by the build-to-rent sector: a number of my members are already members of an ombudsman voluntarily; the build-to-rent sector has proudly been at the forefront of welcoming pets; and decent homes is not something that will trouble the sector. The portal is something I have been campaigning for since 2007. There is a lot to welcome in the Bill.
Some challenges that are specific to build to rent are things like the Government abolishing rent review clauses and the lack of any minimum tenancy length in the Bill for landlords, which means that there could be a danger, particularly in properties in core cities, of significant churn.
Jacob Young
Q
Ian Fletcher: As I say, the stock of build to rent has been developed over the past 10 years, so it is unlikely not to be meeting the decent homes standard. Equally, the management of the property is done to a very high standard. That is something the sector is very proud of. I do not see any challenges in introducing decent homes into the sector from a build-to-rent perspective. We have sat around a number of tables with the Department as it has worked through the specifics of how the standard would impact the private rented sector, and I have not heard many dissenting voices in terms of this being introduced into the sector.
Ms Karen Buck (Westminster North) (Lab)
Q
Ian Fletcher: It is something that we have been continually concerned about. In a London context, the removal of the planning constraints on the short lets market affects property across not only the rental sector but the leasehold sector.
It is a concern, I suppose, in terms of members. At the moment, you obviously have to take a minimum six-month tenancy, but what members often find is that you do not want to restrict subletting, because often that is helping the ultimate tenant, if they have to move for various reasons. You are finding that quite a lot of people are moving into these premises and then subletting to somebody who will take it on a short-let basis, so these are portals and things of that nature that, to some extent, are exploiting that situation.
Ms Buck
Q
Ian Fletcher: Clearly, the Government are taking forward reforms, particularly planning reforms, and talking about licensing. In the context of this Bill, we would like to see a minimum tenancy length of six months—four months plus the two months’ notice. However, we are mindful that there are good reasons why tenants might have to leave within that six months: they have been mis-sold a property or the property is substandard. In those circumstances, we suggested that the solution might be to allow them to appeal to the ombudsman to be able to break the tenancy.
Eddie Hughes (Walsall North) (Con)
Q
It feels to me that it is likely that your tenants will stay and all the people who I have spoken to who provide this type of accommodation give me the feeling that the type of people that you are attracting and the type of property you are offering means that people do not walk in and walk back out again very quickly. I would imagine that lots of your tenancies last considerably—when I say “lots”, I mean that a very significant percentage of your tenancies last over a year.
Ian Fletcher: You were very welcome when you visited a build-to-rent building in Newcastle.
Eddie Hughes
I loved it.
Ian Fletcher: There are things to encourage the sector to provide long-term tenancies at the moment as well. As you will know, national planning guidance suggests that build to rent should be providing at least a minimum of a three-year tenancy.
I suppose the concern is that these are, as you found out from the site in Newcastle, very metropolitan and very popular areas.
Eddie Hughes
Very.
Ian Fletcher: You could end up in a situation where somebody has taken a two-month tenancy and is just using that as an opportunity to earn some money for themselves by renting it out at weekends for hen parties or things of that nature; it is almost sort of hotel accommodation in some respects. That is the concern of the sector—that you end up with a lot of churn in that respect.
I think there is also another concern. We have heard, quite rightly, from Ben and other evidence givers about the costs of moving from the tenant’s perspective. There are also significant costs from a landlord’s perspective where you are setting up a tenancy and then that is churned very quickly.
Lloyd Russell-Moyle
Q
I wonder whether you would support an idea that there should be some sort of matrix that prevents landlords from increasing rents above a certain level—that was nationally known, as it were, and that could be published by the Secretary of State, so that everyone had some security about what that ceiling is.
Ian Fletcher: Those remarks are specific to a particular context.
Lloyd Russell-Moyle
Q
Ian Fletcher: The context is that at the moment the way rents are often set in the build-to-rent sector is to give the tenants some certainty. They will typically be index-linked. The Bill abolishes the use of rent review clauses, so you are not allowed to do that in terms of setting a rent beyond a year. We think that is a pity. Often, tenants appreciate the certainty of knowing whether their income will meet the rental payments going forward. I would not want somebody to be tied into those sorts of rent review clauses forever and ever, because economic circumstances change significantly, but for a short period of time that should be acceptable.
Lloyd Russell-Moyle
Q
Ian Fletcher: I would be. I think that that is starting to look like rent controls, and that then comes with some of the adverse consequences of rent controls in terms of the quality of the stock. You tend to find with rent controls that the sector shrinks down and does not attract—
Lloyd Russell-Moyle
Q
Ian Fletcher: That is the market. I am supportive of the market.
Lloyd Russell-Moyle
Q
“The abolition of no-fault evictions needs to happen in tandem with…court reform.”
What indicator explicitly do you think should be hit for court reform to be sufficiently achieved?
Ian Fletcher: I obviously saw the debate on Second Reading. I thought that the tests that the Secretary of State set out were relatively good ones. The thing that we have been particularly keen to see is the digitisation of the courts. That project has not advanced as quickly as I would have liked, but it will make a huge difference to the experiences of both tenants and landlords going to court.
A lot of the complaints that we hear about the courts are to do with communication and knowing where your case is in the system and how it is progressing, and digitisation will improve that significantly. I would like to see times coming down—obviously, it is at a 22-week median at the moment. I would like to see that come down to about 16 weeks.
Lloyd Russell-Moyle
Q
Ian Fletcher: Twenty-two weeks is the median time that a case takes to go from claim to possession at the moment.
Lloyd Russell-Moyle
Q
Ian Fletcher: I think one of the Secretary of State’s other tests was that bailiff recruitment would improve. The other thing I would say is that the Levelling Up, Housing and Communities Committee recommended that there should be some sort of key performance indicators and regular measurement of them, which would give us the confidence that the courts are delivering what they should be delivering: speedy and efficient access to justice.
The Chair
If there are no further questions from Members, I would like to thank the witness for his evidence. We will move on to the next panel.
Examination of Witness
Kate Henderson gave evidence.
The Chair
Q
Kate Henderson: Good afternoon. I am Kate Henderson, chief executive of the National Housing Federation. We represent housing associations in England, which are not-for-profit providers of 2.7 million homes to around 6 million people.
I would like to say a little about housing associations, just for 30 seconds. While, on the face of it, this Bill does not apply to social housing, and a lot of the homes that we provide would not be seen in the private rented sector, it is important to acknowledge that the Bill has implications, particularly for supported housing, where we might currently be using assured shorthold tenancies.
That type of accommodation—we provide three quarters of all supported accommodation in this country—covers things such as emergency accommodation for people fleeing domestic abuse, for veterans experiencing homelessness, for care-experienced young people, for adults with both physical and learning disabilities, and also step-down accommodation from mental health facilities.
Again, it is about just being really mindful that, while the vast majority of the tenancies in the housing association sector are assured, there are implications for that important supported housing provision, and just making sure that there are no unintended consequences from this Bill coming forward.
Matthew Pennycook
Q
Kate Henderson: The National Housing Federation supports the Government’s aims of protecting the rights of tenants, and we agree with the abolition of section 21. That should extend across the board. It is important to strike the right balance between landlords and tenants in all sectors, including tenants of housing associations, so it is really important that the Bill does not have any unintended consequences for the ability of housing associations to operate effectively and to provide decent, secure and affordable homes for their tenants, particularly in that area of support and need.
We have four areas in which we would like to seek further clarification. The first is around changes to rent increases. The second is around ground 1B for rent to buy specifically. The third is around superior landlord grounds—so 2ZA and 2ZB—and the fourth is around ground 6 for redevelopments.
We would like to see all types of social housing exempt from the proposed approach to rent increases, whether included within the rent standard or not. That is a limited change to the Bill but it would help to deliver vital forms of housing to meet specific sub-market needs. We would like to see ground 1B be extended to apply when a property is not being sold but a tenancy is being offered to another tenant wishing to take part in a rent-to-buy scheme. We would like clarification around ground 2ZA so that that can be used on a tenancy at will. Lastly, we would like housing associations to be given access to ground 6. There could be a possibility of making that a prior-notice ground as a safeguard for tenants. I have just listed several grounds for quite specific contexts, so I would be happy to give examples of why we would find changes in those areas useful.
On the specific ground that Matthew has just raised, the current wording of the rent-to-buy ground 1B does not allow it to be used when a property is not being sold but when a new tenant is moving in instead. For example, you have somebody who is in a rent-to-buy property, has been there for five years and has decided that they do not want to buy it or they cannot buy it; we would like the ground available so that that property could be given to another tenant who would like to use the property as it was intended and designed to be used—as a rent to buy. Just to highlight, that is a Government product supported by the affordable homes programme and regulated by the Regulator of Social Housing, so we would like it to be able to operate as intended. Again, just that access to that ground would ensure that rent to buy works as intended.
Matthew Pennycook
Q
Kate Henderson: Sure. At the moment, the social housing sector is regulated by the Regulator of Social Housing, and the vast majority of our rents are set by Government and set annually. The Bill makes changes that would restrict rent increases to once in 12 months and require landlords to give two months’ notice of rent changes.
As I mentioned in my introduction, our members manage 2.7 million homes. Requiring two months’ notice of a rent increase, and requiring each tenant’s rent to be changed on the anniversary of their tenancy, would place a huge administrative burden, whether it is on a large-volume landlord or even on a smaller landlord with fewer staff.
This would take away from a provider’s ability to deliver those core services. The Bill acknowledges that by including an exemption for social housing in the rent standard—social housing is exempt from those changes. However, some types of social housing, such as intermediate rents, specialist supported housing and some forms of low-cost home ownership, are not included and do not appear to be exempt from the changes. Not exempting some types of social housing would cause complications and administrative burdens. It might mean that neighbours had their rents increased at different times, and it would really affect delivery.
Housing associations are responsible landlords, and we are regulated by the Regulator of Social Housing, so any concerns about unscrupulous rent increases do not apply to us. We are asking that all types of social housing be exempted from the proposed approach to rent increases, whether or not they are included in the rent standard.
Jacob Young
Q
Kate Henderson: It is absolutely right that residents in the private rented sector have access to an ombudsman. It is really important that that access is clear and easy to navigate and that there are routes to address where things have gone wrong in the private rented sector.
From a housing association perspective, we want to make sure that there is clarity about the remit of a new ombudsman, because we already have an ombudsman service. However, some housing associations also provide market rent homes. If you were a resident in a market rent home, would you go to the current housing ombudsman or to the new PRS ombudsman? We need real clarity on remits so that there is not confusion either for the landlord or, most importantly, for the tenant.
Ms Buck
Q
Kate Henderson: Housing associations take reports of antisocial behaviour very seriously, and we will always investigate them thoroughly. Many of our members have in-house teams dedicated to managing and resolving ASB that often work extensively with the police and local authorities. For any housing association, although eviction is sometimes necessary, it will always be a last resort. There are many actions that housing associations will take to resolve an ASB case prior to its reaching the point at which a tenant might face an eviction.
The Bill’s changes to ground 14 propose a widening of the definition of ASB in the ground from any behaviour “likely to cause” to any behaviour “capable of causing” nuisance or annoyance. The word “capable” is really open to interpretation. For us, it is all about clarity: what, exactly, constitutes a legal ground for eviction under the new definition, and how will it work in practice? Eviction is, of course, a last resort. It is incredibly distressing to deal with such cases, particularly if they are having an impact on multiple residents. It is really important that we do everything we can to resolve a case before it gets to an eviction.
Lloyd Russell-Moyle
Q
Kate Henderson: This is an area on which I would like to see further evidence. I am a member of the Domestic Abuse Commissioner’s strategic reference group on perpetrators. In that scenario, where the victim does not want to leave the property, how can we ensure that the tenancy is in their name but the perpetrator is removed? I would like to seek the expertise of those who are working at the forefront of domestic abuse before giving you a direct answer on the strength of that ground, but I would be happy to follow that up with the Committee.
Lloyd Russell-Moyle
Q
On ground 6, you said that you would quite like the ability for redevelopment. We know that there have been some very controversial repossessions over a state redevelopment that local authorities and housing associations have been part of. Tenants have often liked the security of knowing that they cannot just be given a few months’ notice, that they have to go through a process, and that they have the ability in the end to say, “No, this is my home.” Would giving that ability strike a balance that is not in favour of the tenant?
Kate Henderson: The context in which we are asking for access to ground 6 is when regeneration is already taking place. It is a scenario where you have a development where people have been moved out while works are taking place. That might be for building safety reasons, for energy efficiency reasons or for decency reasons. At the moment, if that accommodation is being rebuilt and the tenant has been moved into temporary decant accommodation, we would always try to do that by consent with the residents.
In that decant accommodation, we typically use assured shorthold tenancies. Obviously that will go with the abolition of section 21, which we support. This is the place for the grounds to be extended to where residents are in the decant accommodation. Those residents would be moving back into the newly built accommodation that would have been allocated to them, but we need to make sure we can have that constant flow between use of the decant accommodation and getting people back into their permanent settled accommodation.
Lloyd Russell-Moyle
So that is where an assured tenancy is being offered.
Kate Henderson: Sometimes it is done on licence. If the building that is being redeveloped is not being fully demolished, and people are going back in, you would move into the decant accommodation on licence. But in a situation with major regeneration—we hope to see more of that; it is great that the affordable homes programme has now opened up to that—typically with the decant accommodation the tenant would have an assured shorthold tenancy. That will not now be an option, so we want a situation where there are grounds for the decant accommodation for those people. It would be a very rare set of circumstances where somebody wanted to stay in the decant accommodation and not move back, but it has happened. We want to make sure that we are able to continue with the pace of regeneration. This could be a prior notice ground to give a safeguard to the tenants. Again, it is just about having access so we can make sure that regeneration can happen in a timely way.
Mike Amesbury
Q
Kate Henderson: This is very technical, but one of the areas—in addition to rent increases; thank you for the opportunity to discuss those—relates to grounds 2ZA and 2ZB, which are two mandatory grounds for possession where a superior lease ends. This will generally be for situations in which a section 21 would previously have been used.
Let me give an example of why this is an issue. It tends to be an issue in supported housing, where you have a superior landlord who has let on a short-term lease to a housing association for, say, five years. That housing association is the intermediate landlord, and it would typically provide supported housing and sometimes very high-level support to vulnerable residents, who would be the occupational tenant.
In some situations, either the superior or the intermediate landlord will allow the lease to lapse, and then you would go into a scenario of tenancy at will; and in that situation, we do not want a situation where the superior landlord is responsible for the occupational tenant, given the high levels of support needs. It is unclear whether these grounds would then be available for use if there is a tenancy at will. Again, in most situations you would have given notice—the intermediate landlord would have given vacant possession to the superior landlord—but in the case where that has lapsed, we need to ensure that these grounds can work. The second issue is around maintaining possession of the property until proceedings have concluded.
It is a fairly technical area, but it matters to those who are providing supported housing and using leases. I would be happy to provide a further note to the Committee when I submit our written evidence. I appreciate that this is a rather technical matter, but it is important in terms of high-level support.
The Chair
If there are no further questions from members, let me thank the witness for her evidence and let us move on to the next panel.
Examination of Witness
Dr Henry Dawson gave evidence.
The Chair
Good afternoon. We will now hear oral evidence from Henry Dawson from the Chartered Institute of Environmental Health. For this panel, we have until 3.30 pm. Will you please introduce yourself for the record?
Dr Dawson: Hi. My name is Dr Henry Dawson. I represent the Chartered Institute of Environmental Health.
Matthew Pennycook
Q
I suppose I would like to probe what you think the consequences are if that legislation takes some years to deliver. How does the delay bear on the other reforms that this Bill enacts? How might we use the Bill to tie into that other legislative process? How does this Bill need to relate, if at all, to that forthcoming legislative decent homes standard for the PRS?
Dr Dawson: Thank you for the question. I have a few thoughts with regard to indications we have had that the decent homes standard might be brought in through the Bill. That is something that the CIEH is very keen to see. At the moment, the decent homes standard provides a fairly simple set of criteria, which are measurable, are fairly easy to understand, and provide the opportunity for both tenants and landlords to have some consistent standards to refer to when considering the condition of the property. Not having that in the private rented sector results in an odd disparity: we have social rented accommodation with the highest standards, and conditions have improved considerably through that standard, and then there is private rented accommodation that does not have that standard.
We find it very difficult for the sector to self-regulate and for landlords to organise their own repairs and maintenance schedules, when they very often have to wait for a local authority inspector to visit their property to carry out an inspection under something like the housing health and safety rating system schemes. It is something we can also get some benefit from through the Housing Act 2004 licensing, which allows us to set some of these conditions, and allows us to tailor them by area. However, bringing in a national standard across the sector would be very advantageous and provide a very clear requirement, although the CIEH would like to see some more clarity and would like to be involved in the consultation on the proposed changes to the decent homes standard.
The standard could be implemented in the sector at a later date, after being included in the Bill in order to get it enacted. That would give us a two-step process, and then we could bring the standard in when the amendments had been made and we had the updated standard to work from.
Jacob Young
Q
Dr Dawson: The CIEH is very happy to see the portal introduced. I am based near Wales, and I sit on the advisory panel for Rent Smart Wales on behalf of the CIEH. We have seen the portal brought in, and it has been very effective. It provides a lot of data on where rental properties are, and who their landlords are. Local authorities have quite a hill to climb in trying to find that out independently. It will be a very useful source of information. It is also a good source to look at when collecting certificates on properties.
However, we find that the portal has limited impact with regard to the condition and contents of properties, and management practices. It is an information-gathering tool. It has the potential to be a central information portal that landlords and tenants can refer to—a sort of single source of truth. On very small landlords registering with landlord bodies, 85% of landlords own one to four properties, and we are finding what an author referred to as a cult of amateurism. These landlords have differing levels of expertise, and of knowledge of a complex legislative environment. The portal can be a central reservoir of information for them, with quite a bit of scrutiny behind it.
As I say, we welcome the portal when it comes to providing data on where the properties are and who the landlords are, though the more unscrupulous operators will still try to avoid the register so as to evade their duties. I would not go so far as to say that it will make a significant impact on the condition and contents of properties, or the management practices of landlords in the sector.
Ms Buck
Q
May I also ask a question about enforcement, which is central to this issue? As we know, the enforcement record is very patchy in local government. In your view, why is that?
Dr Dawson: With regard to the use of the decent homes standard in the sector, I have found through my personal research on the sector that there is a lot of variation in the licensing conditions and standards set for private landlords in different sub-markets up and down the country. It is only right that local authorities tailor their approach to suit their local market, but there is great need for more consistency between the licensing conditions that they set and what they require in their area.
If we were to bring in the decent homes standard across the sector, licensing standards could be revised to accommodate that new duty and any updates made to the decent homes standard. That would provide a fairly common set of grounds for properties nationally. Then, local authorities need only make small changes to what they require of properties in their area to fit local peculiarities of housing; for example, northern back-to-back houses are something to burden yourself with only if you need to be aware of the issues that they present. You get steel-framed houses in some areas and concrete houses in others. Local authorities need to be able to focus their approach and the standards that they require to fit what they have going on in their area.
We still have the opportunity to use the housing health and safety rating system under the decent homes standard. The updates to the HHSRS will come through fairly shortly; we will welcome their being brought into practice. Use of the HHSRS would remain a common requirement during the inspection of properties, to satisfy the requirement on properties not to have serious hazards.
A whole range of factors influence levels of enforcement in local authorities. At the moment, we have about 2.2 qualified environmental health officers for every 10,000 private rented sector dwellings, so that is already a pretty low rate. Where we have larger authorities and significant political backing, we see more environmental health officers, with better recruitment, better political backing and more funding for those officers, which is key, so you start to see a collection of experience building up and the legal backing behind it. For example, Newham has something like 100 environmental health officers or enforcement staff in its departments, and they can move their way through more than 200 prosecutions in a year. In contrast, a rural authority may have one or two environmental health officers, who must share their duties across all the regulatory functions of environmental health, including food safety, health and safety, environmental protection and public health.
One of the profession’s big problems is ensuring consistency in funding. When funding is renewed annually and you are looking at changes each year, it is very difficult to do succession planning. We have seen a gradual reduction in the number of people coming through university environmental health programmes in order to support the profession and provide a reservoir of expertise for the inspectorate. We are also seeing more of them going off to private sector employers, rather than the public sector.
A range of issues are affecting the sector, and the sustainable and predicable funding such as we get with Housing Act 2004 licensing has been a real lifeline for the sector. Where we have big schemes going, it has managed to keep the nucleus of staff that is required for the expertise and the momentum to move large-scale enforcement forward. My apologies—that was quite a long answer.
Jacob Young
Q
Dr Dawson: When Wales first implemented the scheme, about 196 penalty notices were given out in the first couple of years and there were about 13 prosecutions. The main reason, from the Welsh Government’s own analysis, is that they did not set up clear systems and processes for liaison with local authorities ahead of the formation of Rent Smart Wales.
There is a process whereby local authorities are expected to carry out enforcement functions and can then bill Rent Smart Wales, through an agreement—a memorandum of operation—that they have all signed up to. However, because they are trying to account for small amounts in hours and tasks, it is very difficult for local authorities to predict the workload and allocate officer time against it. That has become somewhat of a Cinderella to local authorities’ other duties.
One of the higher impact areas is that, although Rent Smart Wales provides licensing and can therefore enforce conditions, it also has a separate registration function, which is purely information gathering and gives it the ability to send out mailshots to landlords and letting agents about changes to the law and training courses that are available. However, landlords have the opportunity to exempt themselves from those communications, and a very large proportion did so at the point at which they registered. Therefore, they receive no communications and no updates, so they are none the wiser, despite the benefit of having registered and made themselves available to get that information. That was a sad loss, and there is not much you can do about it now.
Lloyd Russell-Moyle
Q
Dr Dawson: I think we could probably do with the portal as an information repository. That is very welcome. Research shows that a lot of landlords tend to deal with the need for information on a reactive basis, when a situation presents itself. As most of them are not members of recognised landlord bodies, they are using things such as internet portals, chatrooms and blogs to get information on what is required of them. Through local authority licensing, local authorities are getting much better penetration and being brought closer to landlords, and that allows them to provide advice, but landlords in general will tend to use online resources to get information. We would like them to use a single portal that we have quality control over.
The same goes for tenants. At the moment, one of the main reasons for tenants’ not complaining is ignorance of their rights; I am sure that Generation Rent will have raised that in its submissions. If we can point to a single, consistent source of information, that will help the sector to regulate itself. Given that so many landlords are small scale—85% of properties in the sector are owned by landlords with portfolios of one to four properties —providing the opportunity for more self-regulation in the sector would be a big help. Local authorities have limited budgets, and because the regulations are so complex and there is such a range of operators—there is a sort of sliding scale from the good to the poor—a more interventionist approach is required. Using rent repayment orders incentivises tenants to keep an eye on landlords.
Things like the three-month period in which you are unable to re-let a property after you have used grounds 1 and 1A will be exceptionally difficult for a local authority to follow up on. We just do not have the resources to react in that sort of time and proactively go out and visit these properties. Six months to a year would be much more sensible.
On incentivising tenants to take action separately from the local authority, the only thing we would say is that we should be able to give them advice. Under the original rent repayment order clauses, we were prevented from giving advice to tenants on cases. If we are taking action, they will often come to the local authority and ask for information. We have not looked at that as an option. We would certainly be open-minded to it, and we would support anything that helps the sector to regulate itself.
Lloyd Russell-Moyle
Q
Dr Dawson: Yes.
Lloyd Russell-Moyle
The second was that there needs to be some sort of amendment to allow you to give advice to and support tenants through the rent repayment order process.
Dr Dawson: At the moment, there is nothing that specifically prohibits that in the Bill, and the original legislation has been updated to permit us to provide advice. We are just keen that, in the regulations that will be used to implement many of the changes introduced by the Bill, we do not see anything that interferes with our ability to do that.
Lloyd Russell-Moyle
That needs an agreement between you, the portal and the housing ombudsperson.
Dr Dawson: Yes.
The Chair
If there are no further questions from Members, I thank the witness for his evidence.
Examination of Witnesses
Dr Julie Rugg and Professor Ken Gibb gave evidence.
The Chair
We will now hear oral evidence from Dr Julie Rugg, senior research fellow at the Centre for Housing Policy at the University of York, and from Professor Ken Gibb, professor in housing economics at the University of Glasgow, who joins us via video link. We have until 4 pm for this panel. Will the witnesses please introduce themselves for the record?
Dr Rugg: I am Dr Julie Rugg from the University of York, where I am a reader in social policy.
Professor Gibb: Hello. My name is Ken Gibb. I am a professor at the University of Glasgow and I direct the UK Collaborative Centre for Housing Evidence.
Matthew Pennycook
Q
Dr Rugg: That is a very big question. I do have concerns about the Bill as it currently stands. We have become quite focused on the abolition of section 21, and I can understand why, but the abolition of section 21 does not deal with the reasons why a landlord might serve a section 21 notice. My feeling is that, if the Bill goes through as it stands, it will give tenants the impression that they have greater security than they in fact have.
One of the biggest concerns with the Bill as it stands relates to possession on the ground of the landlord selling the property. The fact that the landlord is selling is one of the biggest reasons tenants are asked to leave, and a lot of landlords are exiting the market. The Bill does not prevent that, so that will continue. We have to think about how we neutralise the market. At the moment, the market is weaponised for both landlords and tenants in ways that are very unhelpful.
We have to think about how to calm everybody down and start thinking about what the problems are in the market. One of the biggest issues in the market at the moment is the lack of supply. That is quite problematic for tenants, and it is one of the reasons there is a lot of energy around section 21. Abolishing section 21 is not going to deal with supply issues. From the evidence we have at the moment, it is very likely to make supply issues worse.
Professor Gibb: My perspective on this stems to a large extent from the experience we had in Scotland after the introduction of some aspects of the Bill and some of the kinds of measures that you are now proposing. I would echo what Julie says, in that we made these changes, which brought some confidence to tenants—that is what some research tells us—but some fundamental issues remained unchanged.
Despite investing in tribunals—in justice, as it were—there is still a strong sense of asymmetry in access to justice, which is to the detriment of tenants. People supported the changes, which are very similar in terms of the grounds for possession and so on, but none the less we find ourselves with a similar housing rental market in Scotland, which exhibits a great deal of shortage and very high and accelerating rents.
The counterfactual is what it would have been like without the changes. It probably would have been worse, but the changes have not stopped those kinds of things happening. In a sense, they probably are not supposed to do that. It is not enough to do these necessary things to make the rental market work more satisfactorily.
Jacob Young
Q
Dr Rugg: On the issue of supply and section 21, counterfactually, a lot of landlords let because of section 21; they do not evict people because of section 21. Section 21 gives them the confidence that, if they run into severe difficulties, they will not have to go through a protracted court process in order to end a tenancy. This is particularly pressing for smaller landlords, who might find themselves paying two or three mortgages at the same time, with tenants that are problematic. You can understand the reasons why risk is hugely important to landlords a lot of the time. Antisocial behaviour is really problematic. If there is a tenant causing lots of problems in the neighbourhood, the landlord wants to get that situation to a close as fast as possible.
Abolishing section 21 would increase landlords’ perception that there is risk in the market. An area that will be problematic is that landlords who come to the sector with property—perhaps they have inherited it or they have started a partnership and there is a spare property—will think very hard about whether to bring that property to the market. I think that is one of the consequences we will see. The market does not look like a very friendly place to landlords at the moment, and that is the big issue we have around supply.
How we help local authorities deal with criminal landlordism is something that I am particularly concerned about at the moment, because it is part of a big project I am working on. Local authorities have very different approaches to dealing with enforcement action in their area. One of the issues is that there is an awful lot of variation in political—i.e. councillor—attachment to the notion that this is something they should be dealing with, so councils invest at different levels in their enforcement activity. That is a democratic issue, and that is something we cannot do anything about, but I agree with the notion that Dr Dawson introduced that we really need some baseline standards that everybody can expect to adhere to.
One thing we have not really mentioned is the use of letting agents. They cover an awful lot of property in the market, but we do not expect them to show responsibility for the quality of the property they are letting. In a sense, I think that is soft policing, if we think that letting agents should have greater responsibility for ensuring that the properties they have responsibility for meet the standards that we set for the sector. In some ways, that would relieve local authorities of some of the burden of inspecting all properties. At the moment, local authorities are obliged to inspect only a certain proportion of properties that sit under licensing regimes. An awful lot of the sector sits outside that and is covered by letting agents. I think we are missing an opportunity to think about how we skill up different parts of the market to improve property quality.
Professor Gibb: I think one of the reasons I am here is that yesterday my colleagues and I published an evidence review for the Department for Levelling Up on the question, “Is there evidence that increasing non-price regulation has led to disinvestment in the private rented sector?” That is clearly a very important question for the kinds of policies being proposed here. In producing the review—it is an international evidence review over the last 20-odd years—we found that it is very hard to answer that question, because there is very little research that directly speaks to it, but you can infer from some of the peer-reviewed literature, and there is actually very little evidence that that is the case.
In other words, we believe that there is probably a constellation of factors that drive disinvestment in the sector, and it is very hard to identify whether increasing regulation, per se, is behind that. The fact of the matter is that in England, there was increasing regulation in the last 20 years, while the sector was growing. There is also evidence internationally that where regulation has increased in the short-term lets market, there might have been a short period of disinvestment, but there has not been disinvestment in the longer term. In the longer term, investment tends to have stabilised and continued to grow.
So we have been quite struck that there is very little evidence to that effect. That is not to say that there is not disinvestment going on, but it is a much more complicated thing. Another problem is that often we have several regulations being introduced at the same time, and it is quite hard to unpick the causal forces of individual things. The bottom line is that we found it quite hard to identify that increased regulation was causing disinvestment or was correlated with it.
Ms Buck
Q
Dr Rugg: I am better able to speak about the lower end of the market, because that is the area that I specialise in. We had some comments earlier about build to rent, and there are some concerns about the build-to-rent sector, but I will not go into those here.
Thinking about the lower end of the market, the proposed regulation seeks an end to “No DSS”, as a catch-all. I do not think that that will necessarily work particularly well. Landlords seek not to let to people in receipt of benefits for two reasons: first, because they might have some prejudiced view about the people who tend to be in receipt of benefits, and that is something that is certainly not right; and the other set of reasons sits around frustration with the benefits administration and the level of benefits being paid.
I have researched landlords and housing benefit for many years—too many to mention. In the past, landlords who routinely let in the housing benefit market enjoyed quite good relations with their local authority and they worked together to deal with problems that their tenants might encounter in the benefits market. The introduction of universal credit has completely taken that link away. A lot of landlords are feeling quite exposed now: they have tenants with quite high needs having problems with their benefits, and they simply cannot do anything about it. That is a problem that we need to think about.
One of the earlier speakers referred to the rent control that sits in the local housing allowance system. That is hugely problematic. It means that tenants who receive local housing allowance simply cannot shop around the market, because the rent levels are far too low for them to act as effective consumers. Essentially, they are having to shop where they can, and some landlords are definitely exploiting that situation, letting very poor-quality property on the understanding that the tenants do not have very much choice.
Professor Gibb: I do not have much to add, except to say that I completely agree on the local housing allowance. We have just been doing some research in Scotland that suggests that the levels are far too low to be effective for the great majority of people. It is really welcome to think about the market rental sector as a series of segmented markets. We should therefore not expect regulation that covers the whole area to have equivalent effects in different parts of that area.
The only other thing I would say is that we also need to think as much as we can about housing as a system, recognising the importance of social and affordable housing alongside the bottom end of the rental market, and thinking about how those things can connect together and about the value that increasing investment in social and affordable housing would bring.
Lloyd Russell-Moyle
Q
Dr Rugg: I think we need to re-establish a relationship between landlords and the universal credit system, so that landlords who are encountering problems can talk to someone in detail about those problems. It is a very basic requirement that some landlords have, that when there are individual tenants who might be falling into difficulties they need to talk to somebody about that case, and about the specifics of the case of an individual who might have high support needs. Thinking about how we support landlords through those cases—and we are talking about specialist landlord lines within the universal credit system, so that landlords can seek advice for particular cases—that is not unreasonable; that is the kind of support that we need to re-engender, so that landlords feel that, when they have difficulties, they know exactly where to get advice from.
Lloyd Russell-Moyle
Q
Dr Rugg: The issue of what rent arrears mean is really quite complicated. Tenants can get quite confused about exactly what their rent arrears mean—whether it is because their housing benefit has not been paid or their shortfall has not been paid. Sitting within that, I think we need to be a little clearer about what rent arrears mean in a housing benefit context, so that that is clear for the landlord and the tenant.
Professor Gibb: This reminds us that the legislation that is being talked about today has to be understood alongside another critical part of the private rented sector, which is the local housing allowance. In a sense, there is something odd about making these changes and treating the LHA levels that it operates at as a constant or a given. In a sense, we are almost trying to fit in bits of legislation and policy on the basis of something that is clearly quite problematic for a lot of people, because the levels are so low.
Mike Amesbury
Q
Dr Rugg: It is good that renters will have the option of going somewhere to get neutral advice. The best advice that you can give to the sector is advice that supports tenancies—that does not support the landlord or the tenant, but seeks to support sustainable tenancies. At the moment, that advice is just not available, coming into the market; you can either, as a landlord, ask for landlord-based advice, or you can go to one of the lobby groups and ask for that kind of advice. Getting some advice that sits in the middle, where everybody can trust that the advice is neutral and accurate, is very important.
Professor Gibb: I completely agree.
The Chair
If there are no further questions, I would like to thank both the witnesses very much for their evidence.
Examination of Witnesses
Fiona Rutherford and Professor Christopher Hodges gave evidence.
The Chair
We will now hear oral evidence from Fiona Rutherford, chief executive of JUSTICE, and Professor Christopher Hodges OBE, emeritus professor of justice systems at the centre for socio-legal studies at the University of Oxford. We have until 4.30 pm for this panel. Could the witnesses please introduce themselves for the record?
Fiona Rutherford: I am Fiona Rutherford. I am the chief executive of JUSTICE, a law reform and human rights charity that covers the entire justice system across the UK. I could expand further but, as you probably know, we have published a report that is specifically on some of the areas that will be touched upon. I am very grateful to have engaged with many of the stakeholders involved, including the Government Departments.
Professor Hodges: Good afternoon. Thank you for the invitation. I am Chris Hodges. I am not an expert in the property sector, but I claim to be an expert in dispute resolution systems—courts and ombudsmen and anything else—and regulatory systems, which takes you into things like the portal and enforcement issues.
Matthew Pennycook
Q
To the extent that the system still needs to be improved, what is your understanding of what the metrics are? My reading of the Government’s response to the Select Committee, what is in the White Paper and what was in the King’s Speech briefing notes is that there is a whole set of different metrics—end-to-end digitalisation, new digital processes, bailiffs and so on. How are we to know, because the concern is obviously that the abolition of section 21 could be years away, if we have court improvements that are undefined or are large in scope?
Fiona Rutherford: That is one of the concerns that we have. Looking at the history of the reform project, while there have clearly been some successes, there have also been quite a few delays. And we are also concerned given the implications for the tenants in particular in relation to section 21, and given that a proper argument has not been made as to why that dependency between the two exists.
I am just thinking of the court performance, which you have just raised. Civil court performance, even during the pandemic, was better than that of most of the other jurisdictions and even now section 21 is taking roughly 28 weeks from notice to point of repossession, versus the estimation that the Government have made that section 8—the new approach in the new Bill—would take possibly the same time, maybe even a week less.
We would say, first, that a proper rationale has not been put forward as to why that dependency exists and why section 21 cannot proceed. Secondly, the implications for the tenants themselves are so considerable that it is not at all clear to us why that cannot proceed as fast as possible.
Professor Hodges: I tend to look at things in terms of quite long stages of evolution. Going back a hundred years, we had courts that administered law. One realises, and I speak as a professor of law, that law is not the answer to everything; in fact, in some situations it is not the answer to very much. A lot of colleagues would shoot me for saying that, but I profoundly believe it.
What we have discovered is that human behaviour, and therefore psychology and other forms of dispute resolution and supporting people to work together and restore relationships, is important. The answer to that is usually not law and the process is usually not an adversarial process involving courts or judges, however sympathetic they are.
We then started talking about a technique of mediation and that went into an institution of alternative dispute resolutions, or ADR, and the courts are sort of playing with trying to put these things together at the moment. Actually, that has been leapfrogged by things like ombudsmen, in the private sector as opposed to the public sector—parliamentary or local government ombudsmen. In the private sector, virtually every regulated sector now has an ombudsman—financial services, energy, communications, motor vehicles, lawyers, blah blah blah. It is quite a long list.
There are various reasons why that is true. The first is that the ombudsmen usually deal with codes—codes of behaviour—and not just legal rights. They can and do decide legal issues, but it is usually codes. They are looking at the underlying behaviour of the bank or the rail company or whatever it is, and therefore you need a different process as well. So it is not adversarial and it is usually free to the consumer, because the business is made to pay or pays for the infrastructure of the ombudsman.
However, there is a very considerable advantage of an ombudsman over a redress scheme, and many of the redress schemes are still somewhat old-fashioned because they are basically arbitration and basically adversarial, and therefore the larger party will bowl up with a whole load of expensive lawyers and you just maintain cost—an adversarialism of not bringing people together. And there is an imbalance of power in that situation.
That does not happen with an ombudsman, because it is a question of “Let’s talk to each other.” The mediation technique is automatically in the process—you encourage communication. If it is not going to work, the ombudsman makes a decision.
Another big function of why the ombudsman is really useful is that they collect data. In all the sectors I can think of, and critically in financial services, energy and so on, ombudsmen are the data controller for the sector because they can tell the banks or the regulator what is going on and what consumers are worried about. That is a feedback system within which people can see in real time exactly what is going on and can therefore respond to it. You sometimes then need responses. On the legal side, the responses may be enforcement of law by a court, or by a regulator if you have one—we do not have one in private rented yet, but we are, perhaps, close—and on the other side, you can have decisions by an ombudsman that are then put in place.
It was very interesting listening to Dr Rugg, who knows much more about the sector than I do. She spoke about support for landlords. Every regulatory system I know needs support for all the actors—tenants, landlords, agents, whatever. Ombudsmen can help with that, but I think there is a gap in local boots-on-the-ground support. Enforcers, like local authorities, or a national regulator if there is one, are sometimes able to support and help, but we have a missing piece.
Summing up, therefore, my view is that this Bill is a very important step forward in modernising towards a useful, effective future system. It is taking an ombudsman as being a central institution, as well as the portal where you get data—admittedly, it is a regulatory portal, rather than a disputes portal, but we may evolve; it is fairly easy to evolve once you have it. These are absolutely critical elements of what a really good future system would be.
I would go further, with just a couple of sentences. One point is that one needs to think about boots on the ground, with people supporting people. An ombudsman is national, so one has to fill that gap. Actually, I think tribunal judges, ombudsmen, local authorities and maybe others—I have had discussions with people about this—could fill that gap. It is critical for everyone. The other part is that one should ensure that everyone knows where to go—“Where do I go to get support? Have we got too many people?” On the dispute resolution side, do you go to court, a tribunal or an ADR scheme? How many ombudsmen are there? We already have three in the property and housing sector. Proliferation is never a good idea, and there are other sectors that show that. The objective is to pull things together. The inevitable logic of this means that you squeeze together the courts, the tribunal and the ombudsmen.
At their request, I chair an ad hoc committee involving the president of the tribunal, the various ombudsmen and the property redress scheme, who, in the past year, have worked on working together on service charges. It has been very effective. I am not sure it has actually been announced yet, as such, but it is not secret. They are working on how to work together. From the point of view of the tenant, certainly, but also the landlord, you want a simple pathway: where do you go? The data reason for that is that if you have a pathway where you have one database, you are going to maximise it; the data is all over the place at the moment, and we do not collect it.
I see this as a direction of travel. The answer to your question on when we will be ready to institute it is: do it now. I would be bold and move the county courts into the tribunal. We already know that the tribunal and the ombudsman can work together. You just squeeze people together one way or another. Then, you will have a fantastically good system, which is the basis of a very self-regulating regulatory space.
Jacob Young
Q
Fiona Rutherford: Thank you for the question. I think I am going to quote Dr Rugg again—I am afraid I only joined recently—but I thought the point on supporting the tenancy was really good: it is about neither the landlord nor the tenant, but the relationship. That is key to ensuring that, whatever solutions are put in place, you are looking at that as being your key outcome, as opposed to trying to take sides, as we have seen all too often.
The other thing that we have seen—Professor Hodges has strongly alluded to it—is the disaggregation of the amount of services that exist. To some extent that is great, because it means that there are potentially lots of places to go. However, the reality is that most landlords and tenants do not know that those services exist or how to access them. Whether or not that is through another ombudsman—I have some concerns about creating more and more ombudsman, and whether there is a way to streamline the available services—I think the most important thing is that those services are signposted to individuals, which means landlords and tenants, and also that the services are provided.
JUSTICE alluded to that in the report we published in 2020, where we talk about our long-term vision of adopting a multidisciplinary approach to avoid escalation and address the common underlying features behind tenants going into arrears, such as debt, family issues or employment issues. If there is a way to keep the longer term in mind, while not delaying on things like section 21, but also thinking carefully about addressing the disaggregation of services and including signposting and information, then ultimately, as far as I am concerned, all those things will be ingredients to success.
Professor Hodges: I have a quick comment. Your question was, “How do we get people to engage in mediation?” It is automatic in the pathway. It is not in courts; it is in ombudsman, and to some extent it is now in tribunals. The Ministry of Justice has just introduced a mediation stage for low-value cases, but it is not necessarily automatically in the pathway.
All the consumer ombudsmen have been using this for up to 20 years, automatically. You put in your complaint and the ombudsman then says, “Okay.” It is investigative and collaborative, rather than adversarial. You do not need lawyers; they do not do anything. You just say, “Tell me about it,” because you have a central expert. It is not that you have two lawyers and a judge—who are not there. Rather, you have one ombudsman in the middle, so it is efficient and quick, and they are saying, “Tell me about it.” So you pull all the evidence in, and then you say, “Okay, what do you say? And you?”
That is automatically mediation, and most cases settle at that stage, because they talk to each other. If it is not going to work, you know fairly quickly, in which case you just get more evidence and then make a decision, unless they agree. So it is in the process. The courts are moving toward that but, because of the cost of public provision, they cannot do it as well as the ombudsmen.
Matthew Pennycook
Q
Professor Hodges: The signposting is to have a single ombudsman.
Matthew Pennycook
Q
Professor Hodges: I would have one for the entire property and housing sector, and this is not the first time that I have said that. My ombudsman and judge colleagues know that, and quite a lot of them would not disagree. Fiona mentioned that we have a number at the moment. It must not proliferate. I am fairly confident that, if the Government just send the right signals, they might not have to legislate and that we can get adhesion on the ADR and the ombudsman side—people joining up spontaneously, if they are encouraged and pushed—so that you actually get there.
What we are doing here is filling a gap in private rented. We have already got the property ombudsman, which largely cover agents, and the private rented redress scheme. Then you have got have got social housing—let us converge. If you converge courts and tribunals as well, that is a major step forward for all the players, and certainly tenants and landlords. You will deliver things more quickly, basically, and everyone will know where to go.
As I said, look at every other sector. In financial services, you have the Financial Conduct Authority and the Financial Ombudsman Service; in energy, you have Ofgem and the energy ombudsman; and so on. It is not 100%, but it is well over 95%. In social housing, you have got a regulator. We have not got one in private property. We could have one, which would be a regulatory space involving these elements in a new and very effective way, within which you would not have, if you like, an old-fashioned regulator. Rather, you would have a system regulator, but all the people would work together in the system on supporting good practice, because codes already exist for that. The decent homes standards is just a code. It should apply, obviously, and then everyone would work towards that, whether it is local authorities, or the system regulator, the various ombudsmen, or the various self-regulatory bodies that exist—everyone knows where they are.
I am involved in several discussions like this, in totally different regulated sectors. If you say to people in your sector, “We’re all going to work together, and this is how we’re going to do it,” and if you have responsibilities to everyone—if you are no longer just a self-regulatory body on your own, but you are an ecosystem, and it has to work—then that works incredibly well, if everyone realises that is the game that has to be played.
Fiona Rutherford: I agree with a lot of what Professor Hodges said, but I am not sure that everybody does know where to go.
Professor Hodges: No, they don’t.
Fiona Rutherford: To answer your question about where there may be good examples, the health justice partnerships, which we have seen work together, are good examples to look at. They do not rely on a tenant or a landlord to know what they cannot know or do not know, and that is what is missing. The health justice partnerships are where we have seen lawyers, or support workers or sometimes NGOs, sit in doctors’ surgeries, so that when a GP sees a patient who is suffering from mental health issues, or various other physical illnesses, and they have it diagnosed that it is probably related to something outside of a medical solution, then there is somebody in the building who that person can go to—if not immediately, then an appointment can be booked. That stops us relying on what are sometimes very vulnerable people, or people who are at vulnerable points in their lives, to seek out support services and help themselves.
Professor Hodges: Just to add one sentence, which was implicit in what I said at the start: in the regulated sectors where you have an ombudsman, such as financial services or energy, no one goes to lawyers or courts—they disappear. People have voted with their feet, because the procedure is faster and more user-friendly, it is free, and it delivers a broader range of behavioural outcomes on the part of the energy companies, or whoever it is, and does not just ask, “Are they breaking the law?” If you feed that in to the ombudsman, you might get a decision, but you will also get the point referred up to Ofgem, or whichever regulator it is, so that it can do something systemically about it, if necessary. It is an ecosystem, but everyone knows where to go. I am afraid that lawyers and courts are toast.
Lloyd Russell-Moyle
Q
Fiona Rutherford: I would like to make a separate comment about the fine in the enforcement process within the Bill, but that is not your question, so perhaps Professor Hodges might start.
Professor Hodges: The amount of money that either a judge or an ombudsman should award must be relevant to the dispute, because you cannot have people not being compensated. Therefore, there should be a mechanism for the amount to be amendable over time. Personally, I would not waste your time with that—coming back again and again to put it up. I would put a mechanism in the Bill, so that someone can set it, whether that is a Minister or whoever. You cannot have people not bringing forward claims because they will not get fully compensated, or bringing forward claims that are not fully compensated when they should be.
That takes you over, however, into penalties or sanctions for behaviour. That is a complicated issue, but the point is that usually we have a national regulator, and here we have a lot of local authorities, and they need the right powers as well, but quite often the right powers are not fines. I am afraid that there is rather a lot of psychological and other evidence that deterrence does not work—which is a shock, the first time that you hear it. Therefore, other, quite significant penalties—such as talking to people, explaining, informing and giving supporting about how things ought to be different, or, in the extreme, removing the licence to operate and saying, “You cannot let this property”—are the ones that work. A broader toolbox of responses and interventions—I am not using the word “enforcement” here—is what actually delivers good outcomes.
Lloyd Russell-Moyle
Q
Professor Hodges: That would concentrate minds.
Fiona Rutherford: And even before enforcement, there is something about transparency. There is something about everybody going into a tenancy—going back to that focus on tenancy—knowing a fair amount of history on both sides.
Lloyd Russell-Moyle
Q
Fiona Rutherford: Importantly for the tenant. It is there that transparency matters the most. I think that there are possibly bigger issues with making it fully public.
Professor Hodges: One of the points about the portal is that it is a very effective self-regulatory—or indeed managerial—system, because it says, “Have you got an insurance certificate? Have you got a fire certificate? Well, upload it.” It is done, and then you get a reminder saying, “You’ve got to do the next one.” Everyone should be able to see that. There is nothing secret about that information, but it delivers a baseline of regulatory compliance—“Are you compliant with the decent homes standard? Where’s your certificate?” or whatever. It is self-policing, and provides a very simple mechanism for doing that.
Just to give one dramatic example of sanctions, the Civil Aviation Authority never fines airlines in relation to safety issues—although it fines them now and again. It has an incredibly good culture among all the players—air traffic control, the airlines, engineers, and so on—and has constructed that deliberately, and it is the only reason why planes stay in the sky and we have confidence in them. It never fines anyone, but it uses the ultimate sanction—rarely—that I was talking about of saying, “I’m going to stop you operating your aircraft or your airport.” That concentrates the mind and gets the result of them saying, “Okay, we’ve fixed it,” very quickly.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Q
Professor Hodges: Personally, I am in favour of the broadest possible enforcement powers, but not necessarily their regular use. Therefore, whoever is involved in management and responsibility should be within scope of the discussion, and then of the potential response or intervention.
Dr Spencer
Q
Professor Hodges: Well, whoever owns, or shadow-owns, a building, if you stop people letting the building, that will have an effect on anyone, will it not?
Dr Spencer
Q
Professor Hodges: You would have other powers against beneficial owners by saying, “You’ve done this several times; you’re out,” or, “Do it right otherwise you’re out.” That is a regulatory power.
Dr Spencer
Q
Professor Hodges: Not necessarily. I think one database is enough, frankly. You should be able to capture all the data about, “Who owns this?” We have been talking about foreign-owned companies and things in other contexts, and there are techniques for identifying them.
Fiona Rutherford: I am going to make a point in relation to enforcement that I referenced earlier. Local authorities have been brought into this as we are talking about the widest panoply of options that might be available. I am going back to the penalties that I referenced earlier, so forgive me—I am moving out of the ombudsman perspective and the regulatory questions—but this is possibly related to enforcement. While there is a plan with the penalties as and when section 21 can be moved forward, and while the local authorities get a benefit from those penalties, a rate of £5,000 probably does not go far enough to act as any kind of incentive, in so far as you want enforcement to work in that way. Of course, there are other examples: £30,000 is the maximum financial penalty for a breach of the Leasehold Reform (Ground Rent) Act 2022.
The other thing to say about local authorities is that while they benefit from the financial gain of any fixed penalties as a result of section 21 breaches, there is a real problem with local authorities’ resourcing. I am probably not saying anything that is particularly new to the Committee, but we are asking local authorities to do something more: it is not only enforcing section 21, but the other obligations to investigate antisocial behaviour appropriately. I again reference a report on behavioural control orders that we have looked into and the poor quality of data and understanding around antisocial behaviour. This means that the resources required are quite simply not going to be delivered through the proposed fixed penalties. We very much urge serious consideration around proper resourcing in a wider sense, but specifically in relation to antisocial behaviour and the section 21 enforcement regime.
Matthew Pennycook
Q
Professor Hodges: Following the principle that the pathway and the process should be as simple as possible, we should not have a system in which people have to go to different institutions—a judge, an ombudsman, a regulator or a local authority—to get everything fixed if that can be done in one place at one time. The logic of that takes you towards giving power to the ombudsman, the judge and the regulator to issue rent orders at the end of a case. Why should anyone have to start again and go somewhere else to get that result? They should say, “Okay, on the proposition, the landlord was wrong—badly wrong, probably—in this particular circumstance. Fix it and we will come and make sure you’ve done all this stuff. The right result is to repay the rent.” Give them the power to do that and to be holistic.
The Chair
If there are no further questions, I thank both witnesses for their evidence.
Examination of Witness
James Prestwich gave evidence.
The Chair
We will now hear oral evidence from James Prestwich, the director of policy and external affairs at the Chartered Institute of Housing. We have until 4.45 pm for this panel. Welcome, James. Could you please introduce yourself?
James Prestwich: I am James Prestwich, director of policy and external affairs at the Chartered Institute of Housing. We are the professional body for the housing sector. Our members are individuals rather than organisations. We are cross-tenure and cross-UK in our remit.
Matthew Pennycook
Q
James Prestwich: I am very conscious that you have heard from any number of really esteemed experts on all manner of aspects of the Bill in today’s sessions, and there was an awful lot to agree with. A question has continued to be posed about striking the balance, and I suppose the position of the CIH is that if we accept that the private rented sector has an important role to play in meeting housing need—I think we all probably do—it is hard to look at what we have at the moment and think that the balance is right. It is tipped much too far in favour of the landlord rather than the tenants. A lot in the Bill is positive in looking to provide a better deal, but there are still some gaps and areas where it would be good to go further. A lot has been said about what was in the White Paper. We need action and to follow through on that now, particularly on the decent homes standard and an assurance on a timetable for its introduction.
We have seen over the past year to 18 months the impact on people of the cost of living challenges, particularly around energy efficiency. Experts have spoken about the importance of ensuring that families and people in receipt of welfare benefits are not discriminated against by landlords, so it is important that we see really firm action on that. We have talked a lot about section 21 and no-fault evictions, and it is worth saying that it is really good to see what is in the Bill as far as section 21 is concerned.
As for those landlord grounds of concern, though, the two-month notice period is a little on the short side. We know—witnesses have stressed this point—that one of the biggest causes of homelessness is the ending of a tenancy via section 21. It takes time for people to find another property, particularly in hot rental markets, and I think it would be reasonable to expect a longer period to allow people to try to find alternative accommodation.
Matthew Pennycook
Q
James Prestwich: We have heard really well-reasoned, well-argued points today about the importance of making that a discretionary ground. We know the challenges that people face when paying rent, particularly when we think about interaction with the local housing allowance, which witnesses have talked about. It is important that we are able to trust judges to make informed decisions based on the evidence of the case—the evidence presented before them.
Jacob Young
Q
James Prestwich: Again, as other witnesses have said, there is an awful lot to like about the landlord portal. We have talked quite a lot about the benefits that the portal will have for tenants, but it is right that there are significant advantages for landlords as well. This point might not have been made yet, but the overwhelming majority of landlords, regardless of the number of homes they own, are thoroughly decent people doing a decent job. We know there are examples of poor quality and poor practice, as there are in all professions, but any tool that enables landlords to get a better understanding of the responsibilities expected of them is to be welcomed. The point about how we get the portal to work both ways is really important. There is something about the sort of information that local authorities will be able to access from the portal, although they do not at the moment. That should enable local authorities, providing they have got the capacity and resources, to be able to take a harder line when people fall below the standards that we all want to expect from landlords.
Lloyd Russell-Moyle
Q
James Prestwich: There is a lot that Ben Twomey said that you could agree with. I think the challenge here is about how we try to find that balance. We know that a lot of people in the private rented sector are accidental landlords. Previously, I was an accidental landlord and an accidental tenant, and neither of those things was particularly pleasant, so I have a little experience of that. There is a real challenge around all of that that we have not quite bottomed out yet.
Lloyd Russell-Moyle
That sounds a little inconclusive.
James Prestwich: Yes, it is.
Lloyd Russell-Moyle
You are saying you think work needs to be done but you are not quite sure of the solution yet.
James Prestwich: Yes, that is probably the case.
The Chair
If there are no further questions, I thank all the witnesses for the time and expertise that they have given with their evidence.
Ordered, That further consideration be now adjourned. —(Mr Gagan Mohindra.)
Renters (Reform) Bill (Third sitting)
Thursday 16th November 2023
(1 year ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 November 2023 - (16 Nov 2023)
The Chair
Good morning. Is it the wish of the Committee that we go into a private session?
The Chair
I remind the Committee that Hansard colleagues would be grateful if Members emailed their speaking notes. Please switch all electronic devices to silent. I am afraid that we cannot allow tea and coffee during sittings.
We are meeting today to continue hearing oral evidence relating to the Renters (Reform) Bill. Before we hear from today’s witnesses, does any Member wish to make any declaration of interest in connection with the Bill?
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I receive income support for my office to operate the all-party parliamentary group for renters and rental reform, and from renters’ organisations. I receive rent from a tenant in my personal home and am on the legal working group of a housing co-operative federation.
Helen Morgan (North Shropshire) (LD)
I am the joint owner of a house that is rented out for residential lets, and I am a vice-president of the Local Government Association.
Craig Tracey (North Warwickshire) (Con)
I am the joint owner of a commercially let property that is held in a pension fund.
Eddie Hughes (Walsall North) (Con)
I am the joint owner of a property that is let out.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
May I take your advice, Ms Fovargue? My understanding was that we only have to make our main declarations at our first meeting. Do we have to reiterate them each time?
Dr Spencer
In that case, I declare an interest: I receive support, in particular as set out in my entry under category 2(a) on the Register of Members’ Financial Interests, from individuals with an interest in this area.
Mike Amesbury (Weaver Vale) (Lab)
I am a vice-president of the LGA and I let out a property.
Examination of Witness
Judicaelle Hammond gave evidence.
The Chair
We will now hear oral evidence from Judicaelle Hammond, director of policy and advice at the Country Land and Business Association. We have until 11.45 am; I remind all Members that matters should be limited to those within the scope of the Bill and that we have to stick to the timings. Could you please introduce yourself for the record?
Judicaelle Hammond: I am Judicaelle Hammond; I am the director of policy and advice at the Country Land and Business Association. We have 26,000 members in England and Wales, who own and manage land-based businesses.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
Judicaelle Hammond: We are looking at the Bill very much from the rural perspective, and there are differences between rural and urban areas. A survey of our members in 2020 found that 90% of respondents provided some form of private rented housing. In a more recent survey, we found that 23% of respondents’ properties were let out at less than 80% of market rent, which means that CLA members are, in effect, key providers of affordable rural housing.
We represent rural landlords, but we also represent rural businesses that are trying to grow. To do so, they mostly need staff, and staff need somewhere to live. The private rented sector provides flexibility and solutions for people who either cannot or do not wish to buy. However, we are worried because the private rented sector is shrinking at an alarming rate: Government figures suggest a reduction of 16.5% between 2018 and 2021 in the number of privately rented homes in areas defined as rural. That is in line with what we are hearing on the grapevine. I should probably say that one thing that the CLA does is provide one-to-one, bespoke advice to members, including on the legal aspects of residential properties.
In 2023, we ran a member survey with a particular focus on housing in England. It suggested that 44% of rural landlords are planning to sell some of their properties over the next two years. Of those, 90% said that that was mainly for two reasons. The first was stricter minimum energy efficiency standards, which are expensive as well as technically difficult to implement in the kind of properties that our members have; the second was removal of section 21, which brings us to this Bill.
Our members are concerned because, at the moment, section 21 provides reassurance that they can get a property back relatively quickly if their personal circumstances change; if their business need changes, which is quite prevalent in rural areas; or if, God forbid, something is going wrong with the tenancy. That is something that section 8, both in its current form and in its new form, would not provide, because of the need for a court hearing. That is why we would want a court system that works. Actually, members would ideally prefer to have a version of section 21 at their disposal, albeit perhaps with a longer notice period.
Matthew Pennycook
Q
Judicaelle Hammond: No, it is none of those things. In terms of the alternative set of grounds, I think some new grounds in the Bill are really helpful, such as the incoming agricultural workers ground, the employers ground and the ground for repeated rent arrears. Where we would want to go further comes within two buckets: an economic bucket and a compliance bucket.
In the economic bucket, the new mandatory ground for possession for an incoming agricultural worker is great. We would like it extended, because although 85% of rural businesses have nothing to do with agriculture, quite a lot of them still need to house employees. For example, they could be in tourism, hospitality, trades, food manufacturing, forestry or the care professions, which we tend to forget. There is something about rural areas, just by dint of geography and the fact that they might be away from other places, so extending that ground would be very helpful.
Still in the economic bucket, there is another scenario. Here we are looking at properties being required to house an outgoing or retired agricultural worker or another protected tenant whom the landlord has a statutory duty to house and who is being moved to suitable alternative accommodation. This is in cases in which there is a new employee who will replace, as part of the business, an outgoing employee, but the landlord either still wants to house that outgoing employee or has a duty to house them. They might therefore need another property in which to house that retired employee or that protected employee. That is the second ground.
The third ground is where a landlord intends to use a property, or the land on which it is situated, for a completely non-residential purpose, by which we mean making it a workshop, turning it into an office or putting it to a commercial use. These are the three grounds in the economic bucket, if you like.
I have another two grounds, in terms of compliance with statutory duties, that are not yet in the Bill and which I will go over quickly. It is more than just a rural issue, but we are hearing quite a lot about it in our case load. The first is a landlord needing possession to undertake works required to meet statutory obligations—for example, minimum energy efficiency standards or the proposed decent homes standard. In some of the properties that our members have, the works that will be needed are so extensive that you cannot do them with a sitting tenant; you need to regain possession. The second ground that we would like to see is where there is a persistent refusal by a tenant to allow in a landlord or their agent for a statutory inspection, for example for gas and electricity safety. You would be surprised at how often this is the case.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
You further mentioned the CLA’s opinion on section 21. In terms of reforming the court system, what changes would you want to see before the CLA would be happy to see the abolition of section 21?
Judicaelle Hammond: If you do not mind, I will take your last question first. I think there is a need to reduce the time between making a court application and getting a property back. It can be a very lengthy process, particularly if you have to resort to bailiffs. There should be a success trigger on the face of the Bill, if at all possible, so that it is measurable. If you are going to abolish section 21, it should not be on any arbitrary date; you need to have a number of weeks. At the moment, the Ministry of Justice measures the average time it takes as 28 weeks, which is quite long. We need something much shorter, at which point you could say, “Yes, the court system, as reformed, is working.”
On the reforms themselves, digitisation will no doubt help. The question in our mind—given what analysis by the National Residential Landlords Association suggests as the cause of the delay—is whether that will be enough. There is a tremendous problem with the resourcing of the court system. To go back to my rural brief, we have lost 74 county courts since 2010, which has meant that the rest of the work has had to go elsewhere. It has also meant that landlords, and indeed tenants, in rural areas have to go further to go to a hearing. There is a question about resourcing as well as about making the process and system easier. Of course, there is the question of what happens after the court order has been given, so there is more to it than what is in the Bill at the moment.
The Chair
I am afraid that this will have to be the last question to this witness, so could we please have a short question and answer?
Helen Morgan
Q
Judicaelle Hammond: I think that what is in the Bill at the moment would fit for agricultural workers. The issue is that actually 85% of rural businesses have nothing to do with agriculture, and some of them still need employees to be there, either because their shift starts early or because there is a need for them to be on the grounds as a matter of urgency. That includes workers who are not within the ambit of what is agriculture; care workers are an obvious example. If you are in a remote community, you still need to house them. If you are an employer and you have a small business—a maintenance business or a heat pump installation business, for example—you would not necessarily want to have your employees very far away. How can you recruit and retain anyone if they cannot find anywhere to live? We are hearing from a lot of members, particularly on the tourism side, who are saying, “If I want people of the right calibre to do my marketing or some of my managerial duties, I have to be able to provide accommodation as part of the deal. Otherwise, they don’t come.”
The Chair
I am afraid we are 40 seconds away from the end of the time allotted to the Committee to ask questions. Thank you very much, Ms Hammond, for coming to give evidence.
Examination of Witness
Helen Gordon gave evidence.
The Chair
We will now hear oral evidence from Helen Gordon, who is chief executive officer at Grainger. We have until 12 noon. Could you please introduce yourself for the record?
Helen Gordon: Good morning. My name is Helen Gordon. I am the chief executive of Grainger plc, the UK’s largest listed residential landlord. We have 10,000 homes; we specialise in mid-market and affordable homes. We have been around for 110 years—not me personally!—so we have experience of dealing with much of what is in the Bill. Thank you for inviting me.
We support the policy intent of the Bill. We think that there are some unintended consequences in the detail with respect particularly to the grounds for possession, but also to the minimum term of two months and how that might deplete housing stock in the UK.
Matthew Pennycook
Q
Helen Gordon: No, we don’t have student accommodation.
Matthew Pennycook
Q
Helen Gordon: I think the Bill’s intent was to give security to occupiers. Encouraging long-term renting is absolutely at the core of the build-to-rent business model. One of the difficulties we have is that a minimum term will affect both the planning for build to rent and the financing of it. It will also have an impact on small buy-to-let landlords, as most of their financing has a requirement in it for a minimum term. I do not know whether the Committee is going to speak to the banks about that, but two months would be in breach of most lenders’ requirements. It is definitely in breach of a lot of capital requirements for going into the professional build-to-rent sector as well.
Matthew Pennycook
Q
Helen Gordon: I think that that is absolutely the intent, and it is the business model. I want to talk about the fact that there is a lot of bad practice. If you go now to Rightmove’s website, or wherever, you will pay significantly more for a short-term tenancy than you would for a six-month or 12-month tenancy. People will abuse that. Searches of Rightmove’s data will give you only a certain amount of data, but we have data showing that in London up to 10% of the people wishing to rent only want to rent for a couple of months. Not having a minimum term greater than a couple of months will lead to a lot of Airbnb and transient renting. That is why, in planning, Westminster City Council and many other councils insist on a minimum term for rental property. The two months approach in the Bill seems to fly in the face of that.
Jacob Young
Q
Helen Gordon: Just to clarify, I think a minimum term of six months would work. That could be four months with two months’ notice. There is a balance between the two. Most landlords will work with a tenant if they make that decision. What I am trying to stop is the abuse of sub-letting and the unintended consequences of financing. Obviously, there is all the protection, so if it does not meet the minimum home standard, it is in breach or it was misrepresented to the tenant, they have all of those grounds, in any event, to leave. But if their circumstances change, I think most landlords would work with the tenant on that.
Jacob Young
Q
Helen Gordon: Absolutely. We have real live examples that I am happy to share with the Committee. We do differ. A minimum build to rent is usually at least 50 homes. The majority of Grainger’s properties are around 250 in a cluster. If you get antisocial behaviour, that can have a very detrimental effect on the whole of the community—we build communities.
Evidencing antisocial behaviour often requires you to get neighbours to make complaints and witness statements, at times when they have been personally intimidated. I have a very live example where we literally had to empty the six properties adjacent to the property causing a problem, and it took something like 15 months to get the ground for possession through the courts.
So we would really welcome lowering the bar on antisocial behaviour. I would particularly like it to reference sub-letting and party flats. There is quite an industry, which, fortunately, Grainger does protect itself from, where people take a property and then sub-let it as a party flat at weekends, causing disruption to the whole block.
Lloyd Russell-Moyle
Q
Helen Gordon: Can I take your first question first? There is a difference in terms of what we would generally say is a party flat. Grainger forbids these things in its lease, and the prospect of anybody who is already in contravention of the lease—probably not paying rent and making a profit rent out of the party flat—going through a registration scheme is pretty unlikely. I am talking about illegal sub-letting as far as the lease is concerned, and illegal party flats.
Lloyd Russell-Moyle
And breaches of the lease are grounds for—
Helen Gordon: Exactly. With the one we put in the representation on the Bill, it took us almost £200,000 and well over a year where we inadvertently let to someone who had a party flat.
Lloyd Russell-Moyle
So you want it to be more explicit—
Helen Gordon: Explicit on the grounds of possession.
Thank you for also referring to the CPI. For family homes, Grainger offers at least a minimum term of five years, if people want a five-year term. To give people certainty, we have offered CPI uplifts. Obviously, CPI has been quite high until recently, and in our submission originally we said there could be an equivalent of a triple lock, so it could be CPI or another index—wage inflation is a good one because it is linked to people’s ability to pay. That is actually how Grainger currently views how our rents progress in terms of affordability—it is very much linked to wage inflation. Those are just some ideas that we had at the time. To be clear, that is in-lease; it is not forever and a day.
Nickie Aiken (Cities of London and Westminster) (Con)
Q
Helen Gordon: Yes, you are right; it is across London—some people do not. Westminster is particularly good at it, because of tourism. People come to London for the summer and purport to take a six-month property, and the reality is that they could give notice on day one that they are leaving in two months—it is a cheap form of Airbnb. So this is really to try to put down roots for longer-term communities.
Nickie Aiken
Q
Helen Gordon: But under the Bill, the ability to serve notice on day one will inadvertently allow short-term letting through the back door.
Helen Morgan
Q
Helen Gordon: The business practice on build to rent was quite often to give a one-year, three-year or five-year lease to offer that, with the CPI uplifts within it. Most landlords are happy to give a minimum of 12 months or two or three years. In our case, because we are a longer-term landlord and we know that we will not require the property back for us to live in it, we have offered longer leases. I suppose the in-perpetuity tenancy does away with that need, but linked to that is giving tenants certainty on where their rent would go. Within that, if we had for example put CPI—and we had a very high level of CPI at the end of 2022—our customers could still give two months’ notice; they can leave within that minimum term as well.
The Chair
I am afraid that this will probably be the last question to the witness, so can we have a short question and answer please?
Eddie Hughes
Q
Helen Gordon: The average stay, excluding our regulated tenancies—many of them have been with us for 40 years—is 32 months. We offer six and 12-month tenancies, but most people like to take a 12-month tenancy.
Has the Bill affected us? We are probably unique in the fact that we have a very good central treasury team, but I know that, for peers in the industry, it is curtailing their ability to invest in the sector until we can sort out that minimum two months, which will affect their financing. I know that others have actually rowed back from investment. The statistics are out there: you can see a drop in the number of schemes coming forward.
Mike Amesbury
Q
Helen Gordon: Obviously, we already have the courts, the first-tier tribunal and the ombudsman. Grainger’s view is that we would like to improve renting across the UK and for it to be mature and sustainable. If we feel that we have a gap at the moment with the courts and the FTT, I think we could work with an ombudsman.
The Chair
As there are no further questions, I thank Ms Gordon for her evidence. We can now move on to the next panel.
Examination of Witnesses
Richard Miller and Nimrod Ben-Cnaan gave evidence.
The Chair
We will now hear oral evidence from Richard Miller, the head of justice at the Law Society, and Nimrod Ben-Cnaan, head of policy and profile at the Law Centres Network. We have until 12.30 pm for this panel. Could you both introduce yourselves for the record, please?
Richard Miller: I am Richard Miller. I am head of the justice team at the Law Society.
Nimrod Ben-Cnaan: I feel I should give a slightly longer introduction, as the lesser party here. My name is Nimrod Ben-Cnaan. I am head of policy and profile at the Law Centres Network. The Law Centres Network is a charity; it is a membership body that represents law centres. A law centre, for those who do not know, is basically a law practice that is a charity: it gives free legal advice on social welfare legal matters. Our point of insertion into this debate is very much on the side of representing tenants across the country—we have 42 law centres doing so—and delivering one in five of the duty desks that are available through the legal aid scheme for possession proceedings.
Matthew Pennycook
Q
Richard Miller: That is as comprehensive a view of what they mean by reform as we have. We have concerns about this idea of putting digitisation ahead of implementation. To give an example, we can look back at the HM Courts and Tribunals Service programme and what happened in private family law. They announced the project to digitise that in August 2020; through 2021, there were various workshops and engagement with the professional and other users of the system to help them to design and build the system; and then there were roll-out plans. The original project was scheduled to finish at the end of December 2022, but it is still ongoing, and the roll-out has not yet been completed. So we are now more than three years down the line and still just about approaching the end of the roll-out of that project.
That is not to be critical of HMCTS. It is vital that it engages with users, understands what the functionality of the systems needs to be, and designs them robustly so that they deliver what will work. There are always teething problems when you roll out these systems, and inevitably it takes a long time. We would be very surprised if this could be done in less than two years.
The fundamental question that underpins all this is why you would design a build around the current processes in law when you are fundamentally changing them. We would all be guessing as to what functionality will be required in a new digitised system. There is a strong argument to say that it would be better to implement the new system before undertaking the digitisation, so that you understand what your digital platform actually needs to achieve. So there are some real concerns about whether we are getting the cart and the horse the wrong way round on that.
More broadly, there are some genuine concerns about the capacity of the system at the moment. We are seeing significant backlogs within the courts. An example was recently provided to us by a member of ours who was representing a landlord. The landlord had issued a section 21 notice and applied to the court for the possession order, but the court took so long to issue the proceedings that the possession order expired—the time limit came to an end. The court had to issue a new notice and fresh proceedings, but the same thing happened again. The administration within the courts is not coping even at the moment.
We expect that the provisions in this Bill will lead to a significant increase in the number of contested hearings, so there is substantial concern about the capacity of the system to handle the workload that will come with this change. There needs to be investment to increase capacity, and that also needs to extend to legal aid. Landlords’ solicitors, as much as tenants’ solicitors, have told us that they need tenants to be represented. Landlords do not want to be up against unrepresented parties in contested hearings: it is bad for the landlords, it is expensive for the landlords and it is expensive for the court, which has to put a lot more resources into dealing with litigants in person. There needs to be substantial investment in legal aid, as well as in the court system, if this change is going to work effectively.
Nimrod Ben-Cnaan: I would agree with most of what has been said. As Richard has said, the court reform programme has been running since 2016, and we have known that possession reform was coming, even though it has now been delayed a little further than was expected. Using that now as an excuse to delay what is otherwise a long-promised measure—the repeal of section 21 and the like—feels unnecessary and misdirected. That is partly because, again, the pinch points are elsewhere and the kind of work that we could do to prevent cases from even getting to court, by expanding early legal advice through legal aid, is so much more significant. Frankly, rather than waiting at the cliff edge to help people showing up for their day in court, law centres would rather advise them at an earlier point to resolve disputes earlier and to talk people out of making a defence that will not do them any good. All of those things would substantially reduce the burden on the courts.
Matthew Pennycook
Q
Nimrod Ben-Cnaan: Our opinion is that, as I think Polly Neate said on Tuesday, the Government should hold its nerve and not wait at all. We can do this without that. There will be a surge; there are other ways to address that surge. That is our opinion.
Jacob Young
Q
Then, on Nimrod’s point about resolving cases before they even get to court, which I think is really relevant, I would be keen to know how you think the ombudsman could be used in such dispute resolution.
Richard Miller: In response to the issue of digitisation, our view is that digitisation is one part of the picture only, and it is a part of the picture that will take a long time and involve quite a bit of investment. Fundamentally, the issue is that we do not know exactly what functionality will be required of the system until we have implemented the process.
Let us suppose that the digitisation programme did not exist. We would be saying, “As long as the courts have the resources to handle the cases, that is fine.” That is what we are saying should happen here: digitisation should be on the cards—it should be something that we intend to do over the coming years—but the starting point is to make sure that the courts are resourced to handle the cases as they are conducted at the moment. That does mean more judges, more court staff to process applications and more investment in legal aid, but the digitisation is not a necessary prerequisite to get the courts into a state where they can handle this workload.
Jacob Young
Q
Richard Miller: That’s right, yes. Digitisation is absolutely necessary. It is disappointing, but we understand the reasons why it has not happened already. It is a major project and we need to have the system that will be in place for the foreseeable future before we start building the digital systems to cope with that system.
Nimrod Ben-Cnaan: On your point about the ombudsman, Minister, there is little to comment on in the Bill. The shape outlined in the Bill is just that: an outline of an idea that has been suggested by various parties. You have heard some of them in previous sessions, and that might be useful in their own terms. Our concern has always been that the ombudsman would be used to displace, specifically, tenants’ access to the courts when they need it, and through that to displace the provision of legal advice that would otherwise be available for them. We would like to ensure that tenants have a good, reliable source of information and advice about their rights, what they can act on, how they can act on it and the support to do so. On the ombudsman, well, let us see that idea get fleshed out in detail.
I was heartened to hear from the Department’s officials that the intention is not to have the ombudsman somehow displace access to courts, for example, with disrepair claims, which would be so important to us. The court still does, and can do very well, the kinds of things that the ombudsman cannot do at all—be that through things such as establishing fact, applying the law, interpreting the law and sometimes being able to issue injunctions when there is, for example, an unlawful eviction. A law centre would normally be able to step in and stop that right there and then, in a way that the ombudsman would not even have the power to do so. Actually, we have a lot going on with the courts at present, and we should resource them and resource the allied measures to make the most of them.
Ms Karen Buck (Westminster North) (Lab)
Q
Richard Miller: The Law Society has published a number of maps showing the availability of legally aided housing advice across the country. Those have shown, over time, that the picture is getting worse. The number of law firms and law centres delivering these services is reducing. We now have something like 42% of the population without a housing provider on legal aid in their local authority area. By definition, the sort of people we are talking about—those who are financially eligible for legal aid, where very often the issue is that they are unable to pay their rent—cannot afford public transport to travel significant distances to get the advice they need. Local provision of advice is vital.
The problem we have—there may well be many people around the table who are not experts in the legal aid system—is that the last time the remuneration rates for legal aid were increased in cash terms was in the 1990s. That is what the profession is up against, and that is why more and more firms have decided that it is not economically possible to carry on delivering these services. We are seeing an absolute crisis in the state of legal aid provision across the country, and that needs to be addressed. I will pass over to Nimrod to deal with the consequences of people not being represented.
Nimrod Ben-Cnaan: Things have got so bad that even delivering the duty desk at court—the scheme that we are so reliant on to make possession work well for all parties—is difficult. In the last procurement round, the Legal Aid Agency had such problems sourcing providers in the greater Liverpool area—Merseyside, if you like—that there was a reliance on transitional arrangements. If you have a large urban centre where a legal aid firm should be able to make a sustainable business but is not able to do so, we have a real problem.
In terms of the kind of impact that legal aid services could offer us, I would say that the current scope of legal aid needs to be addressed, not just the remuneration. Ten years ago, in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the scope cut to legal aid was such that a lot of early intervention to help people was taken out of scope, so you are basically incentivised to let problems escalate. It is the wrong way round, and even the Government are realising that in their current review of civil legal aid. If you get in early, you are able to divert people from the court wherever possible. You get to represent tenants wherever possible, lightening the load of the court, and you get to give assistance for as long as it is needed, rather than by adhering to whatever original parcels you were apportioned by legal aid. There is an opportunity here to make a secondary provision to legal aid that would help to prop up the system through this transition.
Richard Miller: To build on that, some unrepresented tenants do not bring cases that they could and should bring and do not enforce their rights; others bring cases that are misconceived, and that has an impact on the landlord, who has to defend the misconceived case, and on the courts, which have to put in resources to hear it. When these cases go to court, whether they are validly brought or misconceived, unrepresented tenants very often do not understand the processes and what is required of them, so they do things wrong and have to have things explained to them. That means that the courts have to put a lot more resources into managing the case than they would if the tenant was represented, so there is a whole range of ways that landlords and courts—and therefore the taxpayer—are adversely impacted by tenants being unrepresented.
Helen Morgan
Q
Richard Miller: Certainly what we have seen in the data is that it was the rural areas that were the first to be impacted. We are now seeing a lot of market towns up and down the country where there is no provision, and the position in the cities is getting ever worse and ever tighter. It was definitely the rural areas that were the first impacted, but this is now a nationwide problem.
Helen Morgan
Q
Nimrod Ben-Cnaan: Landlords are beyond my remit—I only represent the other side—but yes, tenants are very much impacted by it. This is something we see, anecdotally, in support of the quantitative evidence that the Law Society has generated. The closure and consolidation of the courts over the last 13 years has been so significant that whenever a court closes, the remaining possession lists in nearby courts get lengthened, so there is an added burden on the remaining courts.
Another big problem in possession cases is that tenants defending possession of their home just do not show up, because they have not been advised early, so they do not know if they should. It could possibly improve their prospects. There is a whole gap in the structure of support for renters that has been missing for several years, and it would be quite simple to replace. You would see the beneficial difference in the medium term.
Richard Miller: Just to reflect on the position of landlords, for the reasons I have explained, landlords have a disadvantage where they are up against an unrepresented tenant. Some landlords are just individuals renting out properties on their own. They may also struggle to find accessible housing advice. They are not generally dependent on the legal aid system, so that aspect is not a problem for them. But some housing firms act for both tenants and landlords, so if they are closing down their housing departments, that may make it more difficult for some smaller landlords to get the advice that they need. The bigger and more commercial landlords will generally have solicitors that they are instructing all the time, so it is less of an issue for them—apart from, as I say, the impact on them of tenants being unrepresented.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Q
On reforming the whole county court system, what can be done other than to resource it better and provide better advice to people? I can only imagine the amount of time-wasting going on because people are desperately in search of help. Currently, at Croydon county court, it takes 16 weeks on average to get a bailiff’s warrant after a possession order is secured. On the other end, we have the local authorities that are desperate to delay for as long as they can, because they do not have anywhere to put people. What is the resolution to that?
Nimrod Ben-Cnaan: It is a tough one, for two reasons. First—this has been mentioned in previous sessions—a separate housing court should probably not be set up. That is partly because if you already have a system that is starved of relevant—mainly judicial—staff and has had its budget starved, creating a separate jurisdiction that would need to have its own of everything makes no sense. The Government are right not to create a separate one. In effect, we have a housing court that works—when resourced—fairly well in the county court. This is something that I have heard Richard talk about before, and certainly we are very strong about that.
Our understanding of where justice begins for people needs to go well beyond the court doors. That is why we keep mentioning the advice sector, legal aid and other measures. I would also include in that public legal education and helping people understand their rights as tenants, which we are not doing nearly enough. Those kinds of support would not necessarily, in themselves, create a more efficient justice system, but they would create the kind of solutions that many people seek in it, rightly or wrongly, and which they could reach elsewhere. I am sure Richard has more on that.
Richard Miller: This is one of the ultimate challenges. If we are being asked how you can improve the situation without quite a bit of significant investment, my answer would be that you cannot. The point—this is so often overlooked—is that if you take that step back, you are still spending the money. You made the point that local authorities have to pick up the burden of homeless families. A bit of early advice to sort out the housing benefit might have meant that the family was never homeless in the first place, with huge savings to the public purse and in relation to pressures on the system. Early advice can stop cases getting to court at all and make sure that cases are better dealt with when they do go to court.
All that investment saves substantial sums. That is even before we get on to housing disrepair, where there is an impact on people’s health and the stress that is caused, which has an impact on the health service as well. There are substantial savings for the health budget in getting these things right early as well. It is penny wise and pound foolish to think we save the money here and to not look at the broader costs that we incur as a result of those tiny savings.
Matthew Pennycook
Q
Richard Miller: From the Law Society’s point of view, we do not take a view on the specific wording. We note that this is a still a discretionary ground and so the courts have the opportunity to look at all the circumstances and determine what is a proportionate response. That, we feel, gives a degree of protection. Beyond that, we do not have any views one way or the other about the change in the wording there.
Nimrod Ben-Cnaan: We, however, do have quite a few concerns about that, mainly arising around case load, as you will probably recognise from yours in the community. Broadening the definition of antisocial behaviour from “likely to cause” to “capable of causing” nuisance is almost designed to catch out patterns of behaviour that could be interpreted as antisocial but which may, in fact, reflect mental health crises or domestic abuse. It is particularly worrying in situations in which the nuisance is more of a modality, as in the example of a tenant who is a hoarder but whose hoarding affects him alone and is not an environmental menace may be caught up in that ground. It needs a lot of clarification, although we are very glad that it is a discretionary ground.
The Chair
I am afraid that that brings us to the end of the time allotted for you. Thank you very much to both of you for attending and for the evidence that you have given.
Examination of Witness
Jacky Peacock gave evidence.
The Chair
We will now hear oral evidence from Jacky Peacock, who is the head of campaigns for the organisation Advice for Renters. We have until 12.45 pm for this panel. Could you please introduce yourself for the record?
Jacky Peacock: I am Jacky Peacock from Advice for Renters, which I guess does what it says on the tin. We have a legal aid contract to deliver advice that we complement with other services, such as money and debt advice, and so on. We also have a brilliant team of volunteer mentors who provide support for our clients when they need it. After the last session, I should add that we could not provide the legal aid service without getting independent grants from charitable trusts; it does not even cover the salaries or the fees, let alone the overheads.
Matthew Pennycook
Q
Jacky Peacock: Yes. I did listen to some of the sessions that you had on Tuesday and I was quite frustrated because, with all the problems that people were grappling with, they were not being seen in the context of the portal and its potential to avoid or minimise—certainly lessen—the problems that have been cited. So yes, it absolutely has a huge potential, and I think that it would be crazy to try to implement this legislation without having the portal in place. Although the intention is that it will be introduced through regulations, I do think that as the Bill progresses through the legislative process, the more flesh that can be put on the bones of it, the better.
I am trying to be as brief as I can. One reason why we think this is so important, although much in the Bill is welcome, particularly the measures to improve tenants’ rights—so that they can exercise their rights and will have security, can challenge poor conditions, and so on—is that we do have to be realistic. At the end of the day, the majority, if not the vast majority, of tenants will have no more idea what is in this Bill or what their rights are when it is enacted than they do now. If there is anything more important than giving the tenants the right to challenge poor conditions, it is ensuring that they do not have poor conditions to start with.
The portal has the potential to regulate the sector so that landlords cannot let properties unless they are safe, fit for human habitation and competently managed. We have worked with the Lettings Industry Council, which represents all stakeholders across the board, to develop a model. We have called it the MOT, and we have used the car analogy. If you want to drive a car or any vehicle, it is a pretty simple process: you register once a year through the Driver and Vehicle Licensing Agency, you provide evidence that the car is roadworthy—of course, the MOT is separately uploaded to the site—and you have a driving licence. All we are asking for is a similar system to operate for the private rented sector.
The other important thing is that the portal is an opportunity to put all the legal requirements in one place. We are not asking for any duties on landlords that do not exist already. But they are in a whole range of different pieces of legislation, and the landlord, with the best will in the world, finds it difficult to know exactly what they are and are not supposed to do. It is all in one place. Whether it is called the decent homes standard and incorporated in that does not matter: it is there on the portal. All the landlords who want to know how to do things properly can find it.
In order to let, landlords have to register and provide objective, independent evidence. All that exists already: the building insurance, the energy performance certificate, gas safety, electricity and so on. There is no reason why that cannot be either scraped from other sites or uploaded directly. The only thing that is missing is that you could have all those and still have a property, for example, with damp and mould that is not fit and that has category 1 hazards. The simple answer to that is for landlords to employ a surveyor to produce a surveyor’s report, which also gets uploaded by that person. Provided that everything is there, the legislation goes through.
I go back to the car analogy. If you want to register, you pay your annual fee; if you have forgotten to get your car insured or something, that will be flagged up—“Gosh, I have to sort that out”—and then you go back and do it. It is all very simple, and nobody complains about it.
The Chair
Can I move on to the Minister?
Jacky Peacock: Well, that outlines it; I can give more detail about how it works if you like.
Jacob Young
Q
Jacky Peacock: I think it will in a number of cases, yes, but neither section 21 nor the Bill as a whole will make a dramatic difference to the landlord-tenant balance or relationship. I know the most robust, feisty tenants, but the idea of going to court and defending themselves is terrifying. In the vast majority of cases, if a landlord tells a tenant to go, they will go; they are not going to question whether they have a right to remain or what process has been followed—they will go. We still refer to the land “lord”—a direct descendant from a feudal stage—and we have not changed that relationship very much. We need to protect tenants by making sure that, without the tenant’s having to exercise the rights, even if they have them, the property is safe and competently managed.
Lloyd Russell-Moyle
Q
Jacky Peacock: We think that all the grounds should be discretionary. There is no more draconian decision that a civil court could make than to deprive someone of their home. The thought that they will be prevented from looking at all the circumstances before making a decision seems, in principle, unfair. Judges are not soft. If they have discretion, they will still grant possession in the majority of cases where the evidence is there and it is the fairest thing to do. But to deprive them of being able to look at every single circumstance in any of those cases before taking someone’s home away is not justice. It does not deliver justice. I have seen many cases of possession orders being issued against the tenant that have been grossly unfair for all sorts of reasons but, technically, the decision was mandatory.
Ms Buck
Q
Jacky Peacock: I should first of all say that we are not happy with the sales ground. If a landlord wants to sell the property, we think that there is no reason that it could not be sold with the tenant in situ. Obviously, if it is sold to another landlord, that is a big advantage because they do not have to have any void periods while the property is going through the process of sale.
I also suggest, whether or not that remains a ground, that tenants should be given the right of first refusal. There is a precedent for that under the Rent Act 1977. Qualifying tenants—in other words, Rent Act tenants and/or non-leaseholders—have that right at the moment under certain circumstances. I will not tire you with the details of that, but as far as I am aware, all the parties are in favour of increasing owner occupation and this seems to be a very sensible way of doing it.
Even if individual tenants could not afford to buy, they may well have a relative that could buy it for them and they could own it eventually or it could be offered to the local authority, a housing co-operative, a housing trust or whatever. I hope that is something that is given serious consideration. It also means that the property is not being lost if landlords leave the sector. Certainly, if we have the portal as we would like to see it, a lot of appallingly bad landlords will be leaving the sector—good riddance—and that property could be bought by someone else, such as the local authority.
Lloyd Russell-Moyle
Q
Jacky Peacock: Yes. I have not given a lot of thought to the way the legislation could cover that. To be honest, it is not unusual. We had a case recently where tenants were sharing with another family, but the landlord wanted the other family to move out. The families were sharing the rent and the landlord therefore approved £20,000 rent arrears. We were able to negotiate a date by which they would move; the landlord would not have to go to court to ask for possession, but he would not pursue the arrears.
The Chair
Thank you for your evidence and time, Ms Peacock.
Examination of Witness
Jen Berezai gave evidence.
The Chair
We will now hear oral evidence from Jen Berezai, the co-founder of AdvoCATS. We have until 1 pm for this panel. Could you please introduce yourself for the record?
Jen Berezai: Hi. My name is Jen Berezai; I am the co-founder of AdvoCATS. We are a wholly voluntary non-profit organisation. On the ground in the east midlands, we help landlords and tenants where there are issues concerning pets and rented properties. We help to produce pet CVs, obtain vet references and do anything else that will help to demonstrate responsible pet ownership so that a landlord can make an informed decision about allowing a pet in their property. Nationally, we ran the “Heads for Tails!” campaign, which was launched in September 2021: it was an umbrella campaign with big names supporting our proposals for a change to the Tenant Fees Act 2019 to make renting easier both for landlords and for tenants. We had support from the Property Redress Scheme, the likes of the NRLA and Propertymark and, on the animal welfare side, International Cat Care and the National Office of Animal Health.
Matthew Pennycook
Q
Jen Berezai: Yes. We understand that there will be guidance on the grounds of unreasonable refusal, but the main reasonable excuse for refusing a pet is likely to be the existence of a head lease on a leasehold property. As I understand it, the head lease legislation is superior to that proposed by the Renters (Reform) Bill, so if there is a head lease on a property that prohibits pets, that will be a reasonable excuse. As approximately 20% of the housing stock in the UK is flats, that will have an impact on a lot of tenants. There is a huge lack of awareness within the tenant community, and among the general public, of what a head lease is and how it can affect you.
Sorry, but what was the first part of your question?
Matthew Pennycook
Q
Jen Berezai: Research that we have done, along with research undertaken by the likes of Battersea Dogs & Cats Home and Cats Protection, seems to indicate that a large number of landlords would be willing to consider pets provided that they are able to protect their own interests. That is why we proposed an amendment to the Tenant Fees Bill to add pet damage insurance to the list of permitted payments. Having said that, the rental market is very hot at the moment. I believe that there are something like 20 to 25 applications per property in London. In the east midlands, I think there are about 11 applications per property, and viewings are usually closed off at about 30. That means that landlords are able to cherry-pick tenants. A lot will take the course of least resistance and choose what they perceive to be the lowest risk.
Jacob Young
Q
Jen Berezai: My concern is that it is an excellent step in the right direction, but it is probably going to benefit those who rent houses more than those who rent flats. That is because of the head lease issue. I know that leasehold reform is going through; it would be nice if the two things could work hand in hand. Giving landlords the ability to say either “You must hold pet damage insurance” or “I am going to charge you for pet damage insurance” will make a difference to a lot of landlords who are currently on the fence about allowing pets.
Helen Morgan
Q
Jen Berezai: It is there now. There are only a handful of companies, to be fair, but it is there now. We at AdvoCATS tend to deal with one company called One Broker, which has been providing a product for quite a few years. Premiums start from about £15 per month, which gets a landlord £4,000-worth of cover. We are aware of people developing other products, because when the Bill goes through we foresee a lot more of them coming to market. In the course of preparing the “Heads for Tails!” report, we spoke to insurance companies, including the Alan Boswell Group. It developed and launched a pet damage policy for tenants, backed by SAGIC—the Salvation Army General Insurance Corporation—specifically as a result of our campaign and what we were calling for.
Helen Morgan
Q
Jen Berezai: Yes. There is probably a bit of a grey area there. I understand that there are accepted industry standards for how long carpets should last, which are different for a couple and for a couple with children. Perhaps it is important to build in a couple, or a couple with children and/or pets, so that if a tenant is leaving a property with a 15-year-old carpet and the landlord says, “Look at the carpet—I’m going to claim on the deposit or ask you to claim on your insurance,” that could be seen as unreasonable because of the age of the carpet.
Eddie Hughes
Q
Jen Berezai: The first time I heard my father swear was when my rabbit ate through the telephone cable for the third time.
It tends to be split about 50:50 down the middle. Some landlords will say, “Dogs are fine, but I’m not having cats,” whereas other landlords adopt the opposite position. Each can bring their own range of risk behaviour, but there is also a problem with perception versus reality. For example, Cats Protection did some research when it ran its Purrfect Landlords scheme. One thing struck me as particularly interesting: for 63% of landlords who did not allow pets, their major concern was a flea infestation, whereas only 2% who did allow cats had ever experienced any problem like that. A horror story will get more traction than a good luck story, so there is a lot of education to be done. Vet referencing should definitely be used to demonstrate responsible pet ownership. Microchipping is becoming compulsory for cats next June. If an animal is microchipped, vaccinated, neutered, and flea and worm-treated, that rules out the majority of antisocial behaviours.
Mike Amesbury
Q
Jen Berezai: I think it is good that there is the option for either. We ran a survey with the NRLA and Propertymark called “What’s the Damage?” because we wanted to drill down a bit deeper into the landlord’s experience. Those who saw insurance as the way forward were pretty evenly split between the landlord paying for the insurance, or the tenant paying the landlord, or the tenant actually buying the insurance policy. That seems to be determined by portfolio size and, to a degree, average rent. I think it is good that there is the balance, because some landlords want one thing and some want the other.
At the moment, if you find a pet-friendly landlord, the likelihood is that they are going to charge you pet rent, which they can do under the terms of the Tenant Fees Act; it is only the deposit that is capped. The average is about £25 per pet per month, which means that you are paying £300 extra rent per pet per year. That is just per pet, whereas an insurance policy covers an address, so you can have a cat and a dog or a couple of cats—whatever it might be—and your premium is less than pet rent and the cover is greater.
Dr Spencer
Q
Jen Berezai: One thing that needs looking at is the current “yes pets” or “no pets” option. If you go on any of the search portals, those are the only options you get. There is no option for “pets considered”, but there needs to be because each case needs to be considered on its own merits.
As far as encouraging landlords goes, it is a bit utopian, but there could be some sort of incentive for a landlord not to discriminate against a pet-owning tenant. At the moment, if a landlord has 11, 15 or 20 applications for a property, they can choose the course of least resistance, take the easy option and ignore the pets. There could be some way of incentivising that, but I do not know what that might be or what might be realistic. I think it is more of an education exercise.
The Chair
As there are no further questions from Members, I thank our witness for coming to give evidence.
Ordered, That further consideration be now adjourned.—(Mr Mohindra.)
Renters (Reform) Bill (Fourth sitting)
Thursday 16th November 2023
(1 year ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 November 2023 - (16 Nov 2023)
The Chair
May I welcome our three witnesses to the first of several sessions this afternoon in which we are taking expert evidence on the Bill? We are now in public and our proceedings are being broadcast. Perhaps it would be easiest if the witnesses introduced themselves.
Liz Davies: My name is Liz Davies. I am a barrister specialising in housing and homelessness law at Garden Court chambers; I also act as a legal consultant to the Renters’ Reform Coalition.
Giles Peaker: I am Giles Peaker, a solicitor and partner at Anthony Gold solicitors and a housing law specialist.
Simon Mullings: I am Simon Mullings, co-chair of the Housing Law Practitioners Association. The experience I bring to this panel is 20-odd years of housing law practice, which includes representing tenants in possession proceedings on court duty in seven or eight different London courts across the years.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
The Chair
Who wants to go first?
Liz Davies: May I start and deal in a little detail with ground 8A? I will then say a couple of things about 1 and 1A, but my colleagues can develop that. There is a great deal of concern about ground 8A, and the “three sets of rent arrears in three years and you’re out” ground. There is a concern that that is a mandatory ground and that it is punitive. There can be an awful lot of reasons why people in insecure employment or on zero-hours contracts, or just because of life events, can slip into arrears—and then make them up, of course—that get as far as two months. If that happens to you three times, you know that you will be subject to a mandatory possession order unless the landlord has kindly told you that you are not. It is punitive and unnecessary because we have ground 8. I would like to see ground 8 made discretionary, but we have it currently as a mandatory ground and we have the discretionary grounds 10 and 11 for rent arrears. I think there is a worry about unintended consequences, because once a tenant is in that third set of rent arrears, you have to ask what incentive they have to remedy that position if they think they are inevitably going to lose their home. I am very concerned about ground 8A and would like to see it omitted altogether.
The courts have plenty of flexibility to deal with tenants who persistently do not pay their rent: such tenants can be subject to an outright order under any of grounds 8, 10 or 11. If ground 8A is to remain, much the best thing would be to make it discretionary, so that at least the court could look at whether this has happened inadvertently to somebody—whether they are now back in a reasonable financial position, can pay their current rent, have made up the arrears and should be able to stay in their home, paying rent to their landlord, which is of course a good thing for the landlord. The courts could enforce that. Equally, the courts are relatively wise: they can spot quite well a tenant who has no intention of paying rent in the future, and they can make an outright possession order if it is a discretionary ground. A discretionary ground is not a “get out of jail free” card for the tenant, by any means. I would like to see ground 8A either omitted altogether or made discretionary.
On grounds 1 and 1A, the deep concern is the short period of time that a tenant is protected—the six-month protected period. The Renters’ Reform Coalition and I would like to see that being much longer, because the six-month period merely reflects the current assured shorthold tenancy regime. The other big concern—I will not go into the detail, but you can ask me—is of course the extent to which a landlord may have no real intention of selling or moving back in: they simply wait three months and re-let. There has to be much greater provision about abuse.
Giles Peaker: I totally agree with Liz’s points. On 1A and 1B, the three-month period and the potential fine for breaking the three-month period both need to be looked at. If you consider what London rents are, the potential fine is actually less than three months’ rent, so there is an issue there. As it is currently drafted, the three-month period also appears to run from the point when the landlord has given notice and the tenant has left—it does not apply to a period after a court has made a possession order—so if the landlord brought possession proceedings and a possession order was made, they could then re-let the next day, with no penalty, even though the possession proceedings were on the basis that a family member was moving in or they were intending to sell.
I would also add a few words of caution—I am afraid that this is anecdotal, but it is certainly what I have gathered—from various practitioners in Scotland. There is a degree of gaming going on. There certainly have been a few tribunals in which a landlord who had supposedly been intending to sell most certainly did not and had never set the process in train—ditto in the case of a family member intending to move in. There is a question of what the evidential requirements would be for a landlord to establish that they were intending to sell, that they were in the process of trying to sell, or that they or the family member were intending to move in as their only or principle home. A simple statement that that is their intention cannot really be sufficient when the consequences for the tenant are quite severe. There is an option to use this as a sort of get-out for the abolition of section 21. The three-month period is too short.
On 8A, I simply echo what Liz said. If you are in a position in which, on literally three days—three separate, individual days—over three years, you find that you have slipped into two months’ rent arrears, even if you could make them up the very next day, you still face mandatory possession proceedings. That is extremely draconian. There would be no appeal to the courts’ understanding that your rent payments were otherwise perfect apart from those occasions, because it is a mandatory ground. It needs to be addressed.
The Chair
Do not feel that you have to say anything, Mr Mullings, unless you have something different to say.
Simon Mullings: On 1 and 1A, I would echo what my colleagues have said. I think you heard evidence earlier in the week in relation to the notice period for those grounds and how that could, in fact, benefit landlords and the court system in allowing more time for a tenant to find accommodation in those circumstances. I do not need to say any more about that.
I think 8A really does warrant more discussion. You have heard from both Giles and Liz how 8A is inapt, in that it is a far too draconian sanction for people who can find themselves triggering 8A through no fault of their own. In a cost of living crisis—
The Chair
I am sorry to interrupt, but we have only 45 minutes and then I will cut you off even if you are mid-sentence. Saying that you agree with one another does not add to the Committee’s general understanding, so say different things and do not feel that all three of you have to answer all the questions.
Please go on. I rudely interrupted; I apologise.
Simon Mullings: Not at all. The second thing about 8A is that it is not just inapt; it is inept because it will not do what it is designed to do, which is to stop the gaming of ground 8. First of all, in my experience—I hope this is useful to the Committee—I have only seen one example in 25 years of that occurring. On that example, the tenant then became subject to a suspended possession order under ground 11, which was a perfectly adequate way of dealing with it.
It is inept because it is perfectly possible to game ground 8A anyway. Let us assume that people do want to try and game it, but I really do not think people are doing that for a moment. If you get into two months or more’s arrears on a first occasion and then on a second occasion, you would think perhaps you should bring your arrears down to less than two months at that point. Well, not really; not if you want to game the system. You keep your arrears at two months or more so you do not trigger the third occasion. Then, when your landlord brings you to court, that is the moment at which you then pay off the arrears and try to game avoiding a possession order. So it is perfectly possible to game 8A anyway. It is not just inapt; it is not going to do what it is supposed to do.
Matthew Pennycook
Q
Simon Mullings: A simple amendment to do exactly what you are saying, which is so that the tribunal does not set a higher rent than the landlord is asking for, would be extremely welcome. The reason for that is that if somebody comes to me asking whether they should challenge the rent that has been set by their landlord, I am bound to advise them that, unlikely as it is, the tribunal could set a higher rent. That has a real chilling effect on somebody’s willingness to then challenge a rent. It has been in section 14 of the Housing Act 1988 since it came into force in 1989, but this is a real opportunity to cure what seems to be a rather bizarre anomaly. I am not really sure why it was there in the first place, but it has this chilling effect. Also, section 13 challenges will become much more important when the Bill passes.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
Liz Davies: I will start with the point about multiple breaches of rent arrears. I think that the answer to that is to trust the wisdom of the courts. The courts have the mandatory ground at the moment under ground 8—again, the concern is gaming and you have heard Simon’s answer on that—and they have discretionary grounds for possession under grounds 10 and 11. A well-advised landlord who wants to ensure that they can get a possession order from the type of tenant you have just described will ensure that they plead all the rent arrears grounds available to them, including ground 8A, if you put that through.
When you get to the court hearing, courts are perfectly capable of identifying somebody who has got into arrears in the past but has made them up or is in a position to pay current rent and to pay off the arrears within a reasonable period. Courts deal with people in financial hardship day in, day out; they are very good at scrutinising budgets and knowing whether or not an offer to pay is realistic. They are equally good at looking at a rent arrears history, no doubt prodded by the landlord, and saying, “Hang on a minute. You’ve just told us when your payslips were and you were not paying rent at that time. You really have been abusing the system.” And they will make an outright possession order.
Case law on suspended possession orders on the basis of rent arrears requires that a suspended possession order, as an alternative to an outright order, can be made only where the court is satisfied, first, that the current rent will be met in the future, and secondly, that if there are arrears at the date of hearing, those arrears will be paid off over a reasonable period. There is some case law, depending on a landlord’s circumstances, about what a reasonable period is. Courts are very sympathetic to the point that private landlords in particular need that money paid back to them, so they are not going to approve an unrealistic repayment offer. I think that all the appropriate safeguards are there in the courts now. Of course, they are not currently used by private landlords because of section 21, which means that they do not need to. I think that those safeguards are there against the scenario that you have just suggested.
On the ombudsman, I will leave Simon and Giles to develop that point. All I would say is that an ombudsman is a very good thing. Access to justice through the courts is also a good thing. It would be wrong if some of the matters that courts deal with on behalf of tenants are then solely dealt with by the ombudsman. You have to have two opportunities.
Giles Peaker: Briefly on the ombudsman, in principle it is a very good thing, but it generally tends to depend on the ombudsman. It really is a question of somebody actually being able and willing to take a serious and proactive approach. I think that there has been quite a market change in the social housing ombudsman over the last five or six years, and performances have really turned around. An ombudsman is not necessarily an answer in and of itself, but it can be a very good thing and, in the right hands, it can be extremely useful.
Simon Mullings: We heard Mr Blakeway’s land grab earlier in the week—he fancies a crack at it. As Giles said, Mr Blakeway has done extremely well in the social housing sector, and, as Liz said, the ombudsman will do well in the jobs that it can do. It is not fair for landlords to face that situation, but it is also not fair for landlords to face a ground for possession that, whether they use it or not, will incentivise tenants to stop paying rent. I really believe that that is what 8A will do in certain circumstances.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
Liz Davies: Entering into a new tenancy at market rent is one thing, but there is a real worry about rent increases to market rent. Although it initially plausible sounds—why should rent not go up to the same level as elsewhere, if it was a new tenancy?—the problem is that you may then end up with an unaffordable rent for the tenant, who had entered into the tenancy on the slightly slower rent, and they then leave voluntarily, but as a result of economic pressure; and when I say voluntarily, I do not mean entirely voluntarily, but it is not due to a notice served or a court order. The Renters’ Reform Coalition is certainly suggesting that the tribunal’s power should be limited to inflation or local median wages to increase rents, along, of course, with the prohibition on increasing them more than the landlord has proposed. I think that must be right. I understand that landlords are conducting a business, but they have let the tenancy initially at rent x; it is not that unfair for both landlord and tenant to have certainty that rent x will increase only by inflation or median wages, rather than out there in the open market.
Lloyd Russell-Moyle
Simon or Giles, do you have anything to add?
Giles Peaker: I do not have much to add, but I am not sure whether we have detailed information about what in-tenancy rent increases look like, as opposed to new tenancies, and what the comparator would be. Are in-tenancy raises usually reaching new tenancy market rents, or do they consistently remain at a lower level across the lifetime of a tenancy? I do not think we have that information.
Lloyd Russell-Moyle
Q
Liz Davies: Three lawyers silent! I throw the question of how back to you, but I think there is something quite important about publishing the principles under which various disputes are determined, and therefore the exact cases. You may or may not provide the names and addresses, although, with the property portal, we would say you should do; it would be the sort of thing one would want to know about a landlord.
Lloyd Russell-Moyle
Q
Liz Davies: I am thinking about it; I had not thought about it before, and it is a good point. However, on the process of determining a dispute between a landlord and tenant about whether or not the tenant has been in breach, whether the deposit can be returned and whether in whole or in part—there is something to be said for that to be published, whether that is by the current providers or within the property portal. The property portal would allow future tenants to know whether they might have difficulties getting their deposit back.
Ms Karen Buck (Westminster North) (Lab)
Q
Simon Mullings: No, it is not necessary.
Ms Buck
Short answers are fine.
Simon Mullings: We are lucky because we have had very recent statistics. The timescales for the various stages of possession and litigation are exactly as they were in 2019, when this Bill started its slow journey to where we are today. There is no doubt that there is a need to improve processes through the courts. What we have at the moment is an extremely good network of county courts, with a very evolved set of civil procedure rules that deal with possession claims very well. What we lack is resources for the county courts for both the physical estate and the personnel in the court to be there to provide the sort of first-class service that you would like to see in possession cases.
HLPA members have been campaigning on court reform and improvements to the court system since around 2015 or 2016, so we are all for it. I echo what Shelter’s director said earlier in the week: it is so important that we move forward with the Bill and the abolition of section 21, which is a key driver of homelessness and of misery, particularly for families with children in schools, who want the stability of knowing that the children can go to the local schools. Section 21 is also a driver of rent increases in various ways—I am telling you things you all know. I do not think there should be any further delay whatsoever.
Giles Peaker: I do not think it is necessary. I am reluctant to think that the process of legislation should be based on whether the courts are functioning as they should be. I agree with Simon: the actual process of possession proceedings is probably one of the quicker processes within the county courts at the moment and is fairly well honed. I would add that the current time from issue to a possession order under the accelerated possession proceedings—an “on the papers” process, without a hearing—is roughly the same as under the section 8 process with an initial hearing. There is no great time lag for the section 8 process as opposed to accelerated possession proceedings. Most possession claims will go no further than first hearing—if there is no defence, that is it. There would not be such a significant impact on the courts’ functioning to make this a concern that should cause further delay.
Jacob Young
Q
Giles Peaker: I do not see that it would necessarily increase contested cases. It would inevitably involve the process that leads to an initial hearing—those are 10-minute hearings on a list day. I really do not see why it would increase the number of contested hearings, because unless there is a defence, the possession order is highly likely to be made at the first hearing. On at least some of these new grounds, if the ground is made out, there is no defence. So I am unsure of the amount of additional burden.
Liz Davies: I think that is the point. Currently, under section 21, landlords can get possession on the papers. There is no court hearing: the papers go in; the tenant has the right to respond; the district judge considers on the papers whether or not there is a defence. If there is no defence, the possession order is made; if there is a defence, it is put over to a hearing. Once section 21 is abolished, the starting point is that there will be a five or 10-minute hearing, which is usually about eight weeks after issue. That is about the same period of time as for the paperwork procedure I just described. At that hearing, the question for the court is, “Is the case genuinely disputed on grounds that appear to be substantial?” That is set out in the rules.
The great thing about that hearing is that there are housing duty solicitors at court. If a tenant does not have legal advice or advice from a citizens advice bureau beforehand, they turn up and talk to a duty solicitor—I am sitting next to one of them. Duty solicitors give realistic advice. If there is a defence—if the landlord has got it wrong—the duty solicitor will go in front of the court and say, “Actually, there is a defence,” and it gets adjourned for a trial, and that is right and proper. But if there is not a defence, the duty solicitor will say, “I’m sorry, there is absolutely nothing that can be said legally to the court,” and a possession order will be made.
One of the important things about advice, and indeed early advice, is that tenants get realistic advice, so they know whether they have any realistic chance of prolonging the proceedings, and so forth. In many ways, a hearing with a duty solicitor will be beneficial to landlords, and, as Giles says, it takes about the same length of time. There is lots to be said about county courts’ efficiencies and inefficiencies, but I do not think that is the problem.
Matthew Pennycook
Q
Simon Mullings: Two of us were involved in Rakusen v. Jepsen, and we were very happy about amendment 21—thank you very much for that; Christmas has come early. I understand that Shelter is looking very carefully at the “No DSS” amendment. I do not want to try to drive a tank on its lawn; I suspect that it will write in with any concerns it has about that. The principle, though, is extremely welcome. Forgive me, Mr Pennycook, but you mentioned another one.
Liz Davies: The decent homes standard amendment.
Simon Mullings: There was too much to read overnight, I am afraid, so I do not have anything particular to say on that.
Liz Davies: I was very pleased to see it, in principle. I am reserving my position on the wording. I am sorry; I am in the same position you are in, Mr Pennycook, from Tuesday night.
Matthew Pennycook
Q
Liz Davies: We will write in.
Helen Morgan (North Shropshire) (LD)
Q
My second question is about clause 18 and local authorities no longer having a duty to help people when they have been made homeless. Shelter has said that the Bill does not specify when help to prevent homelessness should be available to private renters. Do you have a view on that and how it could be addressed?
Liz Davies: First, housing legal aid is absolutely in crisis. The number of housing legal aid providers is diminishing each year. The Law Society has an amazing and heartbreaking interactive map where you can press on a county and discover that there are no housing legal aid providers or one of them in the area. Obviously, London is slightly better served. That is letting down everybody who cannot afford to pay for housing legal advice.
That needs fixing, and it needs an injection of resources—there is no doubt about that—but that is not a reason why there would be difficulties for landlords in obtaining possession under these new proceedings, not least because the Government have put this money into the duty solicitor scheme. Where there are no housing legal aid providers and a tenant turns up at court having been unable to find advice in advance, they will see the duty solicitor. While Richard Miller is absolutely right to be concerned about the sustainability of the housing legal aid sector—we all think it could collapse in a few years—this particular area of getting advice about possession is covered by the duty solicitor scheme. That is the first thing.
Homelessness is covered partly in clause 18 and partly in schedule 1, but this is one of the unintended consequences that the Committee should look at. The current position is that somebody is threatened with homelessness if they are likely to be homeless within 56 days. If they have a valid section 21 notice, which is two months or 56 days, they are threatened with homelessness. It is deemed. All that a local authority has to do is look at the notice and say, “Yes, that’s valid,” and that means that it owes the tenant what is called a prevention duty—a duty to help them to prevent the homelessness—and spends the next two months trying to help them to find somewhere else to live. That is a good thing, because if it works, it averts the crisis of homelessness. It means that someone can move from their previous tenancy into their new one.
As a result of the abolition of section 21, this Bill retains the definition of threatened with homelessness within 56 days, but takes away the deeming provision whereby if you have a notice of possession within 56 days, you are deemed to be threatened with homelessness. If that was reinserted, if a tenant received what would be a section 8 notice requiring them to leave within two months, you would be back in the straightforward position that they go along to a local authority, the local authority would say, “Yes, you are threatened with homelessness. We don’t need to make further inquiries or think about it any more. We accept that we owe you a prevention duty and we will help you to find somewhere else to live.”
That is absolutely the best thing, because it front-loads all the looking for somewhere else to live while a tenant still has a roof over their head, rather than waiting for the crisis moment when they have to go into interim accommodation or end up on the streets. I urge the Committee to think about an amendment that requires that section 8 notices count as deemed homelessness. I know there have been some drafts flying around, so the work has been done.
Matthew Pennycook
Q
Simon Mullings: Rent repayment orders create, as I have said before to officials in DLUHC, an army of motivated enforcers, because you have tenants who are motivated to enforce housing standards to do with houses in multiple occupancy, conditions and all sorts of things. There are clearly opportunities to expand the rent repayment order scheme, perhaps to sit alongside existing enforcement measures to do with offences. I am sorry that I do not have really specific references for you, but certainly expanding the rent repayment order scheme could in principle take some burden off local authorities in terms of their obligations, which would be an extremely important measure.
Giles Peaker: Was the question about enforcement of RROs or about the use of RROs in enforcing?
Matthew Pennycook
I suppose it was about their application—I think Mr Mullings has answered on whether they should be expanded in principle.
Giles Peaker: I would agree. I think that since the Housing and Planning Act 2016 they have been a success.
Simon Mullings: You would expect a legal aid lawyer to say that it would be great if legal aid were available to help tenants to bring RROs.
Matthew Pennycook
Q
Simon Mullings: I am tempted to say, “As much as possible.” For example, with ground 1 or 1A, if it were decided that post-possession order information was needed to ensure that they operate correctly, the portal is an ideal way of dealing with that. Very often, information relating to tenancies is a cause of disputes in possession proceedings—all the time. You have mentioned the conditions that attach to a section 21 notice at the moment; it will be extremely advantageous to landlords and to tenants, in an information and communication sense, to be able to essentially deal with those through a transparent portal.
Giles Peaker: To very quickly follow up on that, there is certainly the dropping of consequences for not providing gas safety certificates, energy performance certificates and so on. Everything except the deposit has effectively been dropped. Those are very important documents that are important for maintaining housing standards, so there need to be some consequences, other than a hypothetical prosecution by the Health and Safety Executive, for failing to provide that. Those kinds of things do need to be in there.
Ms Buck
Q
Liz Davies: The change from “likely” to “capable” is a worry. Ground 14 remains discretionary; I made the point about the wisdom of the courts, and one would hope that, where it is a case of domestic abuse, or a case of mental health, and so forth, the courts would have the wisdom to see that that person was not at fault. However, I do not see any need to reduce the threshold. If antisocial behaviour is such that a private landlord needs to get their tenant out because of the effect that that behaviour is having—usually on the neighbours but sometimes on the landlord themselves—then it is going to cross the threshold of “likely to cause”. I do not see the point in lowering it.
Jacob Young
Q
Liz Davies: No, clearly that is not fair, but the current ground 14 allows for a possession order when the tenant or somebody residing in or visiting the tenant’s property
“has been guilty of conduct causing or likely to cause a nuisance or annoyance”
to other people residing, living nearby or next door, visiting, and so on. So, that test is there. There is an antisocial behaviour ground for possession. It is discretionary, but the Bill will continue it as a discretionary ground; it simply lowers the threshold by a small amount from “likely to cause a nuisance” to “capable of causing a nuisance”. I really cannot see the circumstances in which a very difficult tenant who has been causing the sort of antisocial behaviour that you have just talked about will not meet the threshold of “likely to cause” but will meet the threshold of “capable of causing”. It is a very narrow distinction.
The point is that antisocial behaviour grounds are there—they really are—and courts use them. At the moment, they are used only by social landlords because of section 21, but we can all tell you that courts are very heavy on antisocial behaviour, and it is impossible for a tenant to remain in possession unless the court is satisfied that that behaviour has stopped and will continue to stop. Courts do not allow tenants to remain in possession under the current test.
The Chair
I thank our three witnesses: Simon Mullings, co-chair of the Housing Law Practitioners Association, Giles Peaker of Anthony Gold solicitors, and Liz Taylor KC of Garden Court chambers. Thank you all very much for giving us the benefit of your wisdom.
Examination of Witness
Ben Leonard gave evidence.
The Chair
We will now have a series of quick evidence sessions of 15 minutes each with a series of learned witnesses, the first of whom is Ben Leonard, senior remote organiser and policy and research officer at ACORN, the union. Mr Leonard, will you introduce yourself?
Ben Leonard: My name is Ben Leonard. I work at ACORN, a community and tenants’ union. We represent thousands of private renters across the country.
Matthew Pennycook
Q
Ben Leonard: What my experience working with tenants and addressing their issues has taught me is that there is a massive imbalance of power between landlords and tenants, which leads to tenants being too afraid to speak up about repairs or harassment. The issue of no-fault evictions is central to that imbalance of power. If people know that a landlord can turf them out of their property and potentially make them homeless with just a couple of months’ notice, they will not speak up about things that need to be addressed, such as repairs. I am sure you are all familiar with the terrible condition of a lot of private housing in this country. In the case of harassment, including sexual harassment, we see tenants just grin and bear it because the stress of having to find a new property within two months is too much.
The Bill could be transformative for tenants. It could offer dignity and security to millions of renters who up until now have been denied that. But I am sorry to say that in its current form the Bill fails to address the fundamental problems that renters face. If a landlord can effectively pretend to need to sell or move into their property and turf out the tenants, we will still have no-fault evictions. If landlords can raise rents past what their tenants can afford, in practice we will still have no-fault evictions. If a landlord can send a tenant an eviction notice as little as four months into their tenancy, with just two months to find somewhere new, unfortunately the Bill will fail to give tenants the secure housing that they desperately need.
Jacob Young
Q
Ben Leonard: As long as the loopholes that I have mentioned are ironed out and the Bill is strengthened in that way, it will massively shift that balance of power and give renters the confidence that they need to come forward. We are a tenants’ union, so we use our strength in numbers to put pressure on a landlord to make repairs and things like that, but it should not have to be that way. A tenant should be able to complain about repairs and get them dealt with in a reasonable timeframe. Often they are just too afraid to complain. I am not saying that every single landlord is a demon, but, as things are at the moment, the system allows bad landlords to treat people horrendously, with very little recourse for tenants. If the changes that I have outlined are made in the Bill, it could be really transformative for tenants.
Jacob Young
Q
Ben Leonard: Absolutely. It needs to be robust, free of loopholes and properly enforced. There are two key ways to do that. The first is properly funding local authorities. It would be no use granting the powers to local authorities to enforce a decent homes standard—we all know the state of local authorities and their finances at the moment—if they do not have the resources or a duty to enforce. It just will not happen, with the best will in the world.
The other thing, which has been discussed already, is incentivising tenants to do it: creating an army of enforcers who are properly incentivised to report landlords who are not up to scratch. The property portal can play a big role here. More transparent information inherently gives renters more power to put pressure on and see when their landlord is lying to the authorities. If a landlord says, “We have met these standards” on the property portal, a tenant can look at it and go, “Well, that’s not true, and I can point to all the problems that exist,” and then there is an incentive for them to pursue it. I speak as someone who has pursued a rent repayment order in the past. I won 80% of my rent back, but it was a long, gruelling and difficult process, with no access to legal aid. The financial incentive was quite strong, but there were times when I felt like giving up. There are many ways to solve that problem, but making the process straightforward for tenants and properly incentivising and supporting them in it, alongside local authority enforcement, are important.
Lloyd Russell-Moyle
Q
Ben Leonard: Ideally, it should be publicly available information. You should not have to move into a property to discover that there are issues with it or that there are issues with the landlord; you should be able to check up a property on the portal before you move in. You should be able to see what it has been rented at in the past and compare that to the rent today. Has the landlord just done a massive rent increase, with no real improvement to the property? Do they have a history of improvement notices from the council? I would like to see that on there as well. In fact, any disciplinary action against the landlord should be available there. Nobody, whether they are a family, an elderly person or a student, should have to move into somewhere to find that they have a rogue landlord and a house that is falling to pieces.
Lloyd Russell-Moyle
Q
Ben Leonard: To prevent abuse in the first place, there should be a high bar of evidence so that landlords have to really prove they intend to move into or sell the property in order to evict their tenants, and significant penalties for abusing that as well. We are talking about significant disruption to people’s lives that can have serious, knock-on consequences as well.
I do not want to go on too much of a tangent, but the consequences for children’s entire lives of having to move school frequently are profound; there is a lot of research that shows reduced economic, education and health outcomes for frequent school movers. Landlords need really seriously to prove that they intend to do it, and there should be significant penalties if they abuse the possession grounds, including fines and, for repeat offenders, complete bans. There should also be a no re-let period of 12 months: if a landlord decides that they need to move a family member in, then they do not need to any more, they cannot let the property for 12 months. There needs to be a serious deterrent to abusing those grounds. What was the second part of the question?
Lloyd Russell-Moyle
Q
Ben Leonard: Definitely. That could take a lot of forms. It could be a simple payment, like a rent repayment, to help with that transition, or it could be that, from the moment the notice is issued, it is illegitimate to collect rent on that property and no further rent needs to be paid. That would go some way to, first, put off rogue landlords from abusing the power and, secondly, make the circumstances of the tenant’s life more liveable. Moving house is a massive hassle, especially if you have dependants, so if that is being foisted on you by an outside force, there is no reason why that outside force should not support you in some way.
Jacob Young
Q
Ben Leonard: I think it is fair to place a reasonable barrier to the abuse of those grounds. These things are always a balancing act. Would it be fair for someone to have to continue paying rent while having to uproot their life and sort things out? They are not really getting what they are paying for in those two months, because those two months are spent preparing to leave, moving their children’s schools or saving for a deposit. They need to pay for all those sorts of things.
For the landlord, it comes down to the cost of doing business. Landlords make a hell of a lot of money on those properties, and I think it is reasonable that sometimes there are times when the amount of money they are getting in will dip because of such things. If it is a choice between landlords’ profits coming down for a series of months and tenants potentially being impoverished, I would choose the former.
Ms Buck
Q
Ben Leonard: Yes, absolutely. The limit on deposits was a huge step forward, but they are going by the back door, so not much has changed, because people ask for rent in advance. I can speak from my own experience: I had to pay six months’ rent in advance before moving to my current flat. A lot of the people I know and work with do, and often they are borrowing money to do it, because not a lot of people have that kind of money lying around. In a way, it is often discrimination—it is a way of saying, “Well, you might be able to afford the rent, but we don’t like the look of you. Let’s see if you can stump up this much cash up front.” It is totally unjust, basically. If you are earning enough income to pay the rent, the property should be available to you. That is the bottom line; extra barriers should not be put in the way, such as rent up front.
Bidding wars are a big thing as well. Something should be done about landlords pitting tenants against each other to drive up rents. If a landlord wants more rent for a property than it is on the market for, they should have listed it as that in the first place, because again tenants end up chasing properties for months at a time, because everything they think they can afford suddenly goes up £300 or £400 a month by the time they can actually let something. It is an absolute nightmare. Imagine you have been evicted, then you are put in a situation of rent in advance and all that. It just doesn’t work. It is a broken system.
Jacob Young
Q
Ben Leonard: Are you talking about landlords exiting the market?
Jacob Young
Yes, if the Bill is too punitive.
Ben Leonard: The first point to make is that these reforms are reasonable, and if a landlord is not willing to deal with reasonable reforms, they have no business renting to someone in the first place—it shows that you are not of good enough character to supply someone’s home.
Secondly, the evidence does not show an exodus from the market. The reforms were announced four years ago, and there are more landlords now than there were then. From the evidence that I have seen, it seems that mainly smaller landlords are selling up to bigger landlords, which from the point of view of the tenant can be a step forward. Many tenants have a better experience dealing with corporate landlords than with one-man bands, who do not know the regulations, cut corners and will take advantage of vulnerable people. Generally, you do not get that with corporates. From the point of view of tenants, it is better to deal with larger, more professional organisations.
The other thing is that that provides an opportunity for first-time buyers to get in the property market. We would like to see a situation in which most people in private renting are either in council or social housing, or are homeowners. If landlords were selling up, first, first-time buyers could get on the property market—
The Chair
Order. I am sorry. I feel I have to interrupt you, it being three o’clock. As Big Ben strikes, you have to stop speaking. I apologise for that. Mr Leonard, thank you very much for your evidence, which has been useful to the Committee and will be useful in the discussions that lie ahead.
Examination of Witness
Chloe Field gave evidence.
The Chair
We will now hear from Chloe Field.
Chloe Field: Thank you for having me. I am Chloe Field. I am the vice-president for higher education at the National Union of Students, which represents students and students’ unions across the country on various issues facing students right now.
Matthew Pennycook
Q
Chloe Field: I do not think it takes sufficient account of the student rental market. People forget how unique and diverse students are and the student rental market is. As you just mentioned, students do not always do their courses in the typical September to June time. We have postgraduate researchers who study and work throughout the year. We also have mature students and students who have families and who will live in properties with non-students. There are things there that need to be taken into account regarding students in the Bill.
We also have the fact that the student rental market is very precarious. Renting in that market is rushed; you are expected to sign a contract about nine months before you move. That means that students end up having to pay really high prices because there is such a rush and people just accept the first house they find. It also means you cannot do sufficient research into the house you are about to sign the contract for. For example, is there mould? Is the quality of the house any good? Those are the unique factors of the student rental market.
In terms of the student exemption, our position has always been that it is incredibly dangerous. It sets a precedent that students will not be afforded the same rights as other renters and sets a further precedent for any future reforms and future exemptions for students. Like I said before, students are not a homogeneous group. They are not just 18 to 21-year-olds doing an undergraduate degree. They come in all types and different forms. It is one thing to make an exemption for purpose-built student accommodations, which is a type of accommodation, but it is another thing to create an exemption for a demographic of people who are studying. We are worried about that.
Also, the reasoning is that landlords are threatening to leave the market. As the previous witness said, landlords should not be renting in a market where they cannot accept that there are slight reforms and accountability for landlords. We consistently see exploitative landlords in the student market. I do not think we should be left threatened by those rogue landlords who cannot accept any form of regulation. Those are the main things on the student exception, but we accept that if there is that exception, it has to be carefully curated to fit the student rental market.
Lloyd Russell-Moyle
Q
Chloe Field: If I remember it correctly, it is good that the amendment specifically acknowledges term times and stuff like that, but it specifies a certain time in the year and, as I said before, not all students fit into term time. It does not sufficiently recognise that different types of students rent in different ways; they are not a homogeneous group of people. Some students live with non-students and families, and it does not fully recognise that.
An idea we have floated is if there is an exemption, it should potentially be done like a council tax exemption: HMOs with a certain percentage of students are exempt from council tax. We think that kind of specification will be really important. Without more specification about the exemption, for a lot of students, especially those living in family homes, there will be the threat of back-door evictions if they have started their studies.
Your idea about universities renting out accommodation is really good. It would provide a bit more accountability if the institution that provides the education and has a form of duty of care is responsible for the accommodation. I think that is really important, but if that is the case, we would have to take it further. Right now, prices for university-owned accommodation are going up. Universities are trying to bring in more and more students to make more money because their incomes are so precarious right now, and that is not sustainable. We would have to look at the higher education model as a whole if we were thinking of doing anything like that.
Lloyd Russell-Moyle
Q
Chloe Field: Yes, I do. I do not know exactly how that kind of speedy enforcement will be put in place, but I definitely think it is necessary. One of the issues we often see is that students feel like they do not know how to hold their landlords to account or complain about them. Especially if they are a first-time renter, they will not have the knowledge or experience to hold their landlord to account or make sure they are complying with the current laws. There is a lack of knowledge there, and the information and the routes are not very accessible. Alongside their studies, students work part-time jobs more and more so they do not have the time to take their landlords to court. There are a lot of those issues.
The short-term nature of a lot of student rentals means that landlords bank on the fact that students often do not complain and tend to suck it up because they know they will leave in May. I had the same issue: I had a lot of mould, and the landlord was not doing anything. I thought, “Well, I’ll go home to my parents’ for a bit to prevent myself from getting ill, and I’m leaving in May, so it’s fine,” but that meant that the landlord could just paint over the mould and sell it to the next person. Accessibility and speed is vital in those cases so that students have an easy route that they can go down quickly to complain about their landlords.
Lloyd Russell-Moyle
I have another question, but I do not want to hog all the questioning.
Lloyd Russell-Moyle
Q
Chloe Field: There are multiple things going on. I think it could be helpful if it were nearer the end of the academic year, so that people actually know if they are going to do another year of study, and they have more established friendships and stuff like that. I think that would be useful.
Also, because the current market has been neglected and unregulated for so long, I think that this panic instilled by landlords would still happen even if it were two months before. Landlords purposely drop their housing on the same day so that people feel that they have to rush and get it. With student intake numbers getting so high right now in cities and areas that cannot actually provide accommodation, there is this rush for similar properties that drives up prices. I think that could be helpful, but there also needs to be a lot more done to control the market so that landlords are not allowed to run truant, dump their properties and increase their prices. Universities also have a responsibility to look at what housing is available for students before they increase their student intake.
Lloyd Russell-Moyle
Q
Chloe Field: Yes.
Lloyd Russell-Moyle
Q
Chloe Field: Yes, 100%, and that is something else that we believe: just being able to have that freedom to not feel like you are chucked out of a house, then you are meant to find a job, and then a house—or you move back to your family house, which can be quite isolating for a lot of students. It is even just that freedom to stay a couple of months. It also means that students who like the community and the area that they are living in are allowed to invest more into that community because they know that are they are not just going to leave once they graduate. They can remain there, find a job and work there, and also invest in that community. We consistently see the town/gown issue, where residents do not like students being in the area and students do not like residents and fall out with them—not always, but there is a lot of contention there. I think this would really help to meld the community together.
On a separate point about building community, if students are exempt from aspects of the Bill, then a lot of rogue landlords will go into the student market because they will take advantage of the lesser regulation, which means that more houses in multiple occupation are going to be built in residential areas, again furthering those divides between residents and students and moving residents out of their local areas. It can create that distinct divide instead of creating a harmonious community where both students and residents live together.
Lloyd Russell-Moyle
Q
Chloe Field: First, it allows people who do not get along with each other to leave; again, with the rushed market, a lot of people are forced to live with people they might have only known for a couple of months. Also, if they have signed their contracts, moved in and then three months later there is black mould everywhere, it allows people to leave, which puts the balance of power back into the tenants’ hands. That means that tenants can leave and also puts pressure on landlords to actually have their home up to scratch, because they know that the tenant could leave at any point. I think that would be a really important thing for students. Also, if you want to drop out of uni because your mental health is bad and you are not enjoying it, you have the freedom to leave. You are not stuck in a contract and paying tuition fees and rent in a place where you do not really want to be.
The Chair
Thank you very much for your evidence. That was Chloe Field, the vice-president for higher education for the National Union of Students. Very useful indeed, thank you.
Examination of Witnesses
Samantha Stewart, Linda Cobb and Roz Spencer gave evidence.
The Chair
May I ask you to introduce yourselves for the record?
Samantha Stewart: Good afternoon, Committee. Thank you for inviting us to speak with you this afternoon. My name is Sam Stewart, and I am the interim chief executive officer of the Nationwide Foundation. Some of you know us, but for those who do not, we are an independent national charity that since 2013 has been supporting, testing and evidencing solutions to the UK’s housing crisis, particularly from the perspective of those most in need. Part of our work funds projects that aim to transform the private rented sector, including the Renters’ Reform Coalition, which you have heard a lot from this week, and the longitudinal RentBetter study, which is looking at the impact of Scotland’s tenancy reform. From our perspective, the evidence from Scotland is particularly helpful in understanding how the Renters (Reform) Bill can be strengthened to better protect those who are most vulnerable, which is our focus today.
The Chair
Before we go on, are you linked to the Nationwide Building Society?
Samantha Stewart: We are very independent, but totally funded by it.
The Chair
The reason I ask that is: are you personally based in Swindon or Wiltshire?
Samantha Stewart: Swindon.
The Chair
Swindon—fine. In that case, you are not a constituent of mine. Had you been, I would have been extra nice to you.
Linda Cobb: Hello, I am Linda Cobb, the manager of DASH Services. DASH stands for Decent and Safe Homes. We are a local authority-led service aimed at improving standards in the private rented sector, and we work with landlords and local authorities across England.
Roz Spencer: Hello, I am Roz Spencer. I run the third sector organisation called Safer Renting, which has been operating in the last eight years, providing advocacy support to private renters in what we call the shadow housing market. We see a lot of the worst-offending behaviour, and are somewhat jaded as a result.
Matthew Pennycook
Q
Linda Cobb: In its current format, a property is classed as being decent if it is free from category 1 hazards as defined in HHSRS. The decent homes standard is linked to HHSRS, and many landlords and tenants do not really understand HHSRS. It is complex.
The Chair
Sorry, but what is HHSRS?
Linda Cobb: The housing health and safety rating system. It is a tool that local authorities use, and a fundamental part of the decent homes standard.
Based on that, HHSRS was reviewed recently. It has gone through a two-year robust review, looking at how it is enforced, what will be included in it and how it will be altered. One of the workstreams in the review looked at the guidance for landlords and tenants. That review is now complete but has not come into force yet. As the decent homes standard relies on HHSRS and we need users to engage with it, it is really important that the reviewed HHSRS comes into force as soon as possible, so that enforcement teams and training providers such as DASH can embed it and get used to it, and so that landlords can get used to the tool as well. The decent homes standard is another layer of enforcement, which really goes to the point that local authority enforcement teams are lacking appropriately skilled and resourced multidisciplinary teams. There is lots of information there.
Finally, when we are looking at decent homes standards, we need to learn from the electrical safety regulations and the smoke and carbon monoxide regulations. When they came into force, they created huge spikes in demand: you could not get an electrical insulation condition report because there were not enough electricians around. You could not get hold of carbon monoxide detectors, which needed to be in every rental property, because there was not the supply of them. We need to learn lessons when looking at decent homes standards as well.
Roz Spencer: Could I just add, from the point of view of how things work out in the shadow private rented sector, that the proposal in the Bill that enforcement teams have the right to go and inspect properties proactively, without having to rely on complaints, is important and welcome? Particularly in the shadow sector, tenants are quite unlikely to report and complain because of their fear of consequences, so even if it does not happen, the fact that it can be concluded that an enforcement team is acting on intelligence proactively and the tenant has not necessarily complained is a helpful protection for renters.
Samantha Stewart: On the enforcement of standards, it is really important to add that one of the main findings from the Scotland research was that even if the law changes, it has limited effect without proper enforcement. Despite the changes, that research told us that tenants living in poor conditions still struggle to access local authority enforcement, leaving them without any other form of redress.
Matthew Pennycook
Q
Linda Cobb: It is, yes. Enforcement teams across the country are producing some fantastic, life-changing results for tenants; however, they are doing so in a very firefighting, reactive way. This Bill and the decent homes standard do not change that—they do not magically change the fact that those teams do not have the staff or the training ability. Going back to what Sam said, DLUHC commissioned a report in 2022 that explored local authority enforcement and concluded that capacity and skills shortages in enforcement teams can undermine any potential gains from legislation and new powers.
Matthew Pennycook
Q
Samantha Stewart: We strongly welcome the provisions in the Bill, particularly on the property portal. We believe that it will create an essential tool for the PRS to drive up standards and improve landlord compliance, supporting enforcement teams and also supporting landlords to understand their rights and responsibilities. This is something that the foundation has been calling for, for some time. As some of you will know, we funded a report called “The Evolving Private Rented Sector”, by Julie Rugg and David Rhodes, which was published in 2018 and called for a national landlord register.
As an important addition, that research also recommended ways in which the portal can work. One of those recommendations, which we support very strongly and which you heard about earlier today from Jacky Peacock, was for an independent property assessment. That assessment could confirm compliance with safety and other relevant checks on the property, and would also be required to be submitted to the property portal before the property can be let out. One of our beliefs is that the property assessment, alongside the portal, will help to shift the burden of compliance somewhat from overstretched local authorities to landlords and the property portal itself.
Roz Spencer: This may be a statement of the obvious, but Safer Renting recently pulled together the best estimate it could from published data about the incidence of offences under the Protection from Eviction Act 1977. Why did we do that? Because nobody else does it and there is no reliable centrally held Government data. This goes into a massively controversial space. People are always arguing on both sides of the fence: “Is this a big problem? Is this not a big problem?”
The absence of data fundamentally undermines the process of good policymaking and being able to identify, for example, the unintended consequences or omissions in legislation. It also undermines enforcement, which I think my colleagues will speak to more eloquently. Having big data is so important. Otherwise, how can you legislate, and how can you know the impact of your measures? When the public finances are so stretched—as we have heard from Linda, there is a problem with skill shortages and capacity in enforcement teams—you really need to have slick systems. That is what a well-designed portal needs to offer: a slick system that will support something that is really stretched for resources and needs systemic support desperately.
Samantha Stewart: Do you want me to take the question about the ombudsman?
Jacob Young
Q
Roz, do you think the portal addresses the problems that you see in the shadow rented sector, in so far as it brings it into the light by making people aware of where those landlords are, highlighting their bad practices?
Samantha, I am very interested in the assessments that the foundation has done in Scotland. What big lessons have been learned from them which could inform how we shape this Bill?
Roz Spencer: I think the devil is in the detail. You need a well-designed portal, and there are many seasoned professionals in the licensing and enforcement field who can tell you exactly what needs to be in that portal. Provided that it is well designed, I think it would be enormously helpful—both to hard-stretched enforcement teams and to people like me in the third sector, who are trying to advocate for tenants in the shadow sector who do not understand their rights—in empowering people to access that information to support themselves.
Samantha Stewart: Are you wanting to understand the more general lessons that we have learned from Scotland around the PRS reform?
Jacob Young
Q
Samantha Stewart: There is lots of evidence. The research commenced in 2019; it is a five-year piece of research. From the perspective of this Bill, it gives us key evidence on how English reform might and will impact vulnerable tenants. That is important, because we know that vulnerable tenants are the most at risk of being harmed by a poorly functioning PRS: they do not have the same consumer power, confidence or voice as their better-off peers. We know that vulnerable tenants have not benefited in the same way as their better-off peers from the reforms in Scotland.
There are two main things we know are happening. The first is about enforcement, as I have already said. Even if the law changes, it has limited effect without proper enforcement. Tenants living in poor housing still struggle to access local authority enforcement, leaving them with no resource at all to address their problems. The second relates to the new mandatory grounds. When the Scotland equivalent of section 21 evictions was removed, some landlords found that they could continue to carry out revenge evictions by abusing the new grounds on sales and on landlords moving in.
I will give you an example. Take Luke, a renter who lived in a property with rats and maggots falling out of his ceiling. The landlord refused to address these issues for months after Luke asked, but was forced to do so by the Scottish tribunal—great. However, shortly afterwards Luke was evicted from his home by his landlords, using the new possession grounds, and soon after he moved out, the property was re-let—not so great. That is just one example of how an unscrupulous landlord can abuse the new grounds if there are not sufficient safeguards.
We know that it is vulnerable tenants who will suffer most, for reasons that I have already mentioned. Based on that evidence, in order for the Bill to benefit vulnerable tenants, it needs amending to provide additional protections for them. First, landlords using grounds 1 and 1A—moving in and selling—should be required to provide adequate and appropriate evidence that they are selling or moving back in. Secondly, landlords who evict tenants using the new grounds should be prohibited from re-letting for a year, not three months. Three months is just not good enough—it is not a meaningful deterrent to landlords—but we believe a year would be. Thirdly, the Bill should be amended to provide a clear legal mechanism for tenants to seek redress, such as through a rent repayment order. Those are the three areas that we feel would really strengthen those mandatory positions.
I will finish by saying again that we really, truly believe that good landlords doing the right thing, who are the majority, would not be affected by changes along these lines, because they truly believe that they are providing homes.
Jacob Young
Q
Samantha Stewart: That is a really good question.
Jacob Young
Also, forgive me—I cannot remember which panellist mentioned Jacky Peacock earlier on, but she talked about this idea of an MOT in order to access the portal. Each of the panellists has mentioned that local authorities have struggled for resource. How would an MOT help? Who would verify such an MOT? I suppose, if we were to go down that route, it would mean local authorities facing even more burdens.
Samantha Stewart: In answer to your first question, there will probably be some. I will definitely make sure that we cover that in our written evidence, because I am sure there will be something we can contribute that we are pleased not to see. Forgive me—I do not know that answer right at this moment in time.
On the MOT, we all know that it is not an easy thing to do, but there is certainly a lot of detail in the Rugg and Rhodes report about how we could go about that. Again, I would be really happy to put that in our written evidence.
Linda Cobb: I manage a large landlord accreditation scheme across lots of different local authority borders, and obviously landlords then register on to a portal, so I am aware of the complexities of managing such an unwieldy beast, so to speak. As part of our landlord accreditation scheme, we have a property check—similar to what Jacky was saying with the property MOT. We do a sample compliance check. DASH and Unipol looked at about 2,000 properties that we had inspected; we assessed those inspections, and we had actually helped our landlords to remove or reduce almost 1,500 hazards that simply would not have been removed or reduced by simply registering on a portal and just self-declaring. Those were good landlords; they were landlords who were willing to make the change, and they made it quickly. But there is an argument that with just self-declaring, we have to be careful about the digital policing of a portal and giving false assurances. We can learn from landlord accreditation schemes and from schemes that are already going on. We really need to do that with the portal as well.
Samantha Stewart: It’s true. It is about taking the best in class as well, isn’t it?
Linda Cobb: Yes. We also have to be careful about avoiding duplication. From my landlord accreditation scheme, I know that landlords do get a little bit confused—they have licensing, accreditation, deposit registration and so on. If we are going to add an ombudsman, we will have to be very careful about avoiding duplication.
Helen Morgan
Q
Linda Cobb: I will take the landlord bit. I think that to call smaller landlords unprofessional is not quite right. The majority of landlords in our landlord accreditation scheme have between one and four properties; most have just one. We see very professional behaviour.
Helen Morgan
To clarify, I do not mean that they are deliberately unprofessional. I just mean that they may not be on top of all the legislative changes.
Linda Cobb: Yes. I think we need to change the way we communicate with landlords. We need to get information out there, because what we found through trying to drive up numbers in our accreditation scheme was that a landlord could be anywhere. Marketing was very difficult. Where do you go to advertise this information? It has to be very mainstream. Look at gas safety certificates: the campaign when they came in was very effective because it was a mass campaign. Safe Suffolk Renters is doing something very similar and we can learn from its work. Going back to what Sam was saying, we should learn from what has been good in the market at getting messages out there.
Roz Spencer: From a renter’s perspective, there is the obvious problem of renters’ knowledge about their rights. I think there are three reasons why renters’ understanding of their rights is poor: landlord and tenant law is so complicated; tenant rights are so slim; and the expectation of enforcement is at a low ebb. Renters have challenging lives and other things to think about. Their bandwidth to pay attention to something complicated, thin and unlikely to deliver for them is quite limited. If you get things right around renters reform, raising renters’ awareness of their rights will be much easier.
Linda Cobb: I am a big fan of going back into schools and doing work at that very early level. The majority will go into rented accommodation at some point, and we need to get into schools to show young people what a good tenancy is like and what their rights are from a very young age.
Samantha Stewart: That is a really good point. Let’s face it: renters are going to be renting for a long time, so getting them to understand things early, right from the start, is a fabulous opportunity.
Linda Cobb: Yes. They should understand what their responsibilities and rights are.
Nickie Aiken (Cities of London and Westminster) (Con)
Q
Samantha Stewart: I think we just have covered some of the ways that we can do that. We just have to repeat the message consistently: there are fabulous organisations out there that advocate for and help tenants, and there are fabulous local authorities that can do the same. I can speak more from a vulnerable tenant perspective, because that is our focus. Even if they know where to go, they do not go, because they do not feel they have the power and they fear eviction if they tell anyone.
Nickie Aiken
Q
Samantha Stewart: Not without a significant increase in safeguards around the new grounds for possession.
Linda Cobb: In the 2021 Chartered Institute of Environmental Health report, 56% of local authorities reported vacancies in their teams, so that phone call is going to go unanswered, and that email is going to go right to the bottom of the pile, even if they did complain. Then people will say, “My auntie complained to the council and nobody got back to her”—that sort of mentality—and they will not feel that they will be listened to. The report also said that 87% were relying on agency staff to fill that gap, and they are obviously expensive, so you can have only one of them as opposed to two full-time equivalents.
We are looking to stem that bleed with local authorities, and we are looking at ways to increase the training in the industry. We are losing very good local authority environmental health officers, because they are either retiring or leaving the sector because they are tired of it. We want more of the one-year private rented sector enforcement training courses, so we are working with our local university and training providers to get those up and running. We also want an apprenticeship-levied housing practitioner training course, which would help with these multidisciplinary teams. The team could then deal with all aspects—as well as physically going out, it could offer information about what the tenant can do themselves.
Samantha Stewart: I will just finish by saying that we also fund seven organisations across the UK that are working with tenants, particularly in the more vulnerable part of the sector, to help them strengthen and increase their voice. One of the reasons we are doing that—helping them to enact and effect these changes themselves, speak up for themselves and know their rights—across the UK with very different types of organisation is so that we can learn what works best and then use that evidence to inform policy.
Ms Buck
Q
Roz Spencer: Thank you for asking. You heard it here first: the safer renting count, which was first established in 19—sorry, 2021; I am showing my age—established a methodology that looked at five different sources of data that could be collected on an established, reliable basis, and did not involve any significant overlap between the data points, and we have just updated those figures from 2021 to 2022. The trend between those two years is an 18% increase in reported offending under the Protection from Eviction Act 1977—so, those are illegal evictions and cases of extreme harassment likely to give rise to the loss of a home. That 18% uptick is of significant concern. I have no evidence to suggest that the performance in courts has had any bearing on that, and I would be surprised if it had.
There is another figure that is interesting—I think it is buried in the Government’s H-CLIC data. All local authorities report on trends in Protection from Eviction Act offences leading to homelessness. That is a very big, stable and reliable time series for the data. Interestingly, during the pandemic, when there was a ban on section 21 and a subsequent inability to use bailiffs to enforce lawful evictions, there was a substantial drop in lawful evictions between 2020 and 2021. There was no such drop in the number of unlawful evictions. In fact, those numbers held up, sadly, at more or less the same level. As a proportion of evictions leading to homelessness, the figure came close to doubling.
The interesting suggestion buried in that statistic is that it is so important, when you are quite rightly considering replacing section 21 with new grounds for possession, that you avoid the unintended consequences of those changes in access to lawful eviction increasing the number of landlords who feel that they can get away with just doing it anyway.
I have another statistic to offer you. If you look at our count of what we think is a very conservative estimate of the number of unlawful evictions and the Ministry of Justice statistics for the number of convictions in a year, the figures show that in more than 99 out of 100 offences, the person who commits the offence, the landlord who undertakes the unlawful eviction, walks away scot-free, so it is little surprise that people do not regard the enforcement of the law as adequate.
Your clause 58 in the Bill is so important because it corrects one of the major defects in what is a 46-year-old piece of legislation, the Protection from Eviction Act, which does not do what it says on the tin. It has not been preventing evictions because nobody has a duty to enforce it. That is a very long answer to your question, but there is a lot of support for what I am saying in those data.
Jacob Young
Q
Roz Spencer: Our count report is in the House of Commons Library. It argues strongly that the Government need to start counting the data. I would not have thought it would be problematic for the Government to introduce their own mechanism for counting, and we talk about the methodology at some length in the report. I would advocate that you start showing, as Government, not only that the law and enforcement matter, but that you understand that the impact assessment needs to be based on data that you simply do not have at the moment.
Samantha Stewart: I am not saying that we are going to fund this, but we should all think about something similar to what we are doing with funding in Scotland. If you want to really understand how impactful the legislation is, we should start tracking it pretty soon, using the data and everything else at our fingertips.
The Chair
As there are no further questions from colleagues, I thank our three witnesses for their evidence: Samantha Stewart, chief executive of Nationwide; Linda Cobb, services manager for DASH; and Roz Spencer, director of Safer Renting.
Examination of Witness
James Munro gave evidence.
The Chair
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.
Matthew Pennycook
Q
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.
Jacob Young
Q
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.
Lloyd Russell-Moyle
Q
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.
Lloyd Russell-Moyle
Q
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.
Lloyd Russell-Moyle
Q
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.
Lloyd Russell-Moyle
Q
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.
Lloyd Russell-Moyle
Q
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.
Helen Morgan
Q
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.
The Chair
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.)
Renters (Reform) Bill (Fifth sitting)
Tuesday 21st November 2023
(12 months ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 November 2023 - (21 Nov 2023)
The Chair
I welcome the Committee to its consideration of the Renters (Reform) Bill. It might be helpful if I lay out a few thoughts before we start line-by-line consideration. Most of you will be old hands, so forgive me if I am teaching grannies to suck eggs, but I might as well try for clarity.
First, will you make sure that you let any speaking notes you have go to Hansard, which makes it easier for the Hansard reporter accurately to report what you have said? Secondly, all the rules and conventions that apply in the Chamber apply here, in particular with regard to drinking coffee, leaving your coats lying around and things like that, on which I am rather old-fashioned. Forgive me if you do not agree, but the rules and conventions that we use in the Chamber, including on speaking, will be used here in Committee.
The purpose of the Committee you all know well. The Government have laid down the outline of the Bill as it was debated on Second Reading—it was read a Second time without Division—and the duty of the Committee is now to examine the words of the Bill to ensure that the resulting law is as good as it possibly can be, leaving aside the principle that may lie behind it. Any member of the Committee, including members on the Government side and in particular those in His Majesty’s loyal Opposition, may table as many amendments as they like on as many clauses as they like, bearing in mind that amendments for consideration on a Thursday must be tabled by the Tuesday and that amendments for consideration on a Tuesday must be tabled by the rise of the House on the previous Thursday. If they are tabled later, they will not normally be considered unless there is a particular reason why they should be.
The end result is the amendment paper that you have before you. You will also see the selection list with the grouping of amendments; it is in my name, but is actually done by my learned friend the Clerk. It groups together topics of similar interest, right through the Bill: we might find that an amendment to clause 1 is grouped with an amendment to schedule 23, say, because that makes it easier to debate. We debate the principle behind the changes; the changes are then voted on when we get to that point in the Bill, rather than at the time we debate them. People often find that confusing, but it works more easily that way.
Unless there are any questions on that little “Boy’s Own” introduction, we now come to line-by-line consideration of the Bill.
Clause 1
Assured tenancies to be periodic with rent period not exceeding a month
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government new clause 2—Repayment of rent paid in advance.
Government new clause 6—Liability of tenants under assured tenancies for council tax.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
May I join you, Mr Gray, in thanking members of the Committee for their engagement with the Bill so far?
My view is that the Bill delivers a better deal for renters and for landlords. As hon. Members are aware, however, we must tread lightly. This is a fine balancing act. Go too far one way, and good landlords will find it harder to operate and exit the market; go too far the other way, and the Bill will not give renters the protections we all seek against bad actors in the private rented sector. As we delve into the Bill, I ask all hon. Members to consider the impact of proposed amendments on that delicate balance.
Everyone has the right to a secure and decent home, whether they own it or are among the 11 million people living in the private rented sector; that is the guiding principle of the entire Bill. Clause 1 will remove fixed terms. It provides that tenancies will be periodic in future: under the clause, the tenancy will roll from period to period. Any term in a contract that includes a fixed term will not be enforceable.
The clause also has limits on how long a rental period can be. That is to prevent unscrupulous landlords from emulating fixed terms by introducing longer periods to contracts. Fixed terms lock tenants into contracts, meaning that they may not be able to end their tenancy before the end of the term and move to another property when they need to, for example to take a new job or when a landlord fails to maintain basic standards or repair a property. The changes will also give landlords more flexibility: they may end the tenancy when they need to, under specified grounds that are covered in later clauses, rather than waiting for the end of the fixed term.
Government new clause 2 will require landlords to refund rent in advance where the tenancy has ended earlier than the duration already paid for. That applies regardless of how the tenancy came to an end. It will ensure that rogue landlords do not try to lock tenants in with large up-front payments.
Government new clause 6 will deliver a technical change to council tax rules in the light of the abolition of fixed-term assured tenancies. It will ensure that tenants who hold assured tenancies are liable for council tax until the end of their tenancy agreement. In particular, tenants will remain liable for council tax when they have served notice to end their tenancy but leave the property before the notice period has ended. That will ensure that liability for council tax does not pass back to the landlord until the tenancy has formally ended. I commend the clause to the Committee.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a real pleasure to begin our line-by-line consideration with you in the Chair, Mr Gray. It is a genuine privilege to serve on a Committee with such evident expertise in the subject matter. It is my sincere hope that we can draw constructively on it all in the days ahead to improve this long-overdue but welcome piece of legislation.
As the Opposition argued on Second Reading, the case for fundamentally reforming the private rented sector—including by making all assured tenancies periodic in future, as clause 1 seeks to do—is watertight. As the Minister implied, regardless of whether someone is a homeowner, a leaseholder or a tenant, everyone has a basic right to a decent, safe, secure and affordable home. However, millions of people presently renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal justification, if any. The lack of certainty and security inherent in renting privately today results not only in an ever-present anxiety about the prospect of losing one’s home and often one’s community, but—for those at the lower end of the private rented market, who have little or no purchasing power and who all the evidence suggests are increasingly concentrated geographically—in a willingness to put up with often appalling conditions for fear that a complaint will lead to an instant retaliatory eviction.
This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old. The Minister may have been even younger.
Matthew Pennycook
Well, that just makes my point that the sector should have been overhauled a long time ago. The fact that it has changed beyond recognition over recent decades and now houses not just the young and the mobile, but many older people and families with children, for whom having greater security and certainty is essential to a flourishing life, renders urgent the need to transform how it is regulated and to level decisively the playing field between landlords and tenants.
This Bill is a good starting point to that end. We are glad that after a very long wait, it is finally progressing. However, we are determined to see it strengthened in a number of areas so that it truly delivers for tenants. In this Committee and the remaining stages, we will seek to work constructively with the Government to see this legislation enacted, but we also expect Ministers to give serious and thoughtful consideration to the arguments we intend to make about how its defects and deficiencies might be addressed.
Part 1 of the Bill seeks to amend the assured tenancy regime introduced by the Housing Act 1988. In the nearly 35 years since that Act came into force in January 1989, with some limited exceptions, all new private sector tenancies in England and Wales have been either assured or assured shorthold tenancies, with the latter becoming the default PRS tenancy following the implementation of the Housing Act 1996. As the Committee will know, assured tenancies can be either periodic or fixed, but the vast majority of ASTs are fixed.
Clause 1 will insert a new section 4A before section 5 of the 1988 Act, thereby providing, as the Minister made clear, that all future assured tenancies will be periodic and open-ended, and that they can no longer have fixed terms. That change will empower tenants by giving them more flexibility to end tenancies where and when they want or need to, including when landlords are not meeting their responsibilities and obligations or in instances in which the property that they have moved into is not as advertised. We support it.
We take no issue with Government new clause 2. Although we are not convinced that it is strictly necessary, given how the Apportionment Act 1870 applies to rent paid in advance, we believe that it is a worthwhile amendment none the less, to the extent that it makes express provision for that.
We believe that Government new clause 6 is a necessary change to how council tax works, given that the Bill abolishes fixed-term tenancies. However, in the sense that its effect will be to render a tenancy that
“is or was previously an assured tenancy within the meaning of the Housing Act 1988”
a “material interest” for the purposes of this Bill, we would be grateful if the Minister provided some clarification. Could he tell us the effect of the proposed change in circumstances in which a tenant used to have an assured tenancy but, after this part of the Bill comes into force, now does not because of circumstances that are out of their control? Let us say, to take an extreme example, that a tenant died prior to the end of their assured tenancy, and the relevant provisions came into force. Would their estate be forced to pay the council tax liability as a consequence of the new clause?
We understand the Government’s intention with regard to the new clause, which is to manage the transition between the two tenancy regimes when it comes to council tax. However, we are a little concerned that, as drafted, the new clause may be unnecessarily broad and may create some problematic outcomes. The explanatory statement accompanying the new clause suggests that it may have another purpose altogether—namely, to make people liable if they leave a tenancy without giving notice—but that raises the obvious question of how the Valuation Office Agency and the relevant local authority are meant to know that, and how the local authority might ever hope to find the tenant who is liable. Could the Minister tell us whether the Government have discussed the matter at all with either the Valuation Office Agency or the Local Government Association?
Lastly in connection with this new clause, is there not a risk that unscrupulous landlords may game this provision by claiming that there is still a tenant in situ who should settle the council tax liability, rather than the landlord doing so? Our concern is that the provision could be abused along those lines and that local authority revenue would suffer as a result. I would appreciate some reassurance and clarification on those points in the Minister’s response.
With or without the incorporation of Government new clause 2 and new clause 6—after clause 6 and before clause 20 respectively—huge uncertainty now surrounds the implementation of clause 1, and the rest of chapter 1 of part 1, as a result of the Government’s recent decision to tie implementation of the new system directly to court improvements. Whatever the motivation behind that—renters will no doubt have reached their own conclusions—the decision has significant implications for when clause 1 and the other clauses in this chapter become operational. We need answers today, so that those whose lives stand to be affected are clear as to what they are.
Clause 67, “Commencement and application”, gives the Secretary of State the power by regulations to appoint a day when chapter 1 of part 1, including clause 1, comes into force. In other words, the Bill has always given Ministers discretion as to precisely when the new system becomes operational—a matter that we will debate more extensively in a future sitting when we come to clause 67 itself and our amendment 169 to it.
The Government were previously clear that there would be a two-stage transition to the new tenancy system, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, and that a package of wide-ranging court reforms was to accompany the legislation, but at no point prior to the response issued on 20 October this year to the Select Committee on Levelling Up, Housing and Communities did the Government indicate that the new system’s implementation was directly dependent on such reforms. As things stand, because of the Government’s last-minute change of approach, not only do tenants have no idea when the new tenancy system will come into force, but they do not even know what constitutes the requisite progress in respect of court reform that Ministers now deem is necessary before it does.
There are three distinct questions to which the Government have so far failed to provide adequate answers. First, is the county court system for resolving most disputes between landlords and tenants performing so badly that reform is a necessary precondition of bringing this clause and others in this chapter into force?
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
We heard from many representations on the county court part of the process that the county court system was performing adequately. Does that not make one suspicious that there are other motivations for kicking this into the long grass?
Matthew Pennycook
I will come on to our view of precisely how the county court system is operating, but I think it would be fair to say that we do not necessarily buy the Government’s argument that it is performing so badly that we need to tie implementation of this clause and others in this chapter to it. It could certainly do with improvement, but if it needs improvement, we need to know what that improvement is. That is an argument that I will come on to make in due course.
The second of my three questions to the Government relates to the point that my hon. Friend has just raised: if the court system requires improvement to ensure that landlords can quickly regain possession of their property if a tenant refuses to move out, what is the precise nature of the improvements that are required? Thirdly, how can we measure progress on delivering those improvements so that tenants have certainty about when the new system might come into force?
I will start with my first question. With apologies, Mr Gray, I intend to spend some considerable time on this point, because it is central to when the clause and the rest of the chapter come into force.
If one examines the evidence, it is clear that the possession claims system is one of the faster and better-administered parts of the civil justice system. As housing expert Giles Peaker put it when giving evidence to the Committee on Thursday, it is “well honed”. As Simon Mullings, co-chair of the Housing Law Practitioners Association, stated in the same session:
“What we have at the moment is an extremely good network of county courts, with a very evolved set of civil procedure rules that deal with possession claims very well.” ––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]
The data seems to bear that out. It makes it clear that the various stages of possession and litigation are back to where they were pre-pandemic, and that non-accelerated possessions are not taking significantly longer than the relevant guidelines stipulate. As Giles Peaker argued,
“the current time from issue to a possession order under the accelerated possession proceedings—an ‘on the papers’ process, without a hearing—is roughly the same as under the section 8 process with an initial hearing. There is no great time lag for the section 8 process as opposed to accelerated possession proceedings.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]
One of the more robust defences of the adequacies of the present system that I have heard came from the sixth of the seven housing and planning Ministers that I have shadowed in my two years in this role. On Second Reading, the hon. Member for Redditch (Rachel Maclean) argued:
“It is important to note at this point that the vast majority of possession claims do not end up in the courts—only something like 1% of claims go through the courts... The courts have already made huge improvements. It is worth saying that over 95% of hearings are listed within four to eight weeks of receipt, and of course the ombudsman will encourage the early dispute resolution process, taking a lot of claims out of the courts and freeing up court time for more complex processes.”—[Official Report, 23 October 2023; Vol. 738, c. 695.]
We also heard expert testimony last week that called into question the suggested impact of the Bill on the courts. For example, it was disputed whether the reforms in the Bill would increase the number of contested cases. Giles Peaker persuasively argued that there was likely to be an increase in the number of initial hearings, but that we are unlikely to see an increase in the number of contested hearings.
To the extent that concern was raised about capacity within the system, several witnesses argued that it still did not justify postponing the enactment of chapter 1 of part 1. Indeed, the head of justice at the Law Society, Richard Miller, argued in relation to plans for digitisation that it would be sensible to see the new tenancy system put in place first so that we can properly understand what a new digital system needs to achieve in respect of the Bill.
Every part of the civil justice system would benefit from improvement, but we would argue that, to date, the Government have failed to demonstrate that the county court system for resolving landlord and tenant disputes is failing to the degree that it is imperative to further delay the long-overdue reforms to tenancies in the Bill. I would be grateful if the Minister set out very clearly why the Government believe the possession of claims system is so woefully inadequate that the enactment of clause 1 and the other clauses in chapter 1 must be postponed.
I turn to the second of my questions. If we accept that the county court system as it relates to housing cases could be improved—probably no one here would dispute that, even if we might debate the extent of the improvement required—how are the Government defining improvement? To put it another way, what is the precise nature of the improvements that Ministers believe are required before we finally abolish section 21 of the 1988 Act and reform the tenancy system, as clause 1 and other clauses in chapter 1 will do?
Let us examine and interrogate what the Government have said about this. Their 20 October response to the Select Committee stated:
“We will align the abolition of section 21 and new possession grounds with court improvements, including end-to-end digitisation of the process.”
Will the Minister tell us precisely what is meant by end-to-end digitisation of the process? Precisely what process did that statement refer to? Was it a reference to just the court possession action process, or to civil and family court and tribunal processes more generally? Further detail was seemingly provided in the briefing notes that accompanied the King’s Speech on 7 November:
“We will align the abolition of section 21 with reform of the courts. We are starting work on this now, with an initial commitment of £1.2 million to begin designing a new digital system for possessions. As work progresses, we will engage landlords and tenants to ensure the new system supports an efficient and straightforward possession system for all parties.”
Lloyd Russell-Moyle
Did we not hear in evidence that the key for this to work was the property portal? Delaying the implementation of these measures until after court reform would therefore seem to be the wrong way around. Surely the property portal and ombudsman need to be up and running, and then we can see what pressure is on the courts, and we can also integrate the property portal into the digitalisation of the process.
Matthew Pennycook
I thank my hon. Friend for that intervention. It is a point well made, and I think the same point was made by Richard Miller of the Law Society. If this Bill works as intended, there are a number of provisions in it that should relieve the burden on the courts. We all want to see that happen. However, to the extent that the courts do need to act in possession cases, we need to know precisely what the Government mean by the “improvements” that they have been referring to over recent months.
That King’s Speech briefing note would suggest that the required improvements relate only to the court possession action process. However, it is not clear whether the proposed new digital system for possessions is the only improvement that Ministers believe needs to be delivered before the new tenancy system can be introduced, and if so—this is crucial—by what date that new system will be operational.
Can the Minister tell us more about the new digital system for possessions that the King’s Speech briefing note referred to? Specifically, can he tell us whether its introduction is the sole determinant of when the new tenancy system can come into force? Can he also outline when the Government expect work on that new digital system to be completed by the Government and rolled out for use by landlords, given that it appears—on the basis of the King’s Speech briefing note—to have only just commenced?
The White Paper “A fairer private rented sector”, which the Government published in June 2022, set out the Government’s intention, working in partnership with the Ministry of Justice and HM Courts and Tribunals Service, to
“introduce a package of wide-ranging court reforms”.
Those went beyond purely the court possession action process that I have just been speaking to. It was suggested in the White Paper that the package would include steps to address county court bailiff capacity, a lack of adequate advice about court and tribunal processes, a lack of prioritisation of cases and the strengthening and embedding of mediation services for landlords and renters—issues that many of our witnesses in last week’s evidence sessions referred to.
Many of those issues were also identified in the Government’s response to the Select Committee as “target areas for improvement”. What is not clear is whether the implementation of the new tenancy system, and this clause, is dependent on Ministers judging that sufficient progress has been made in relation to each of those target areas for improvement, or whether it is dependent, as I have suggested, solely on improvements in the court possession process.
Can the Minister tell us clearly which one it is? Will the new tenancy system be introduced only when improvements have been made in all the target areas specified, or is the implementation date linked solely to improvements in the court possession process? If it is the former, what are the criteria by which the Government will determine when sufficient improvements have been made in each of the listed target areas for improvement? Those of us on the Opposition side of the Committee, and many of the millions of tenants following our proceedings, need answers to those questions. As we debate the Bill today, we do not know precisely what reform of the courts is required for the new tenancy system to be enacted.
I turn to my third question. Because we have no real sense of precisely what the Government mean by court improvements, and therefore no metrics by which they might be measured, we have no idea whether and when they might be achieved. The concern in that regard should be obvious. Having been assured repeatedly by Ministers that the passage of this Bill will see a new tenancy system introduced and the threat of section 21 evictions finally removed, tenants have no assurances, let alone a guarantee, that the Government have not, in effect, given themselves the means to defer—perhaps indefinitely—the implementation of these long-promised changes.
As I referenced in my response to my hon. Friend the Member for Brighton, Kemptown, we accept that the court system needs to be improved so that, when landlords or tenants escalate a dispute, they can have confidence that it will be determined in an efficient and timely manner. However, since they committed themselves to abolishing section 21 evictions, the Government have had more than four and a half years to make significant improvements to the system to support tenants and good-faith landlords, and they have not succeeded in doing so.
Mike Amesbury (Weaver Vale) (Lab)
On that four-and-a-half-years point, can my hon. Friend clarify how many people have been evicted through no-fault eviction since 2019, when abolition was originally promised?
Matthew Pennycook
That is a very good point. Every month that the Government delayed tabling the Bill, many thousands of tenants were put at risk of homelessness by a section 21 eviction. I cannot remember the precise figure, but I think the last Government data release showed that just under 80,000 tenants had been put at risk of homelessness as the result of a section 21 notice since the Government first committed to abolishing section 21. And we are talking not just about those 80,000, but about however many tens of thousands more will be put at risk of eviction while the Government delay the enactment of the provisions on the basis of court reforms.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Does my hon. Friend agree that this issue is putting huge strains on local authorities, which are being forced to pick up so many homeless families at a time when social housing unit availability is at its lowest and it is difficult to find any form of temporary accommodation that is half-decent?
Matthew Pennycook
I thank my hon. Friend for that well-made point. A related and incredibly important issue is the supply of genuinely affordable housing, and the Government have failed woefully to build enough social rented homes in this country to meet housing need. She is absolutely right that local authorities are picking up the burden for this failure and the failure in the courts. My local authority—like hers, I am sure—is now sending people in need of temporary accommodation as far as Dartford or north Kent, and even further in some cases. Those people are struggling to retain a foothold in the community they live in and value, and in the schools that their children go to. Frankly, that is unacceptable. We need an end to section 21 as soon as possible.
Lloyd Russell-Moyle
My hon. Friend talked about the insecurity for tenants if the measure is not implemented in time, but does he also think that if it is not clear when it will be implemented, there could be adverse effects on the wider rented sector market? We know that people game the system; if it is not clear when the measure will be implemented, the danger is that people can run rings around both tenants and the public sector.
Matthew Pennycook
My hon. Friend is right: a protracted delay in implementing this clause and the others in chapter 1 could lead landlords to look at how they can best abuse the system before the new one is introduced. Equally importantly, it could provide a real problem for good-faith landlords who are trying to do the right thing. If a landlord who is affected by high interest rates and section 24 tax changes is wondering whether they can stay in the market and continue to provide private lets, how does it help to have hanging over their head an undetermined date, based on an unspecified set of metrics, for when a new system will come into force?
As I was saying, the Government have had more than four and a half years to improve the court system. They have not succeeded. If they had, then, as the former Housing Minister—the hon. Member for Redditch—claimed, they would have had no justification for delaying the enactment of this clause and the others on the grounds that the system is failing to such an extent that landlords have no confidence in it. The truth is that the Government’s record on court reforms is as woeful as their record on social rented housing. In a damning report published this summer, the Public Accounts Committee made it clear that, seven years into the courts and tribunals reform programme, HMCTS
“is once again behind on delivering critical reforms to its services. Overall, despite an increase in budget, the programme is set to deliver less than originally planned, at a time when the reforms are even more vital to help reduce extensive court backlogs.”
The Chair
Order. I indicated to the hon. Gentleman that I was content with a reasonably wide-ranging, Second Reading-type debate on clause 1 stand part, but we are now going well beyond the scope of the clause. Perhaps he might like to return to it.
Matthew Pennycook
I am bringing my remarks to a close. The degree of progress in improving the courts is pertinent to the debate, given that the Government have linked the implementation of the clause directly to it. When it comes to digitisation, which the Government have flagged as one of the target areas for improvement and on which the implementation of this clause relies, the Government have made agonisingly slow progress. As Mr Miller from the Law Society argued in his evidence to the Committee last week, the project to digitise private family law was announced in 2020 and was scheduled to be completed in December 2022. Yet the issue is ongoing and the roll-out has not yet been completed.
Given the Government’s record on court reform, how can tenants, looking for clause 1 and other clauses in chapter 1 to be enacted as soon as possible, have any confidence that sufficient progress will now be made in even the limited number of areas identified by the Government? As I have remarked, the inefficiency of the court system is a huge problem and action must be taken to address its lack of capacity so that possession claims can be expedited. The end of no-fault evictions cannot be made dependent on an unspecified degree of future progress subjectively determined by Ministers.
On Second Reading, we asked for clear commitments from the then Housing Minister on metrics and timescales that would give renters a degree of certainty about when the new tenancy system would be introduced. None was forthcoming. There is a huge amount of confusion, and genuine concern, about this issue. In the absence of any assurances to the contrary, the conclusion that has been reached by many tenants, and those who represent them and defend their interests, is that the Government have reached for a spurious excuse in order to delay the implementation of some of the most fundamental reforms in this legislation, under pressure from the landlord lobby and discontented Members on their own Back Benches.
I have spent some time on this clause stand part debate, but that is because of its importance to millions of tenants in England and Wales. We will return to this issue again when we debate clause 67, but given that the Government have made it operational on clause 1 and the rest of chapter 1 is dependent on those unspecified reports, we would appreciate it if the Minister took the opportunity in this debate to clarify precisely what the Government’s intentions are and set a clear timeline for when the new periodic tenancies provided for by this clause, as well as the rest of the new tenancy system, will come into force.
Helen Morgan (North Shropshire) (LD)
In the interests of avoiding repetition, I will keep my remarks fairly brief. As I outlined on Second Reading, Liberal Democrats welcome the Bill. We welcome the objective of achieving a balance between landlords and tenants, increasing the supply in the private rented sector and enhancing the ability of tenants to enjoy a secure and safe home. To that end, we welcome the introduction of periodic tenancies.
I would like to touch on some of the evidence that we heard last week around the absence of any longer-term tenancy option. We heard from both tenant and landlord groups that in certain situations they would like a long-term tenancy option to be introduced. As things stand, periodic tenancies guarantee a tenant only six months’ security before a no-fault ground for eviction can be introduced. For a landlord, that period of certainty is effectively only two months, because of the notice period that the tenant has available to them. Some landlords might therefore feel that they are not secure in that market, given that they cannot guarantee their income. Equally, tenants might feel that they are unable to commit to a local school, for example, or a job, because they do not know whether they will be in that property for longer than six months.
I have not tabled an amendment, because clause 1 does away with fixed-term tenancies and is a fundamental part of the Bill, and also because we are not opposing the introduction of periodic tenancies, but will the Minister give some indication of whether a long-term alternative, where neither the landlord nor the tenant could break those terms, could be considered? That would mean that some people will have the security that they need.
I was particularly concerned about the evidence from Grainger plc that some financing is dependent on the availability of a longer-term period for the landlord. We would all hate to see withdrawal from the housing market because of a lack of financing for landlords, given that the issue of supply underpins this whole housing crisis—not just in the private rented sector, but in social housing, as the hon. Member for Mitcham and Morden has already pointed out.
That is my key concern about clause 1. I do not want to repeat the concerns about the delays in implementing clause 1, except to echo them. Landlords are running a business and need certainty about when these reforms will take place, so that they can plan for them. Uncertainty is the worst thing for a business. Even if they do not particularly like the idea that is coming in, planning for it enables them to get over the hurdles, but if there is uncertainty, that is the worst thing for any business to plan for. The Minister needs to be clear about the timescale of reform, when exactly the clause will be implemented and what the finished reform will look like. I echo the concerns around that.
Ms Karen Buck (Westminster North) (Lab)
I rise briefly to reinforce the key points made by my hon. Friend the Member for Greenwich and Woolwich. The hon. Member for Cities of London and Westminster and I share in our borough what I think is the largest private rental market in the country, so these issues are of particular concern to us. I am sure that she, like me, deals with consequences of section 21 evictions constantly.
We are all pleased to be here finally to recognise the principle that the section 21 evictions will end. However, I must also echo the concerns about the practice being dependent on a Government decision that in itself rests on agreement on court reform. That, as we heard in evidence last week, is unspecified and imprecise, which allows for the possibility that it will be some time before tenants see the benefits.
My hon. Friend the Member for Greenwich and Woolwich was asked in an intervention how many households had lost their homes since the Government introduced the principle of the Bill. The answer to that is 23,000 households since the commitment to the principle in the Bill. Even more worryingly, if the provisions of the Bill do not come into effect until the end of 2024, we are likely to see an additional 35,000 households losing their homes.
The consequences of losing a home are catastrophic for families. Many of us rented when we were younger, when we were students or young professionals, and moving frequently is a hazard of young life, but the private rented sector has been transformed in recent decades; it is now a home to families with children in a way that it simply was not a couple of decades ago. Therefore, the consequences for those families are at a level of disruption that is quite different, in particular in the impact on young people’s education.
One of the aspects that I deal with a lot, and that causes me great concern, is the number of uprooted families who have education and care plans. Children might be in the middle of special needs education—in particular, vulnerable children with autism or various disabilities—but they are uprooted and moved to different boroughs. That is also at considerable public expense, let alone the damaging consequences for the children.
We also have a growing number of older renters. Again, that was very rare a few decades ago. Those people have put down roots over decades.
Siobhain McDonagh
Has my hon. Friend had the same experience that I have had? I see an ever-growing number of constituents over 60 who face section 21 eviction. In the 26 years that I have been the MP for Mitcham and Morden and in the previous 18 years that I was a councillor, or when I worked for Wandsworth local authority or the Battersea Churches Housing Trust, I have never seen that. It is a very new development.
Ms Buck
I very much agree. That is a new development, and it is extremely worrying and damaging to people’s quality of life.
The whole area of enforced mobility and frequent moves is an under-researched area of social policy, but it has massive implications. There is unfortunately far too little quality research, but from anecdotal evidence we know the negative impacts that frequent moves have on children’s education—I mentioned special needs, but there is an impact on children’s educational opportunities generally. I and, I am sure, other Members who represent areas with large renting populations have heard of children being uprooted in the weeks before they take public examinations, and being forced to commute to their schools, sometimes travelling an hour or more each way. We know that this is bad for educational prospects, we know it is bad for health, and we know that it correlates with low birth rates, infant mortality and serious mental health consequences.
Siobhain McDonagh
The guidance code on dealing with homeless families suggests that priority for local temporary accommodation should be given to children in their exam years. That is a great aspiration, but it is not being realised on the ground because local authorities cannot find accommodation, particularly for larger families.
The Chair
Order. Before the hon. Member for Westminster North replies, I must point out that although these are important matters, they are consequences of what we are discussing but not of the precise clause. We ought to return to the group of amendments before us.
Ms Buck
Thank you, Mr Gray. I was merely making the point that agreeing the principle in the Bill but not setting a date, or making the date consequential on an unmeasurable set of objectives, will have serious real-life consequences for individuals and public services.
Regarding court reform, the evidence we heard last week from the Law Society, the Housing Law Practitioners Association and other expert lawyers is that it is simply not a prerequisite for abolishing section 21. I hope the Minister will respond specifically to the evidence we heard that the median time between claim and possession has fallen back to pre-pandemic levels, meaning the courts are performing better than in recent years, so the assertion that they are incapable of dealing with the consequences of the abolition of section 21 is not a valid argument. As Shelter told us, the pressure is overstated, in part because most evictions are concluded with tenants vacating before court proceedings; demands on the courts are therefore not as presented. In addition, many possession cases under section 21 would not be legitimate claims under section 8.
We also heard evidence that court digitisation is, if anything, adding to the delays affecting the civil court system. The speed of transformation, the scale of change and the multiplicity of changes happening simultaneously may place an additional burden on the courts system, rather than facilitating speed over the next couple of years. The National Audit Office and PAC reports made much the same points. I argue that the Bill is being delayed because of a flawed and rushed digitisation processes, and unwillingness to recognise that the civil courts as they stand are perfectly capable of dealing with the consequences of the abolition of section 21.
I hope the Minister will respond specifically to those points. The Opposition are desperately anxious to get on with the abolition of section 21. We want families to have security and stability and the pressure on local authorities of homelessness to be reduced. We do not believe that the arguments advanced by the Government for failing to speed ahead with implementation are valid.
Lloyd Russell-Moyle
I rise to support clause 1, while raising concerns similar to those expressed by my good colleagues about the delay to its implementation. I will first explain why it is important that we abolish fixed-term tenancies and do not provide loopholes whereby such tenancies can be brought back in, despite the well-meaning efforts of colleagues on this Committee.
When the original Act that introduced assured tenancies and assured shorthold tenancies was being discussed, assured tenancies were initially expected to be the dominant form of tenancy. Members can see from the debate at the time that assured shorthold tenancies were meant to be there because some tenants might want the security of a specified period. What happened over the slightly less than 10 years until the 1996 Act was that they dominated and took over the market as the only recourse for people. The reality is that tenants do not have a choice: they must choose what is available—what the landlord offers. If there is an option for any form of fixed period, the landlord might well offer it for that property. That then limits the tenants who can apply for that property to people who are willing to have fixed-term periods only, and eventually those are the only tenancies offered in the market. Effectively, we get to the same situation that we have at the moment.
I applaud the Government for not relenting and giving into having fixed-term periods, even for longer periods. Although the argument might sound appealing, it is a slippery slope. It is also true that none of our future conditions can be predicted. I might sign a tenancy and the landlord’s situation or mine might change; the inability to get out of that situation, or the requirement to go to the courts to get out of it, would bung up the courts and slow the process down. It is, then, the right call to make.
I worry that the link relates to the courts. I heard that the problem was getting bailiffs in at the final stage of the final part for, let us be clear, a very small number. Most people leave when a section 21 notice is issued—in cases under the Bill, that will be when the new grounds are issued—and they leave quickly. They often leave before their time limit is up, because they have found a place, or when it is up. The very few who do not leave and are required to go to court will usually leave as soon as the court has given notice. There is of course a tiny minority who need to be dealt with efficiently—they need forceful eviction via bailiffs and are required to leave.
I think we all agree that reform of the bailiff system needs to happen. It needs to happen on many fronts to make sure that it is sensitive, targets the right people and is efficient for all sides. That does not seem the same as needing to wait for the advanced digitisation of the court system. We all agree that the court system needs digitisation, but they are two different things. The digitising of the bailiff system does not seem to be the problem we have heard about bailiffs: the problem we have heard about bailiffs is the supply chain. It is about the pay and conditions of bailiffs, the equipment they need and procuring the right number of bailiffs in certain areas, with London being particularly problematic. If the Minister is talking about bailiff reform in respect of the delay, it would be useful if he could be clear about what exactly the Government will do to increase the number of bailiffs in the sector. If this is not about bailiff reform, the Minister needs to give clear indicators of what the court reform he talks about actually is.
We heard in evidence that while we can always have improvements in the courts, we must not do it the wrong way around. We need a property portal through which eviction notices can be served to free up some of the court processes. We need an ombudsperson who can help to resolve disputes before they get to the courts, so that we can get to a situation in which things do not lead to eviction because the issue has already been resolved. We also need clearer competencies for councils to be able to fulfil their homelessness duty—there are amendments on that later in the Bill. That is what will free up the courts, so the full implementation of the Bill, not delays to sections of it, is needed to allow the courts to function more effectively.
The danger of delaying the implementation of clauses 1 and 3—on periodic tenancies and section 21—is that there will be a rush for evictions in that period or, as we have heard from Opposition Members, that landlords will be unsure about their situation, the market will slow down and people will withdraw to see what happens. I would like the private rented sector to be smaller overall in the long term, but I do not think anyone thinks that, before we get Britain building again, withdrawing or slowing down the letting market would do anyone any favours.
Helen Morgan
The hon. Gentleman is making an excellent point about short fixed terms, and I absolutely agree with him. To be clear, my proposal was for a long fixed term of at least three years.
Lloyd Russell-Moyle
I totally take that point. I am talking specifically about the short-term problem.
On the all-party parliamentary group for renters and rental reform, we heard from Gemma Marshall, who every year has to look for a new house and has had to change her children’s school three times. She lives not in London, which is even worse, but in north Devon. This problem affects all parts of our country. We also heard from Amy Donovan, who does live in London, and equally has had to move numerous times, which has meant that she cannot commute to her job effectively and has had to move job.
This issue causes problems for the very foundations of society. On the Opposition Benches—and, I genuinely believe, on both sides of the House—we believe that strong societies are built with strong, stable families and communities from the ground up. To some extent, communities are built with bricks and mortar—with people being safe and secure where they are. That is why the clause is so important, but also why it is so important that it is implemented right now, because any delay will mean more mould on the walls for the Amys of the world and more new schools for the Gemmas and their children. Whether the wait is a year, two years or whenever the Minister has the whim to act—he has not laid out the conditions in which he will enact the clause—it is not acceptable for anyone.
Shaun Bailey (West Bromwich West) (Con)
I do not intend to detain the Committee for long. I congratulate the hon. Member for Brighton, Kemptown on his powerful contribution to the debate, which has inspired me to make a contribution.
I want to pick up on a point that the hon. Member made about the aims of the clause and the flexibility for tenants to leave their tenancies when they need to. That is welcome, and I welcome the clause. I also welcome what my hon. Friend the Minister is doing and congratulate him, because I have not yet had a chance to do so officially, on his elevation to his position and the work that he has done so far in this space. However, the aims of the clause need to go alongside a regulatory foundation. The Bill rightly builds that flexibility.
This has been an interesting debate; it has almost had two sides. The hon. Member for Brighton, Kemptown spoke about the need for security, and not uprooting families from their community. I agree with that, and I think we all share the aim of building sustainable communities that enable people to put down roots. They need a home with security of tenure, but equally, a regulatory framework is needed if we are to meet the aim of enabling tenants to escape tenancies that are not working because, say, there is mould, or uninhabitable conditions.
I think quite often of the additional licensing schemes that were available to councils, particularly for houses in multiple occupation. The fights that I have had with my local authority to implement those schemes have driven me to the point of madness at times. Authorities—particularly mine, in Sandwell—have the expertise, in many ways. My authority has admitted to me that it could do that. We need a localised, driven regulatory system.
I think we would all agree that landlords are, broadly, good actors. They want to offer decent, habitable homes, and to have people in them for the long term. That benefits the landlord, because they then get emotional and moral investment in the property, and from a long-term, sustainability perspective it of course makes sense to have that. We do not want to broadbrush the sector in general. However, clearly there are bad actors. We all know about them from our postbags; I certainly see them in the area that I represent. We need a framework that deals with the issues. My hon. Friend the Minister and I have had many positive discussions on this subject, and I know that he is committed to it. The framework should be locally driven, in many respects—I know his commitment to localism—and should enable us to catch these people and drive down the problem.
I fully support what clause 1 does. When a tenant needs to get out because the tenancy is frankly not working and puts them in a dangerous situation, getting out is absolutely the right thing to do.
Lloyd Russell-Moyle
The hon. Member mentions selective licensing, which is important. Do we need to review the way that authorities apply for selective licensing? Should there be an assumption that they should have selective licensing for all properties, rather than their having to provide evidence for a license? Many shy away from doing that.
Shaun Bailey
To be honest, I probably want a comprehensive selective system. There are already structures and expertise that would enable us to have that. The hon. Gentleman and I have probably had similar experiences with constituency casework. Something like that could be preventive. I am not saying that the issues we have talked about would not still present themselves—let us face it: they probably always will—but if we can mitigate them, that is what we need to do.
I welcome the clause for a variety of reasons that Members from across the Committee have touched on. It is welcome that it enables tenants to leave more expeditiously, but I say to my hon. Friend the Minister that we need to continue the conversation. The Bill is part of a broader conversation about how we ensure that we do not even get to the point at which the measures are needed, because we have habitable homes, people have somewhere to live safely, and they do not have to fall back on the provisions all the time just to keep themselves safe. The clause is absolutely the right way forward. My hon. Friend the Minister can see that there is support for it from across the Committee. I thank him for hearing me out.
Siobhain McDonagh
I ask the Minister to consider the law of unintended consequences. If the Government delay implementation of the clauses that end section 21 evictions, they could find that landlords who are worried about their ability to evict tenants or have choices will rush for a clause 21 eviction, because they know that at some point section 21 evictions will be ended. The longer it takes the courts to be reformed, in whatever undisclosed way we are considering, the greater that concern will be.
As I said, I see a lot of older long-term assured shorthold tenants being evicted, their landlord rushing them toward the door because they do not want a tenant who has limited means of paying increased rent in the future, and because they are concerned about the news that it will be difficult to evict anyone. The rush for the door is distressing for the people involved, but has the knock-on effect of causing huge problems for local authorities attempting to assist people who are in priority need in terms of homelessness. We are all seeing many more people than usual being evicted via section 21. That has enormous consequences in so many ways.
Mike Amesbury
It is an honour to serve under your chairmanship once again, Mr Gray. The central plank of the Bill is the abolition of section 21, as everybody in this room knows. We all experience this concern in our postbag and constituencies, yet it seems that the can has been kicked down the road. The changed narrative, as my hon. Friend the Member for Greenwich and Woolwich said, is that the focus is now on court reform, particularly digitalisation.
Thousands of people face evictions. The local authority in my city region, Liverpool City Council, has declared a homelessness emergency. Homelessness is now on an industrial scale. To pick up on the point made by my hon. Friend the Member for Mitcham and Morden about potential reforms coming down the line in the Bill, including the abolition of section 21, landlords are focusing on that at the moment.
The learned lawyers Giles Peaker and Liz Davies were clear that the court system overall is working. That is certainly not the problem. Reference was made to bailiffs, particularly in the London area. Fundamental to this—I know we all agree—is to end the misery and insecurity for families and children. People increasingly use the private rented sector. The Bill will reward most landlords—good landlords. It is almost a good landlord’s charter in many ways. It needs some amendments and tidying up, but fundamental to the Bill is the abolition of section 21. That should not rely on reform of the courts, which is a red herring that has been influenced by stakeholders, many of them sitting on the Benches in the Chamber. I urge the Minister, who is relatively new in his post—I welcome him to it—to make his mark and do the right thing in the next 12 months or so, while he has the opportunity in government.
The Chair
Before I ask the Minister to reply to the debate, may I make it plain that I have been relatively flexible in this first debate? I will not be so flexible and open-minded subsequently.
Jacob Young
I am grateful to you, Mr Gray, and to the Committee for their consideration. As you and members of the Committee have identified, we plan to debate further a lot of the things that have been discussed already.
I say to concerned hon. Members that the Government are committed to the abolition of section 21. In fact, I am sure the Committee is committed to the abolition of section 21. I invite any hon. Member who is not to speak now or forever hold their peace. That is exactly what we are debating today. No one could expect that the implementation of a brand-new tenancy system would not require reform. Surely all hon. Members agree that we need to get this reform right.
Matthew Pennycook
Can the Minister tell us clearly why the two-stage transition process set out in clause 67 does not afford the Government enough time to make the necessary improvements?
Jacob Young
We will come on to that point when we discuss clause 67. I want to address some of the points that have been raised, particularly the question about bailiffs. HMCTS has already begun making improvements at the bailiff stage, including automated payments for debtors, to reduce the need for doorstep visits in those cases. We are also improving guidance to increase awareness of each party’s rights and responsibilities.
The hon. Member for North Shropshire spoke about the concern raised in evidence about longer fixed-term tenancies. I completely understand the hon. Lady’s position. I understand the genuine concern that she and the people giving evidence have. Our fear, which was rightly identified by the hon. Member for Brighton, Kemptown, is that to include any fixed-term tenancies creates a loophole. We are certain about abolishing section 21, so we do not believe that having a fixed-term tenancy will provide any security to the tenant. It could, in fact, lock a tenant into a property that they would be unable to get out of, even if the property was of poor quality, because the term of their tenancy was fixed. I hope that the hon. Member for North Shropshire can accept that.
I will write to the hon. Member for Brighton, Kemptown other Committee members specifically on the points raised by the Opposition on new clause 6. I am pleased that there is a consensus on clause 1. We all want to see this measure implemented. I commend it to the Committee.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Abolition of assured shorthold tenancies
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider Government new clause 18—Abandoned premises under assured shorthold tenancies.
Jacob Young
Clause 2 removes the assured shorthold tenancy regime entirely, including section 21 evictions, meaning that in future all tenancies will be assured. Ending these section 21 no-fault evictions will provide tenants with more security and the knowledge that their home is theirs until they choose to leave, or the landlord has a valid reason for possession. It will allow tenants and their families to put down roots, providing them with the stability that we know is a prerequisite for achievement.
Government new clause 18 deals with property abandonment. The Housing and Planning Act 2016 introduced provisions that would allow a landlord of an assured shorthold tenancy to recover possession without a court order if the tenant had abandoned the property, owes more than two months’ rent and the landlord has served three warning notices. Those provisions were never brought into force and we consider they are inconsistent with the intentions of the Bill to provide greater security. Removal of the provisions will help prevent landlords from ending a tenancy without a court order where a property appears to have been empty for a long period. It is possible that, on occasion, a property may appear to have been abandoned, but the tenant is in hospital or caring for relatives. Instead, landlords will need to use one of the specified grounds.
Matthew Pennycook
Let me start by making it clear that the Opposition welcome Government new clause 18. Although I have not been in Parliament long compared with other Members, I have been here long enough to remember sitting on the Bill Committee for the Housing and Planning Act 2016. Part 3 of that Act, which this new clause repeals, was always a foolish provision, and has rightly never been brought into force. We believe it is right that we rid ourselves of what might be termed statutory dead wood.
Clause 2 will remove section 21 of the Housing Act 1988 and, as the Minister made clear, will abolish assured shorthold tenancies and remove mechanisms by which assured social housing tenants can currently be offered ASTs—for example, as starter tenancies—or be downgraded to an AST as a result of antisocial behaviour. The provisions in this clause, as well as those in clause 1, will be brought into force on a date specified by regulations made by the Secretary of State under clause 67. It is appropriate to raise a very specific issue on this clause. We have just discussed court improvements at length. I know that is not the Minister’s brief, and that this is his first Bill, but I have to say to him that his answers on court reform were not adequate. At some point, the Government will have to explain specifically what improvements they wish to see enacted and on what timeline they will be brought into force. Leaving that aside, can the Minister provide further details on precisely how the Government intend to phase in the provisions in this clause? What consideration, if any, has been given to preventing unintended consequences arising from the proposed staged implementation?
The guidance on tenancy reform that the Government published alongside the Bill on 17 May said:
“We will provide at least six months’ notice of our first implementation date after which all new tenancies will be periodic and governed by the new rules”—
that is when they will introduce Part 1, Chapter 1. It continued:
“The date of this will be dependent on when Royal Assent is received”.
I take that to mean that, at some point in the future, a Government Minister will hopefully determine that the court system is, in the their eyes, finally ready to implement the new system—although there is nothing in the Bill to ensure that will happen. He or she would then presumably announce that the first implementation date—that is, the date when all new periodic tenancies come into force—will be six months hence.
I would like the Minister to confirm whether my understanding of how the Government expect the process to develop is correct. If so, can he respond to the concern—the flip side of my hon. Friend the Member for Mitcham and Morden’s point on a rush to section 21 evictions—that this may create a clear incentive for landlords to offer new tenants a lengthy fixed-term assured tenancy before the new system comes into effect?
If the safeguard in the Government’s mind is that all existing tenancies will transition to the new system on the second implementation date, can the Minister provide any reassurance that the period between the first and second implementation dates will not be overly long? I raise the point because the guidance makes explicit reference to a minimum period between the first and second dates, but does not specify a maximum period after which the second date would have to come into effect. As the Bill stands, it could enable a scenario where all new tenancies become periodic, but there is an extensive period of time where all existing fixed tenancies remain as such. It could be an indefinite period, there is nothing in this Bill to put any time limit on it at all. I look forward to hearing whether the Minister can provide any reassurances in relation to that concern. If he cannot, we may look to table another amendment to account for this loophole, whether it is intended or unintended.
Jacob Young
I thank the hon. Member for his support. He asked about the first and second dates. He is entirely right on the first date—it is six months. The second date is 12 months. I hope that gives him reassurance.
Matthew Pennycook
Just to clarify: as I understand it, 12 months is the minimum. Is the Minister saying that there is a maximum? If not, will the Government consider introducing a maximum? I see the officials shaking their heads. There is no maximum in the Bill. We could have a system where, six months after Royal Assent, all new tenancies become periodic and all existing tenancies could remain fixed indefinitely. What is there in the Bill to prevent an incentive for landlords to rush before the first implementation date to hand out fixed tenancies across the board for very extended periods of time to circumvent the measures in the law?
Jacob Young
Ultimately, we want to bring in these measures as quickly as we can. The system will be in place soon. What I will do to give the hon. Gentleman the assurances he desires is to write to him further. We can agree on that principle and if changes are needed to the Bill, I am happy to consider them.
Lloyd Russell-Moyle
I want us to give the Minister an opportunity to elaborate on court reform, because it is also relevant to this clause, in terms of when it will be implemented and the indicators as to when it will be implemented. Will he be able to write to us, or publish after the Bill receives Royal Assent, what those clear indicator thresholds are regarding when court reform will be completed, so that it will be clear for everyone? It does not need to be set out in the Bill, but a commitment that the Government will do that, so that everyone will know when that threshold has been met, would be useful.
Jacob Young
I appreciate the hon. Gentleman’s concern about this point. As I mentioned earlier, I think we will discuss this issue when we debate clause 67, so we can have that debate then.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Changes to grounds for possession
Matthew Pennycook
I beg to move amendment 145, in clause 3, page 2, line 32, at end insert—
“(aa) after subsection (5) insert—
‘(5ZA) The court shall not make an order for possession under Ground 1 if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”
This amendment would extend the greater hardship provisions to new Ground 1 (occupation by landlord or family).
The Chair
With this it will be convenient to discuss the following:
Amendment 146, in clause 3, page 2, line 32, at end insert—
“(aa) after subsection (5) insert—
‘(5ZA) The court shall not make an order for possession under Ground 1A if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”
This amendment would extend the greater hardship provisions to new Ground 1A (new grounds for sale of a dwelling-house).
Amendment 150, in clause 3, page 2, line 32, at end insert—
“(aa) After subsection (5) insert—
‘(5ZA) The court shall not make an order for possession under Ground 6A if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”
This amendment would extend the greater hardship provisions to Ground 6A (ground for possession to allow compliance with enforcement action).
Matthew Pennycook
Clause 3 amends the grounds for possession in schedule 2 to the 1988 Act, by means of the changes set out in schedule 1 to the Bill, which we will debate separately later today. Taken together, amendments 145, 146 and 150 would extend “greater hardship” provisions to three of the mandatory grounds set out in amended schedule 2 to the 1988 Act, namely grounds 1, 1A and 6A.
Ideally, we would have debated these amendments as the last amendments to clause 3, because they are very much our fall-back position if we cannot convince the Government to accept the other changes that we propose to the clause. In due course, we will debate our concerns about several of the revised or new possession grounds provided for by the Bill that can still be fairly categorised as de facto “no fault”. These include grounds 1, 1A and 6A.
In cases where a landlord has proved a discretionary possession ground, a judge must decide whether it is reasonable to make the possession order. In reaching their decision, a judge can consider not just the reason for the possession claim, but anything relevant to the case, including the tenant’s conduct and the likely consequences of eviction for the individual or individuals in question. They can also consider whether the tenant has tried to put things right since the claim was issued. If the judge is not satisfied that it is reasonable to award possession in these discretionary cases, they can dismiss the claim all together. In contrast, if a landlord proceeds on a mandatory ground—I remind the Committee again that proposed new grounds 1, 1A and 6A are mandatory—the judge must make an order, if the landlord has proved their case.
The amendments would give the court very limited discretion, in relation to mandatory grounds 1, 1A and 6A, to consider whether the tenant would suffer greater hardship as a result of the possession order being granted.
Shaun Bailey
I appreciate that the hon. Gentleman has tabled further amendments on the evidential burden, but does he not appreciate my concern that there is perhaps a little bit of a floodgate situation around appeals on this issue? Notwithstanding his comments about the judicial system and the court system, I am conscious that we may have a scenario where judges’ decisions are challenged and we end up with a backlog. As a result, what the amendment tries to do would either be delayed, or would end up in a system of appeal after appeal, because clearly the result would be down to a judge’s subjective decision, based on the evidence in front of them at the time.
Matthew Pennycook
I thank the hon. Member for his intervention. Perhaps I have not explained myself clearly. These amendments do not provide for an appeals process. As I have tried to make clear, when it comes to a discretionary possession ground, judges can weigh up the evidence. That is not the case for a mandatory ground. The amendment provides for not an appeal process, but discretion for the court and the judge to consider whether their decision would cause greater hardship to the tenant. I will come on to explain how that would work.
Shaun Bailey
To clarify my point, I am aware that the amendment is not about an appeals process. However, as the hon. Gentleman will know, an application for appeal can be made against any judge’s decision, and that application can be granted by the superior courts, so the process is not immune from appeal; decisions can be taken to appeal. That is a right, which would be granted, and it could be achieved through another part of the system. I just wanted to clarify my position on that point.
Matthew Pennycook
It is an interesting debate, but not particularly pertinent to the amendments. It is not my understanding that a mandatory possession ground order can be appealed. If it can, then I think that the instances in which it can are vanishingly small. However, that is not what these amendments seek to do. They purely seek to protect very vulnerable tenants who might suffer great hardship as a result of the court’s decision.
The starting point for the court would remain that the landlord in question has proved his or her intention to either occupy the property under ground 1 or sell it under ground 1A, or the need to respond to enforcement action under ground 6A. In other words, the presumption would be that a possession order will be made, and in most cases it would be. However, the amendments would provide tenants with the opportunity to demonstrate to the court—not at appeal, but at a hearing of the court—that their eviction on any of the three grounds in question would lead to hardship greater than that of the landlord or, in the case of amended ground 1, potentially the landlord’s family. If the judge determined that the hardships each party is likely to experience were the same, under these amendments, the tenants would not succeed, and the possession order would still be made. However, if the tenant could prove to a court that they or a member of their household would suffer greater hardship than the landlord or the landlord’s family if a possession order were made, the court could refuse to make the possession order.
Lloyd Russell-Moyle
I rise to support these three amendments. Amendment 150 is, of course, inextricably linked to amendment 149, which we will come on to shortly. I want to talk about the protections, particularly against ground 6A, which is a ground for possession to allow compliance with an enforcement action, fundamentally so that conditions for the tenants can be improved. Enforcement action is almost impossible unless tenants co-operate with it. There is a real danger that ground 6A will be used as a quasi-punishment for tenants who have co-operated—tenants who have said, “This house has a massive hole in the ceiling”—
Lloyd Russell-Moyle
I am speaking to amendment 150, which relates to ground 6A, about greater hardship. The next group is about the court having mitigating measures other than eviction. They could have been clustered differently—
The Chair
Quite right. I apologise for interrupting the hon. Gentleman; he knows much more about it than I do.
Lloyd Russell-Moyle
Thank you, Mr Gray.
We have a problem here. It is important that the court is able to weigh up where the greater hardship is. Is it a greater hardship to evict a tenant who has complained to the council so that the property can be fixed? Or is the ground being used to get rid of a tenant who is constantly complaining about enforcement action? Without an element of discretion—other amendments would afford wider discretion—and without this particular measure on greater hardship, there is a danger that ground 6A could be misused. That is why it would be good to hear reassurance from the Minister, particularly on amendment 150, that advice and guidance will be provided to the courts to ensure that the ground is not manipulated or abused, and that the Government are considering other changes to prevent that.
Jacob Young
I thank hon. Members for their contributions. I thank the hon. Member for Greenwich and Woolwich for his amendments 145, 146 and 150. As has been discussed, the amendments look to make grounds 1, 1A and 6A discretionary.
Matthew Pennycook
To clarify, the amendments do not seek to make those grounds discretionary in any case. We accept that they are mandatory. We believe that the amendments would allow those mandatory grounds to be used in almost every case, unless great hardship would result from them. They do not make those three possession grounds discretionary.
Jacob Young
However, judges would be required to assess whether possession would cause greater hardship than not. We think that would count as making the grounds discretionary.
The changes would add significant uncertainty to the system. It is right that landlords should have confidence in the process, and can manage their properties, including when they want to move into or sell a property. The uncertainty that the amendments would cause means that landlords may simply choose not to rent their properties in the first place if they know that they may want to move into or sell a property in future. That would reduce the vital supply of homes in the private rented sector. In the case of ground 6A, on enforcement compliance, if possession is not granted, the landlord would continue to be in breach of their obligations, and could face fines and other penalties. Given the adverse consequences that the amendments would cause, I hope that the hon. Member will withdraw them.
Matthew Pennycook
I am disappointed by the Minister’s response. I welcome the clarification he gave. The amendments would introduce a limited amount of discretion. We would argue that they do not make the grounds discretionary—it is a point of debate—but introduce a limited amount of discretion into the system. However, we trust judges in county courts to make these decisions in most cases. The amendments would put the burden on the tenant to prove great hardship, and make the presumption that the mandatory ground award will be issued in most cases.
I will bring the Minister back to some of the hypothetical scenarios I gave. We absolutely agree with the Government that landlords need robust possession grounds to take their properties back. In one of my hypothetical examples, the Bill would allow a terminally ill cancer patient to be evicted and put at risk of homelessness, just because the landlord wished to sell. They may have no need to sell; they might own eight properties and wish to sell one or two of them. In limited circumstances and cases, we should give the judges a bit of discretion. Otherwise, some very vulnerable and in-need tenants will evicted through these means.
I am disappointed that the Government have not accepted the amendments. I hope that they go away and think about them, but I will not push them to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 149, in clause 3, page 2, line 32, at end insert—
“(aa) After subsection (5) insert—
‘(5ZA) The court shall not make an order for possession under Ground 6A if the court considers that it is not just and equitable to do so, having regard to alternative courses of action available to the landlord or the local housing authority, which may include—
(a) a management order under Part 4 of the Housing Act 2004;
(b) in relation to paragraphs (b) and (f) of Ground 6A, other measures which are more appropriate for reducing the extent of overcrowding or the number of households in the dwelling-house, as the case may be;
(c) in relation to paragraph (c) of Ground 6A, the provision of suitable alternative accommodation for the tenant, whether under section 39 of the Land Compensation Act 1973 or otherwise; and
(d) in relation to paragraphs (d) and (e), other means of enforcement available to the local housing authority in respect of the landlord’s default;
and having regard to all the circumstances, including whether the situation has occurred as a result of an act or default of the landlord.’”
This amendment would permit a court to refuse to make a possession order under Ground 6A where a more appropriate course of action exists.
One of the changes made to schedule 2 to the 1988 Act by the clause, as we briefly discussed, is the introduction of a new ground for possession to allow compliance with an enforcement action. The new mandatory ground 6A will require the court to award possession if a landlord seeking possession needs to end a tenancy because enforcement action has been taken against the landlord, and it would be unlawful for them to maintain the tenancy.
The relevant enforcement actions (a) to (f) are set out on page 73 of the Bill. They include situations where a landlord has been issued with
“a banning order under section 16 of the Housing and Planning Act 2016…an improvement notice under section 11 or 12 of the Housing Act 2004”
and
“a prohibition order under section 20 or 21 of the Housing Act 2004”.
We take no issue with the fact that the Bill introduces the new mandatory power. Clearly there are circumstances in which landlords will require possession of a property in order to comply with enforcement action.
We wrestled with what should be the minimum notice period that applies to the new ground, given that it feels somewhat perverse to provide for a mechanism by which possession can be gained quickly when the reason for the possession being granted is that the landlord has fallen foul of an obligation under housing health and safety legislation, particularly if it resulted in a banning or prohibition order. As we will come to discuss, we ultimately determined to argue in amendment 136 for a four-month minimum notice period in relation to ground 6A, because in all the situations set out on page 73 of the Bill, the tenant will be evicted because of neglect or default on the part of the landlord. In other words, it is a de facto no-fault ground for eviction that will punish tenants and put them at risk of homelessness because of bad practice on the part of a landlord, particularly as there is no requirement for the landlord to provide suitable alternative accommodation.
Amendment 149 seeks to provide tenants with a measure of protection in such circumstances—this touches directly on the point the Minister made on the previous group of amendments—by giving the court the power to consider whether the relevant enforcement can be met by means other than the eviction of the sitting tenant or tenants, including through a management order under the Housing Act 2004 or the provision of alternative accommodation. If the court judges that the enforcement objectives can be met by other means, the amendment would give the court the power to refuse to make a possession order on the grounds that it is not just and equitable to do so in the circumstances, given that there are other means of ensuring that the enforcement action is complied with.
We believe that the amendment would provide tenants with stronger protection in circumstances where they are victims of poor practice on the part of a landlord. Importantly, it would also ensure that tenants have an incentive to seek enforcement action through their local authority if their home is in a very poor condition or is non-compliant with HMO licensing schemes. That would address the fact that, as things stand, the introduction of the new mandatory no-fault ground with only two months’ notice is likely to actively discourage tenants from doing so. I hope the Minister will give the amendment serious consideration.
Lloyd Russell-Moyle
Following on from the debate on the last group of amendments, I want to add my concern about ground 6A. Where there are issues with fire or flood, landlords are often expected to find alternative accommodation before a house is vacated, but there is no such provision when enforcement action has to be taken. There is a real worry that a landlord who has multiple properties that are perfectly fit for habitation might seek to punish tenants who have pushed for enforcement, rather than moving them into those properties. That seems wrong, so it is important to require the courts to go through a checklist of other options that the landlord has to consider before they get to ground 6A.
The amendment also provides a checklist for landlords. They can go down it and say, “Okay, I need to comply with enforcement action. Have I considered these things?” It also allows the local authority to consider other courses that they could pursue, such as management orders. We do not want tenants punished. Although revenge evictions are illegal, we know that they happen time and again, because there are loopholes in the law. Closing those loopholes is important, and a statement from the Minister on the matter might suffice.
Jacob Young
I thank hon. Members for their comments. Amendment 149 would require judges to consider whether there are suitable alternative courses of action available before granting possession under ground 6A, which permits a landlord to evict if evicting a tenant is the only way that they can comply with enforcement action taken by a local authority. That includes cases in which, disgracefully, a landlord has received a banning order, meaning they are unable to continue operating as a landlord. It also includes situations in which a prohibition order is incompatible with the tenant’s continuing to occupy the property. The ground is mandatory, so there is certainty that possession will be granted to the landlord and they can comply with enforcement action taken against them. That means that tenants will not be left living in unsafe situations and gives local authorities confidence that their enforcement action demands can be adhered to.
Lloyd Russell-Moyle
Will the Minister clarify that when courts grant possession under ground 6A, they will have to take into consideration whether that is the only option, and whether other options might be on the table? Confirmation of that would help courts’ deliberations in future.
Jacob Young
I should be clear that the landlords who are subject to enforcement action are the rogues; they are the people we are trying to root out of the system through the Bill. They are unlikely to be able to provide the suitable alternative accommodation that the hon. Member mentioned. If things get to this stage, they are that bad. We therefore do not feel that we can accept amendment 149, and I hope that the hon. Member for Greenwich and Woolwich will withdraw it.
Matthew Pennycook
I have been on enough Bill Committees to know that the Minister has been sent out with explicit instructions to resist amendments—we all understand that—but the Government will have to grapple with the Bill’s weaknesses regarding how the new possession grounds will affect tenants who are not at fault. They could clearly be affected by a landlord’s using ground 6A—a ground that I find perverse, because it allows for possession where the landlord is at fault.
The Minister gave the game away when he said that 6A can be used only when it is the only way that the landlord can comply with an enforcement order. Well, we could leave it to the court to make that determination under the amendment. If possession is the only way that the landlord can comply with an enforcement order, the court will grant the possession order, but there will be cases in which it is not the only way, and the Minister said that he encourages local authorities to explore those other means. I would say that, in those circumstances, encouragement is not enough. We need some provision to ensure that all alternatives are completely exhausted before this very severe mandatory ground—we are talking about eviction and potential homelessness—is brought into force.
Jacob Young
I take the hon. Gentleman’s point on board, but as I have outlined, these are landlords who are subject to enforcement action. Does he accept that such landlords should not be operating in the private rented sector anyway, and that this ground allows us to root out those bad landlords?
Matthew Pennycook
I think the Minister has to be very careful on that point. It depends on what the enforcement action is, and on the degree to which the landlord is at fault. The enforcement action could relate to a breach under the housing health and safety rating system that merely needs to be rectified before the landlord can continue to rent as an appropriate and good-faith landlord; or it could relate to a very severe enforcement ground, as the Minister described. I come back to the point I made when moving the amendment: there are other enforcement powers that could deal with those types of landlords. I gave the example of a management order under the 2004 Act. There are ways that local authorities could enforce that do not require a mandatory possession ground order to be awarded. All we are saying is: give the courts the discretion to decide that.
If the Government are not minded to give the courts that discretion, there are other ways that the clause might be changed. The local authority might be required to have first exhausted other grounds before the landlord can issue a 6A notice. Let us find a way of protecting tenants who are not at fault from being evicted by landlords. In this situation, landlords, not tenants, are to blame, and they could abuse this new mandatory ground in ways that will have detrimental consequences for tenants.
I hope that the Minister has taken that point on board. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
Order. Technically, the hon. Gentleman is moving only amendment 138; the other amendments are merely being debated.
Matthew Pennycook
I like having a stickler in the Chair. I prefer it to having a non-stickler.
I beg to move amendment 138, in clause 3, page 3, line 3, at end insert—
“(5C) (a) Where the court makes an order for possession on Grounds 1 or 1A in Schedule 2 to this Act (whether with or without other grounds), the order shall include a provision requiring the landlord to file evidence at court and to serve the same on the tenant, any other defendant, and the local housing authority for the district where the dwelling is located no later than sixteen weeks from the date of the order.
(b) The evidence referred to in paragraph (a) must—
(i) give details of the state of occupation of the dwelling-house since the date of the order,
(ii) give details of the progress of any sale of the dwelling-house, and
(iii) be verified by a statement of truth signed by the landlord.”
This amendment would require a landlord to evidence the progress toward occupation or sale of a property obtained under grounds of possession 1 or 1A no later than 16 weeks after the date of the order and to verify this by a statement of truth.
The Chair
With this it will be convenient to discuss the following:
Amendment 139, in clause 3, page 3, line 4, at end insert—
“(2A) After section 7 of the 1988 Act insert—
‘7A Evidential requirements for Grounds 1 and 1A
(1) The court shall not make an order for possession on Grounds 1 or 1A in Schedule 2 to this Act unless the landlord has complied with the relevant provisions of subsections (2) to (4).
(2) Where the landlord relies on Grounds 1 or 1A, the claim must be supported by evidence which is verified by a statement of truth signed by the landlord.
(3) Where the landlord relies on Ground 1 and the dwelling-house is required by a member of the landlord’s family as defined in paragraphs 2(b) to (d) of that Ground, the claim must also be supported by evidence which is verified by a statement of truth signed by that family member.
(4) Where the landlord relies on Ground 1A, the evidence referred to in subsection (2) must include a letter of engagement from a solicitor or estate agent concerning the sale of the dwelling-house.’”
This amendment would require a landlord seeking possession of a property on the Grounds of occupation or selling to evidence and verify in advance via a statement of truth.
Amendment 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.
Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Amendment 192, in schedule 1, page 65, line 10, after “6 months” insert
“or 6 months have elapsed since rent was last increased”.
This amendment would prohibit evictions under Ground 1 within 6 months of each rent increase giving periodic protection at each rent renewal.
Amendment 203, in schedule 1, page 65, line 29, at end insert new unnumbered paragraph—
“Where this ground is used no rent will be due in the final two months of the tenancy.”
This amendment would ensure when a no-fault eviction on Ground 1 is used tenants would not pay rent for the final two months of the tenancy.
Government amendments 2 to 3.
Amendment 144, in schedule 1, page 66, line 6, leave out “6 months” and insert “2 years”.
Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Amendment 193, in schedule 1, page 66, line 6, after “6 months” insert
“or 6 months have elapsed since rent was last increased”.
This amendment would prohibit evictions under Ground 1A within 6 months of each rent increase giving periodic protection at each rent renewal.
Government amendments 4 and 5.
Amendment 194, in schedule 1, page 66, line 23, at end insert—
“(e) the landlord has offered to sell the property to the current tenant at the same value at which the landlord intends to list the property for public sale and the tenant has informed the landlord within four weeks of receiving the offer from the landlord that the tenant does not intend to buy the property at this value.”
This amendment would require landlords wishing to issue a notice for possession on the basis of Ground 1A to offer the current tenants the right to buy the property at the intended listing value before it goes onto the market.
Amendment 204, in schedule 1, page 66, line 24, at end insert new unnumbered paragraph—
“Where this ground is used no rent will be due in the final two months of the tenancy.”
This amendment would ensure when a no-fault eviction on Ground 1A is used tenants would not pay rent for the final two months of the tenancy.
Matthew Pennycook
As we have already discussed, clause 3 amends the grounds for possession in schedule 2 to the Housing Act 1988, by means of the changes set out in schedule 1 to the Bill. Paragraph 2 of schedule 1 sets out revisions to the existing mandatory ground 1. Under the existing ground 1, a court is required to award possession of a property if the landlord requires it to live in as their “only or principal home” or if they have previously lived in it on either basis. Under ground 1 as amended by the Bill, a court is required to award possession if the landlord requires the property for use as their only or principal home, but also if they require it for such use for members of their immediate family, for their spouse or civil partner or for a person with whom they live
“as if they were married or in a civil partnership”,
or for that person’s immediate family, such as the child or parent of a partner in those terms. Under the existing ground 1, landlords are required to provide tenants with prior notice that the ground may be used. This requirement is absent from ground 1 as amended by the Bill.
In turn, paragraph 3 of schedule 1 inserts a new mandatory ground 1A into schedule 2 to the 1988 Housing Act. Under this new ground, a court would be required to award possession, with limited exceptions, if the landlord intends to sell the property. We believe very strongly that there is a clear risk that both of these de facto no-fault grounds for eviction could be abused in several ways by unscrupulous landlords. I want to be very clear that we believe that only a minority of landlords are unscrupulous and may act in these terms.
In her evidence last week, Samantha Stewart, chief executive of the Nationwide Foundation, provided us with the example of just how these grounds are being abused in the Scottish context. She gave an example of a renter named Luke, who lived in a property with rats and maggots falling out of the ceiling. The landlord refused to act on the complaint but was eventually forced to do so by the Scottish tribunal. Shortly afterward, however, Luke was served an eviction notice using the new landlord circumstance possession grounds. As soon as the prohibited re-let period was up, they moved a new tenant in.
The risk of these grounds being abused is clearly not a point of difference between us and the Government. Ministers clearly accept that amended ground 1 and new ground 1A could be used as a form of section 21 by the backdoor, because the Bill contains provision to attempt to prohibit their misuse by preventing landlords from re-letting or re-marketing a property, or authorising an agent to do so on their behalf, within three months of obtaining possession on either ground. We will debate the adequacy of those no-let provisions when we get to clause 10 and press our amendment 140 to extend the proposed period, but it is enough to know at this stage that the Government felt it necessary to include such safeguards in the Bill. We can take it as given that their decision to do so is evidence of a clear understanding that there is potential risk of abuse along the lines I described.
In addition to strengthening the no-let provisions in the Bill, we believe tenants require protection from the misuse of grounds 1 and 1A in two other important respects. First, we believe there needs to be a greater burden of proof placed on landlords who issue their tenants notices seeking possession on either of these grounds. As the Bill is drafted, at any point after the protected period is ended a landlord can simply issue their tenant with a mandatory ground 1 or 1A notice, and a county court would be required to award them possession. When it comes to expanded ground 1, there is no requirement for the landlord to evidence whether they actually require the use of the property for themselves; or, if they do not, which family member or members or person connected to them does.
Similarly, when it comes to new ground 1A, there is no requirement for the landlord to evidence that they are trying in good faith to sell a property after possession has been awarded. The risk to tenants should be obvious: six months after the start of a tenancy, when the protected period ends, a model tenant who is not at fault in any way—but who, for example, complains about damp and mould in a property—could be evicted with just two months’ notice using these grounds, without any need for the landlord to verify through evidence that they are using these landlord circumstances legitimately.
As the chief executive of the Legal Action Group and chair of the Renters’ Reform Coalition, Sue James, argued in her evidence last week, there is no indication at present that landlords will have to provide much, if anything, in the way of evidence. Although the Government have made noises to that effect, as things stand we do not know what that evidence might consist of.
The case for requiring landlords to provide evidence is obvious. As Samantha Stewart argued in her evidence,
“landlords using grounds 1 and 1A—moving in and selling—should be required to provide adequate and appropriate evidence”.––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 127, Q170.]
Amendments 138 and 139 are designed to address that deficiency by requiring relevant evidence to be submitted both prior to an eviction and after one has taken place. Amendment 139 would require a landlord seeking possession on the grounds of occupation or selling to evidence and verify that they are doing so in advance of a possession order via a statement of truth or, in the case of sale, by means of a letter of engagement from a solicitor or estate agent. That mirrors provisions in the Private Housing (Tenancies) (Scotland) Act 2016, which require the landlord to provide specific evidence proving his or her intention to sell.
Amendment 138 would require a landlord to evidence progress towards occupation or sale of a property obtained under grounds 1 and 1A no later than 16 weeks after the date of the order, and to submit that to the court and—most importantly, because they will be the enforcement bodies under the Bill—local authorities.
The clear benefit of amending the Bill to include those evidential requirements in respect of grounds 1 and 1A would be their deterrent effect—the consequences to any landlord of being found guilty of lying to a court, in terms of litigation and potential liability for damages. At present, after an eviction takes place on either of those grounds, either because of the tenant leaving voluntarily or the court issuing a possession award, the Government are proposing only two means of redress: local authority enforcement action or a compensation award, issued by the new ombudsman. The Bill provides only a framework for the new landlord redress scheme, so the ombudsman is still largely an unknown quantity, and there are well-known issues, attested to in the evidence that several witnesses gave last week, about the efficacy of local authority enforcement.
We believe that rent repayment orders have a role to play, but those evidential requirements and the deterrent effect they would have on unscrupulous landlords seeking to abuse grounds 1 and 1A would strengthen the Bill and ensure that tenants are better protected. We urge the Government to give them due consideration.
Secondly, we believe that the proposed protected period of six months during which a tenant cannot be evicted under either of these grounds is insufficient. The explanatory notes accompanying the Bill state that the protections mirror those that tenants currently receive. That is true, but the current protections, as Liz Davies KC made clear in her evidence to the Committee, reflect the assured shorthold tenancy regime, which the Bill is abolishing. The decision to mirror the current protected period also fails to take into account the fact that ground 1A is a new mandatory ground, and that ground 1 has been amended such that the previous requirement to serve a notice that it may be relied upon prior to the start of the tenancy has been removed. As the Bill is drafted, a landlord can let a property to a tenant, provide them with no prior notice whatsoever that they may in future wish to rely on either ground 1 or 1A, and then serve them with a notice at four months.
We believe that any landlord likely to use ground 1 or 1A in good faith will have some prior awareness that they or a family member may need the property for use at some point in the coming years, or that they may wish to sell it in the near future. As such, and because the Government have chosen to remove the prior notice requirement that currently applies to ground 1, we believe that there is a strong case for extending the protected period with respect to grounds 1 and 1A from six months to two years, allowing landlords to first serve notice under either of them 22 months after a tenancy begins. Taken together, amendments 143 and 144 would extend the proposed protected periods accordingly.
These four amendments, while retaining mandatory grounds 1 and 1A as the Bill proposes, would go a long way to preventing and deterring abuse of the kind that we fear will occur fairly regularly if these possession grounds remain unchanged. I look forward to hearing the Minister’s response to them as well as further information about the four Government clauses.
Ms Buck
I rise briefly to speak in support of the amendments, which seek to address two key themes. One is that tenants start disproportionately from a position of lack of power, and a large minority of tenants are in a position where they are limited by their access to advice and representation and a lack of alternative accommodation. They are frequently unable, without stronger legislative protection, to exercise their rights against the landlords who abuse their role.
Lloyd Russell-Moyle
I support amendments 138, 139, 143 and 144, which would require evidence to be given when using grounds 1 and 1A. While that is important, I again think—I always live in hope—that some clarity from the Minister about the courts being required to obtain at least the first part of that evidence could achieve this without that necessarily being written in the Bill. I believe that the second part would need some legislative clarity, which is why the amendment is useful.
However, let us be clear: it is a crime to knowingly make a false statement to the court. We need to make it clear to landlords that that crime will be followed up. It can only be followed up if we then determine that the property was not then taken into possession and that there was no malicious element to it—there can be other reasons, of course. Without that element of enforcement, and therefore knowing what has happened in a number of months’ time, that will never happen. This could quite easily be implemented through the property portal sending automatic messages to the court, which would not overburden our court process. I again ask for some clarity from the Minister that this is how the property portal and court reform is intended to work. That would probably alleviate some of these issues.
I have tabled a number of other amendments in this group, which I would also like to speak to. The first one would provide for the six-month protection to be renewed on the basis of rent renewals. At the moment, a lot of assured shorthold tenancies—not all of them, Mr Gray, I grant you, but probably the majority of them—have rent renewal clauses, such that that when the rent is increased, there is a new tenancy. The landlord will say, “I’m increasing your rent. Please sign the new tenancy for the year ahead.” Every year, the landlord says, “Well, you’re moving on to the periodic. I would quite like you to sign the new tenancy with the new rent.” That is what happens for most of my constituents who are in the most precarious part of the market, which we are trying to address. That gives them six months’ protection every year, on an ongoing basis, every time their rent is increased.
I know that the National Residential Landlords Association has described this idea as bonkers, but I think that is because it does not quite understand what I am trying to get at here, which is to retain what we already have currently. Although it seems that the Bill is increasing the protection of tenants—and the security of landlords, by knowing that the tenant will be there for a period—the danger is that it will reduce it because, de facto, most tenants currently have six months protection in every 12. The proposed change would provide six months’ protection over an indefinite period, which is clearly far less. Six divided by infinity is an impossible mathematical equation, but it is clearly less than six months divided by 12.
Lloyd Russell-Moyle
Quite right: zero protection—well, it is mathematically zero, but I think we all know that six months’ protection is a bit more than that—so there needs to be something.
When a landlord comes along on that annual date, the landlord might say, “I don’t want to make any changes. I don’t want to increase the rent.” Then, to some extent, the question is: why should any further protection be afforded? But if the landlord comes along and says, “I want to increase your rent,” and the tenant agrees that they are going to increase the rent—it does not go to a tribunal; it is all agreed—it seems quite reasonable to ensure protection on both sides, for example to provide for a new six-month protection period, just as happens at the moment.
That is why I have tabled these amendments, because I do not think it is in anyone’s interest for tenants suddenly to be leaving. Although the six-month protection does not prevent tenants from leaving, it does produce a mindset that the tenancy is now at least fixed for six months, based on what the landlord is offering and the higher amount that the tenant is now offering to pay. I do not think that is unreasonable, and I would love to see the Government accept the principle of it. If not—of course, I am not foolish, but there is always wishful thinking—it would be useful to hear an indication from the Government of which measures they think might be put in place to ensure that rolling protection.
The other amendment that I wish to speak to concerns the ability for a tenant to be offered the property before it is for sale. If it is a genuine sale, on the open market—the amendments would require a solicitor’s letter or an estate agent’s letter; I think that is reasonable and fair enough—no landlord would have any problem with making this offer for a short period. In my experience of selling houses, it takes more than four weeks between interest and getting it on the market anyway. I am talking about the landlord offering it to the tenant at the rate at which they are going to initially list it on the market. The landlord might reduce what it is on the market for later, because of market factors. I am not saying that that needs to be taken into account. All I am saying is that the initial listing should be offered to the tenant—a right of first refusal—in those four weeks. Again, I do not think this is unreasonable. Of course, in the majority of cases, the tenant will not be in a position to buy; but if, in a small number of cases, we can prevent turmoil and give the landlord a quick sale, it is in everyone’s interest to do so.
Again, I am not delusional and do not think that the Minister will accept this proposal, but I hope that the Minister might indicate how he will be encouraging, through court papers, potentially, and court reform, all those questions to be asked, just as we saw during covid, when court papers required the landlord to ask whether the tenant had been affected by covid. That was not a Bill change—a law change—but it was in the court papers. I am talking about how the question could be asked in court papers. There does not necessarily need to be a change in the discretionary grounds, but the very fact of asking the question could change the mindsets of landlords and, I think, is important.
Finally, under amendments 204 and 203, which I have also tabled, no rent would be required for two months—
Renters (Reform) Bill (Sixth sitting)
Tuesday 21st November 2023
(12 months ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 November 2023 - (21 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 139, in clause 3, page 3, line 4, at end insert—
“(2A) After section 7 of the 1988 Act insert—
‘7A Evidential requirements for Grounds 1 and 1A
(1) The court shall not make an order for possession on Grounds 1 or 1A in Schedule 2 to this Act unless the landlord has complied with the relevant provisions of subsections (2) to (4).
(2) Where the landlord relies on Grounds 1 or 1A, the claim must be supported by evidence which is verified by a statement of truth signed by the landlord.
(3) Where the landlord relies on Ground 1 and the dwelling-house is required by a member of the landlord’s family as defined in paragraphs 2(b) to (d) of that Ground, the claim must also be supported by evidence which is verified by a statement of truth signed by that family member.
(4) Where the landlord relies on Ground 1A, the evidence referred to in subsection (2) must include a letter of engagement from a solicitor or estate agent concerning the sale of the dwelling-house.’”
This amendment would require a landlord seeking possession of a property on the Grounds of occupation or selling to evidence and verify in advance via a statement of truth.
Amendment 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.
Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Amendment 192, in schedule 1, page 65, line 10, after “6 months” insert
“or 6 months have elapsed since rent was last increased”.
This amendment would prohibit evictions under Ground 1 within 6 months of each rent increase giving periodic protection at each rent renewal.
Amendment 203, in schedule 1, page 65, line 29, at end insert new unnumbered paragraph—
“Where this ground is used no rent will be due in the final two months of the tenancy.”
This amendment would ensure when a no-fault eviction on Ground 1 is used tenants would not pay rent for the final two months of the tenancy.
Government amendments 2 and 3.
Amendment 144, in schedule 1, page 66, line 6, leave out “6 months” and insert “2 years”.
Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Amendment 193, in schedule 1, page 66, line 6, after “6 months” insert
“or 6 months have elapsed since rent was last increased”.
This amendment would prohibit evictions under Ground 1A within 6 months of each rent increase giving periodic protection at each rent renewal.
Government amendments 4 and 5.
Amendment 194, in schedule 1, page 66, line 23, at end insert—
“(e) the landlord has offered to sell the property to the current tenant at the same value at which the landlord intends to list the property for public sale and the tenant has informed the landlord within four weeks of receiving the offer from the landlord that the tenant does not intend to buy the property at this value.”
This amendment would require landlords wishing to issue a notice for possession on the basis of Ground 1A to offer the current tenants the right to buy the property at the intended listing value before it goes onto the market.
Amendment 204, in schedule 1, page 66, line 24, at end insert new unnumbered paragraph—
“Where this ground is used no rent will be due in the final two months of the tenancy.”
This amendment would ensure when a no-fault eviction on Ground 1A is used tenants would not pay rent for the final two months of the tenancy.
The hon. Member for Brighton, Kemptown was on his feet, but I think he had nearly completed his remarks, and he is not here, so I call the Minister to reply.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I thank hon. Members for their contributions so far, and for the amendments. As we discussed, we all agree that the removal of section 21 will give tenants more security in their home. Tenants will know that landlords can evict them only when they have a legitimate reason to do so. It is also vital that the new grounds give landlords the confidence to continue renting out their properties, rather than leaving them empty, if they might wish to sell or move in.
If a landlord goes to court to seek possession, a judge will determine whether the ground has been met, based on the evidence provided. We do not think it is necessary to prescribe in legislation what the evidence is, because a judge will always be best placed to determine, based on what is in front of them, whether the landlord intends to occupy or sell the property.
Mike Amesbury (Weaver Vale) (Lab)
The question is why it would not be useful for a judge to base that professional, informed decision on criteria that are in front of them.
Jacob Young
We feel that it is best to give the courts the power to make the decision themselves, rather than prescribing that in legislation. Of course, following Royal Assent, we will publish secondary legislation and guidance. I hope that that gives the hon. Member the assurance that he is looking for.
We will issue guidance to help landlords understand what type of evidence they may choose to provide. It would not be appropriate to be too prescriptive about that in legislation; that might inadvertently suggest that other evidence may not be sufficient. The decision is best determined by a judge on a case-by-case basis. I therefore ask that the hon. Member for Greenwich and Woolwich withdraw his amendment.
With regards to amendments 143, 144, 192 and 193, we thought long and hard while developing these reforms about getting the right balance between tenant security and landlords’ ability to move into or sell their homes. We believe that having a six-month period at the start of the tenancy during which landlords cannot use the grounds provides the right balance. A longer period risks landlords not making their properties available for rent and reduces the supply of much-needed homes. Landlords also need the flexibility that periodic tenancies allow, and our proposals strike the right balance.
On amendment 194, although we encourage landlords to consider selling to or with sitting tenants, landlords must have the ultimate decision over who they wish to sell their property to. Giving a tenant first refusal could prevent the landlord selling if, for example, they already had a buyer in mind. It could also cause delays in the public sale process and therefore financial hardship to the landlord.
On amendments 203 and 204, the Government do not believe in penalising landlords by mandating that tenants be entitled to a rent-free period at the end of their tenancy. Landlords looking to move into or sell their property may themselves be in financial difficulty, and amendments 203 and 204 could exacerbate that. By disincentivising landlords’ investment in the sector, the amendments would introduce uncertainty and ultimately be detrimental to tenants. On that basis, I ask that the hon. Member for Brighton, Kemptown, not move the amendments.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I want to ask about a two-month no-rent period. The Government must recognise that there is a huge cost to tenants who have to move out through no fault of their own. Does the Minister not think that there should be some alleviation of that cost? For example, if a tenant finds another property during the two-month notice period, they should not be bound to pay two months’ rent. They have been forced to leave through no fault of their own, and should not have to pay double rent; that would be totally unfair. Does the Minister have views on that?
Jacob Young
I accept the hon. Gentleman’s argument and understand the sincerity with which he makes it. We are trying to strike a balance throughout this Bill between tenants’ rights and landlords’ rights. A landlord may choose to evict someone on the grounds that they wish to sell their property, for example, and then be unable to sell their property; if we were to follow the hon. Gentleman’s logic, that landlord would be without rent for two months during the notice period, and three months during the refusal-to-let-again period before being able to put their property back on the market, given that they had been unable to sell their property. I do not think it is fair that if landlords were to pursue that course of action, they could be five months’ rent out of pocket.
Lloyd Russell-Moyle
May I press the Minister on that point? If a tenant leaves within the two-month notice period, does the Minister really think that they should be bound to pay those two months’ rent, even though they have been kicked out and have found another property, and relinquished the property to the landlord sooner than the landlord asked them to? Surely they should not be liable for that amount of money.
Jacob Young
Again, I understand the hon. Gentleman’s point. We are trying to strike the right balance in these reforms. That is all I can say on that.
Government amendments 2 to 5 deliver technical changes that will ensure that grounds for possession work as intended, allowing the selling ground to apply to both freeholders and leaseholders who wish to sell their interest in their property. The changes to possession ground 1A are slight, and ensure that the selling ground for private landlords applies to all circumstances where it would be reasonable to consider the landlord to be selling their property, and ensuring that their valid desire to manage their property as they see fit is not unintentionally thwarted. These small changes will ensure that the selling ground works as intended.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
We are disappointed with the Minister’s response, for the following reasons.
We will, no doubt, hear ad nauseam about the Government’s intention and the obvious need, with which we all agree, to get the balance right between the interests of landlords and tenants. We do not think the Government have got that balance quite right in this and many other areas of the Bill.
It is, of course, reasonable that landlords who legitimately want to use grounds 1 and 1A either to take back a property for themselves or a family member, or to sell it, should be able to. We take no issue with the mandatory grounds. However, the Minister has failed to address Labour Members’ arguments about the clear risk of those mandatory grounds being abused in several ways. We know that they are being abused in Scotland, where they have already been introduced—that is the proof point here—and there are several other layers of protection in Scotland that this Bill does not provide.
The Government know that there is a risk of these grounds being abused; they would not otherwise have the three-month no-let period. We have clearly identified the loopholes that exist as a result of there being no evidential requirement, unlike in Scotland. Evidence suggests that the Scottish provisions are still open to abuse, but Scotland at least has the Private Housing (Tenancies) (Scotland) Act 2016, which requires the landlord to provide specific evidence. That is not the case here. The Minister makes the point that it is for judges to make a determination, but grounds 1 and 1A are mandatory grounds. The judge literally just has to determine whether the landlord has proved that ground 1 or 1A applies. The judge does not assess the merits of the case, as they would if these were discretionary grounds. Judges do not have the freedom to say that they do not think the landlord is legitimately taking back the property. As we have argued, at the end of four months of the protected period, any landlord can, under these grounds, serve notice or evict on the pretence that they will use the property for themselves or sell it, but they can then not sell it; nothing prevents that.
Jacob Young
On the hon. Gentleman’s point about providing evidence to a court, a judge would have to determine whether the intention to sell the property is valid.
Matthew Pennycook
I will happily give way to the Minister again if he can say how the judge would prove an intent to sell or occupy the property without evidential requirements. The judge does not have to ask the landlord for any evidence that they will use those grounds.
Jacob Young
It is our position that the types of evidence that can be used do not need to be in the Bill, but as I have already set out, they will be in guidance.
Matthew Pennycook
That is some progress. If we have a commitment from the Minister that we will get detailed guidance that landlords need to submit—
Matthew Pennycook
That is welcome, but I think the concern is still there, because what does the guidance say? We do not know. What proof does it ask for? We have a clear set of evidential requirements in amendment 138.
We feel strongly about the point of protected periods. In amending ground 1, the Government have removed the requirement for prior notice of the use of the ground. If a landlord wants to take back a property for their own use, they must tell the tenant when the tenancy agreement is made that they may wish to engage the provision for prior notice. There is no prior notice under the amended ground 1. Any tenant could find themselves evicted with six months’ notice, and they would have no clue when they agreed the tenancy with the landlord that they could face that scenario. We very much support the legitimate use of these grounds, but it is essential to strengthen the Bill and the guidance that may come forward to prevent and deter abuse.
For that reason, we will press amendments 138, 139 and 143 to a vote. We also support amendment 194, in the name of my hon. Friend the Member for Brighton, Kemptown. It is completely reasonable for landlords to have to offer the sitting tenant first refusal on purchase of a property. To be frank, I do not really understand what the Minister says about the alternative scenario of a landlord having a buyer in mind who is not the tenant. That does not sound like a particularly fair ground. The tenant is in the property; they should have first refusal at the market price that the landlord asks for. If they cannot meet that price, the landlord can sell to any other buyers.
Lloyd Russell-Moyle
My hon. Friend will note that such provisions exist in other areas, where the first right of refusal is given. Surely if this legislation is passed, the landlord will always first have the tenant in mind when looking for a buyer. The scenarios suggested by the Minister would not occur, because the landlord would go to the tenant before other buyers.
Matthew Pennycook
That is a reasonable point. Landlords will adapt to the system. They will have it in mind that they must automatically make an offer to the sitting tenant. If they determine that the market price is more than the tenant can afford, they can go to the second buyer that they have in mind. We are not quibbling about them selling at market rate, obviously, but it is important to help renters on to the home ownership ladder if possible.
Jacob Young
I understand the hon. Member’s point, but consider a landlord who wanted to sell a property to a family member. That is perfectly legitimate. They might want to sell to their child. If there was a duty on the landlord to offer the tenant first refusal, surely they could not do what they wanted with their property. [Interruption.]
Matthew Pennycook
My colleagues behind me are making the case for me. In that scenario, I respectfully say that the landlord could legitimately exercise ground 1 and, within six months, take the property back for that family member. They could then sell it freely. However, evicting a tenant to do so is, we think, questionable, because it is reasonable to give the tenant first refusal. If I have understood the Minister’s point correctly, if I am a landlord and I want to sell to my son, I can take back the property under mandatory ground 1. My son could live in it, and I could then sell it to him at any point. I do not see why a sitting tenant would need to be evicted for that to happen.
Jacob Young
Under the hon. Gentleman’s argument, the landlord would have to charge rent to the family member. Say the landlord wanted to sell to a close friend; they would not be covered by ground 1. There is a difference on a point of principle between the two sides here. We think that landlords should be able to sell their property to whomever they want. The Opposition seem to take a different view.
Matthew Pennycook
We do take a different view, because, as I have said, it is reasonable that landlords should offer first refusal to tenants. I do not know how many landlords out there are desperately planning to sell to a close friend and would not be able to. That scenario might arise, but in the majority of cases, landlords will sell a property on the open market, and they could give tenants first refusal, at the price that they seek. As I said, we support amendment 194, and will press our amendments in this group to a vote.
Question put, That the amendment be made.
Matthew Pennycook
I beg to move amendment 136, in clause 3, page 3, leave out lines 21 and 22 and insert— “1, 1A, 1B, 2, 2ZA, 2ZB, 6, 6A four months beginning with the date of service of the notice 5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”
This amendment would ensure that the minimum notice period for a number of ‘no fault’ grounds for possession would be four months rather than two.
Clause 3 amends the grounds for possession in schedule 2 to the Housing Act 1988 in relation to not only the courts making orders for possession, but notice periods, to which amendment 136 relates. Each existing, revised or new possession ground, with the exception of grounds 7A and 14, has a corresponding minimum notice period after which either a tenant must vacate the property or the landlord is permitted to start court proceedings to regain possession. Each of these minimum notice periods is set out in clause 3(3). I will read them all out for the record, Mr Gray, because it is important that we know precisely which grounds we are talking about.
As the Bill stands, there is a minimum notice period of two months before the landlord can begin court proceedings under grounds 1, 1A—which we have just discussed—1B, 2, 2ZA, 2ZB, 5, 5A, 5B, 5C, 5D, 6, 6A, 7 and 9. There is a four-week notice period for grounds 5E, 5F, 5G, 8, 8A, 10, 11 and 18, and a two-week notice period for grounds 4, 7B, 12, 13, 14ZA, 14A, 15 and 17.
Amendment 136 amends the provisions in question by creating a new minimum notice period of four months that would apply to a number of existing, revised or new possession grounds that can still fairly be categorised as de facto no-fault grounds because they could be used to evict even model tenants who scrupulously adhere to the terms and conditions of their tenancy agreements. The grounds for possession that we believe should have their minimum notice periods increased from two to four months are the new mandatory grounds for possession 1 and 1A for occupation of a property by the landlord or their family and for its sale; ground 1B for sale of a property by a registered provider of social housing; ground 2 for sale by mortgage; grounds 2ZA and 2ZB for when a superior lease ends or when a superior landlord becomes the direct landlord; ground 6 for redevelopment; and ground 6A for when compliance with enforcement action is required. Grounds 5, 5A, 5B, 5C, 5D, 7 and 9 would retain a minimum notice period of two months, as provided for by subsection (3).
While there are legitimate, genuinely held differences of opinion between the Opposition and the Government about how Ministers propose to implement the ending of section 21 evictions, there is broad consensus in the House on the removal of section 21 by means of the Bill. It is obvious why such a consensus exists. As we have discussed, landlords can evict tenants with as little as two months’ notice at any point after their fixed-term tenancy has come to an end, without giving a reason for doing so, or even having such a reason.
As we discussed this morning in discussion on clause 1 stand part, significant numbers of tenants are evicted each year through a section 21 notice. Worryingly, the numbers appear to be rising; the Government’s own figures make it clear that between July and September of this year alone, accelerated procedures numbers for England increased across all actions, with claims up 38%, orders up 32%, warrants up 31% and repossessions up by 29%. No-fault, no-reason evictions are hugely disruptive for tenants; they harm the health, wellbeing and life chances of many, particularly the growing number of young people growing up in the private rented sector. They are also the leading cause of homelessness in England.
Abolishing section 21 is, then, long overdue, and when it is finally enacted it will give private renters much-needed security in their homes and enable and embolden them to assert and enforce their rights more vigorously. However, the abolition of section 21 will not entirely remove the threat of short-notice frequent evictions, which put tenants at risk of homelessness, and the Bill proposes to retain a number of de facto no-fault grounds for possession with, as I explained earlier, minimum notice periods of just two months.
Some would argue, as the Minister may, that two months is more than enough time to find a new private rented property, but we think that such an assumption is highly questionable. There is a wealth of evidence to suggest that a significant proportion of the approximately 11 million private renters in England struggle to do so, particularly in hot rental markets where demand is extremely high, as pointed out in the evidence given by James Prestwich from the Chartered Institute of Housing. For example, research carried out by Shelter suggests that for 34% of renters it took longer than two months to find and agree a new tenancy the last time they moved. Worryingly, that increased to 40% of renters with children and 46% of black renters. That highlights the additional challenges faced by particular tenant cohorts.
Our amendments do not press for a blanket four-month minimum notice period in relation to all grounds for possession. That would be excessive and limit the ability of landlords to quickly regain possession of their properties in legitimate circumstances. For example, if a tenant is found guilty of breaching one of the terms of their tenancy agreement, it is right that, albeit on a discretionary and not mandatory ground, the landlord can recover the property in two weeks. We would not want to extend notice periods in a uniform way in that respect, which would undermine ground 12 or any number of others.
However, we do feel strongly that when it comes to the de facto no-fault grounds that the Bill provides for, the notice period should be increased to better protect tenants against the risk of homelessness, particularly families and those who, for a variety of reasons, will struggle to secure a new home within two months. As Ben Twomey, the chief executive of Generation Rent, put it in our evidence sessions:
“We think there should be better protections”
in this part of the Bill. He continued:
“It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 38, Q38.]
The Government maintain that, as we have just discussed, the Bill strikes the right balance between the interests of landlords and tenants. Indeed, the Minister made the point in the previous debate, and this morning, warning us that to seek to upset that delicate balance would be to invite ruin. We do not believe that the Bill as it is currently drafted strikes the right balance between the interests of landlords and tenants. The proposed notice periods are a prime example of where we believe the playing field is still tilted towards the landlord interest, in a way that would cause real problems for tenants. To ensure that the playing field between landlords and tenants is truly levelled, the latter require greater protection when it comes to the notice period for the de facto no-fault possession grounds that are to remain in force as a result of the Bill. I look forward to hearing the Minister’s response.
Lloyd Russell-Moyle
I rise to support the amendment —no surprise there. We have a crisis not only in our private rented sector, but with the burdens that local authorities are having placed on them, with people coming to them at short notice because they are losing their homes. Many Members will know that two months is just not long enough for many local authorities to assist the constituent or, in this case, tenant to find a home in time. They are put into emergency accommodation at great cost to the council and the public purse. As a result of section 21s and the short period people have to find homes, last year 24,000 households were threatened with homelessness and had to resort to their local council. That is a huge number, and our local councils are suffering. The emergency accommodation spending of Hastings Borough Council, just down the road from me, has gone from £500,000 to £5 million this year. How can a council find that amount of money in three years? Almost exclusively, the cause is the ending of private tenancies.
We all think that private tenancies will need to end sometimes. No one thinks they should not when there are legitimate reasons. The Conservative party manifesto said that the Government would end no-fault evictions. It did not say that they would end just section 21s: it said they would end no-fault evictions. Clearly, that has not happened. We all agree that there are some reasons why a no-fault eviction might be needed, but serving those no-fault evictions with the same terms and time limit as section 21 evictions seems to breach the spirit, if not the letter, of not only the governing party’s manifesto but the point that we are meant to be rebalancing and giving time for tenants to find properties.
We could choose any number and say it was suitable, but let us think about the cycle through which people find houses. It will often take a number of weeks just to look for a house. Then someone will have to raise the money to pay for a deposit in advance, which might require one or two pay cheques. The Minister has already dismissed my amendment on rent-free periods, so people will have to raise that amount from the money they are earning at the time, and that may take a number of months. For a lot of private renters, 60% of their salary goes toward rent, so the idea of having to raise a month’s rent in advance in two months is almost impossible.
There is then the need to ensure that contracts are signed and references are done. To go through all that process in two months, someone would effectively need to have found a property on day one of getting the order. Four months is a much more reasonable period for someone to be able to do all that, when there is no fault of their own. It is incumbent on the Minister to at least consider that idea, and if not, to ask what additional protections and support will be given to tenants and local authorities to aid that transition, which is currently not aided.
All that is without me even touching on children and the fact that they will need to move schools. Four months would also mean that a child can make a move between schools within term-time and half-term periods. That allows a parent to say to their child, if they are having to move, “At half-term you will be starting at a new school.” These are important things for raising families, and the cycles are not unrealistic.
Of course, there will always be need for quicker evictions. There will be fault evictions. There will be pre-notice evictions. My Front-Bench team is not proposing to change any of them; I think that that is a reasonable balance for everyone. I urge the Minister to accept the amendment.
Ms Karen Buck (Westminster North) (Lab)
I, too, urge the Minister to accept the amendment. It is common knowledge that London is at the sharp end of the pressures in this respect, and the need for a more flexible approach is pressing.
The Government are missing a recognition that the private rented sector, and moves within it, are not as they were, as we touched on earlier. The profile of renters is now completely different compared with the situation a decade or two ago, so the needs of households need to be accommodated in the management of the sector. There are more families in the sector and, as my hon. Friend the Member for Brighton, Kemptown said, we need to ensure that families with children are given sufficient lead-in time to move their children between schools. For families with two or three children, that can involve finding a way of moving children in primary school and secondary school and between nurseries. These are major logistical tasks.
The Chair
Order. It is also an extremely bad idea to argue with the Chair. You did not make yourself known to me, I did not see you, and saying you did puts you in bad odour, so just don’t do it.
Mike Amesbury
Thank you, Mr Gray. I rise to support the amendment, which is a pragmatic response to the current housing market conditions, which are particularly acute in London and the south-east, for those who are vulnerable and do not have buying power, such as young professionals. My hon. Friend the shadow Minister highlighted a rather startling figure from Shelter: 40% of renters with children wait way beyond the two months currently in the Bill.
Members have also referred to the cost ultimately to the Exchequer, but certainly to local authorities. We have 104,000 people—a record number—living in temporary accommodation, and the cost to local authorities is £1.7 billion. That is another startling figure, and maybe the Chancellor will respond to it tomorrow with changes to the local housing allowance. I think the amendment is pragmatic. It is about focusing on the families and vulnerable tenants most in need in a marketplace that has limited availability. I think local housing allowance covers about 5% nationally—
Mike Amesbury
Of course it is far worse in London and, indeed, other cities. I urge the Minister and the Government to do the to do the right thing with this amendment.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich for tabling amendment 136, which seeks to lengthen the notice period that landlords must give for some grounds of possession. The notice period in the Bill balances the needs of both tenants and landlords. We have not reached our decisions without a lot of thought and careful consideration over many years and in collaboration with the sector.
It is important to give tenants sufficient time to find a new home. However, notice periods must also balance that aim with ensuring that landlords can manage their assets. For example, they may need to sell or move into the property, which might also be their long-term family home. Landlords must also be able to comply with enforcement measures or contractual requirements, such as superior leases, in a timely manner. Setting a longer notice period would undermine landlords’ confidence in dealing with such reasonable scenarios. We encourage landlords to work flexibly with their tenants and notify them of their intentions as far in advance as possible, but we also recognise that that is not always possible.
As Members have indicated, we think our approach strikes the right balance, so I ask the shadow Minister to withdraw the amendment.
Matthew Pennycook
I will not withdraw the amendment; I am going to press it to a vote because, again, I do not think the Government have got the balance right. I do not think that two months’ notice is sufficient for a whole cohort of tenants, and I think my hon. Friend the Member for Weaver Vale is absolutely right. There is a basic issue of fairness here in terms of the profile of the private rented sector, as it now is. We can all look at the minimum notice period in the explanatory notes and think that it seems very reasonable: “Two months. Who could not make two months?” But we all look at that as highly paid professionals who could move in that period of time. Older people, disabled renters, or renters with a family simply cannot do that.
I put the Shelter figure to the Minister again. He may question the figure, but it seems like it comes from a very detailed study. What are the Government saying to the 34% of renters who could not move within that two-month period when they last moved? The Government are effectively saying to those renters, “You’re at risk of homelessness,” and we do not think that is fair. On the de facto no-fault grounds—which, just to be very clear, are mandatory; we are not talking about every ground—the Government should think again.
Jacob Young
The hon. Member refers to fairness, but the situation is not fair for the landlord either. A landlord who wants to move into their property for whatever reason—we do not know the reasons, but it could be a reasonable ground—or sell it would have to wait an additional two months. We are talking about two months’ notice to provide grounds for possession, so in reality it could be much longer than that because it could be two months plus whatever court proceedings come afterwards.
The hon. Member is saying that we should extend the period to four months. On the basis that a typical court hearing would take 22 weeks, as we have heard elsewhere, we are talking about a period of nine months between when a landlord might want to move into their property and when they can actually do so. I do not think that that is fair either. As I say, we believe that we are striking the right balance.
Matthew Pennycook
I say two things to the Minister. First, the minimum notice periods are from the date of service of the notice. I take the point about court reform, but this is at the point of service of the notice, not the point of the possession award; they are the minimum periods that apply. Secondly, what is his answer to the 34%? There is evidence out there from organisations with expertise in this area. What the Minister is saying is that the Government are content to see a third of tenants given a minimum notice period in which they cannot possibly reasonably find a new property.
There is a fairness point and also a cost point, which the Government should, from their own perspective, be more concerned about. The cost of those renters not being able to find properties will be borne by local authorities. As Parliamentary Under-Secretary of State for Levelling Up—I think I have his title correct—the Minister will know what is happening with Liverpool City Council. Its spend on temporary accommodation increased by 7,660% by the end of the fiscal year compared to 2019. Several London councils, including my own, are in financial difficulty because of temporary accommodation costs. This is not sustainable. If the Government are going to allow this broad swathe of new mandatory de facto grounds to be in place with a two-month notice period, that situation will persist.
The last thing I would say goes to a point made by my hon. Friend the Member for Brighton, Kemptown earlier. Lots of tenants served with these notices are going to find somewhere and move out before the date. We are talking about the hard cases where people cannot move out. I think the Government have a tin ear on this—they have a mindset issue when it comes to grappling with what the PRS looks like now. By refusing the amendment, the Government are effectively saying, “That’s their problem.” We think the Government should think again, so we intend to press the amendment to a vote.
Question put, That the amendment be made.
Jacob Young
I beg to move amendment 1, in clause 3, page 3, line 21, after “2ZB,” insert “4A,”.
This amendment adds the new Ground 4A inserted by Amendment 9 to the table that the Bill inserts into section 8 of the 1988 Act, with the effect that a notice under that section relying on that ground must specify a date no sooner than 2 months after the date of service of the notice.
The Chair
With this it will be convenient to discuss the following:
Government amendment 9.
Amendment (a) to Government amendment 9, line 16, at end insert—
“(e) the property was exclusively advertised through a specified educational institution, their agents or providers as outlined in Schedule 1 of the 1988 Act.”
This amendment would only allow Ground 4A to be used as a ground for possession when the property was exclusively advertised through an educational institution, rather than in relation to a HMO property which is not exclusively provided to students.
Jacob Young
Government amendments 1 and 9 introduce a new ground for possession to ensure that the annual cycle of student lettings can continue in the new tenancy system. We have spoken to many, including landlords and universities, who are concerned about the potential impact of our reforms on the student market. I thank all those who have engaged with us on this important issue. The amendments address the concerns in a balanced and proportionate way.
As many of us will have experienced, the student housing market works on an annual, cyclical basis. Students typically move in and out of properties over the summer, in line with the academic year. Without the backstop of section 21, we understand that landlords would no longer be able to guarantee that properties would be empty for new groups of students. That would have knock-on implications for students, who could not sign up for properties in advance and know that they had somewhere to live for the start of the academic year. The introduction of this ground will mean that the annual churn of “typical” student lettings is maintained. Landlords letting to full-time students can ensure a property is vacant at the end of the academic year and ready for a new group of student tenants over the summer months.
I would like to reassure Members that we have designed the ground carefully. Our approach will protect this crucial part of the market while balancing the needs of both landlords and students. The ground can be used by landlords in England when a house in multiple occupation is occupied by full-time students at the start of a tenancy and the property is needed for a new group of students for the next academic year. That means that the ground is unlikely to capture students who have children or other caring responsibilities, or who are studying part-time alongside their main job.
The amendment tabled by the hon. Member for Brighton, Kemptown is therefore not necessary. It would narrow the scope of the ground significantly. Most properties are advertised on Zoopla or Rightmove rather than through a university, so the amendment would not provide the carve-out that the student market needs. Landlords will be required to give tenants at least two months’ notice in line with the other “landlord circumstance” or “no fault” grounds. I hope the hon. Member will withdraw his amendment to clause 9.
Lloyd Russell-Moyle
I am sceptical about the need for a special student carve-out. The National Union of Students is sceptical as well, but it did acknowledge that if worded correctly it could provide some relief to support a special dedicated market.
I think the Government’s amendment is too broad: it attacks the market that students might be bidding in rather than specifying student markets. There are three markets for the students to bid in. One is purpose-built student accommodation, which already has an exemption and a ground in the Bill—no problem. The second is the student-only houses in multiple occupation market, which is usually advertised via universities or organisations such as Unipol, and focuses only on students. Then there are the HMOs available for young professionals and young people.
Most of the HMOs on the seafront in my constituency are not occupied by students; they are occupied by young professionals looking to eventually get a house to themselves, but they are sharing. There might be people who share accommodation for cost-saving purposes. The measure gives an exemption to that market if the landlord lets to students only. It sucks away a market that is already overstretched—the HMO market—and pushes it into the student market. Already there is pressure because the student market pays more than the general HMO market. The measure will exacerbate that and make things far worse. I am deeply worried about that unintended consequence.
We could stop that unintended consequence. If a property is only for the student market, of course we recognise that, but it should be advertised only via student letting agencies—at the university or via a registered provider. That is largely done, anyway. Universities often pair up with local letting agents and assign letting agents that are trusted providers. My amendment allows that, but it treats the exemption much more like the purpose-built student accommodation exemption. In the long run, universities should have a duty to provide housing—purpose-built or HMO—via the university for all students who want it. That would relieve a lot of the tensions that we get in communities where people are fighting over HMOs—young professionals versus students.
There are measures via article 4 directives under the planning regulations, but they are blunt tools. What we really need is a duty given to universities to ensure that any student who so wishes can be provided with accommodation. That would be a long-term solution. It would solve the madness in Manchester this year—students having to live in Liverpool because not enough accommodation is provided for them in Manchester. But that will not be solved by the Government’s amendment. In my view, it could be made worse.
Providing that all student accommodation needed to be advertised via the university would also allow the university to have a better appraisal of what accommodation was available for their students. It would allow the university to liaise with landlords. When there are problems in communities with student houses—I do not want to be unfair to students, but they are sometimes known to enjoy a party here or there—the universities would be involved in that process, rather than students just being out in the wild, as it were. Good universities already do that. Most universities already have that process.
My other fear is that the measure will make it harder for students who actively choose to live in mixed households, because landlords will not want mixed households. Students who at the moment want to enter the general HMO market and live in a mixed household will now be discouraged. The landlord will say, “No, even though I am advertising this on the general market, I would quite like to rent to an exclusive student household.” The measure also underestimates the flexibility of the student experience: students will drop out, want to stay or want to go into work.
Finally, the danger of the Government amendment, without my amendment, is that it will embed the very problem with the student market. Anyone whose children have gone to university or who has recently been to university themselves will know that, by January, students already have to decide what accommodation they will have next year. Preserving that function of the market is not a positive thing. Students have not developed deep friendships—they only arrived in October—and often have not actually worked out what course they want to do. If they are on a course that has vocational or work placement elements, they do not know where those placements will be. It is impossible for those students to properly plan. Young people who come through clearing are often scrabbling around; by that point, purpose-built accommodation is already taken, and private rented properties are already snatched up.
We could push back the point at which a landlord would know whether that property was vacant. If the students want to stay, there is no problem: the landlord is still going to get the rent, and for the landlord there is no argument there. But if the landlord knew only a few months beforehand—perhaps a two-month or four-month notice period—then students would be deciding in July or August about what accommodation they would be living in. That would give students who had gone through clearing or were going into work placements much better options in the private rented sector.
I worry that, without my amendment, we are locking in many of the problems of the student market. I would struggle to withdraw my amendment, because I think it improves the Minister’s amendment: it does what he is trying to do, but without the unintended consequences.
Matthew Pennycook
I thank the Minister for his explanation, but it lacked detail; I am still not particularly clear on the Government’s rationale for drafting and tabling the amendment as it stands. I will come to the reasons why, but I want first to thank my hon. Friend the Member for Brighton, Kemptown for raising an important issue in relation to student lettings. I fully agree that we need to do much more to improve the student lettings market and drive up professionalism in it.
Lloyd Russell-Moyle
I should have declared at the beginning that I am a trustee at the University of Bradford Union of Students, which has a board member place on Unipol, the student lettings agency.
Matthew Pennycook
The Committee will have noted that. I have no doubt that lettings services run by universities and student unions have an important and effective part to play in driving up professionalism and improving the functioning of the market.
As we have heard, Government amendments 1 and 9 make provision for new possession ground 4A, which would allow a student HMO to be recovered by a landlord for further occupation by students. On the Opposition Front Bench, we take a slightly different view from my hon. Friend the Member for Brighton, Kemptown: we welcome the fact that the Government have recognised that the student market is distinct in particular ways from the rest of the private rented sector and that its protection requires a bespoke approach of some kind. We appreciate the arguments advanced by some landlords operating in the sector about the fact that much of the student market—not all of it; I will come to that—is cyclical and that landlords need a means of guaranteeing possession each year for a new set of tenants. However, we are equally cognisant of the concerns put forward by bodies and organisations representing students and their interests about the potential implications of treating student renters differently from other private tenants—the precedent that might set and the problems that might arise as a result of specific exemptions for certain types of purpose-built dwelling.
In determining whether the Government have struck the right balance as it relates to this measure, we need to grapple with the fact—my hon. Friend the Member for Brighton, Kemptown referred to this—that defining what constitutes a student dwelling is deeply challenging, given the diversity of individuals engaged in higher education and how varied their educational circumstances can be. There is also the fact that some private dwellings will be shared between students and people in employment, whether because the people working have chosen to remain in the area following completion of study or because it made sense for the student in question to move in with an individual of working age who was already at work when they signed their tenancy agreement.
Paragraph (a) of the proposed new ground 4A makes clear that it may be used for houses in multiple occupation and where each tenant is a student at the beginning of the tenancy. Is the implication of the paragraph that, to make use of the ground, a landlord would have to verify at the point the tenancy was signed that every individual who would occupy the property was in fact a student? If a landlord let a house, for example, to two students and one person working full-time, would they not be able to make use of new ground 4A? If it is the case that landlords cannot use new ground 4A to gain possession of a household of, say, part-time students sharing with full-time workers, can the Minister explain whether the Government have undertaken any assessment of the impact of the new possession ground on the availability of rental housing, particularly in towns and cities with large student populations where, as my hon. Friend said, the supply of student housing is already under enormous pressure? I know that, too, from my own constituency.
A further complication is added into the mix by sub-paragraph (a)(ii), which provides for use of the ground where
“the landlord reasonably believed that the tenant would become a full-time student during the tenancy”.
That strikes us as an incredibly low evidential threshold to have to meet. Can the Minister explain how on earth landlords will be expected to prove that such a belief is legitimate? Who will they need to satisfy, if anyone, that there are reasonable grounds to assume that a non-student tenant will become a student during the lifetime of the tenancy?
We are genuinely concerned that Government amendment 9 as drafted could be abused by unscrupulous landlords following the enactment of chapter 1 of part 1 of the Bill. Relying on paragraph (a)(ii), one could easily imagine landlords evicting groups of, say, young working tenants sharing a property using the justification that they believed they intended to become full-time students before the tenancy agreement expired. We would venture that the courts themselves will struggle to ascertain whether a landlord has proved the new ground by relying on sub-paragraph (ii) and that most evictions under 4A, like other mandatory possession grounds, will probably not even arrive before a judge—the tenants will simply leave, the threat having been made. We would welcome further clarification from the Minister about why sub-paragraph (ii) has been included in the proposed new clause and would like some robust assurances that it cannot be abused to facilitate section 21 no-fault evictions by the back door.
Another complication arising from the wording of the new clause concerns paragraph (c) on lines 11 and 12 of the amendment paper. That states that new ground 4A can be used to gain possession only between 1 June and 30 September in any year. However, as hon. Members with student populations in their constituencies will know, a large number of UK universities now also accommodate a winter intake in January. They do so not only for postgraduate students; it is now also the main secondary intake for some undergraduate courses. Given that the proposed new possession ground is available for use only during June and September, we are concerned it could have the unintended consequence of impacting detrimentally on the availability of other properties for students to let at other times of the year, given that under the proposed new ground there is an inherent incentive for landlords to let only on the primary summer-to-summer cycle.
If it is the Government’s intention to ensure that there is a cyclical availability of student accommodation, we suspect that they may need to think again about how it is achieved for students whose academic year starts and finishes at times other than those specified in the amendment. Moreover, even for those students who finish their courses in the summer, there is a wide degree of variation between undergraduates, who will usually finish earlier; postgraduates, who may be working on research projects until a much later date; or undergraduates undertaking placements.
Jacob Young
Let me address some of the hon. Gentleman’s questions straightaway. On whether a landlord will have to check that the tenants are students, they must do that at the beginning of the tenancy. They can be fined if they try to use these grounds without having notified the students that they are in student accommodation and that the grounds are therefore included.
The hon. Gentleman asked if everyone in a property must be a student. That is the case; if the property is mixed occupancy, the ground will not apply. On his point about reasonable belief, that is specifically in relation to first-year students who have not yet become a student. A landlord can reasonably believe that a student taking out a tenancy is to become one, but until they are a student they are not technically one just yet.
The ground is designed to cover the majority of the market. Were we to make the ground available all year round, it would give much less security and open it up to much greater abuse.
Lloyd Russell-Moyle
That is why it is better to swap in my amendment on this point. Rather than working with the universities on the particular cycle they might have in their local area, we are trying to legislate for term times here in Westminster, but it does not work. Will the Minister go away, maybe when the Bill goes to the other place, and rethink how we can have a clause that requires landlords to work with a university to ensure that letting is in line with the relevant local term times and not our attempts to legislate for these things here? I get what the Minister is trying to say.
Jacob Young
I completely take the hon. Gentleman’s point. Obviously, on the back of the conversations we have had today, we will consider these measures further. The ground has been carefully designed in consultation with stakeholders—landlords, universities and so on—to facilitate the annual cycle of short-term student tenancies. That is why we specifically created that gap in the change in the academic year.
Matthew Pennycook
If I have understood the Minister correctly, he has made a commitment to go away and think further about this. As it stands, is there anything in the Bill that would protect students whose courses are not on that summer-to-summer cycle from being evicted through the use of the new mandatory ground? We do not think there is, which is why we think the Government need to think again. Is anything forthcoming or in the Bill that is designed to protect against the problem I spoke about—postgrads or others who go beyond the summer cycle? It may be a minority of students, but it is still a significant minority.
Jacob Young
I undertake to write to the hon. Gentleman with the assurances he seeks. We have designed the ground carefully with landlords, because we have listened to their concerns, particularly about the student market. None of us in Committee today would want to end up in a situation where, on Royal Assent, we were not able to facilitate student accommodation.
Mike Amesbury
I want to probe the Minister a little more on the point that the landlord “reasonably believed” someone could be a student. Some time ago I was a councillor in Fallowfield, which had large areas of student accommodation. Some of those were mixed tenancies, but people would have made an assumption—would have reasonably believed—that all the people who lived there were students. Is that covered? Is the clause tight enough?
Jacob Young
As I said, everyone in a property would have to be a student. It would be an obligation on the landlord to ensure that they are students or that he or she reasonably believes that they are students. We will follow the Bill with statutory instruments plus guidance; we can make it clear in the guidance what we expect. For those reasons, I ask the hon. Member for Brighton, Kemptown not to press his amendment.
Mike Amesbury
It is about evidencing that. It would be in the guidance, but what kind of evidence would the landlord need to provide?
Jacob Young
I am not in a position to outline that today. I have made it clear that, in terms of a landlord reasonably expecting someone to become a student, that would hinge on them starting term in the very near future. I think that that is clear, but we will set that out further in guidance. For those reasons and others, I ask the hon. Member for Brighton, Kemptown not to press his amendment.
Lloyd Russell-Moyle
The Minister has given a good rationale for his amendment. Paragraph (d) requires the landlord, in the next letting cycle, to be letting out to exclusively students or those he believes to be students. How will we assess whether the property has been let out to students exclusively? That is the only point of the clause. Will the property portal be an opportunity to record information about whether the house is a student let, so that we can be clear when the tenancy is signed and when the next tenancy is released that it is a reserved student property?
Jacob Young
It is likely that a new contract would have to be signed with the new tenants, who would be students, for this to be used. It would be unusual for a judge to think that, “I thought all of these people were suddenly going to become students,” would be a reasonable argument to use this ground. I do not think the hon. Gentleman’s points have merit, and I ask him not to press his amendment to a vote.
Lloyd Russell-Moyle
I am not inclined to press my amendment, because the Minister has given assurances that he will go away and rethink the clause. I am still not happy about the clause, and we will see what we do on the substantive issue, but there are problems with paragraph (d). The provisions do not work with the universities; they set things in Westminster, rather than saying that the property should be protected because it has been let via an approved university letting agent or the university itself. That seems like a solution the Minister could grab. It would solve his term dates problem, his “Is it going to be let to students?” problem and his “Is it being let to students?” problem. In fact, every single question we have would be solved by my amendment. The Minister has said, and I will take it in good faith, that he will go away, look at this and see how things could be amended, and I will push him on Third Reading on what ideas he has come up with.
Amendment 1 agreed to.
Matthew Pennycook
I beg to move amendment 137, in clause 3, page 3, line 32, at end insert—
“(4) The Secretary of State must lay before Parliament a review of the changes to grounds for possession made under this Act within two years of the date of Royal Assent.”
This amendment would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.
The Chair
With this it will be convenient to discuss new clause 54—Review of changes to grounds for possession—
“(1) The Secretary of State must, within two years of the date of Royal Assent to this Act, conduct and lay before Parliament a review of the grounds for possession in Schedule 2 of the Housing Act 1988, as amended by this Act.
(2) The review must include—
(a) an assessment of the effectiveness of the new or amended grounds for possession set out in Schedule 1 of this Act in securing evictions from properties;
(b) an assessment of the impact on the security of tenure of tenants as a result of the use of the new or amended grounds for possession set out in Schedule 1 of this Act;
(c) a report on the use of enforcement action in relation to the new or amended grounds for possession set out in Schedule 1 of this Act;
(d) an assessment of the effectiveness of the grounds for possession listed in Schedule 2 of the Housing Act 1988 in securing evictions from properties that remain unamended by Schedule 1 of this Act.
(3) The review under subsection (1) must make such recommendations as, in the opinion of the Secretary of State, are necessary in the light of the findings of the review.”
This new clause would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.
Matthew Pennycook
Clause 3, as we have discussed, amends the grounds for possession in schedule 2 to the Housing Act 1988. Once section 21 has finally been removed from that Act through the provisions in clause 2 and the commencement dates in clause 67, the only means by which a landlord will be able to regain possession of a property by evicting a tenant will be by securing a court judgment under the revised section 8 grounds set out in schedule 2 to the 1988 Act, whether they be mandatory or discretionary. We have already debated concerns relating to several of those grounds, and we will debate more in due course when we get to schedule 1. However, we believe it is important to also take a view on the proposed replacement possession regime as a whole, given that it is the most comprehensive reform of the grounds in that regime in the 35 years since the 1988 Act came into force.
Labour recognises, and has repeatedly said since the White Paper was published, that following the abolition of section 21 no-fault evictions, landlords will need recourse to robust and effective grounds for possession in circumstances where there are valid reasons for taking a property back, such as flagrant antisocial or criminal behaviour. However, we have also made it clear that the Bill must ensure that such grounds cannot be abused to unfairly evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland in the wake of the major private renting reforms introduced there in 2017.
The revised set of section 8 possession grounds must reflect the fact that evictions, which are inherently disruptive and often incredibly damaging to tenants’ lives, should be only ever a measure of last resort where no alternative course of action exists. The grounds must be proportionate, secure against abuse from landlords seeking to carry out unfair or retaliatory evictions, and designed effectively so that properties are recovered only when a tenant is genuinely at fault, and they must not cause tenants undue hardship.
Amendment 137 and new clause 54 would require the Government to publish a review of the impact of the amended grounds for possession regime within two years of the Act coming into force. With that requirement, whether individual grounds for possession are further amended, as we hope, or the Government resist our efforts and the grounds remain as drafted, we will at least be able to judge the efficacy and impact of the new arrangements both for landlords seeking to recover their properties when a tenant is genuinely at fault and for tenants who are not at fault but who may suffer as a result of flaws in the regime. We think the amendment is entirely reasonable, and I am interested to hear how the Minister will, no doubt, resist it.
Lloyd Russell-Moyle
I rise to support the amendment. The Minister has already indicated that there is work still to do and that he will go away and see how this will work in practice. Clearly, some of these issues will come out when the Bill receives Royal Assent.
These are sensible measures with which nobody—landlords or tenants—could really disagree. We can no longer have a set of grounds that have been stuck in time for 30 years, and Bills that only add things on from time to time, without stepping back and looking at the changes that have occurred, whether those relate to students—the Minister is pushing for the measures on students to be included in the Bill, rather than in regulations—or any of the other clauses. Consider antisocial behaviour in particular, and the concern that many campaign groups have expressed around potential domestic violence falling foul of the new “likely” or “able to” provisions.
Lloyd Russell-Moyle
The Minister may disagree. That is fine: he will get his way, and we will pass his wording, but there should then be an assurance that, in a few years’ time, there will be a review of the legislation. If the Minister is right, we will applaud him—well, we cannot applaud in the House of Commons, but we will metaphorically cheer him in the House and say that he did such a fantastic job with his civil servants and the Department that the legislation is watertight. Alternatively, we will say that there are some small loopholes that need changing or that the world has changed. I do not think that that is unreasonable.
Personally, I think these sorts of provisions should be in almost all Bills we pass, but they are particularly important in this Bill, because of the dynamic nature of the market and the wholescale reforms we are making. Nobody knows what effects this will have on the courts. Nobody knows quite what effects it will have on tenants. Opposition Members are all talking about unintended consequences, which is why our proposals are so important.
Helen Morgan (North Shropshire) (LD)
I should have referred this morning to my entry in the Register of Members’ Financial Interests. I apologise for that oversight and refer Members to it now.
I rise to support the amendment and the new clause. We have had a lot of discussion, in good faith, about the unintended consequences for the private rented sector and the impact on tenants, but much of this has been guesswork. It would be extremely sensible to have a requirement to look at this a couple of years down the line and to ask, “Have we driven landlords from the market unintentionally? Have we put tenants in an insecure position unintentionally?” It would be remiss of any Government to fail to assess the impact of their legislation.
Ms Buck
I really do hope that the Minister will concede on this point. One of the striking themes that emerged in the evidence sessions was just how little we know about what is happening in the private rented sector. It is to the shame of the Government, and probably even the previous Government, that this massive transformation in the life of the country and throughout the housing stock, which is affecting millions of people, has happened without us having accurate data to assess the impact. We are struggling to catch up in so many respects.
We will no doubt be talking more about the changing grounds for possession in the context of antisocial behaviour and rent arrears but as has been reinforced—we just need to keep saying this—the people in the private rented sector who we have the most concern about are those whose equivalents were not in the private rented sector 20 or 25 years ago. Their patterns of need, the patterns of demand they place on the sector and the risks they have to face are also quite different.
Families with children, families experiencing domestic violence and those with all kinds of vulnerabilities, including serious mental health problems, addictions or learning disabilities, would for the most part not have been in this situation before, but they are now having to be accommodated. It is not only that they are in the private rented sector in a way that they were not before, and are at risk, but that they are disproportionately impacted by harsh decisions that cause them to lose their homes. They face a higher risk and are worst affected.
I do not know whether all Members have experience of this, but any Member of Parliament with a larger private rented sector will be experiencing the consequences and will have traumatised families coming to them with problems who will perhaps be facing eviction and be in distress. That is often for completely trivial reasons or because of circumstances that arise simply out of misunderstandings or the failure of the bureaucratic and social security systems to catch up.
It is the most basic and sensible thing to do to ensure that there is a proper data review and that we make up for the fact that we have spent several decades now trying to understand a system about which we have too little information. The Minister has a chance to put that right.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich and other hon. Members who have spoken on amendment 137 and new clause 54. We all agree that it is vital that the Government keep such an important set of policies under review. We must ensure that the grounds for possession are providing adequate security to tenants and functioning effectively for landlords, too.
We are committed to robustly monitoring and evaluating the private rented sector reform programme. Our impact assessment for the Bill, which has been published online, sets out our plans for evaluation. That builds on the Department’s existing long-term housing sector monitoring work, and we will conduct our process, impact, and value for money evaluation in line with the Department’s recently published evaluation strategy. Setting an arbitrary deadline in law for that work might detract from the quality of evaluation and prevent us conducting as robust an assessment as possible. I therefore ask the hon. Member to withdraw his amendment 137.
Mike Amesbury
Why could this not be added to the current evaluation plans? Surely good law is about assessment of the planning, implementation and then review. Given the nature of the current marketplace and how it can shape things, particularly for those who are out of sight or are vulnerable in the current population, surely that two-year review would be good law.
Jacob Young
I appreciate the hon. Gentleman’s point, but it is not usual for us to include such a review on the face of the Bill.
Matthew Pennycook
I thank the Minister for his response, but it is a little disappointing, and I want briefly to say why.
The point that my hon. Friend the Member for Westminster North made is absolutely right. Unlike in other sectors, we really have no idea of the composition of the private rented sector. That is one reason why the portal is so important: it is such a potential game changer that we can start to get that information, but we do not have it at the moment, so we do not know what the impact of these reforms will be, nor do we know the impact of the changes to the grounds for possession.
I want to bring it home to the Committee that the changes to the grounds for possession are not small. We have new grounds that could potentially work in ways that the Government do not intend; we also have significantly amended grounds. We really need a more formalised review than the Department’s ongoing review process that the Minister has set out.
I urge the Minister to think about that point. If the two years set out in amendment 137 is the wrong deadline or, as he sees it, an arbitrary deadline, we would welcome the Government coming forward with some more formalised means of reviewing the impact not only on tenants, who might find themselves at the sharp end of abuse on some of the grounds, but on landlords, for whom the new grounds simply may not work in the way the Government want. I will not press the amendment to a vote, but I encourage the Government to think about whether we can have something beyond the usual departmental processes. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, ordered to stand part of the Bill.
Schedule 1
Changes to grounds for possession
Amendment proposed: 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.—(Matthew Pennycook.)
Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Question put, That the amendment be made.
Jacob Young
I beg to move amendment 6, in schedule 1, page 66, line 28, after “sell” insert
“a freehold or leasehold interest in”.
This amendment makes it clear that the ground of possession for when a landlord is selling the dwelling-house after a rent-to-buy agreement (Ground 1B) is available where the landlord’s interest is a leasehold one as well as where the landlord holds the freehold of the dwelling-house.
The Chair
With this it will be convenient to discuss the following:
Government amendment 7.
Amendment 147, in schedule 1, page 66, line 29, after “dwelling-house” insert
“or to offer it to another tenant”.
This amendment would allow private registered providers of social housing to use new ground for possession 1B to offer properties to another tenant.
Jacob Young
Government amendments 6 and 7 will apply to ground 1B, which ensures that private registered providers of social housing can gain possession if they want to sell, dispose of a lease on or grant a lease on a rent-to-buy property, having first given the sitting tenant the opportunity to buy it. Many private registered providers will sell their rent-to-buy homes to the existing tenants on shared ownership terms, but where they do not, they will be able to sell the home to another buyer on the same terms as those on which they had intended to sell to the sitting tenant. The amendments are technical changes to ensure that ground 1B works as intended; they will simply ensure that there is no ambiguity about what selling means. They will support the operation of rent to buy.
I thank the hon. Member for Greenwich and Woolwich for tabling amendment 147, which would expand ground 1B. As I have set out, the Bill already takes steps to allow rent to buy to continue to operate in the new system. We are aware that stakeholders are concerned about the issue of providers selling to a different tenant from the sitting one; I will carefully consider that issue further.
I commend Government amendments 6 and 7 to the Committee, and I ask the hon. Gentleman kindly not to press his amendment.
Matthew Pennycook
I rise to speak to amendment 147, which stands in my name and the names of my hon. Friends the Members for Weaver Vale, for North Tyneside and for Brighton, Kemptown.
As we have discussed, schedule 1 specifies the reasons that landlords will be able to seek possession once the new tenancy system has come into force. As the Minister has explained, paragraph 4 of schedule 1 provides for a new mandatory ground 1B, which will require a court to award possession when private registered providers of social housing are selling a property under a rent-to-buy or London living rent arrangement. Social landlords will be able to use the new ground only where the defined period stated in the rent-to-buy agreement has expired, and to do so they will have to have complied with any terms in the relevant agreement that require them to offer the sitting tenant the opportunity to purchase the property.
The Bill is concerned primarily with the private rented sector, but it has implications for social housing providers in a number of different areas. New mandatory ground 1B relates to one of those, namely affordable products, offered by registered providers, that are designed to enable tenants to use the savings accrued by sub-market rents to save up for a deposit and ultimately purchase the property at a price no more than market value before it is offered for general sale. New ground 1B will ensure that rent-to-buy schemes, including London living rent, will remain viable in the new tenancy system by providing a mechanism for possession to be gained to sell the property at the end of the scheme in line with the terms of agreement.
Although the new ground is absolutely necessary, the proposed drafting would prevent it from being used when a rent-to-buy property is not being sold but when a new tenant is moving into it. A hypothetical example was given by the chief executive of the National Housing Federation, Kate Henderson, in Tuesday’s evidence session:
“you have somebody who is in a rent-to-buy property, has been there for five years and has decided that they do not want to buy it or they cannot buy it; we would like the ground available so that that property could be given to another tenant who would like to use the property as it was intended and designed to be used—as a rent to buy.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 52, Q63.]
Jacob Young
The points that the hon. Gentleman raises are fairly technical in nature, so I will endeavour to write to him as soon as possible; I will copy in members of the Committee. As I have already outlined, I will consider his amendment 147 carefully in the further steps of the Bill.
Matthew Pennycook
I think that that is about as positive a response as will come, so I look forward to what may be forthcoming from the Government.
Amendment 6 agreed to.
Amendment made: 7, in schedule 1, page 66, line 29, after “dwelling-house” insert
“or to grant a lease of the dwelling-house for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord”.—(Jacob Young.)
This amendment makes the ground of possession for when a landlord is selling the dwelling-house after a rent-to-buy agreement (Ground 1B) also available to a landlord who is granting a lease of over 21 years.
Matthew Pennycook
I beg to move amendment 188, in schedule 1, page 67, line 23, after “terminate that tenancy”, insert
“(including any tenancy at will or other tenancy arising on expiry of a fixed-term lease)”.
This amendment would extend Ground 2ZA to apply in a situation where a tenancy at will may arise.
The Chair
With this it will be convenient to discuss amendment 189, in schedule 1, page 67, line 40, at end insert—
“(c) where the intermediate landlord serves notice under this Ground, the intermediate landlord shall be deemed to continue to hold sufficient interest in the dwelling-house to maintain a continuing right to possession until conclusion of any possession proceedings.”
This amendment would ensure that an intermediate landlord retains possession of the property and remains as the landlord of the occupying tenant until the conclusion of possession proceedings.
Matthew Pennycook
In her evidence to the Committee last week, in addition to the request that she made on behalf of housing associations in respect of new ground 1B, the NHF chief executive Kate Henderson also made the case for greater clarity in the Bill on new mandatory ground 2ZA. As is set out in the explanatory notes accompanying the Bill, new ground 2ZA will require a court to award possession when a social or other specified intermediate landlord
“has a superior lease and that superior lease is coming to an end”,
thus enabling them to comply with the terms of the superior lease to which they were subject. The clarification for which Ms Henderson argued related to if new ground 2ZA could be used on a tenancy at will—in other words, a tenancy that arises when a tenant occupies a property with landlord consent indefinitely on the basis that either party can end the arrangement by giving immediate notice at any time.
Amendment 188 would ensure that new ground 2ZA would apply in a situation in which a tenancy at will may arise. That is particularly important for social landlords who use superior and intermediate leases to provide specialist supported accommodation.
Amendment 189 would ensure that social or specified intermediate landlords obtain possession of a property when serving notice under the ground. That would see those landlords remain the landlord of the occupational tenant until the conclusion of possession proceedings, rather than running the risk of the superior landlord becoming the landlord for the occupational tenant. We believe that these are both common-sense amendments, and we hope that the Government will accept them either today or at some future point.
Jacob Young
I thank the hon. Gentleman for tabling amendments 188 and 189, which seek to amend new ground 2ZA. I know he said they were a concern to the National Housing Federation. We have had similar conversations with the federation. The amendments would change the ground so that it would continue to apply where the superior lease should have ended but is carrying on in some capacity, either as a tenancy at will or in another form. The ground is already drafted to cover those circumstances, so the amendments are unnecessary.
The amendments would also seek to make a much broader change that would allow the intermediate landlord to retain an interest in the property after the superior lease has come to an end. That would be where the intermediate landlord has commenced possession proceedings, presumably to enable them to conclude them. It is already the case that superior leases can make contractual provision for exactly that scenario, and the Bill does not interfere with that. Where there is not contractual provision in the superior lease, ground 2ZB in the Bill allows a superior landlord to continue the same possession proceedings. That will ensure that possession proceedings can continue.
I therefore ask the hon. Member kindly to withdraw his amendment.
Matthew Pennycook
Those were two very helpful explanations of why these amendments are necessary. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jacob Young
I beg to move amendment 8, in schedule 1, page 68, line 25, at end insert—
“(d) after that unnumbered paragraph insert ‘and—
(c) if the tenancy arose by succession as mentioned in section 39(5), notice was given to the previous tenant under Case 14 of Schedule 15 to the Rent Act 1977, and
(d) the tenancy is not an assured agricultural occupancy in respect of which the agricultural worker condition is fulfilled by virtue of paragraph 3 of Schedule 3.’”
This amendment to the ground of possession for former student accommodation requires notice to have been given under the equivalent Case in the Rent Act 1977, where the assured tenancy succeeded a tenancy under the 1977 Act, and makes an exception for certain assured agricultural occupancies which arose by succession.
Jacob Young
Under the new system, landlords will be required to notify their tenant, through the new mandatory written statement of terms, where they wish to regain possession through the use of what are called “prior notice” grounds. Government amendments 8 and 10 make consequential changes to the Housing Act 1988 to reflect the new “prior notice” requirements. This will preserve the enhanced security of tenure afforded to assured tenancies that have succeeded tenancies under the Rent Act 1977 and assured agricultural occupancies.
Government amendment 60 will make further consequential changes to the Housing Act 1988 to reflect new “prior notice” requirements. These requirements under the new system mean landlords will need to notify their tenant through the new mandatory written statement of terms, where they wish to regain possession through the use of what are called “prior notice” grounds.
I commend the amendments to the Committee.
Amendment 8 agreed to.
Amendments made: 9, in schedule 1, page 68, line 25, at end insert—
“New ground for possession of student HMO for occupation by students
9A After Ground 4 insert—
‘Ground 4A
The dwelling-house is an HMO and—
(a) at the beginning of the tenancy, as regards each tenant either—
(i) the tenant was a full-time student, or
(ii) the landlord reasonably believed that the tenant would become a full-time student during the tenancy,
(b) the tenants are joint tenants,
(c) the date specified in the notice under section 8 is a date between 1 June and 30 September in any year, and
(d) the landlord seeking possession intends, on the next occasion on which the dwelling-house is let, to let it to people who are full-time students or who the landlord reasonably believes will become full-time students during the tenancy.
In this ground, “full-time student” means a person receiving education provided by means of a full-time course—
(a) of any description mentioned in Schedule 6 to the Education Reform Act 1988 provided by an institution in England or Wales;
(b) of any description mentioned in section 38(2) of the Further and Higher Education (Scotland) Act 1992 provided by an institution in Scotland;
(c) of any description mentioned in Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)) provided by an institution in Northern Ireland.’”
This amendment inserts a new ground of possession to allow a landlord to recover possession of a house of multiple occupation let to full-time students at the end of the academic year, in order to let it to students again.
Amendment 10, in schedule 1, page 68, line 27, at end insert—
“(b) after paragraph (b) insert—
‘(c) if the tenancy arose by succession as mentioned in section 39(5), notice was given to the previous tenant under Case 15 of Schedule 15 to the Rent Act 1977, and
(d) the tenancy is not an assured agricultural occupancy in respect of which the agricultural worker condition is fulfilled by virtue of paragraph 3 of Schedule 3.’”—(Jacob Young.)
This amendment to the ground for possession for a residence for a minister of religion (Ground 5) requires prior notice to have been given if the tenancy arose by succession after a statutory tenancy, and excepts certain agricultural occupancies from the ground.
Jacob Young
I beg to move amendment 11, in schedule 1, page 71, line 35, leave out from “authority” to end of line 36 and insert
“means a district council, a county council in England for an area for which there is no district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.”
This amendment makes it clear that the reference to a local housing authority in new Ground 5G in Schedule 2 to the Housing Act 1988 does not cover Welsh county councils and county borough councils.
The Chair
With this it will be convenient to discuss Government amendments 50, 61, 66, 69, 79 and 107.
Jacob Young
These amendments will make technical changes to remove separate definitions of “local housing authority” and create a single definition to be used throughout the Bill, to ensure alignment and greater simplification as far as possible. For example, Government amendment 11 excludes Welsh local authorities and includes county councils in England where there is no district council, in new possession ground 5G. I commend the amendments to the Committee.
Matthew Pennycook
I will be very brief. The Minister and I discussed this subject outside the Committee earlier. As he knows, the Levelling-up and Regeneration Act 2023 has created a new kind of authority for England: combined county authorities. However, CCAs are not referred to in these amendments, which are otherwise completely uncontroversial and whose inclusion we welcome. I just wonder whether the Minister could give us a reason, on the record, for their omission. Is it because a county council cannot ordinarily be a local housing authority, or is there another reason?
Jacob Young
I am grateful to the hon. Gentleman for allowing me to clarify. A combined county authority can exercise the functions of a district council, which will be a local housing authority, if the regulations made under the Levelling-up and Regeneration Act provide for the conferral of those functions on a case-by-case basis. As a result, the Government do not believe that there is any need to include combined county authorities in the general definition of a local housing authority at present.
Amendment 11 agreed to.
Jacob Young
I beg to move amendment 12, in schedule 1, page 71, line 40, for “A relevant landlord” substitute
“The landlord seeking possession is mentioned in the first column in a row of the table in this ground, the tenancy is mentioned in the second column of that row, and a person mentioned in the third column of that row”.
This amendment, together with Amendment 14, allows certain social landlords to rely on Ground 6 to get possession of a property let under an assured tenancy if they intend to carry out building works.
The Chair
With this it will be convenient to discuss the following:
Amendment 148, in schedule 1, page 72, line 3, leave out “6 months” and insert “2 years”.
This amendment would ensure that no tenant could be evicted on grounds of redevelopment within two years of the beginning of a tenancy.
Government amendments 13 to 15.
Jacob Young
Government amendments 12 to 15 expand the circumstances in which private registered providers of social housing can use the redevelopment ground for possession, known as ground 6. Private registered providers let out property that they know they will substantially redevelop or demolish through an assured shorthold tenancy. That allows them the use of section 21, as they are prohibited from using the existing redevelopment possession ground in almost all circumstances. The amendments widen the definition of “relevant landlord” to include private registered providers, so that they can use the ground for redevelopment in future. However, they will be able to use it only for tenancies that were not granted pursuant to a local authority nomination; that will ensure that tenants whose tenancy was granted pursuant to a local authority nomination retain their long-term social tenancy. The landlords will also be required to provide notice to the tenant before the tenancy begins, or on the day it begins, that they intend to use the redevelopment ground because they are planning to redevelop the property. That will ensure that tenants are fully informed about landlords’ intentions.
The Government believe that it is essential that property earmarked for future redevelopment is still available to live in. The amendments will enable social landlords to make the best possible use of housing stock, and prevent properties that could provide a home needlessly standing empty.
I thank the hon. Member for Greenwich and Woolwich for tabling his amendment 148, on ground 6. If there was a longer period before landlords could use the ground, there would be a risk of landlords not making their properties available for rent, which could reduce the supply of much-needed homes. Landlords also need the flexibility that is a key benefit of periodic tenancies. Our proposals strike the right balance. Although the vast majority of improvement works can take place with a tenant in situ, not allowing landlords to use the ground for two years may prevent them from ensuring that a property is maintained to the required standard. I therefore ask him to withdraw his amendment.
Matthew Pennycook
I rise to speak to amendment 148 in my name and that of my hon. Friend the Member for Weaver Vale. Paragraph 18 of schedule 1 amends ground 6 in schedule 2 to the 1988 Act. As the Minister has set out, the revised ground, which remains mandatory, would require a court to award possession if a relevant landlord wishes to undertake substantial redevelopment of a property, or a part of a building in which the property is located. The landlord must demonstrate that the changes cannot be accomplished with the tenant living there.
Paragraph 18(3) of schedule 1 inserts proposed new paragraph (aa) into ground 6 in schedule 2 to the 1988 Act. New paragraph (aa) specifies that the ground cannot be used unless the landlord was authorised to acquire the property by a compulsory purchase order, or the tenancy had existed for at least six months at the date specified in the notice. The circumstances in which the amended ground is likely to be used are quite limited. However, we believe, as in the case of other mandatory no-fault grounds, that tenants deserve more security than is proposed.
I go back to a point that we have made several times today. The impact on tenants of frequent, short-notice, unexpected moves cannot be over-stated. Such instability takes a mental and physical toll. It prevents tenants from putting down roots in communities; puts them under financial strain, given the high cost of moving, which was mentioned earlier; and prevents them from saving for a deposit to buy their own home. For the millions of families with children now living in the private rented sector, it has a direct and tangible negative impact, including on children’s education as a result of constant school moves.
It is not right that a tenant should continue to be exposed to the risk of a de facto no-fault eviction only six months after starting a tenancy. Any landlord who wishes to undertake substantial redevelopment—it must be substantial—that cannot be accomplished with the tenant in situ should plan for it over the long term. We therefore think it is reasonable to extend the protected period for ground 6 from six months to two years, and amendment 148 would do that.
I finish by tackling head-on the argument that the Minister continues to use: that our changes create a risk that landlords will not use their properties, which would impact supply. What is the evidence for that risk? The Government keep using the defence that landlords will exit the sector. Of course, if they exit the sector, the property is not then used for nothing; it is either sold or taken back into local authority ownership. What evidence do the Government have that measures that we propose, including this amendment, would cause landlords not to use their properties, and would therefore further exacerbate supply problems in the sector?
Jacob Young
On the hon. Gentleman’s questions around security, tenants will have much more security under the new system; under it, landlords will always need a reason to evict a tenant, and must be prepared to evidence that reason in court. That is unlike what happens under section 21. He referred to my comments about properties sitting empty before redevelopment. Obviously, a landlord who was looking to redevelop a property in the near future, but was not yet able to, would not be minded to put a tenant in there unless they had reasonable means of taking back control of that property.
Matthew Pennycook
That scenario raises an interesting question that takes us back to the debate we had on ground 1. As the Minister has just argued, landlords who wish to substantially redevelop their property probably have some prior awareness of the likelihood that they will do that. If he will not accept our amendment, will he at least consider having some form of prior notice mechanism, as there used to be for ground 1 before the Government amended it, so that tenants signing up to a tenancy at least have some indication, when signing their agreement, that a landlord may seek to use this ground in the future? Then, at least, the tenant would enter the agreement fully aware that they may be evicted, with six months’ notice, on that ground.
Jacob Young
The challenge in going down the route of prior notice is that there is a unique circumstance in which prior notice might be used. If we were to apply prior notice across all types of tenancies, it could be argued that it would be less obvious to tenants that they were in a unique circumstance in which prior notice was relevant. I therefore do not accept the arguments on prior notice. “Landlord seeking possession Tenancy Landlord intending to redevelop a relevant social landlord a tenancy of a dwelling-house that was granted pursuant to a nomination as mentioned in section 159(2)(c) of the Housing Act 1996 a superior landlord a relevant social landlord a tenancy of the dwelling-house that was not granted pursuant to a nomination as mentioned in section 159(2)(c) of the Housing Act 1996 (a) the landlord who is seeking possession (b) a superior landlord the unit-holder of a commonhold unit relation to which a commonhold association exercises functions a tenancy of a dwelling-house which is contained in or comprises the commonhold unit (a) the landlord who is seeking possession (b) the commonhold association any landlord other than a relevant social landlord or a unit-holder of a commonhold unit in relation to which a commonhold association exercises functions any tenancy the landlord who is seeking possession”
Amendment 12 agreed to.
Amendments made: 13, in schedule 1, page 72, line 10, at end insert—
“(ab) if the landlord seeking possession is a relevant social landlord and is the person intending to carry out the work, the landlord gave the tenant, before the beginning of the tenancy or on the day on which it began, a written statement of the landlord’s wish to be able to recover possession on the basis of an intention to carry out work mentioned in this ground, and”.
This amendment provides that a “relevant social landlord” as defined in Amendment 15 may only regain possession on the basis of their intention to carry out redevelopment work if they have given a statement to the tenant of their wish to do so before the beginning of the tenancy or on the day on which it began.
Amendment 14, in schedule 1, page 72, line 14, for lines 14 to 33 substitute—
Table
This amendment, together with Amendment 12, allows certain social landlords to rely on Ground 6 to get possession of a property let under an assured tenancy if they intend to carry out building works, and allows a commonhold unit-holder who has let their unit under an assured tenancy to regain possession if the commonhold association is planning works.
Amendment 15, in schedule 1, page 72, line 37, at end insert—
“‘relevant social landlord’ means—
(a) a non-profit registered provider of social housing,
(b) a body registered as a social landlord in the register maintained under section 1 of the Housing Act 1996,
(c) a body registered as a social landlord in the register kept under section 20(1) of the Housing (Scotland) Act 2010,
(d) a housing trust, within the meaning of the Housing Associations Act 1985, which is a charity, or
(e) where the dwelling-house is social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008, a profit-making registered provider of social housing.”
This amendment is consequential on Amendments 12 and 14 and inserts a definition of “relevant social landlord” into Ground 6 (possession because of redevelopment works).
Amendment 16, in schedule 1, page 74, line 1, at beginning insert “the”.—(Jacob Young.)
This small drafting amendment makes it clearer that the definition of “the local housing authority” in section 261 of the Housing Act 2004 applies for the purposes of the new Ground 6A in Schedule 2 to the Housing Act 1988.
Matthew Pennycook
I beg to move amendment 152, in schedule 1, page 74, leave out line 7.
This amendment would retain the existing 12-month period within which the landlord can initiate proceedings on this ground for possession.
The Chair
With this it will be convenient to discuss amendment 151, in schedule 1, page 74, line 8, at end insert—
“(c) at the end of the last unnumbered paragraph insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
This amendment would limit the use of Ground 7 of Schedule 2 of the 1988 Act to social rented housing.
Matthew Pennycook
Paragraph 20 of schedule 1 amends ground 7 in schedule 2 to the Housing Act 1988. Ground 7 requires a court to award possession if a tenancy has been passed to someone by will or intestacy after the death of the previous tenant. The landlord has 12 months in which to initiate proceedings using this ground, or 12 months from the point when the landlord learns of the tenant’s death, if the court agrees. The Government propose amending the ground to give landlords 24, rather than 12, months to initiate proceedings.
There are two issues here. The first is whether ground 7, even in its current form, is reasonable, and we are not convinced that it is any more. Why should a private tenant who is complying fully with all the terms and conditions in the tenancy agreement be put at risk of eviction purely because of the death of someone they live with? As the UK Commission on Bereavement has detailed, in the aftermath of a bereavement, renters face not only a significant and immediate loss of income in many cases, but additional costs; they have to prepare funerals and memorials for loved ones, and so on.
In those uniquely distressing circumstances, the threat of eviction should not hang over a tenant for up to a year, as it presently does. Nor should landlords, in our view, be able to use this ground for reasons that the Bill seeks to prohibit—for example, to avoid letting their property to a bereaved family who might find themselves reliant on universal credit, tax credits or housing benefit as a result of the family member’s death. The UK Commission on Bereavement found evidence of that in the sector. The situation is different when it comes to social rented housing, given that stock is much reduced and there is tight rationing; that might require a council or housing association to regain possession of an under-occupied property, but we do not think the same circumstances apply to the private rented sector. Amendment 151 would limit the use of ground 7 to social rented housing, thereby abolishing its use in the private rented sector.
The second issue relates to the change to ground 7 that the Government propose. Assuming that the Minister resists our amendment 151, as I fully expect him to, we still hope that the Government will reconsider extending the period in which a landlord can initiate proceedings on this ground from 12 to 24 months. We recognise that it can often take some time to investigate, and to find evidence confirming whether a person left behind in a property after a tenant’s death is a successor or inherits the tenancy. As a point of principle, however, we do not believe that private tenants who lived with someone who died should face the risk of eviction with just two months’ notice for up to two years after their loss. In fact, I would go so far as to argue that seeking to double the period in which a bereaved tenant has to live with such a risk hanging over their head strikes us as a particularly callous decision. If the Government are adamant that ground 7 needs to remain in force, they should at least retain the existing 12-month timescale for applying for possession on that ground. Amendment 152 would achieve that, and I hope that the Minister will give it serious consideration.
Lloyd Russell-Moyle
I rise to support amendment 152, and particularly its spirit. I could not agree more that if a tenant is in good standing, paying their rent and not breaching any other clauses of the contract, why should they be kicked out because the named person on the tenancy has died? There are also implications for HMOs if a joint tenant dies, or where the tenancy has been passed on via will or intestacy. Where it is passed on, that will almost always be to children or partners. Very often, a lease will be in the name of only one of the family members—maybe the breadwinning family member, who will have gone through all the financial checks.
A landlord will almost invariably know that they are renting out to a group of people, but for legal and financial reasons, one name will be on that tenancy. It does not seem right that those other people would, over such a long period, possibly face eviction. My preference is for the period to last two or three months after the landlord finds out about the death, but 12 months seems a reasonable compromise that us sceptics could live with, because that is the law at the moment. I have not heard any reasons—I look forward to hearing some from the Minister—why the period needs to be extended, or why the Government think hanging the sword of Damocles over a grieving family is positive. This is bearing in mind that any other grounds can be used if the tenants are not in good standing or not behaving well.
In the social sector, there will be a duty to house a family, maybe in alternative accommodation, if they have a housing need. That duty does not exist in the private sector, so the danger is that all we are doing is putting the burden on local authorities. That family will go very quickly to the local authority, and they will be accommodated in emergency or temporary accommodation. Putting that additional burden on the local authority does not seem reasonable. It is also difficult for the authority, because effectively there is now a two-year period of potential eviction and homelessness for that family. That does not seem a good situation for either the local authority or the family. Can the Minister give some rationale for the proposal? I am particularly interested in why he thinks the period should exist at all.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich for tabling amendments 151 and 152, which seek to restrict the use of ground 7. I also thank the hon. Member for Brighton, Kemptown, for his comments. Ground 7 permits a landlord to evict when a tenancy has passed on by will or intestacy, following the death of an assured tenant. Landlords will not usually be able to evict bereaved spouses or partners from their only home on that ground. Eligible bereaved spouses or partners are, by law, entitled to succeed the tenancy, as long as the named tenant did not themselves succeed. When succession occurs, the ground cannot be used.
Lloyd Russell-Moyle
My understanding is that the Minister is referring to a legal partner or spouse, unless he can reassure me that he is not. Many people might not be legally married or be in a civil partnership. That puts them at risk, does it not?
Jacob Young
I understand the hon. Member’s concerns. I will write to him to clarify that point.
Amendment 152, tabled by the hon. Member for Greenwich and Woolwich, would reduce the time in which landlords can initiate proceedings back down to 12 months. We have been told by a number of social housing providers that it can often take longer to establish whether succession has occurred. Indeed, the hon. Member for Brighton, Kemptown, mentioned that as well. That can hinder providers’ ability to regain possession from someone who is not entitled to social housing, and therefore prevent the property from being occupied by someone who is.
It is right that private tenants cannot name anyone they want to succeed their tenancy, as that would leave the landlord with no control over who lives in their property. Therefore, it is vital that ground 7 remains available to both private and social landlords. The ground will not be used frequently, and provides the right balances in those instances when it is used. I therefore hope that the hon. Member for Greenwich and Woolwich will withdraw his amendment.
Matthew Pennycook
I take on board what the Minister says about the rationale for the 24-month period for social rented landlords. The situation he mentioned would not arise if he accepted amendment 151 and confined the use of the ground to the social rented sector. I will not press the amendment to a vote, but I am not convinced by the Minister’s argument for why ground 7 should continue to be used in this way. I do not think it would bind the landlord unnecessarily if we said that someone who lives with a person whose name is on the tenancy, but is not their legal partner—the Minister did not refute the point made by my hon. Friend the Member for Brighton, Kemptown—should not be at risk of eviction simply because the person on the tenancy died. I worry about the implications of the threat of eviction hanging over their head for 24 months. However, as we may return to the issue at a later stage, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 180, in schedule 1, page 74, line 20, leave out “After Ground 8” and insert “Before Ground 9”.
This amendment would move new Ground 8A from the list of mandatory grounds for possession (in Part I of Schedule 2 to the Housing Act 1988) to the list of discretionary grounds for possession (in Part II of Schedule 2 to the Housing Act 1988).
The Chair
With this it will be convenient to discuss the following:
Amendment 153, in schedule 1, page 74, line 20, leave out paragraph 22.
This amendment would remove the new ground for possession for repeated rent arrears.
Amendment 154, in schedule 1, page 74, line 22, leave out “three” and insert “one”.
This amendment would limit the period to demonstrate repeated serious rent arrears to one year.
Amendment 155 in schedule 1, page 74, line 25, leave out “a day” and insert “two weeks”.
This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.
Amendment 156 in schedule 1, page 74, line 28, leave out “a day” and insert “two weeks”.
This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.
Matthew Pennycook
The amendments, which stand in my name and the names of my hon. Friends, concern the proposed new mandatory ground 8A that is inserted into the 1988 Act by paragraph 22 of schedule 1. For the purposes of debating this new mandatory possession ground, it is important that the Committee understands precisely what is proposed. The new ground would require a court to award possession if, over a period of three years, a tenant fails to pay at least two months of rent for a day or more on three separate occasions or, in instances where rent is required by the tenancy agreement in instalments of less than a month, at least eight weeks’ rent goes unpaid for a day or more, again, on at least three separate occasions.
There is an existing ground 8 that covers serious rent arrears. That existing ground requires the court to award possession where a tenant is at least two months in arrears at the time that a notice is served and at the point of the court hearing, with an exemption provided for benefit entitlements that have not been paid. That exemption is expanded to explicitly cover universal credit payments by paragraph 21 of schedule 1.
Eddie Hughes (Walsall North) (Con)
I am interested in the argument that the hon. Gentleman is making, although I am slightly confused by some elements of it. Given the fact that he suggested that the likelihood of its occurrence were vanishingly small, why does he think that any landlord would lobby the Government to include something that, based on the statistics he has quoted, they have never had experience of? I can only say that in my experience, anecdotally—I do not have anything that I can reference for it—a number of people have adopted this approach previously, and it is frustrating for both the courts and landlords. However, I follow the argument that the hon. Gentleman is making; it is very interesting.
Matthew Pennycook
I am glad that the hon. Gentleman has decided to contribute, because he has a huge amount of experience in this area. I hope that I was as clear as possible when making the case that ground 8A can be gamed; that there are already mechanisms to deal with it under existing ground 8; and that the numbers are likely to be incredibly small. I suggest that the reason the Government included it is that tenants will collectively feel the force of the new mandatory grounds for possession, and many of them will leave their tenancy under threat of it being served, rather than it being practically served. It is a deterrent to challenging and asserting one’s rights, and, as I will explain, we do not think it is necessary. We are extremely concerned about how the ground might operate and the fact that it could lead to a great many vulnerable tenants being evicted. It is a punitive and draconian measure that will cause great hardship. It is not necessary—this is the important point, in answer to the hon. Gentleman’s question—to tackle genuine instances of persistent arrears or the occasional instance when a problem tenant seeks to deliberately avoid ground 8A action.
These are not tenants who might simply refuse to pay their rent. By implication, those tenants will still be dealt with under the serious rent arrears ground 8. To be evicted under ground 8A, a tenant will need to have fallen into arrears and then worked them off twice in a period of three years. Many will have paid the two periods of arrears off in full, and between them could have been fully up to date with their rent. The new ground will cover many tenants who, for whatever reason, are waiting to receive a lump sum in order to clear their arrears—people who are self-employed or struggling with late payments and those in similar circumstances. To be clear, these are people who are trying to do the right thing and doing precisely what we would expect them to do—namely, trying to put the situation right. As Darren Baxter from the Joseph Rowntree Foundation put it in the evidence he provided to the Committee,
“it is punishing people for doing the right thing.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 15, Q13.]
We agree with the chief executive of Citizens Advice, Dame Clare Moriarty, who argued last week that the measure targets a group of people, many of whom “are probably in crisis”. We are talking about people who are almost certainly struggling to keep afloat, people in insecure employment, or people whose lives and finances may have suffered multiple adverse shocks.
There is also a real concern that the measure will encompass particularly vulnerable groups of tenants. For example, the Domestic Abuse Housing Alliance-led National Housing and Domestic Abuse Policy and Practice Group—that is a mouthful, Mr Gray—has suggested that the new ground presents a significant risk to victims of domestic abuse, who are more likely to accumulate rent arrears due to economic abuse and the economic impact of feeling domestic abuse.
The common denominator will be that the tenants are likely to be doing everything they possibly can to retain their tenancy and their home. As Dame Clare Moriarty rightly put it last week:
“These are people who are either suffering multiple adverse life events or possibly trying to avoid losing the roof over their head by borrowing in insecure ways, but they need help and advice, not to be evicted.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 15, Q13.]
The idea that we are instead talking about a bunch of people familiar enough with ground 8A of schedule 2 to the Housing Act 1988 to sit down and work out how they can game it is frankly insulting. So troubled are we by the proposed new mandatory ground 8A that, unlike with any of the other new possession grounds that the Bill seeks to introduce, we believe it should be removed from the legislation altogether. By leaving out paragraph 22, amendment 153 would achieve that, and we intend to press it to a vote.
If, as we fully expect, the Government resist the removal of new mandatory ground 8A from the Bill, we will press the Government to consider at least making it a discretionary rather than a mandatory ground. Then at least the court would have to consider whether the tenant had inadvertently fallen into arrears three times over the specified period and whether they could reasonably be expected to make up the arrears and pay their rent on time and in full going forward—an outcome that would obviously be advantageous for the landlord, who would not lose income during the void period. If the court believed that the tenant could not do so or was likely to fail to pay their rent again in the future, they could still make an outright possession order under a discretionary ground. As Liz Davies KC argued in her evidence last week, a discretionary 8A ground would not be
“a ‘get out of jail free’ card for the tenant, by any means.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 106, Q135.]
Amendment 180 would have the effect of moving ground 8A from part 1 of schedule 2 to the 1988 Act to part 2, thus rendering it discretionary. We urge the Minister to give that serious consideration. The county courts, as we have heard, are extremely good at looking at rent arrears histories and judging whether an outright possession order is warranted.
Lastly, if the Government will not countenance removing new ground 8A entirely or making it discretionary rather than mandatory, we urge the Minister to at least tighten it in ways that will make it far less punitive. Amendments 154 to 156 seek to achieve that by reducing the period in which repeated serious rent arrears must take place from the proposed three years to one, and by extending the period during which at least two months of rent arrears were unpaid from a single day to two weeks. Those three amendments, if accepted, would at least ensure that ground 8A is utilised only in instances where a tenant is almost continuously falling into arrears for extended periods of time. As I have said, we feel very strongly about this group of amendments. I look forward to hearing the Minister’s response to each.
Lloyd Russell-Moyle
I rise to support the amendments. I think this clause is particularly pernicious. I do not know whether other Members do this, but I have a tendency in the evening, when my staff have all gone home, to sit at the telephone lines, see who rings in and pick up the calls. I probably should not do that, but I like to get a feeling for who is ringing. They are usually the people who are in crisis. I do not do it every evening, so if constituents try and ring, they will not always get me, but on a Friday afternoon or evening, I will pick up the phone. Invariably, one of those people will be in crisis.
It will be the tradesperson who has again not been paid for the job that he has been working on for the past month, or perhaps the payment has been delayed—we know that there are huge problems with people paying small businesses. Or it will be the person who has been trying to scrimp and save, and has not yet gone to universal credit or any of the support agencies, despite probably being eligible, out of pride or a belief that they could get out of it. They have borrowed money from friends and family, and over a period of time repeatedly dipped down, but they always managed to get themselves back up, usually on their own terms, but this time it has just been a bit too much.
The problem is that, by the time that those people have rung my office, it is too late, because they will have dipped up and down a number of times over the past year—or three years, potentially—and the reason for their holding off getting help is because, every time before, they have managed to build back up. However, now, for the third time, we will move to a non-discretionary, mandatory ground. They will phone up their local citizen’s advice bureau or their MP’s office, or go round to the council, but we will be able to say only one thing: “I’m sorry, there’s nothing we can do because it’s a mandatory ground.”
I think that that is particularly pernicious and nasty, because these are people who we know are good for it in the long term. They will often be people who can raise the money eventually but have cash-flow problems, perhaps through no fault of their own. As I said, a lot of tradespeople will suffer some of these problems. They are having to pay out money for supplies to continue their work; the money does not come in in some months, and two months’ arrears can quite easily build up.
That feeling—that they might have to spend the rent to be able to buy the materials to build the building that they can get the money for—is a choice that they have to make all the time. While that is of course not encouraged, it surely is better that we encourage them to make good in the end and build themselves up, so that that does not happen repeatedly, rather than push them out. Of course, an eviction makes them more likely to spiral into further difficulties, which is why making this a mandatory measure is so unpleasant. The reality is that a payment plan, in many situations—or a deferred order in most situations—would suffice, and the courts can implement that at the moment.
The idea that we need this as a mandatory ground is also dangerous, as we have heard, because, what would my advice or an advice centre’s advice be, on that third occasion? “Well, you’re going to get the eviction notice anyway. Prioritise the other debts that you need to pay off, or making sure that your family have food on the table, rather than considering the rent a priority.” That is not good for the landlord either. Having to reclaim money through the courts from those groups of people in a speedy manner is nigh on impossible, and eviction is not what most landlords want. They want a payment and to be able to ensure that that support is there.
It would be much better either to not have this clause or to have a discretionary ground that requires engagement with debt advice and advisers. There is also much that can be done through court processes, as we saw during covid. As I have mentioned, for section 21s and other forms of evictions, the landlord—when permitted—had to demonstrate that they had taken covid into account and had sought to advise the tenant of the support offered under the covid regime. Aspects like that need to be incorporated here. Again, it does not always need to be on the face of the Bill, but there need to be reassurances that it is incorporated in a binding way, to be able to process these elements. The Minister needs to relent on this.
Ms Buck
Once again, the Government are falling into the trap of creating a system that will create problems for itself, because they refuse to accept the sheer complexity of real people’s lives. Making these grounds mandatory will prevent the courts from doing what they are so good at, which is considering the circumstances that prevail in individual cases. Not only will that inevitably lead to many families and individuals who are struggling with difficult circumstances losing their homes, but it will have a direct impact on local authorities, because this is yet another driver of homelessness and other pressures on local councils. This does not do away with the problem; it moves the problem somewhere else.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Does my hon. Friend agree that it causes another problem for those families, because hard-pressed councils might find them intentionally homeless? Generally, if someone is evicted for rent arrears, they are found intentionally homeless. Although reference has to be made to particular circumstances, I imagine that a court order with that result would lead to no landlord taking them on and to the council not helping them. There are then families floating around the system, with social services ultimately taking children into care.
Ms Buck
I agree with my hon. Friend about all this. In fact, tragically, my office is dealing at the moment with a family where the children have been taken into care as a consequence. These things can indeed happen; we have touched on that occasionally in the passage of this Bill, but I just wish that the Government had not rather short-sightedly removed things like debt advice from the scope of legal aid provision. If we had been able to intervene in many of these cases, we could have prevented these problems from ending up as a crisis. The solution to that is outside this Bill.
I concede that there are undoubtedly some people who persistently fail to pay their rent. That is absolutely the case, and it drives landlords mad—rightly so. I think the rumours of it create a much larger problem than actually exists, but there are people who do it, and it is essential that there are powers for the court to deal with that. The people who are doing that will frequently disappear before the case ever gets to court anyway, and will try their luck not paying their rent with another landlord. We need powers to deal with that, but so many of the people who end up in this situation do so because of a set of very, very difficult circumstances that have thrown them into chaos.
Here are just some of the cases that my office and I have dealt with over the course of a few months. There is the small shopkeeper and private tenant who was burgled; he lost his stock and his income, and it took him a while to sort out the insurance claim, during which time he got into very serious arrears. There is the young father on a zero-hours contract who found himself, several times during the year, expecting to have an income but finding that he was not called into work for two or three weeks at a time. Each time, it caused a set of problems.
The Minister may say that that is what social security and housing benefit are supposed to be for. I do not know whether the Minister has ever tried to claim universal credit or housing benefit on a variable income, with all the documentation that has to be prepared. It is an absolute living hell.
One of the safeguards in the Bill is supposed to be that the ground will not affect people who have a benefit entitlement that has been delayed, which, as we know, reflects a structural problem with universal credit. However, many of the difficult cases involve the entitlement to benefit being disputed in the first place, and that is a whole different ball game.
I had a case not that long ago in which a mother and her three children were days away from an eviction, not because they were deemed not to be entitled to benefit, but simply because after a relationship breakdown the benefit claim had for some reason not been transferred, despite repeated efforts. Over three years, that led to huge arrears. Each time, it was settled, but then the same structural problem occurred yet again, which left the family vulnerable. We were able to sort it out, but the case would not have fallen under the safeguards that the Minister will no doubt claim apply in this case.
Siobhain McDonagh
Does my hon. Friend agree that one of the groups of people for whom it is most difficult to get housing benefit or universal credit correct is self-employed minicab drivers, because of the difficulties in assessing the costs involved in being self-employed? They regularly get a decision on their benefit claim only to have it change and have money taken back, while they remain on exactly the same income.
Ms Buck
I absolutely agree. It is an issue for the self-employed; the very small businesses operating at the margin; the people who, because of the structure of our labour market, dip in and out of employment and have highly variable earnings; and the people who are on zero-hour contracts. It is exactly those people who end up in difficulties. It would be lovely if the system had the competency and level of provision to help those people, but all too often it does not. Many young people and vulnerable people—for instance, after a relationship breakdown or a bereavement—do not know where to go for advice. They try to help themselves and fail to do so.
Ground 8A is both disproportionate to the scale of the problem and unnecessary, because there are powers in the system to deal with rent arrears anyway. It will inevitably lead to further evictions, which will be concentrated among those people who have the biggest problems, who will end up making claims for homelessness support from local authorities.
The Minister does not need to go down this route. As my hon. Friend the Member for Greenwich and Woolwich said, if the Government do not want to go all the way to removing the reformed ground 8A, which would be the simplest way, there are layers of protection that could be built into the system. The Minister should trust the courts: that is what they are for. They are good at this, they are experienced at this, and they know how to tell a charlatan from somebody with genuine and complex problems. The measure will place an unnecessary burden on the most vulnerable people, and I genuinely believe that the Minister will have cause to regret its implementation.
Jacob Young
I think we can all agree that it is better for a tenancy to continue where possible, and we encourage landlords and tenants to work together when rent arrears arise. However, sometimes a tenancy cannot be sustained, and in such instances it is right that landlords have certainty. Ground 8A is intended to support landlords when a tenant is repeatedly falling into serious arrears. It will also prevent tenants from repeatedly paying down a small amount of arrears to frustrate possession proceedings brought on ground 8.
Jacob Young
I shall endeavour to write to the hon. Lady with such evidence, if there is any.
The Government have set a high bar for the ground. Tenants must fall into serious arrears three times within a rolling period of three years, which is already a significant financial burden for landlords to bear, particularly at a time of rising costs in the sector. Amendments 153 to 156 and 180 seek to narrow the ground. They propose that each instance of arrears must last two weeks, rather than one day, and must fall within a one-year period. That is simply too high a financial cost to ask landlords to bear. It would severely limit the availability of the ground.
The ground must also remain mandatory. As the Committee has heard, there is already a discretionary ground, ground 11, for persistent delays in rent payments, but that does not offer certainty to landlords. Ground 8A is intended to give certainty to all parties: a defined threshold that can lead to eviction. We therefore think that the ground strikes the right balance. I ask that the hon. Member for Greenwich and Woolwich withdraw the amendment.
Ordered, That the debate be now adjourned.—(Mr Mohindra.)
Renters (Reform) Bill (Seventh sitting)
Thursday 23rd November 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 November 2023 - (23 Nov 2023)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Chair
I have a few preliminary announcements. Most Members will be familiar with them, but I will run through them anyway. Members should send their speaking notes by email to Hansard. Please switch electronic devices to silent—I had better do that myself. Officials in the Gallery should communicate with Ministers electronically.
Today we continue line-by-line consideration of the Bill. The selection and grouping list for this sitting, which shows how the clauses and selected amendments have been grouped, is available in the room. Grouped amendments are generally on the same or a similar issue. Please note that decisions on amendments take place not in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment and on whether each clause should stand part of the Bill are taken when we come to the relevant clause.
The Member who has put their name to the leading amendment in a group is called first, which sometimes surprises people. Other Members are then free to catch my eye to speak to all or any of the amendments in the group. A Member may speak more than once in a single debate. At the end of the debate on a group of amendments, I will call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a Division. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know in advance. If Members find it too hot and want to take their jacket off, they may do so.
Schedule 1
Changes to grounds for possession
Amendment proposed (21 November): 180, in schedule 1, page 74, line 20, leave out “After Ground 8” and insert “Before Ground 9”.—(Matthew Pennycook.)
This amendment would move new Ground 8A from the list of mandatory grounds for possession (in Part I of Schedule 2 to the Housing Act 1988) to the list of discretionary grounds for possession (in Part II of Schedule 2 to the Housing Act 1988).
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 153, in schedule 1, page 74, line 20, leave out paragraph 22.
This amendment would remove the new ground for possession for repeated rent arrears.
Amendment 154, in schedule 1, page 74, line 22, leave out “three” and insert “one”.
This amendment would limit the period to demonstrate repeated serious rent arrears to one year.
Amendment 155, in schedule 1, page 74, line 25, leave out “a day” and insert “two weeks”.
This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.
Amendment 156, in schedule 1, page 74, line 28, leave out “a day” and insert “two weeks”.
This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to continue our line-by-line consideration of the Bill with you in the Chair, Mr Paisley. As you said, we adjourned on Tuesday with the Minister having responded to amendments 180, 153, 154, 155 and 156. That response, which you did not have the pleasure of hearing, was deeply unsatisfactory. It amounted to little more, I have to say, than an unsubstantiated assertion of the Government’s position that new mandatory ground 8A is required to support landlords in all instances of a tenant falling into serious arrears, and to prevent tenants from repeatedly paying down a small amount of arrears to frustrate existing ground 8 possession proceedings.
In moving amendment 180 and speaking to the other amendments in the group, I advanced three arguments as to why the Government’s position is flawed. First, there are already robust mechanisms in place, namely discretionary grounds 10 and 11, to deal with the very small minority of problem tenants who attempt to game ground 8, and courts use them. Secondly, new ground 8A can be gamed in much the same way as the Government believe existing ground 8 is being gamed, and ground 8A will have the added flaw of actively discouraging tenants from paying off a third set of arrears because they know that they will inevitably lose their home. Thirdly, all the evidence suggests that the number of people seeking to game ground 8 is vanishingly small, if not non-existent.
The Minister did not provide a rebuttal to any of those arguments. There was no response from him to our argument that new ground 8A can be gamed in much the same way as ground 8, and that it will have an impact on landlords as a result of incentivising tenants to avoid paying their third set of arrears. There was no response to the point that all the evidence suggests that the number of tenants gaming ground 8 is vanishingly small. After we heard extensive expert testimony last week supporting our arguments, the Government essentially said on Tuesday, “We dismiss the evidence. We think we know better.” To say that their position is unconvincing would be a gross understatement. I say to the Minister that he is going to have to do better on some of these very controversial clauses on Report.
We are extremely concerned about the implications of leaving new ground 8A in the Bill. We believe that it will lead to a great many vulnerable tenants being evicted unfairly. These are tenants who, I remind the Committee, will be struggling financially. Many will be in crisis and will desperately require debt advice and support, but we know they will have been trying to do the right thing because they will have made previous attempts to pay off their arrears in full. As I argued in our last sitting, the idea that we are talking about a bunch of people familiar enough with ground 8 in schedule 2 of the Housing Act 1988 to sit down and work out how they can game it is frankly insulting.
This is a punitive and draconian measure that will cause great hardship without providing the additional certainty that the Minister claimed it would. It is not necessary to tackle the genuine instances of persistent arrears or the rare instance of a problem tenant seeking to deliberately avoid ground 8 action. On that basis, we intend to press to a vote both amendment 153, which seeks to remove new ground 8A from the Bill entirely, and, if that fails, amendment 180, which seeks to make the ground discretionary. We will certainly be returning to the issue at a later stage.
The Chair
Just to clarify, I will put the Question on amendment 180 first.
Question put, That the amendment be made.
Helen Morgan (North Shropshire) (LD)
I beg to move amendment 130, in schedule 1, page 75, line 4, leave out paragraph 23.
This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.
The Chair
With this it will be convenient to discuss the following:
Amendment 131, in schedule 1, page 75, line 5, at end insert—
“23A In Ground 14, after ‘residing in’ insert ‘regularly’”.
This amendment would clarify that visitors to a property displaying anti-social behaviour must be regular visitors, so that Ground 14 cannot be used to penalise tenants for the behaviour of a one-off visitor.
Amendment 158, in schedule 1, page 75, line 5, at end insert—
“23A In Ground 14, at start of line 1 insert—‘Where the landlord seeking possession has had regard to any relevant guidance made by the Secretary of State and’”.
This amendment would require landlords seeking possession on Ground 14 to have regard to any guidance produced by the government on what constitutes anti-social behaviour.
Government new clause 1—Factors for court considering granting possession order for anti-social behaviour.
New clause 55—Duty to publish guidance on what constitutes anti-social behaviour—
“(1) The Secretary of State must, within 180 days of the day on which this Act is passed, publish guidance defining anti-social behaviour for the purposes of Ground 14 in Schedule 2 to the Housing Act 1988.
(2) Guidance under subsection (1) must define how anti-social behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crises, and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties.”
This new clause would place a duty on the Government to produce guidance on what constitutes anti-social behaviour for the purpose of assisting landlords to determine when Ground 14 conditions have been fulfilled.
Helen Morgan
It is a pleasure to see you in the Chair, Mr Paisley. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
I tabled these amendments to reflect my general concerns about the potential for abuse of ground 14, the discretionary ground for eviction on the basis of antisocial behaviour. We heard, both on Second Reading and in last week’s evidence sessions, about concerns that ground 14 could be used to evict a tenant who is a victim of domestic abuse or is suffering with mental ill health or a physical condition that could cause annoyance to surrounding neighbours.
We also heard last week from Liz Davies KC, in our fourth sitting, that the threshold is being lowered by a very small margin. She said that it was difficult to see circumstances in which behaviour would not meet the threshold of “likely to cause”, but would meet the threshold of “capable of causing”. She outlined that, in her experience, courts use the existing discretionary ground wisely, to rightly allow possession where there is a flagrant problem with antisocial behaviour. We have no reason to believe that courts will not continue to do so. I am therefore a bit perplexed as to why the Government have tried to slightly lower the bar for eviction. Further to our recent discussions of other amendments, I am concerned that it is to allow landlords to exploit the clause as a route to an easier eviction.
Amendment 130 would maintain the existing definition, which, as we heard last week, should be sufficient for landlords to evict where antisocial behaviour is a genuine problem. Unless the Minister can provide some reassurance that the changed terms will not lead to an increased number of evictions, I intend to press amendment 130 to a vote.
Amendment 131 reinforces that point. Literally interpreted, the legislation does not specify whether or not a visitor exhibiting antisocial behaviour is regularly attending the property. Clearly tenants should be protected from eviction where there has been a single or very intermittent problem. Indeed, a regular antisocial visitor may not be welcome at the property; they may be regularly attending to intimidate or cause distress to the tenant.
I have a piece of casework in which the tenants of a property, through no fault of their own, have been subjected to intimidation and verbal abuse by a member of the community who lives elsewhere. I do not doubt that that causes nuisance and annoyance for other residents, but it would be grossly unfair to evict those tenants. In all likelihood, it would not resolve the problem in the long term either; it would just shift it to a different place in the same town.
I will not press amendment 131 to a vote, because ground 14 is discretionary and we should trust the judgment of the court as to whether an eviction is appropriate in each individual case. However, as we have heard of instances where unreasonable evictions have taken place, I would welcome an assurance from the Government that there will be safeguards and guidance in place to prevent the innocent from being evicted by an unscrupulous landlord under ground 14.
Matthew Pennycook
I rise to speak to amendment 158 and new clause 55, which stand in my name and in the name of my hon. Friends.
It is a pleasure to follow the hon. Member for North Shropshire. Both her amendments to schedule 1, in relation to the proposed revision of existing ground 14, are welcome. Indeed, we tabled an identical amendment to her amendment 130, but it was not selected, on the basis that it was an exact duplicate—that is a lesson for the whole Committee on the importance of tabling amendments in a timely fashion. If the hon. Lady presses her amendment 130 to a vote, we will certainly support it.
As the hon. Lady set out, paragraph 23 of schedule 1 to the Bill will widen ground 14 of schedule 2 to the Housing Act 1988 to include behaviours
“capable of causing nuisance or annoyance”,
as opposed to the existing language, which merely refers to
“likely to cause nuisance or annoyance”.
We are pleased that the Government are not proposing to make existing ground 14 mandatory, as some had feared prior to the publication of the Bill earlier this year. The court will therefore still have discretion to judge whether it is reasonable and proportionate to evict a tenant for the behaviour in question.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
With respect to the hon. Member, we have heard previously in Committee how the existing grounds do not work. There was an ask in the evidence for us to amend the grounds in the way we are doing.
Matthew Pennycook
The Minister must have been listening to a different balance of the totality of the evidence from what I heard. I heard significant criticism of this proposed change by the Government. He still has not given me an example of the types of behaviour that would not fall under the existing definition, but that would be covered by the expanded one. I think that is because the change is driven more by the politics of what is required to get the Bill through than by any empirical evidence that such a change is required to deal with instances in which landlords cannot recover their properties from tenants who cause antisocial behaviour.
Helen Morgan
We heard extensively from the representative of Grainger plc about antisocial behaviour. I felt that her evidence demonstrated clearly that the existing grounds were adequate for tenants to be evicted under such circumstances. Does the hon. Gentleman agree?
Matthew Pennycook
I think that is a worthwhile intervention. I heard the evidence from Grainger and others highlighting concerns about this ground, so the Government are just wrong if their position is that expert opinion out in the country is that there is no problem whatever with the proposed change to ground 14.
We agree with the hon. Member for North Shropshire that the Government should remove paragraph 23 of schedule 1 and leave ground 14 with the current “likely to cause” wording. However, if they resist doing so, we urge the Minister to at least consider clarifying, as I have asked him to, what kind of behaviour is and is not capable of causing nuisance or annoyance so that county courts can better exercise their discretion about whether eviction is reasonable and proportionate in any given circumstance once the Bill has come into force. Let us be clear: the Government’s eleventh-hour new clause 1 does not do that. Indeed, it is not clear what on earth they are trying to achieve with it. As with so much of what the Government have tabled fairly late, we suspect it is more a product of rushed thinking than anything else.
New clause 1 would make it a requirement for the court to consider, in particular, the effects of antisocial behaviour on other tenants of the same house in multiple occupation, but that is already the case. Judges already have to consider the impact of behaviours that could be categorised as antisocial on others, so why do the Government feel the need to specify that they are required to do so via this amendment, purely in relation to HMOs? I would be grateful if the Minister could provide us with a reason. Will he also explain why the Government do not believe this provision needs to cover, say, a house under part 3 of the Housing Act 2004 or a rented property that is not covered by parts 2 or 3 of that Act?
The new clause also provides for the court to take into account as a factor in its determination
“whether the person against whom the order is sought has co-operated with any attempt by the landlord to encourage the conduct to cease.”
Again, when considering antisocial behaviour, the courts can already consider, and frequently do, what efforts the tenant has made to co-operate—for example, what the tenant’s response has been when a landlord has tried to contact them to press them to bring the offending behaviour to an end.
Of course, that presumes that the landlord has tried to contact the tenant, but that highlights a more fundamental problem with the new clause. At present, there is no duty on landlords to prevent or take steps to stop antisocial behaviour on the part of their tenants. I am thinking of the extensive case law reviewed in the recent Poole Borough Council v. GN judgment. Is the new clause an attempt to impose such a requirement surreptitiously? If it is, I wonder what the National Residential Landlords Association and other landlord organisations will have to say about it. The problem is that it is not clear at all, and we fear that fact exposes the Government to the possibility of litigation.
If the new clause is not an attempt to impose a requirement for landlords to take steps to stop antisocial behaviour on the part of their tenants, should we instead take it to imply that landlords now have to at least reasonably co-operate with a tenant to limit antisocial behaviour? If it does not imply that, what is the point of it? If landlords do not have to do anything to encourage antisocial behaviour to cease or do anything about it, whether a tenant can “co-operate” is reliant on the whim of the landlord in question and whether they decide to ask the tenant to stop.
Put simply, we question whether the new clause will have any practical effect, and we would appreciate it if the Minister could explain the thinking behind it, particularly because, like the many other last-minute Government amendments to the Bill, there is no detail about it in the explanatory notes. Even if the Minister just reads his box notes into the record, I would welcome the clarification. That would at least give us a sense of the Government’s thinking.
Leaving aside the deficiencies of new clause 1, we remain of the view that if the Government are intent on widening ground 14 to cover behaviour likely to cause nuisance or annoyance, they must at least clarify what kind of behaviours they believe will be included in that definition. New clause 55 would place a duty on the Government to produce detailed guidance on precisely what constitutes antisocial behaviour for the purpose of assisting landlords and the courts to determine when ground 14 conditions have been fulfilled under the revised terms that the Government are proposing. Specifically, it requires the said guidance to define how antisocial behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crisis and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties. Amendment 158 would, in turn, require landlords seeking possession on the basis of amended ground 14 to have regard to the guidance that the Government would be obliged to produce.
Taken together, we believe that new clause 55 and amendment 158 would at least provide the extremely vulnerable tenants we fear might fall foul of amended ground 14 with a further degree of protection beyond the discretion that the courts will still be able to apply. I look forward to the Minister’s response.
Ms Karen Buck (Westminster North) (Lab)
I want to press the Minister on his thinking and on the motivations for widening ground 14 in respect of antisocial behaviour. I support the hon. Member for North Shropshire and my hon. Friend the Member for Greenwich and Woolwich.
There is a continuing theme of the Government looking at this world as they want it to be, rather than at the rather messier reality. In respect of private tenancies, it is a world that they have quite deliberately created. No one likes being exposed to any form of antisocial behaviour or inconvenience. Some antisocial behaviour can literally ruin lives. Many of us will have dealt with casework relating to harassment; stalking; deliberate making of noise at antisocial hours; people running small businesses in flats, which can create noise; behaviour arising from the often illegal use of accommodation for short lets; people stealing post; and abuse, including homophobic and racist abuse. All those things can occur, and they can be extremely damaging to people’s lives.
One of the problems, which my hon. Friend addressed, is that these things are often not dealt with not because the threshold is too high for such cases, but because, in many instances, it is extremely difficult to gather the evidence. People are often extremely reluctant to act as witnesses and support evidence, and a lot of evidence is one-on-one and, to some extent, highly subjective.
Managing antisocial behaviour requires landlords to be part of the solution, and it is completely right that we are encouraging the consideration of that. Social landlords spend considerable time and resource trying to do that, with varying degrees of effectiveness, but in the private rented sector—with honourable exceptions—that often simply does not happen. The reduction in the threshold that the Government are proposing will make it even easier for landlords to choose to go down an eviction route or to hold the threat of eviction over the heads of households, in such a way that they themselves do not have to take a great deal of responsibility.
The Government must anticipate consequences from their change to the definition, or one would like to think that they would not have done it, but we need the Minister to spell those consequences out. Obviously, we must expect that more people will risk eviction for behaviour that is below the current threshold; that is a consequence almost by definition. In how many instances do the Government think that is likely to apply? Who might be affected by it, and under what circumstances not currently covered by legislation? What will happen to people who are at risk of eviction with a lower threshold?
Jacob Young
Does the hon. Lady accept that we cannot possibly know those figures? At the moment, landlords have the ability to use section 21 to remove tenants who are causing repeated antisocial behaviour. We are removing section 21, so we cannot possibly know what the impact will be.
Ms Buck
If the Minister is going to propose a change to the law, it is incumbent on him to have some indication of what the implications might be; otherwise, I am not sure why the Government would make the change. I do not understand that argument at all. It might be difficult to provide quantified figures, but the Minister has a duty to present to the Committee a sense of the type of instances that the change will apply to so that we can have some idea why it is necessary.
Jacob Young
Let me put to the hon. Lady—this goes to a point that the hon. Member for North Shropshire made earlier—what Grainger has said in evidence to the Committee:
“We welcome the strengthening of anti-social behaviour grounds for possession, which has been of particular concern to us previously.”
Does the hon. Lady not accept that that, in and of itself, is reason enough to proceed on this ground?
Ms Buck
I have a very large Grainger development in my constituency, and it is not an issue that has come to me at any scale. Obviously—the Minister is right—landlords are likely to want these powers. Of course, if a landlord is able to circumvent the abolition of section 21 by using powers of eviction in other ways, at a lower threshold or with a lower evidential base, then they are going to want to do that.
We are saying that a balance has to be struck between the genuine need to deal with serious antisocial behaviour and the consequences of that. It will mean additional pressures on households, on local authorities, which inevitably end up having to deal with the consequences of it, and indeed on the courts, which will be expected to make judgments with a much looser and more nebulous definition of antisocial behaviour. I am not sure that the Minister’s argument works there at all.
Matthew Pennycook
My hon. Friend makes a good point, which we have made in connection with other grounds for possession, and I think it is worth putting on the record again. Lots of these notices that will be given will not go to court. We cannot rely on the courts’ discretion in all these instances. The tenant that my hon. Friend mentioned could be served with a notice, might not know the recourse that she has and might feel she has to go. The threat of the expanded ground will be enough in most instances.
Ms Buck
I absolutely agree. The sword of Damocles is hanging over the heads of lots of people just living a fairly ordinary life. Families with special needs children are a particularly high-risk category. A woman and her representative came to me recently to say that her current property is unsuitable. She lives with her non-verbal autistic 19-year-old son, and they have occupied the property for over 20 years. As her son has grown older, he has displayed more challenging behaviours, in line with those often associated with autism. The family has been subject to several complaints from neighbours in relation to the noise being made, but the mum states that it is near-impossible to have full control over her son, due to his increasing support needs.
There is one other category the Minister needs to address, which is what we do about families who have already been evicted from social housing. Clearly, families cannot be on the street. Getting landlords to provide accommodation to households in those cases is essential, but already extremely difficult.
Jacob Young
Is the hon. Lady suggesting that landlords should be forced to house tenants that were committing antisocial behaviour, simply because they have been removed from social housing?
Ms Buck
Of course I am not suggesting that landlords should be forced. I am saying that a balance needs to be struck. As I have said several times, the Minister is completely failing to recognise that the Government have chosen to use the private rented sector for housing, at scale, households who previously would often have been provided with social housing and supported. The Government have to recognise the consequences of that. There has to be proper provision in law. The abolition of section 21 is part of that, but as we keep arguing, by taking away other safeguards in the legislation, the Government are undermining something that we regard as very positive.
The proposed change will lead to more evictions at a lower threshold; it will lead to families leaving their property before going to court, as my hon. Friend the Member for Greenwich and Woolwich says; it may lead to landlords actively avoiding tenants who may pose a risk; and it will lead to more applications to local authorities, which will then have to source more temporary accommodation, inevitably in the private rented sector, to house them.
The Minister has to ensure that there is a proper backstop. If the Government want to house people—particularly those with vulnerabilities and families—in the private rented sector at scale, as they do, getting the balance right is essential. The weakening of legislation in this respect is one way in which they are failing to do that.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I repeat the declarations that I have made previously in Committee about the support I get for running the all-party parliamentary group for renters and rental reform, the rent I receive from tenants in my personal house, my work on the advisory group of a housing co-operative federation legal group, and my work as a trustee of the University of Bradford Union of Students, which has interest in Unipol housing, which offers housing for students. The list gets a little longer every time we talk about different things.
I rise to support what my colleagues have said. It is striking that the Government say in the impact assessment that the change will have no monetised or non-monetised impact on tenants, although—the changes to grounds are all clumped together—they list a number of positives and negatives for landlords. That seems rather odd. If the Government are saying that they need to lower the threshold to get rid of antisocial behaviour, there will be a cost to tenants and local authorities.
Now, perhaps that cost is worth it in order to stop antisocial behaviour; perhaps it is better that the local authority, opposed to the private sector, comes in and houses a family that might be causing a particular problem, because the family needs more wraparound support. I am more than willing to go along with that line of argument, but the Government do not make that argument in the impact assessment. They argue that there will be no impact.
I wonder whether the Minister really believes what the impact assessment says. Have he and the Department done the due diligence on the change? If they are genuinely saying that there will be no impact, what is the point of the change, other than to enable landlords to threaten tenants more? That is what it will be. If they are saying that, when a case gets to court, there will be no material change, what they are actually saying is, “Yes, in the court there will be no change, but we’ll be able to put the kibosh on tenants a bit more.” We need some clarity on that from the Minister.
Clearly, “likely to cause” is an extremely low threshold, but it still requires evidence. What I heard from Grainger and others was that it was difficult for them to gather evidence, because people did not want to come forward, and that in the end people wanted to move out of the situation rather than confront it. Even if we lower the threshold—it is a discretionary ground that we all agree on—there will still need to be evidence. I therefore do not see how changing the threshold—as opposed to, for example, changing court evidence guidelines—helps. The court guidelines could be quite easily changed to say that more regard can be given to diaries, recordings and other forms of evidence. I think we would all agree that we should ensure that landlords and courts can use and have more regard to all the evidence and technology that we have nowadays, such as Ring doorbells and so on. When such behaviour can be evidenced, people need to move out.
There is another problem. As the Opposition Front-Bench spokespeople have said, there is a grey line between nuisance and antisocial behaviour. Let us be honest that that is a very grey area. Clearly, the most egregious forms of antisocial behaviour are horrible and nasty, and everyone can see them from a million miles away. Those are not the cases that are struggling in the courts at the moment; it is the grey-area cases where we are unsure. I am not sure that that helps the debate.
It would be much better if the Secretary of State accepted Labour’s new clause 55, which empowers the Secretary of State to issue guidelines from time to time on the levels, thresholds and evidential thresholds for antisocial behaviour. That would be much better, because it would also allow us to understand the changing nature of antisocial behaviour. It would help with problems of cuckooing and drug dealing. We know these kinds of behaviour change with legislation. It is a cat and mouse game with drugs and gangs. The danger with changing the threshold to “likely” is that we will not actually target those people correctly, but will end up bogging down the courts and people with things that are just nuisances, and we will not be able to pinpoint and get people on areas where we all agree real problems need to be targeted.
The Minister should either accept our new clause or say that he will go back and think about guidelines to frame the matter, so that it is clear. We have heard evidence from domestic abuse charities that they are deeply worried. I remember living opposite a lovely woman whose husband had been sent to prison for domestic abuse. On his release, every other night he was outside her house banging the door and shouting abusive expletives. Yes, the police were called and that was dealt with, but it happened repeatedly month after month. It was hugely antisocial for the rest of the residents, but clearly she should not have been evicted.
The problem is only changing the “likely” thresholds, rather than saying, “We will produce a comprehensive set of guidelines that will ensure and give security to those people.” In changing the threshold to “likely” in a vacuum, the Minister has created a lot of fear and panic in some of the sector, whereas that could have been closed down and the Minister could have been given more discretion. I do not say this very often, but on these matters, I am always in favour of giving Ministers more discretion.
I support amendment 131 on repeat visitors. We have all had situations where constituents or neighbours, particularly—dare I say it—younger people with parties that might have gotten out of hand, where they have had to eject visitors from their flat and in the process of doing so, it has created a great deal of antisocial behaviour. We do not want it to suddenly trigger a threshold when the tenant has done the right thing by trying to stop the problem but that has caused a disturbance. It needs to be when someone has repeatedly and voluntarily invited a person back into their flat to cause a disturbance. It also links to things like cuckooing, where the tenant does not have the capacity to resist that individual. Clearly other interventions, particularly by the police and social security, are needed.
I think the Minister is trying to do the right thing, and we all agree that we need tougher abilities to tackle antisocial behaviour. First, he should accept the amendment. Secondly, it always sticks in my throat that we create a whole different set of regimes for people in the private rented sector compared with people who own houses. We assume that people who live in the private rented sector are more prone to antisocial behaviour, but I must admit that I know lots of people who own their own homes who are darn antisocial as well.
I do not disagree that there should be cause to evict, sometimes and when needed, but it needs to be on a fair and equitable basis, and it should be based on guidelines that can change as the need changes, rather than just lowering a threshold of one word, which the Minister says in his own impact assessment will have no impact whatsoever.
The Chair
Just before I call the next speaker, I want to let the Whips know that there will be a Chairperson in place this afternoon at 2 pm.
Mike Amesbury (Weaver Vale) (Lab)
I will be brief. The proposed definition is, of course, far too broad and our concern on the Opposition Benches is that it could potentially give the green light to that minority of unscrupulous landlords, giving them an opportunity to evict tenants with very little evidence indeed, and within quite a draconian timeframe; I think that my hon. Friend the Member for Greenwich and Woolwich, who is on the Labour Front Bench, referred to two weeks, which is quite remarkable.
Of course, there is no clear definition, so I will be interested to hear the Minister’s response. Surely there will be a definition and surely the Secretary of State will outline guidance on what constitutes nuisance and “capable of causing” nuisance or “anti-social behaviour”. Probably every one of us in this room—I speak respectfully, Chair—is “capable”, from time to time, of causing a nuisance. I mean, is it a nuisance if a toddler is running up and down in an upstairs flat or playing with their toys?
My hon. Friend the Member for Westminster North referred to children with autism. I am quite confident that we all know people and families with autism who we have tried to help and we know the complexities of that disability for the child and their family. That could constitute a nuisance and be considered by some people as “anti-social behaviour”, according to the definition in the Bill. Perhaps when a former Prime Minister has a row with their partners—it is quite well-documented that it did upset the neighbours—then, according to the definition, that could constitute a nuisance or “anti-social behaviour”.
I declare an interest as chair of the all-party parliamentary group on antisocial behaviour. I am incredibly keen— as I know quite a number of us are, on a cross-party basis—on strengthening the law and making sure that people live peaceful and fulfilling lives. But it has got to be good law and this is not good law.
I look forward to hearing the Minister’s response, which I hope will outline quite clearly today—of course, when we change the law, it must be evidence-based—what constitutes something “capable of causing” a nuisance and “anti-social behaviour”, according to the definition.
The Chair
Thank you, Mr Amesbury. As 50% of a pair of terrible twins, I recognise the analogy.
Jacob Young
It is a pleasure to see you in the Chair, Mr Paisley. I thank hon. Members for tabling amendments 130, 131 and 158, and new clause 55. As we have heard, antisocial behaviour causes misery and it is an issue that the Government have considered extremely carefully when developing the reforms.
We know that antisocial behaviour can be hard to prove, as the hon. Member for Westminster North said, so this measure gives landlords more confidence that they will be able to evict a tenant when necessary. Members will be aware that antisocial behaviour encompasses a wide range of conduct. Lowering the threshold for this ground will help landlords to recover their properties when tenants engage in antisocial behaviour, even if it cannot be proved that it has caused or is likely to cause a nuisance or annoyance in any given case.
Repetition and regularity is obviously likely to be a key part of most people’s experience of antisocial behaviour. A one-off incident involving a visiting relative, for example, is already unlikely to be classed as antisocial behaviour. There is also precedent elsewhere in the statute book for defining antisocial behaviour as conduct that is “capable of causing” nuisance or annoyance to a person in occupation of residential premises or in relation to housing management functions.
It is important to remember that the ground remains discretionary. Judges will determine whether it is met and whether giving the landlord possession is reasonable. The Government are committed to publishing guidance on tackling antisocial behaviour before the new rules come into effect. My officials have already set up a working group with key stakeholders, including landlord and tenant groups, charities, antisocial behaviour specialists and legal professionals. The group will ensure that the reforms are implemented effectively and that the guidance is clear and thorough.
Lloyd Russell-Moyle
It is very good that the Minister is talking about the guidance. Will he expect courts to consider that guidance in their deliberations?
Jacob Young
On the hon. Gentleman’s specific point, we have expanded the factors a judge needs to consider when using discretion so they have particular regard to people who are sharing properties or not engaging with their landlord’s efforts to tackle ASB.
Lloyd Russell-Moyle
I am trying to ensure that courts will be empowered, required or encouraged—whatever form of words the Minister wants—to consider the guidance that he has outlined in making their deliberations.
Jacob Young
As we have already heard a number of times in this debate, it is important that the courts have that flexibility to make that discretionary judgment on this issue, and I think that they would consider all manner of things when deciding on that.
The working group will help to ensure that the reforms are implemented effectively and that guidance is clear and thorough. We intend to use the guidance to highlight the important links to domestic abuse, mental health and other vulnerabilities. That is the aim of new clause 55, and I hope that addresses some Members’ concerns.
Mike Amesbury
But if the guidance is not mandatory for the courts, what is the point?
Jacob Young
With respect to the hon. Gentleman’s question, he mentioned whether a victim of domestic abuse would fall short of these grounds. I would say to him that that is exactly what a judge is there to determine—whether it is reasonable to grant possession to the landlord in those circumstances. I think that I have addressed that in my remarks. I hope that this provides some reassurance and that hon. Members will withdraw their amendments.
To further bolster landlords’ confidence in being able to regain their properties in cases of antisocial behaviour, Government new clause 1 expands the matters a judge must consider, as I outlined previously, when making a discretionary antisocial behaviour eviction. It ensures that the court must also consider specific issues that have been of concern to the sector. First, the new clause asks judges to give regard to whether the perpetrator has engaged with measures to resolve their antisocial behaviour, making it easier for landlords to evict non-compliant tenants.
Matthew Pennycook
I asked the Minister a very specific question about this new clause, to which I would be really grateful for an answer. Does new clause 1 in any way imply or direct landlords, by a new requirement, to proactively engage with their tenants to resolve the behaviour, rather than just putting the onus on tenants to do so, and therefore, in instances where the landlord will not engage, leave that tenant in an impossible situation, one might say?
Jacob Young
I do not believe that it does, but I will write to the hon. Gentleman to clarify. Turning back to what I was saying, it asks judges to give particular regard to the effect of antisocial behaviour on other tenants within houses of multiple occupation, which the hon. Gentleman had mentioned.
Jacob Young
I will write to the hon. Lady and other hon. Members to confirm the status of that issue—I appreciate that question was raised in the last sitting as well. As I was saying, with houses of multiple occupation, it will make it—
Lloyd Russell-Moyle
Further to that, will a judgment of a 5A be in the public domain and therefore available or declarable to potential new landlords? I am asking because a section 21 is not, but a county court judgment on financial grounds is.
Jacob Young
We are not discussing 5A right now, but I will write to the hon. Gentleman to clarify that point.
As I was saying on houses in multiple occupation, this measure will make it easier to evict perpetrators who are having a severe impact on those living in close proximity with them day to day. I therefore commend Government new clause 1 to the Committee.
Matthew Pennycook
I will say two things to the Minister, because I think that was a helpful answer, although his officials are going to be doing a lot of writing over the coming days and weeks. It was helpful in two ways: it is welcome to hear an assurance that we expect guidance before these measures come into force, and that the working group has been set up to that end.
This is where the private rented sector is very different from the social rented sector, where registered providers operate. Registered providers often have trained antisocial behaviour teams who are equipped and trained with the tools—injunction powers and others—to remedy antisocial behaviour before eviction action has to take place. They are trained to distinguish between antisocial behaviour and things such as the domestic violence instances that we are worried about, and to take safeguarding action to protect tenants from either eviction or criminalisation. The private rented sector has none of that. I do very much think we need guidance in this area, so I welcome the Minister’s clarification in that regard. On that basis, I am happy to not to push new clause 55 to a vote.
However, what I am still concerned about, and why we will support the hon. Member for North Shropshire if she pushes her amendment to a vote, is that in some ways it does not matter what the guidance says if the definition of what constitutes antisocial behaviour is very broad and the change from “likely” to “capable” is made. That still concerns us a great deal. The Minister has not given me an example—I only want one—of a kind of behaviour that would be “capable of causing” antisocial behaviour without falling under the existing “likely to”. I do not think he has any such behaviour in mind; I do not think the officials have any idea, either.
I think the Minister gave the game away, intentionally or otherwise, that this power is to be used to make it easier for landlords to threaten tenants in the first instance, and most will not go to court, and then to be able to evict tenants. As he said, the behaviour in question does not have to have caused or be likely to have caused antisocial behaviour in any given instance. It will enable an argument on the basis that there is a pattern of behaviour that now meets the reduced threshold.
None of the evidence I listened to last week suggested that that was necessary. I remember—one good example—that Timothy Douglas from Propertymark could not understand the difference between “likely” to cause and “capable” of causing, and the need for the change in this instance. He did call for guidance—absolutely. However, none of the evidence I heard supported the change, apart from evidence from some landlords, who, of course, are going to say that they welcome a widened power. They do not have to deal with the consequences. It is local authorities and society that will have to do that.
I know this is not the Minister’s brief, but he really should know whether tenants, if evicted under these grounds, will be made intentionally homeless. I suggest that it is almost certain that they will be. We are talking about an easier way to make people homeless, and we will all pick up the costs in various ways. This will impact some incredibly vulnerable tenants. We therefore think that this measure needs to be removed from the Bill. Again, we will certainly return to the issue at a later stage.
Helen Morgan
I welcome the support from Opposition Members, who, I think, have summed up the issue very well. There is an increased threat of eviction even if these cases are not taken to court, because the threat of having notice served in the first place is very frightening for people who do not necessarily have the legal ability to follow that through and oppose it.
Jacob Young
I take the hon. Lady’s point fully on board. I inadvertently forgot to mention during my speech that tenants will be given full information on their rights when notice is served. I hope that addresses her concerns about the threat being enough to push someone out. People will know their rights and whether or not they can challenge this in a court.
Helen Morgan
I welcome the Minister’s intervention. It is sometimes hard for us to put ourselves in the position of the tenant who may not have the professional skills of some of us in this room. The threat of being taken to court is a very serious one, even if someone has been advised of their rights. It is an intimidating place, and an intimidating process to go through.
Lloyd Russell-Moyle
The timetable referred to is two weeks. We all know about the crisis in people being able to get a lawyer, seek advice or even get an appointment at a citizens advice bureau: it can often take longer than two weeks. By the time a person has got advice or legal support, they will be out, will they not? Is that not a key problem with the provision?
Helen Morgan
I thank the hon. Gentleman for his well-made point. In Shropshire, citizens advice bureaux sometimes refer people to their MP’s office because they do not have the capacity to deal with the number of issues that are brought to them. The point about the threat is an extremely important one that we need to bear in mind: it will have a strong adverse effect on tenants who are put in that position. The hon. Member for Westminster North made the excellent point that we are dealing with people who would otherwise be in social housing, but they are not in social housing because we do not have an adequate social housing stock. With the best will in the world, a lot of landlords in the private sector—particularly when it is not their main business or primary job, but they happen to rent out a property—do not have the skills or capacity to deal with these things.
I welcome the Minister’s explanation that a working group will come up with detailed guidance. That is a positive step forward and is the reason why I will not press amendment 131 to a vote. However, I am concerned about his comment that the point of the expansion of the definition is to reduce the evidential level at which a landlord is allowed to serve notice. For that reason, I will press amendment 130 to a vote.
Question put, That the amendment be made.
Matthew Pennycook
I beg to move amendment 177, in clause 4, page 3, line 34, at the beginning insert—
“(1) In section 8 of the 1988 Act, after subsection (2) insert—
‘(2A) A notice under this section must include reference to the unique identifiers allocated to each person and dwelling-house with an entry on the database in accordance with section 41 of the Renters (Reform) Act 2023 (Allocation of unique identifiers).’”
This amendment would require landlords to be registered on the database to serve grounds for possession notices.
We will debate at some length the provisions in the Bill that will establish a private rented sector database when we consider chapter 3 of part 2 in detail, so I do not intend to dwell on our view of the Bill’s database provisions more generally, or how they might be improved. We will have sufficient time to do so in due course. Suffice it to say that we take it as given that the Government wish to see, as we do, as many existing and prospective residential landlords registering themselves and their properties on the property portal that the database will support.
We acknowledge that the Bill already contains provisions designed to ensure that registration rates are high. These include the financial penalties that local authorities can impose, assuming that they have the capacity and capability to do so, on people who, for example, do not meet the requirements in relation to marketing, advertising and letting set out in clause 39. However, we believe that the Government should seek to make it virtually impossible for a residential landlord to operate without registering themselves and their property on the database by ensuring that every single process that the Bill covers bites on them in that regard.
Amendment 177 seeks to contribute to that objective by inserting into section 8 of the Housing Act 1988 a new subsection that would compel landlords to be registered on the database in order to serve grounds for possession notices by requiring them to add to any possession notice served the unique identifier that they will be allocated on registering. Requiring landlords to append a unique identifier to a possession notice, and thus denying landlords not registered with the database the opportunity for a court to make an award of possession, would be an important means of ensuring maximum compliance with the proposed portal and properly regulating the new system to the benefit of both landlords and tenants. For those reasons, I hope the Minister will look favourably on the amendment.
Jacob Young
I thank the hon. Gentleman for moving amendment 177, which would require landlords to have registered on the property portal before serving a tenant with a valid notice for possession under section 8 of the Housing Act 1988. The property portal will play a crucial role in helping landlords to understand their legal obligations and will give tenants the information they need to make informed choices before starting a tenancy. Our view is that the enforcement mechanisms in the Bill, including the mandatory duty on landlords to be on the portal and the ability of local authorities to find those, will prevent abuse. However, I note the hon. Member’s concerns, and if there are further measures we can take to ensure that all landlords are on the portal, we will explore them further.
Matthew Pennycook
I welcome the Minister’s response and his commitment to look further at this matter. Although the mandatory duty is welcome, we have real concerns about the ability of local authorities to properly investigate and enforce. We will come back to those concerns, because they relate to a number of areas in the Bill. I therefore hope that the Minister goes away and thinks about every—
Eddie Hughes (Walsall North) (Con)
There is form in this area: a landlord cannot evict their tenants if the property does not have an energy performance certificate. It seems like an interesting proposal.
Matthew Pennycook
I very much welcome the hon. Gentleman’s intervention. I have covered all bases in our set of amendments. We will come to the preconditions and requirements that have developed around section 21 that fall away under the Bill; they are a concern. The hon. Gentleman is right: to serve a section 21 notice, a number of regulatory obligations must be met.
Lloyd Russell-Moyle
Another advantage of doing it through the property portal is that it helps to speed up the digitalisation process that the Government are so keen on with the courts. The portal would retain the information that the courts need.
Matthew Pennycook
Absolutely, and it is one of several ways that we think that, with some reasonable, common-sense amendments, we can strengthen the Bill so that every part of it works together. I hope that the Government will go away and think about the other ways in which we can ensure maximum landlord compliance with the portal. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Statutory procedure for increases of rent
Lloyd Russell-Moyle
I beg to move amendment 200, in clause 5, page 5, line 17, at end insert—
“(4F) It shall be an implied term of every assured tenancy to which this section applies that percentage increase between the existing rent and any new rent specified in a notice given under subsection (2) shall not exceed whichever is the lesser of—
(a) the percentage increase in the rate of inflation (calculated by reference to the Consumer Prices Index) since the date on which the existing rent took effect; or
(b) the percentage increase in median wages in the local authority area in which the dwelling-house is situated, calculated over a three-year period ending on the date on which the notice was served.”
This amendment specifies that the annual increase in rent requested by a landlord may not exceed the lesser of either the Consumer Prices Index or wage growth in the relevant local authority area.
The Chair
With this it will be convenient to discuss the following:
Amendment 159, in clause 5, page 6, line 23, at end insert—
“13B Recovery of rent
(1) Any increased rent which is paid otherwise than in accordance with section 13 or section 13A is recoverable from the landlord by the tenant as a debt claim in the courts.
(2) The Secretary of State may, by regulations, provide for such claims to be recoverable by proceedings in the First-Tier Tribunal, rather than the courts.”
This amendment would ensure that in instances where a private landlord increases the rent without issuing a section 13 or section 13A notice the tenant can seek to recover costs through a debt claim in the court. It also provides the government with the power by regulation for such claims to be recoverable by tribunal.
Clause stand part.
Amendment 201, in clause 6, page 7, line 3, leave out paragraphs (b), (c) and (d) and insert—
“(b) leave out from ‘shall determine the rent’ to end of sub-section and insert ‘in accordance with subsection 13(4F)’.”
This amendment would require a tribunal to determine an appropriate rent in accordance with proposed subsection 13(4F).
Amendment 197, in clause 6, page 7, line 13, at end insert—
“(3A) After subsection (1) insert—
‘(1A) In making a determination under this section, the appropriate tribunal must have regard to the original rent agreed with the tenant and subsequent changes in—
(a) Local Housing Allowance;
(b) the average rent within the broad rental market area as assessed by the Valuation Office Agency or as listed in the Property Portal;
(c) the consumer price index; and
(d) median income growth.’”
This amendment would allow the tribunal to take into account not only new rents in the market but current rents in existing tenancies, changes in wages, inflation, and local housing allowance when making a determination.
Amendment 198, in clause 6, page 7, line 25, at end insert—
“(5A) After subsection (5) insert—
‘(5A) Where a notice under section 13(2) has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the original rent and the increase in consumer price index or medium income growth, whichever is lower over the period since the tenancy started.’”
This amendment would limit tribunals to an upper cap of CPI or medium income growth, whichever is lower, for rent increases.
Amendment 199, in clause 6, page 7, line 25, at end insert—
“(5A) After subsection (5) insert—
‘(5A) Where a notice under section 13(2) has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) applies, to the addition of the appropriate amount in respect of rates) shall be set using the statutory guidance on in-tenancy rent increases laid before Parliament by the Secretary of State.’”
Amendment 199 and NC66 would require the Secretary of State to issue guidance to tribunals on the determination of in-tenancy rent increases, and require tribunals to take such guidance into account when making determinations.
Amendment 160, in clause 6, page 7, line 27, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Amendment 190, in clause 6, page 7, line 38, at end insert—
“(c) no more than the rent proposed by the landlord in the notice served on the tenant under section 13 of the 1988 Act.”
This amendment would mean that the rent payable after a tribunal determination can be no higher than the rent initially proposed by the landlord in the notice served on the tenant.
Amendment 161, in clause 6, page 8, line 20, at end insert
“which must be no earlier than two months following the date of determination”.
This amendment would ensure that in cases of undue hardship tenants would have a minimum of two months from the date of determination before a new rent became payable.
Amendment 162, in clause 6, page 8, line 21, leave out subsection (4) and insert—
“(4) A date specified under subsection (3)(b) must be no earlier than the date on which the determination becomes final, with a decision only becoming final on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.”
This amendment would remove the requirement for a date determined by a court for rent to become payable in cases of undue hardship to not be later than the date of the determination.
Clause 6 stand part.
New clause 58—Requirement to state the amount of rent when advertising residential premises—
“(1) A landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.
(2) A letting agent acting on behalf of a landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.”
This new clause would require landlords or persons acting on their behalf to state the proposed rent payable in the advertisement for the premises.
New clause 59—Not inviting or encouraging bids for rent—
“(1) A landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(2) A letting agent acting on behalf of a landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(3) Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent.”
This new clause would prevent landlords or persons acting on their behalf from inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises.
New clause 62—Limit on amount of rent that a residential landlord can request in advance—
“In Schedule 1 to the Tenant Fees Act 2019, after paragraph 1(8) insert—
‘(9) Where rent is payable in advance, the maximum that may be charged is equivalent to the amount specified in paragraph 2(3).’”
This new clause would ensure that the maximum amount of rent that could be lawfully requested by a residential landlord in advance of a tenancy commencing would be 5 weeks’ rent for tenancies of less than £50,000 per annum and to 6 weeks’ rent for tenancies over £50,000 per annum.
New clause 66—Rent increase regulations—
“The Secretary of State must lay before Parliament, from time to time, guidance for tribunals on the determination of in-tenancy rent increases under a section 13(2) notice, such guidance shall include reference to Local Housing Allowance, average rents as assessed by the Valuation Office Agency or published on the Property Portal, consumer price index and median income growth.”
Amendment 199 and NC66 would require the Secretary of State to issue guidance to tribunals on the determination of in-tenancy rent increases, and require tribunals to take such guidance into account when making determinations.
Lloyd Russell-Moyle
I will speak to amendments 197 to 201 and new clause 66. I also support the other amendments put forward by my Front-Bench colleagues: amendments 160, 161 and so on.
The reason for these amendments is generally to probe the Government. The intention of the Bill is to stop landlords evicting people with no reason. It might well be through no fault of the tenant, or it might be that the landlord has genuine reasons, but it is still through no fault of the tenant. The danger is that without proper safeguards on economic evictions, landlords will be able to evict through the back door by whipping up the rent. The explanatory note from the Department for Levelling Up, Housing and Communities acknowledges the need to prevent back-door evictions, and that is why there are clauses to strengthen some of the rent tribunals’ work. We all welcome that.
However, there are a few particular problems with the current definitions of the rent tribunal. The Secretary of State himself says that 20% and 30% rent increases are “unacceptable”. However, the reality is that those kinds of rent increases could, in certain markets, still be acceptable in the rent tribunal, primarily because the rent tribunal looks at current market rents. Off the top of my head, I believe that the wording around current market rent refers to the rent that the landlord would be able to get if they were to put a property on the market, or in that phraseology. The problem with that is fewfold.
First, current market rent is based on the market rent of newly let properties, not of properties that have a sitting tenant. Quite understandably, if there is a sitting tenant, a landlord may not require as high a rent. They have not just had to deep-clean the property. Most good landlords—we all accept that they are the majority—make repairs to a house between tenancies and make sure it is back up to speed after general wear and tear. For a sitting tenant, those changes due to wear and tear will probably not be made, or they will have to make some of those improvements themselves. Asking the tenant to pay the general market rent is not a fair allocation of what the rent would be.
Tenants might have moved in and started paying a rent that was accessible on local housing allowance. Changes might then have happened around the area, or the area might have been gentrified, but the landlord may not have made any changes themselves—they have not invested anything more in the property. Suddenly, the rents go up and make that house unaffordable on local housing allowance. That does not seem fair to me either. The landlord has not invested. Clearly if the landlord has invested, there could be increases in rent. Under certain circumstances, we all think that rent needs to go up; it could not be fixed at one number forever.
I have therefore tabled a number of amendments. Amendments 200 and 201 state that the landlord may increase rents only according to the consumer prices index or median wages in the local area. This is effectively the clause that Grainger puts on its new properties. Grainger said in evidence that it does this routinely. It is not something that will come as a horrible surprise to lots of landlords, because many of the good ones—many of the big institutions—do it already.
Jacob Young
With respect to the hon. Member’s point, the Committee has heard other evidence that Grainger does not do that. Grainger did it specifically in relation to their fixed-term rents. Since we are abolishing fixed terms, I do not think his point applies.
Lloyd Russell-Moyle
Grainger currently does it on its fixed-term rents, and almost all new rents are fixed-term rents for a period of time. The Minister is right: we do not know what Grainger will do in future. However, Grainger did not say that it would abolish them for sure in future either. I would expect Grainger to continue some sort of mechanism where there is that discussion. That is one suggestion I put to the Committee, and I would like to have the Minister’s thoughts on it.
Helen Morgan
I am interested in what the hon. Gentleman suggests, and I am broadly supportive of it. If we get this right, we should see a stable private rented sector where rents do not go up very much each year; they might fall in some local areas, depending on local circumstances. Does he envisage allowing rents to drop, or does he envisage them always going up by some kind of consumer price inflation-linked level?
Lloyd Russell-Moyle
That is an interesting question. In amendments 200 and 201, they would be linked to CPI or median local rents. Where that has been introduced in Belgium, two-thirds of landlords declined to increase rent at the rate of inflation, so it has not particularly caused a constant push to always increase.
In amendment 197, I am talking about a negotiation between the tenant and the landlord. If they do not agree, the tribunal can consider not just what the current market rate would be if the property were to be put on the market brand-new, but a number of other indicators, and come to a conclusion. It might well be that if market rents have decreased in an area, the tribunal would be able to come to that consideration; I am not forcing the tribunal, but allowing it to come to that consideration. Some of these amendments allow more flexibility, and I always think that flexibility in these issues is probably right. Amendment 197 also allows the tribunal to consider CPI and median income growth.
However, amendment 198 says that the tribunal might consider all those things, but even then it can never increase rent above CPI or median wages. It might well be that the tribunal wants it to go down, and it might find a different place, but there is a ceiling. Amendment 197 allows the tribunal to consider; amendment 198 puts a cap on what the tribunal can impose. Amendment 199 and new clause 66 give the Secretary of State the power, from time to time, to lay before Parliament statutory guidance or a statement outlining the consideration that courts should take into account in their rent deliberations the maximum amount by which they can increase it. I think that is the most flexible. It allows the Secretary of State, from time to time, to look at the wider market and be able to say, “It needs to be locally driven,” or, “It needs to be national indicator-driven.”
As I have already discussed, the market is changing, and there is not just one market throughout the UK. We would not necessarily have to find a single indicator that would work for everyone. We have development areas, areas where house prices have slumped and areas that are going through gentrification. We have properties that are increasing in value because of infrastructure inputs. If High Speed 2 was ever to happen, property prices might increase in parts of the north. If Labour gets in, perhaps we will see some actual improvements in rail and other infrastructure in the north of England, and that will help the market. Of course, we have had many promises that have never been delivered so far.
Lloyd Russell-Moyle
I digress, but I do believe that all of Britain will have a better deal under Labour—although, of course, I would say that.
Amendment 199 would give the Secretary of State the flexibility to work out what the local markets are, and they could even devolve that to local or regional bodies. It would give them the ability to say, “I’m laying down a statement to say that there is no restriction of the total amount whatever,” or they could say, “Certain areas have restrictions, and certain areas have none.” The Secretary of State should consider introducing the ability to do that, given that certain areas are more problematic than others, and also the ability to look at indicators that might be relevant from time to time. At the moment, the courts cannot consider Secretary of State guidance on this matter because they are bound to consider only one thing. All I am saying is that they should consider market rents and the Secretary of State’s guidance.
Jacob Young
The hon. Gentleman suggested that the Secretary of State could devolve that decision. The Mayor of London has asked for powers to introduce rent controls in London. Does the hon. Gentleman agree with the Mayor of London?
Lloyd Russell-Moyle
We are talking about in-tenancy rent controls, and I think there are cases where they should be devolved and cases where they should be decided by the Government. Different Governments will take different approaches, depending on the need of the local area. Out-of-tenancy rent controls are a different matter and are not covered by the Bill. I will not be distracted, because I am sure you would pull me up for going into a different area, Mr Paisley.
Lloyd Russell-Moyle
I also support some of the other important amendments in the group. Amendment 160, from my hon. Friend the Member for Greenwich and Woolwich, is about ensuring that rents cannot be above the initial section 13. What I mean by that—I am sure my hon. Friend will discuss it further—is that if the landlord says, “I want a rent of x,” and the tenant says, “That’s unreasonable,” and takes it to the tribunal, the tribunal cannot issue a higher rent than what the landlord was asking. We heard a lot of evidence about how that would have a chilling effect and prevent people from going to the rent tribunal.
The whole premise of the Bill—even the Government acknowledge this—is that what prevents economic evictions is the threat of going to the court or tribunal. Nobody wants to go to the rent tribunal, so landlords propose decent rents; there is self-control and self-restraint. If there is no upper cap on what the rent tribunal can decide, a landlord who is happy to accept a lower amount might end up dancing out of the court because they were suddenly offered more than they asked for. That does not seem fair to me; that does not seem fair in any form of the market. That is important.
Of course, if we give courts the ability to consider Secretary of State guidance, that could be included in the Secretary of State guidelines, but I assume the Minister will reject that proposal, so it is important that there is a backstop. Amendment 160 is important for that backstop.
Then there are some amendments about undue hardship. I support them, and other hon. Members will talk about them. It is important that the Government give some indication of how they think tribunals should interpret these measures. I also say that because it is in nobody’s interest for every single rent to be challenged in the tribunal in the first few years of the new system. That will not help the tribunals, renters or landlords. Landlords need guidelines. If landlords are just told, “Punt a rent and find out what happens in tribunal,” we are letting down landlords as well. Providing some clearer guidelines, either in the Bill or through the Secretary of State, would reassure landlords that when they want to raise their tenants’ rents reasonably, they can do so.
Finally, I have heard some concern externally that if we limit rent increases, a landlord who forgoes a rent increase over one or two years will be unable to match the rent up later. All my amendments refer to when the tenancy started, so the court and tribunal could consider what the rent increases have been throughout that tenancy. Of course, sometimes a landlord will say, “I will not increase your rent for a few years, because I do not need to, but when I do get round to doing it, I will increase it to what it would have been had I done it annually.” That is fair enough, and my amendment allows for it. No landlord would be disadvantaged by the amendment; it would provide security for landlords, security for tenants and flexibility for the tribunals.
If there is any movement from the Government on any of my very reasonable amendments, I would love to hear about it.
Ordered, That the debate be now adjourned.—(Mr Mohindra.)
Renters (Reform) Bill (Eighth sitting)
Thursday 23rd November 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 November 2023 - (23 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Chair
I remind the Committee that with this it will be convenient to discuss the following:
Amendment 159, in clause 5, page 6, line 23, at end insert—
“13B Recovery of rent
(1) Any increased rent which is paid otherwise than in accordance with section 13 or section 13A is recoverable from the landlord by the tenant as a debt claim in the courts.
(2) The Secretary of State may, by regulations, provide for such claims to be recoverable by proceedings in the First-Tier Tribunal, rather than the courts.”
This amendment would ensure that in instances where a private landlord increases the rent without issuing a section 13 or section 13A notice the tenant can seek to recover costs through a debt claim in the court. It also provides the government with the power by regulation for such claims to be recoverable by tribunal.
Clause stand part.
Amendment 201, in clause 6, page 7, line 3, leave out paragraphs (b), (c) and (d) and insert—
“(b) leave out from ‘shall determine the rent’ to end of subsection and insert ‘in accordance with subsection 13(4F)’.”
This amendment would require a tribunal to determine an appropriate rent in accordance with proposed subsection 13(4F).
Amendment 197, in clause 6, page 7, line 13, at end insert—
“(3A) After subsection (1) insert—
‘(1A) In making a determination under this section, the appropriate tribunal must have regard to the original rent agreed with the tenant and subsequent changes in—
(a) Local Housing Allowance;
(b) the average rent within the broad rental market area as assessed by the Valuation Office Agency or as listed in the Property Portal;
(c) the consumer price index; and
(d) median income growth.’”
This amendment would allow the tribunal to take into account not only new rents in the market but current rents in existing tenancies, changes in wages, inflation, and local housing allowance when making a determination.
Amendment 198, in clause 6, page 7, line 25, at end insert—
“(5A) After subsection (5) insert—
‘(5A) Where a notice under section 13(2) has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the original rent and the increase in consumer price index or medium income growth, whichever is lower over the period since the tenancy started.’”
This amendment would limit tribunals to an upper cap of CPI or medium income growth, whichever is lower, for rent increases.
Amendment 199, in clause 6, page 7, line 25, at end insert—
“(5A) After subsection (5) insert—
‘(5A) Where a notice under section 13(2) has been referred to the appropriate tribunal, then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) applies, to the addition of the appropriate amount in respect of rates) shall be set using the statutory guidance on in-tenancy rent increases laid before Parliament by the Secretary of State.’”
Amendment 199 and NC66 would require the Secretary of State to issue guidance to tribunals on the determination of in-tenancy rent increases, and require tribunals to take such guidance into account when making determinations.
Amendment 160, in clause 6, page 7, line 27, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Amendment 190, in clause 6, page 7, line 38, at end insert—
“(c) no more than the rent proposed by the landlord in the notice served on the tenant under section 13 of the 1988 Act.”
This amendment would mean that the rent payable after a tribunal determination can be no higher than the rent initially proposed by the landlord in the notice served on the tenant.
Amendment 161, in clause 6, page 8, line 20, at end insert—
“which must be no earlier than two months following the date of determination”.
This amendment would ensure that in cases of undue hardship tenants would have a minimum of two months from the date of determination before a new rent became payable.
Amendment 162, in clause 6, page 8, line 21, leave out subsection (4) and insert—
“(4) A date specified under subsection (3)(b) must be no earlier than the date on which the determination becomes final, with a decision only becoming final on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.”
This amendment would remove the requirement for a date determined by a court for rent to become payable in cases of undue hardship to not be later than the date of the determination.
Clause 6 stand part.
New clause 58—Requirement to state the amount of rent when advertising residential premises—
“(1) A landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.
(2) A letting agent acting on behalf of a landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.”
This new clause would require landlords or persons acting on their behalf to state the proposed rent payable in the advertisement for the premises.
New clause 59—Not inviting or encouraging bids for rent—
“(1) A landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(2) A letting agent acting on behalf of a landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(3) Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent.”
This new clause would prevent landlords or persons acting on their behalf from inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises.
New clause 62—Limit on amount of rent that a residential landlord can request in advance—
“In Schedule 1 to the Tenant Fees Act 2019, after paragraph 1(8) insert—
‘(9) Where rent is payable in advance, the maximum that may be charged is equivalent to the amount specified in paragraph 2(3).’”
This new clause would ensure that the maximum amount of rent that could be lawfully requested by a residential landlord in advance of a tenancy commencing would be 5 weeks’ rent for tenancies of less than £50,000 per annum and to 6 weeks’ rent for tenancies over £50,000 per annum.
New clause 66—Rent increase regulations—
“The Secretary of State must lay before Parliament, from time to time, guidance for tribunals on the determination of in-tenancy rent increases under a section 13(2) notice, such guidance shall include reference to Local Housing Allowance, average rents as assessed by the Valuation Office Agency or published on the Property Portal, consumer price index and median income growth.”
Amendment 199 and NC66 would require the Secretary of State to issue guidance to tribunals on the determination of in-tenancy rent increases, and require tribunals to take such guidance into account when making determinations.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I rise to speak to amendment 159 and others tabled in my name and the names of my hon. Friends. I thank my hon. Friend the Member for Brighton, Kemptown for tabling the six amendments that he moved and spoke to this morning. They raise a number of important issues and it is right that the Committee and the Government carefully consider them.
As we have heard, clauses 5 and 6 set out the process for rent increases under the new tenancy system and how any such increase can be challenged by tenants. Under the existing assured tenancy regime, a landlord can only increase the rent during a fixed-term assured shorthold tenancy by including a rent review clause in the tenancy agreement. Rent review clauses of this kind are used by landlords to increase rent levels during fixed-term tenancies, but it is far more common for landlords to offer a new fixed-term tenancy at a higher rent when the old one is coming to an end, or to seek to increase the amount of rent payable once a tenant has fallen into a periodic tenancy with no specific end date.
The rents on periodic assured shorthold tenancies can be increased by the landlord serving notice under section 13 of the Housing Act 1988. However, although formal section 13 increases can take place only once a year, under the current system assured shorthold tenants can still be asked by their landlords either to agree informally or to formally sign a new agreement accepting a higher rent level, and there is no limit whatsoever on how high rents can rise by either method.
In theory, the tenant does not have to agree to a rent increase proposed informally or formally via a new agreement, and they can refer increases to a first-tier tribunal on grounds of reasonableness, yet all the available evidence suggests that only an incredibly small proportion of privately renting households do so. An analysis by Generation Rent of market rent assessments undertaken by the first-tier tribunal indicated that only 341 such cases were heard between January 2019 and August 2021. Bearing in mind that there are approximately 4.4 million privately renting households in England alone, it is a miniscule proportion.
The reason why so few tenants determine to make use of the tribunal process under the existing tenancy regime is obvious. If a tenant refuses a rent increase either informally or formally via a new agreement, or successfully challenges a rent increase at tribunal, a landlord can take immediate steps to end their tenancy, most obviously by issuing a no-fault section 21 notice.
With the introduction of the new tenancy system, the ability of landlords to compel tenants to accept rent rises by means of the latent threat of a section 21 notice will obviously be removed. Although there will remain the threat of spurious eviction by means of the remaining de facto no-fault grounds for possession that we discussed at length in previous debates, the new system will be an improvement on the current situation faced by private tenants when it comes to rent increases.
By amending section 13 of the 1988 Act, clause 5 will ensure that issuing a section 13 notice will henceforth be the only valid way that a private landlord—except those of a relevant low-cost tenancy, as specified in the Bill—can increase the rent, and landlords will therefore be able to increase the amount of rent charged only once per year. Supplemented by the provisions in subsection (4), which will increase the notice period for a rent rise from one month to two months, the changes will create more predictability and give tenants more certainty about future rent increases. On that basis, we welcome them.
However, we remain seriously concerned that the provisions in the clauses are not robust enough to prevent unaffordable rent increases from being used as default eviction notices for the purpose of retaliation against complaints, or simply because a landlord wants to try to secure a rent level that is far in excess of what they can reasonably expect from a sitting tenant.
We have consistently raised concerns about this issue since the White Paper was published in the summer of 2022. As I argued in response to a statement accompanying the release of the White Paper that was made by the then Under-Secretary of State at the Department, the hon. Member for Walsall North—he may remember—it is problematic that the Government did not include in the reform package any robust means of redress for tenants facing unreasonable rent rises. Our view remains as set out in that exchange last year—namely, that a one-year rent increase limit, the removal of rent review clauses, and vague assurances about giving tenants the confidence to challenge unjustified increases at tribunal are not enough.
With the scrapping of section 21, the risk of economic evictions by means of extortionate within-tenancy rent hikes will increase markedly. The Government acknowledge that tenants need protection against what they term “back-door eviction” by such means. However, we believe that the Bill as it stands does not protect tenants sufficiently from such economic evictions, and that it needs to be strengthened accordingly in several ways.
In the White Paper, the Government committed to preventing
“the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase.”
We believe that that was an entirely sensible proposal. An obvious need under the new tenancy system is to ensure that all tenants are fully aware that they can submit an application to the first-tier tribunal to challenge a rent amount in the first six months of a tenancy or following the issuing of a section 13 notice. Equally as important is that the tribunal process operates in a way that gives them the confidence to do so.
The Bill allows for a situation in which tenants who are handed section 13 notices with what they consider to be completely unreasonable rent increases might apply to the tribunal to challenge the increase, only to see the rent level rise higher. That will act as a powerful deterrent to tenants making such applications. As a consequence, the Bill risks emboldening landlords to press for unaffordable rent increases in the knowledge that tribunal challenges will remain vanishingly rare, as they are now.
The Government’s explicit intent might well be to deter a proportion of tenants from challenging section 13 rent increases. After all, with 4.4 million households now renting privately in England, even a minor uptick in applications to the tribunal will place it under enormous pressure. Without additional resourcing and support, that could lead to extensive delays. Ultimately, however, it is for the Government to ensure that the first-tier tribunal can cope with the implications of the new tenancy regime that they are introducing, not for tenants to have to stomach unreasonable rent rises because there is a chance that they will not do so.
On a point of principle, we believe that the tribunal should only ever be able to increase the rent increase requested in the section 13 notice issued, or to award a rent amount lower than it. Amendment 160 would ensure that that would be the case by specifying that where a rent assessment is carried out by a tribunal, the rent subsequently determined by the tribunal cannot be higher than that originally requested by a landlord in the section 13 notice. We believe that that change, which would ensure that the tribunal process was in line with the commitments made by the Government in their White Paper, and reasonable and proportionate. I urge the Minister to accept it.
We also take the view that the Bill needs to include greater protection for tenants who would suffer undue hardship as a result of a section 13 rent increase. Once the provisions in the Bill are finally enacted, a considerable number of tenants—in particular those in hot rental markets where rent levels increase rapidly—will without doubt be unable to afford an increase in rent as set out in a section 13 notice. Many will simply give notice and leave the property without taking the matter any further.
A significant proportion of those who attempt by means of the tribunal a challenge of a rent increase perceived to be unreasonable, in an effort to secure a rent lower than proposed in the section 13 notice, but fail, will ultimately leave the property. That would even be the case if the Government accept amendment 160 and the tribunal cannot increase the amount further. We believe that those who would experience undue hardship as a result, such as tenants at risk of becoming homeless, because they have to leave what has become an unaffordable, should be afforded a little more time—it is only a little more time—to try to secure a property that they can afford.
Taken together, amendments 161 and 162 would achieve that aim by changing the point at which the rent increase becomes payable from the date at which the tribunal makes a determination to two months after that date. The effect of that pair of amendments would simply be to give vulnerable tenants a reasonable period of time in which to make new arrangements as a result of a rent rise that was unaffordable for them. We hope that the Government can see the merit of accepting the amendments and will give them serious consideration.
We also believe that three other important changes to the Bill are required in relation to rent. The first concerns section 13 notices. As I remarked earlier, the clause amends this section of the 1988 Act so that from the date of commencement it will be the only valid way in which a private landlord, except those of a relevant low-cost tenancy, can increase the rent, once per year. In practice, however, we know that, particularly at the lower end of the private rented market and in the unregulated shadow rental market, a great many landlords will inevitably increase rent levels without issuing a formal section 13 or 13A notice. Amendment 159 would ensure that in instances where they might, a tenant would have the right to seek to recover costs through a debt claim in the court. It would also provide the Government with the power by regulation to have such claims recoverable by tribunal, if Ministers felt that was a more appropriate body to determine such claims.
The second issue concerns rent requested in advance of a tenancy’s commencement. In the White Paper, the Government committed to introducing a power to prohibit the amount of rent that landlords can ask for in advance, and we supported that proposal. We will come to discuss measures aimed at discriminatory practices in relation to the granting of tenancies when we debate the various Government amendments that are to form new chapter 2A of part 1 of the Bill. However, irrespective of how effective those groups of amendments might ultimately be—we have our doubts, which we will set out in due course—blanket prohibitions are not a silver bullet for discriminatory practices in the private rented sector.
A number of informal barriers to renting privately are regularly faced by large numbers of tenants. They include requests that renters appoint a high-earning guarantor—an issue to which I hope we can return in a future sitting—and asking renters for multiple months of rent in advance. According to research carried out by Shelter, a staggering 59% of tenants reported being asked to pay rent in advance when attempting to secure a property the last time they moved; some were even asked to pay in excess of six months’ rent up front. Tenants reported taking out unsecured loans, using their credit cards or going significantly into their overdrafts to make the advance payments. One in 10 of those surveyed reported being denied a property for which they could afford the monthly rent simply because they were unable to pool together the sizeable advance rent payment that the landlord requested.
It is true that clause 1 defines a rental period as one month—a change from the current situation in which periods of a periodic tenancy can be of any length. One reading of the Bill might suggest that a single rental period is all that a landlord will be able to request under the new tenancy regime. If that is the case, I would be grateful if the Minister confirmed as much and detailed precisely how clause 1 would prevent landlords from requesting multiple rent payments in advance. Nothing that we can see in the Bill would prevent a landlord from requesting several rent payments at one time before a tenancy was signed.
We believe that the solution is new clause 62, which would ensure that the maximum amount that could be lawfully requested by a residential landlord in advance of a tenancy would be five weeks’ rent for tenancies of less than £50,000 per annum and six weeks’ rent for tenancies of over £50,000 per annum.
The third and final change that we believe is required relates to rental bidding wars—the product of soaring demand and inefficient supply which is, I admit, to a large extent concentrated in our cities and larger towns. The phenomenon involves multiple tenants competing fiercely for individual private lets. Landlords and the agents acting on their behalf, overwhelmed by applicants, now regularly play prospective renters off against each other, with some offering to pay months of rent up front as a lump sum, to sign longer tenancy agreements or to agree to rent levels far in excess of the advertised monthly rate.
Under the new tenancy system, long-term fixed-term tenancy agreements will not exist. We hope the Government will accept our new clause 62 or introduce an amendment of their own, as they promised in the White Paper, to prohibit landlords from asking for rent in advance. That leaves competitive bidding wars in respect of monthly rental periods as the only means by which this inherently inflationary phenomenon could continue—a phenomenon that the unscrupulous can undoubtedly use to discriminate against certain types of tenants and, even where no such discrimination occurs, pushes many to the limit of what they can afford financially.
Taken together, new clauses 58 and 59 would effectively prohibit bidding wars for private rented properties by requiring landlords or persons acting on their behalf to state the proposed rent, based on an estimate of the property’s market rate, in the advertisement for the premises. That should prevent landlords from inviting or encouraging bids that exceed the amount stated.
The new clauses are based on legislation introduced in New Zealand and Australia, the former having banned the practice entirely in February 2021 and the latter having seen it prohibited in most states—including, most recently, New South Wales in December last year and South Australia in June this year. We hope the Minister will give the new clauses due consideration. I look forward to his thoughts about them and about other five amendments in this group.
Nickie Aiken (Cities of London and Westminster) (Con)
I thank the shadow Minister, who had some very reasonable thoughts about this issue, for his speech.
Currently, I am dealing with an example of what I believe to be the worst behaviour by a corporate landlord that I have ever come across in 18 years as a councillor or Member of Parliament. I am talking about rent increases. AXA Insurance, which now owns Dolphin Square in Pimlico in my constituency, is carrying out a major refurbishment of that estate; that is understandable. However, it is now asking tenants, some who have been there for many years, to move out of flats that it wants to refurbish and into others. But, if they do move out and into another flat, their tenancy breaks, and they have to take out a new tenancy, which includes a 40% increase in rent.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I thank Members for their amendments. Let me start by being clear that the Government do not support the introduction of rent controls at any point in the tenancy, no matter what they are linked to. The Bill protects tenants from very large rent increases being used as a back-door method of eviction while protecting the ability of landlords to increase rent in line with market levels.
That said, I am concerned by the practices that my hon. Friend the Member for Cities of London and Westminster mentioned in relation to Dolphin Square and would be happy to meet her to discuss the matter further. Although I appreciate that the Bill will not be passed in time for her constituents, hopefully we can prevent some of those types of practice in the future.
Clause 5 amends section 13 of the Housing Act 1988 to ensure that in future all rent increases for private landlords will take place via the specified mechanism. If a landlord tries to make a tenant pay an increased rent outside of the process, it will be unenforceable.
Clause 6 amends section 14 of the Housing Act 1988. It sets out the conditions by which a tenant can submit an application to the first-tier tribunal to challenge the rent amount in the first six months of a tenancy, or following a section 13 rent increase notice.
Let me turn to the amendments. When a tenant challenges a rent increase, it is for the first-tier tribunal to then determine the rent. Although market data can indicate the general trends in an area, it can be challenging to use when calculating the value of a specific property. The tribunal is made up of experts who are experienced in understanding the different factors—including the rent for comparable properties in the area, the quality of fixings and the proximity to amenities—that result in a market rate. The tribunal members are best placed to determine the rent using the data that they feel is most appropriate, rather than having to use whichever indicator is the flavour of the month. The tenant must pay the rent from the date that the tribunal directs, or from the beginning of the rent period specified in the notice. In cases of undue hardship, that will be the date that the tribunal directs, but must not be later than the date of determination.
On new clauses 58 and 59, landlords and agents are already prohibited from engaging in pricing practices that are false or misleading, under the Consumer Protection from Unfair Trading Regulations 2008. If a prospective tenant believes that a landlord has acted dishonestly during the lettings process, they will be able to raise the matter via the new private rented sector ombudsman. Complaints about letting agents can be referred to the existing agent redress schemes.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Will the Minister confirm that he thinks that bidding wars that are not advertised beforehand constitute dishonesty?
Jacob Young
Yes, I do.
New clause 62 seeks to align the maximum amount of rent in advance that landlords can charge tenants with the limits set on security deposits by the Tenant Fees Act 2019. Although I understand the reasoning behind the new clause, to link the two on an arbitrary basis would not be an efficient means to achieve its intended effect. It would mean that any changes to one would directly affect the other.
As the Committee will be aware, and as the hon. Member for Greenwich and Woolwich mentioned, the Government committed to introduce a similar power to limit rent in advance as part of our White Paper. We have concluded, however, that no such additional power is needed, as it is already possible to limit rent in advance using the power in section 3 of the Tenant Fees Act 2019. Before deciding to use that power, which would significantly infringe on the business interests and financial freedoms of private landlords, it is vital that we gather strong evidence of need and undertake a thorough impact assessment.
Furthermore, rent in advance can be beneficial in a variety of situations. For example, it can be employed to balance a financial risk when a prospective tenant could not otherwise pass a reference or affordability check. Above all, it is vital that landlords retain the ability to ensure a sustainable tenancy for both parties. We have made it clear that asking for a large amount of rent in advance should not be the norm.
On new clause 66, we will update the guidance to ensure that tribunal users have the confidence and information they need to engage with it effectively. This includes helping parties to understand how they can provide evidence of comparable rent. Our reforms strike a balance between the landlord’s ability to increase rent in line with the market and protecting tenants from back-door evictions through excessive rent hikes.
Matthew Pennycook
Forgive me if I missed it, but I do not think the Minister addressed the argument that underpins amendment 160. Why did the Government commit in their White Paper to limit the tribunal to determining a rent increase in line with or below the section 13 notice, instead of giving the tribunal the power to increase notice? If a landlord asks for a certain amount of rent and the tribunal determines that that is the amount to be paid, surely a tenant should not suffer by seeing the rate increased. Does the Minister not worry, as we do, that the Government’s approach will have a chilling effect on the confidence that tenants have in taking such cases to the tribunal?
Jacob Young
I understand the argument that the hon. Gentleman is trying to make, but we have listened to concerns and think it is fair that the tribunal is not limited when determining the market rent. This will mean that the tribunal has the freedom to make full and fair decisions, and can continue to determine the market rent of property.
Lloyd Russell-Moyle
The Minister has talked about the tribunal making free and fair determinations, but the tribunal is already limited by what it cannot take into account. For example, it cannot take into account alterations that the tenant has made to the property, at their own cost, to increase its value. The tribunal already indicates what it can take into account, so widening that scope or making it clear that the tribunal should not issue a higher rent is not about giving it more restrictions. Surely it is about giving it clearer guidelines on the face of the Bill, so that everyone entering the process knows where it is going.
Jacob Young
As I have already set out, we believe that the tribunal should be free to make whatever determination it thinks is the market rent for a property. I therefore ask hon. Members not to press their amendments.
Lloyd Russell-Moyle
I think the Minister is missing a trick here, because we have tabled some reasonable amendments. I welcome the fact that he seemed to suggest that it is already possible, via regulation, to prevent rent from being paid in advance, but he needs to enact that and get on with it. He seemed to be a bit cautious about doing so. A regulatory framework that allows advance rent in some, but not all, circumstances would be a good compromise. Maybe that is where the Minister was going, but we need to have more flesh on that bone.
I also worry that when the Minister talks about flexibility for the tribunal, he is actually saying that it can look only at market rent and not at other things. What I am trying to say is that it should be able to look at all the different indicators—not just the flavour of the month, as he put it, but the local housing allowance, the consumer prices index, and the rents via the property portal. At the moment, it is not clear that the tribunal would have access to use the rents via the property portal as an indicator, rather than new rents. That is what the amendments attempt to do. Some of these improvements could be made when the Bill comes back, and I hope the Minister will do that.
Finally, the Minister needs to reconsider the upper limit. A landlord could still re-issue another section 13 if, via the tribunal process, they realised that they wanted to increase it higher, but rather than involving the tribunal, they just set it at a higher rate themselves. That creates a disincentive to go to the tribunal.
Jacob Young
I should be clear that there is no requirement for the landlord to accept the tribunal’s final outcome. The landlord could still offer the initial rent to the tenant.
Lloyd Russell-Moyle
They could, so why not? It would be expected if a property was marketed at a certain price for that to be the accepted price. If someone puts a section 13 down, it is a form of marketing what this property is now worth. The Minister is quite right that it is wrong to engage in unfair advertising practices. A section 13 is a form of advertising to a sitting tenant, to say, “I’m advertising that this is the rent that I now want.” To then change their mind via a tribunal is, in my view, unfair. I think the Minister probably gets that point, but I wonder whether it might be possible to change it through regulation, and advice to the courts and the tribunals. These things need to be considered, and the same goes for widening the scope of what the tribunals could push. I will not push my amendments now, but I hope the Minister will genuinely think about how we can increase the scope of what the courts can consider, so that rents are not always inflated up to the very highest level, but are fair for all our communities.
Matthew Pennycook
There were some points of interest raised in this debate that we will certainly come back to—I will check the transcript in relation to a couple of them—but I do not think they satisfy us sufficiently not to press these amendments.
On new clauses 58 and 59, I took the Minister to imply that bidding wars could fall under the category of false, misleading or essentially unfair practices—I think he mentioned dishonesty. I do not think he has given us a cast-iron commitment that bidding wars of any kind constitute an unfair practice. If they do, and the Government know that, why are they not taking action to stamp them out? Lots of people in cities and towns across the country, and certainly in my constituency, are being impacted financially by bidding wars. In some areas, they are extremely intense, and people end up paying huge amounts more than were initially advertised.
I agree with the Minister that advance rent should not be the norm. It seems to be somewhat the norm in many parts of the country. I am interested that he says there is a potential means of addressing this via the Tenant Fees Act 2019. It sounded to me like it may take quite a long time for the Government to bring forward any proposals in that regard. We will certainly not see advance rent stamped out any time soon. The Minister did not address my point on undue hardship. I absolutely realise—it was part of my remarks—that under the Government’s proposals, when a tribunal determines the rent, it will kick in from the point of determination. We think that vulnerable residents need a little more time to adjust and move out if they simply cannot afford those rents.
Finally, on the tribunal awarding rent levels in excess of what is asked for, I think the Government have got it wrong. The Minister referenced unspecified interests that the Government had heard lobbying from—I think he said, “We’d heard concerns.” Who from? I do not know. We can all take a guess who from. There were proposals in the White Paper, this being one of them, that we thought extremely sensible. He is right that some landlords may, having been told by the tribunal that they can increase the rent level even further than asked for, be good-natured enough to charge only the initial rate, but I cannot think that many of them would. They are, after all, running businesses. We need a measure—we will no doubt return to this at a later stage—to ensure that the rent level that the landlord asked for via section 13 is the maximum. In many cases it may reduce, but it should be the maximum that a landlord can ask for. On that basis, I am afraid that we will press our amendments 160 and 161 to a vote.
Jacob Young
I want to be absolutely clear: the Government’s position is that bidding wars are not illegal.
Matthew Pennycook
That was my understanding as well, so I am not sure what the Minister was saying about false, misleading or unfair practices. If that does not apply to bidding wars, it applies to something completely separate from what we are talking about, so he has convinced me that new clauses 58 and 59 are even more necessary than I thought. I thought there was a glimmer of hope there, but there clearly is not. We will press all our amendments to a vote.
Lloyd Russell-Moyle
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 ordered to stand part of the Bill.
Clause 6
Challenging amount or increase of rent
Amendment proposed: 160, in clause 6, page 7, line 27, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”—(Matthew Pennycook.)
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Matthew Pennycook
I beg to move amendment 183, in clause 7, page 8, line 36, leave out “42nd” and insert “14th”.
This amendment would ensure a landlord gives or refuses consent in writing within 14 days of the request being made.
The Chair
With this it will be convenient to discuss the following:
Amendment 182, in clause 7, page 8, line 37, at and insert—
“(d) the landlord may not review or withdraw consent once given.”
This amendment ensures that a tenant may keep a pet for the duration of their tenancy once consent has been given.
Amendment 184, in clause 7, page 9, line 2, leave out “42nd” and insert “14th”.
This amendment would ensure that where a request for further information is made on or before the 14th day after the tenant’s request, the landlord may delay giving or refusing consent for a further 7 days if that information is provided.
Amendment 185, in clause 7, page 9, line 15, leave out “42nd” and insert “14th”.
This amendment would ensure that where a request for the consent of a superior landlord on or before the 14th day after the tenant’s request, the landlord may delay giving or refusing consent for a further 7 days if that information is provided.
Amendment 186, in clause 7, page 9, line 16, leave out “7th” and insert “14th”.
Amendment 187, in clause 7, page 9, line 18, at end insert—
“(3A) Where the consent of a superior landlord is required for the purposes of subsection (3), the superior landlord must give or refuse consent on or before the 14th day after the date of the request from the landlord.”
These amendments require a superior landlord to give or refuse consent within 14 days of a request being received.
Amendment 181, in clause 7, page 9, line 27, at end insert—
“(7) The Secretary of State must, within 180 days of the day on which this Act is passed, publish guidance on what constitutes a reasonable ground for refusal of consent to keep a pet for the purposes of this section.”
This amendment would require the Government to publish guidance on what qualifies as a reasonable ground of refusal for a tenant to keep a pet.
Clause stand part.
Clause 8 stand part.
New clause 63—Prohibition of discrimination relating to pet ownership—
“(1) In relation to a dwelling that is to be let on a relevant tenancy, a relevant person must not, on the basis that a pet would be kept by a person at the dwelling if the dwelling were the person’s home—
(a) prevent the person from—
(i) enquiring whether the dwelling is available for let,
(ii) accessing information about the dwelling,
(iii) viewing the dwelling in order to consider whether to seek to rent it, or
(iv) entering into a tenancy of the dwelling, or
(b) apply a provision, criterion or practice in order to make people who keep a pet at the dwelling, if it were their home, less likely to enter into a tenancy of the dwelling than people who would not.
(2) Subsection (1) does not apply if—
(a) the relevant person can show that the conduct is a proportionate means of achieving a legitimate aim, or
(b) the relevant person can show that the prospective landlord of the dwelling, or a person who would be a superior landlord in relation to the dwelling, is insured under a contract of insurance—
(i) to which section (Terms in insurance contracts relating to pet ownership) does not apply, and
(ii) which contains a term which makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy from keeping a pet at the dwelling, and the conduct is a means of preventing the insured from breaching that term.
(3) Conduct does not breach the prohibition in subsection (1) if it consists only of—
(a) one or more of the following things done by a person who does nothing in relation to the dwelling that is not mentioned in this paragraph—
(i) publishing advertisements or disseminating information;
(ii) providing a means by which a prospective landlord can communicate directly with a prospective tenant;
(iii) providing a means by which a prospective tenant can communicate directly with a prospective landlord, or
(b) things of a description, or things done by a person of a description, specified for the purposes of this section in regulations made by the Secretary of State.”
This new clause would prohibit landlords and those who act on their behalf or purport to do so from adopting certain discriminatory practices which make it harder for people who have pets to obtain a relevant tenancy.
New clause 64—Terms in insurance contracts relating to pet ownership—
“(1) A term of a contract of insurance to which this section applies is of no effect so far as the term makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy or regulated tenancy from keeping a pet at the dwelling.
(2) This section applies to contracts of insurance which were entered into or whose duration was extended on or after the day on which this section comes into force.”
This new clause provides for terms of an insurance contract to be ineffective so far as they would prohibit a tenant from keeping a pet.
Matthew Pennycook
Clause 7 will add new provisions to the 1988 Act to strengthen the rights of tenants to keep a pet in their home, including a new legal obligation for landlords to consider requests to keep a pet while providing a route for them to refuse such requests when they can give a reasonable justification for why it would not be suitable. The clause also allows landlords to require insurance to cover pet damage.
We welcome the clause. As many of us know, pets are wonderful companions, and keeping them results in a host of benefits, not only for pet owners but for society. While it may be going too far to ascribe to them the status of a public health intervention, it is not in dispute that pets can help to relieve loneliness, boost physical activity, decrease stress and anxiety and, as I know from my own experience as the owner of a puppy called Clem, bring real comfort and joy to young children. We are therefore extremely pleased that the Government have delivered on the commitment they made in the White Paper to take steps to ensure that landlords cannot unreasonably withhold consent when a tenant requests to have a pet in their home.
We also welcome the fact that the Government have explicitly recognised the link between overly restrictive conditions on pets in the private rented sector and the number of animals either left on the street or given up to shelters each year. We know that such steps are required because there is extensive evidence that a significant proportion of landlords do not let to tenants with pets. Figures from the English private landlord survey 2021, which were quoted in the Government’s White Paper, suggest that nearly half of all landlords are unwilling to let to tenants with pets. The fact that so many landlords do not accept pets is not just an inconvenience for private tenants who own them; due to the constrained supply of properties in the private rented sector, it is also a significant contributory factor to the number of animals given up each year. It is telling that, last year, 10% of people who contacted the Dogs Trust with a view to rehoming their dog cited their reason for doing so as issues with accommodation, including being unable to find somewhere to live that was pet-friendly.
However, while we welcome the intent of clause 7, we are concerned that these provisions are not yet robust enough to ensure that the new “right to request” process will operate fairly and effectively in practice to prevent prospective tenants with pets from being disadvantaged at the point that they seek to secure a new periodic tenancy. The amendments to clause 7 that we have tabled in this group are an attempt to ensure that responsible pet owners can, as the White Paper promised, truly feel like their house is their home. We are pleased to have the support of both Battersea Dogs & Cats Home and the Dogs Trust in tabling them.
Amendments 183 to 187 seek to reduce the period in which a landlord can consider a request made to keep a pet from 42 days to 14 days, with the ability to extend by a further 14 days should a superior landlord need to be consulted. We do not believe that the Bill, which currently would give landlords up to six weeks to determine whether to provide or refuse consent to keep a pet, is fair on tenants, particularly those who might already have pets and would presumably, absent a family member or friend temporarily housing them, have to cover the potentially significant costs of putting them in boarding kennels or catteries.
We have also taken seriously the concerns that Battersea Dogs & Cats Home has put to us about the possible impact of the proposed 42-day consideration period on rescue organisations. Its entirely justified fear is that if there are six weeks of uncertainty about whether tenants can live with their pets in a newly secured privately rented home, there is a real risk that a considerable number of animals could be surrendered to rescue organisations, thereby putting significant additional strain on those organisations. Battersea Dogs & Cats Home has also highlighted another potential impact of the lengthy proposed period: private tenants looking to rehome an animal from a rescue centre or shelter in a newly secured privately rented home may find themselves unable to do so in a timeframe that the shelter can accommodate.
It is not clear to us why the Government believe that landlords will need up to six weeks to arrive at a decision on a request to keep a pet. If the Minister can provide a justification for why the Government chose 42 days as the period in which a landlord can consider such a request, we would be grateful to learn of it. In all honesty, we struggle to conceive of why any good-faith landlord would need such a lengthy period to make such a decision. It is our belief that a 14-day limit will allow tenants to better plan for pet ownership if they wish to acquire a new pet and make life easier for those who already own them. We hope that the Government will consider accepting these amendments.
Amendment 181 simply seeks to require the Government to address the present lack of clarity on what constitutes a reasonable ground for refusal. Subsection (4) of proposed new section 16B of the 1988 Act states that the
“circumstances in which it is reasonable for a landlord to refuse consent include”
those in which a pet being kept would breach an existing agreement with a superior landlord. Yet aside from the circumstances set out in paragraphs (a) and (b) of subsection (4), the Bill is silent on what would constitute a reasonable refusal in those circumstances. Are we to take it that paragraph (1)(b) of proposed new section 16A, which provides that consent to keep a pet is
“not to be unreasonably refused by the landlord”,
applies in all circumstances other than those in paragraphs (a) and (b) of subsection (4)? In short, can private tenants who wish to own or already own a pet now be confident that a landlord cannot reasonably refuse a request to keep a pet, unless accepting such a request would breach an agreement with a superior landlord? Or do the Government intend for there to be a greater range of circumstances that could provide legitimate grounds for a reasonable refusal?
I hope the Minister will accept that this is not simply Opposition nit-picking over specific subsections of legislation, because the answer to that question is key to how the provisions will operate in practice. Tenants need to know whether the right to request to keep a pet must be accepted in all but the most extenuating circumstances, or whether there is a broader range of situations where landlords can legitimately refuse. In an attempt to clarify the present ambiguity, our amendment 181 would require the Government to publish guidance on what qualifies as a reasonable ground of refusal for a tenant to keep a pet. We hope the Government will give it serious consideration.
Another area where we believe the Bill would benefit from greater clarification is the nature of the consent once given. Our amendment 182 would ensure that, once given, landlord consent for a tenant to keep a pet cannot be reviewed or withdrawn. That would provide tenants with far greater confidence that, once a consent had been awarded, the landlord could not change their mind, and that they would be able to live with their pet for the duration of the tenancy as a result. We hope the Government will look favourably upon amendment 182, but even if the Minister does not ultimately accept it, we hope that he will provide some reassurance today that, once a consent is given, it cannot be withdrawn or revoked.
Turning to new clauses 63 and 64, as I touched on at the outset of my remarks, not only do we believe that changes are required to clause 7 to ensure that it operates fairly and effectively in practice, but we are concerned about the risk of prospective tenants with pets being disadvantaged at the point that they are seeking to secure a new periodic tenancy. As drafted, the clause applies only to existing tenancies and not prospective ones.
Given that we know that a significant proportion of landlords, perhaps even a majority of them, do not allow pets, we are concerned that any restriction may mean that landlords who do not wish to have a pet in their property, but who are unable to reasonably refuse a right to request from a sitting tenant, may instead seek to screen out tenants who are existing or prospective pet owners. New clauses 63 and 64 would prevent landlords from discriminating in that fashion, thereby ensuring that those with pets can move between properties as freely as those without. We hope that the Government will consider our new clauses carefully and, if they are not minded to accept them, will at least consider what might be done by way of statutory guidance, for example, to ensure that existing or prospective pet owners seeking to agree a new tenancy are not discriminated against.
Before I conclude, I want to touch briefly on how and whether tenants will be able to seek a review of a decision to give or refuse consent by a landlord. The White Paper stated that the Government would
“legislate to ensure landlords do not unreasonably withhold consent…with the tenant able to challenge a decision”,
yet there are no provisions in the Bill to deliver upon that commitment. The only reference to any kind of challenge to non-fulfilment of a landlord’s responsibilities under these provisions is to be found at subsection (5) of proposed new section 16B, which states:
“In proceedings in which a tenant alleges that the landlord has breached the implied term created by section 16A, the court may order specific performance of the obligation.”
If that is indeed the only means of redress available to tenants who have a request for a pet refused, it would be disappointing and, we believe, contrary to what was implied in the White Paper. I would be grateful if the Minister confirmed whether that is the only means of potential redress in the case of a refusal and, if so, whether the Government are at least considering alternative means of non-statutory redress, for example via appeals to the new ombudsman.
I hope that Minister will take these amendments in the spirit in which they are intended, namely as a constructive attempt to ensure that clause 7 works fairly and effectively in practice and that there is no discrimination against pet owners once the new system is in place. I look forward to hearing his response.
Craig Tracey (North Warwickshire) (Con)
I want to make a brief contribution on clause 8, to satisfy my inner insurance nerd and get some clarification. I declare an interest as chair of the insurance and financial services all-party parliamentary group. My understanding from speaking to officials and the Minister—I thank them for their time—is that the clause is intended to allow either landlords or tenants to obtain insurance to cover damage by pets, with the cost then being passed on where it is obtained by the landlord.
The explanatory notes state:
“Clause 8 amends section 1(4) of the Tenant Fees Act 2019 to allow landlords to require a tenant keeping a pet to enter into a contract with an insurance company to cover pet damage.”
That suggests that it is very much about only tenants obtaining that cover. As somebody with a background in insurance, I am very pro insurance contracts. The more people who can take them out, the better, but I have concerns about this measure and how it could be interpreted.
Mike Amesbury (Weaver Vale) (Lab)
Would the market respond to that? Is there an opportunity there?
Craig Tracey
Yes, there is, but there are still some problems, which I will explain now. Even if the market does respond, that cover is not available now, so it might not be available from day one. It might respond in future—the hon. Member is right—but that leads me on to insurable interest. Usually, someone insures only something that they own. If they insure somebody else’s property, they have the potential to make a claim on it and that money goes to them as the policyholder, and they are not obliged to pass it on to the property owner. For that reason most insurance contracts are tied around an insurable interest, which is an important point because what we are trying to do here is cover the landlord’s property.
There could be an instance where a policy is taken out, a dog chews through a cable or something like that, and the tenant claims for it, but does not pass the money on. I will come to how we get round that. Also, Shelter mentioned that—there was a conversation over the weekend with the British Insurance Brokers’ Association —when financial shocks come, insurance products are normally one of the first things to be cancelled. So there is a worry for the landlord that the tenant might take the cover out at the start of the term, but there is nothing to say that that continues through the whole life of the tenancy and that the payments are made and maintained.
The third point is about the ability of a tenant to obtain cover, anyway. There are various barriers that might leave people unable to take out an insurance policy. There might be previous convictions or a previous claims history, or it might just down to the postcode and the particular area. Often such barriers would exclude some of the most vulnerable people who would benefit most from the cover.
The simplest solution is for the landlords to take responsibility for the policy covering their buildings insurance. It is their cover and they can make sure that the correct cover is in place and that there is not an onerous excess on the policy that might exclude payments coming out. They can make sure the cover is in force.
Matthew Pennycook
A point has just struck me. We heard from several advocacy organisations and charities that were sceptical about the need for this provision. Their concern was primarily about the impact on the finances of tenants, particularly vulnerable tenants, in the current cost of living crisis. Does the hon. Gentleman worry that if landlords have to take out insurance, they might pass on unreasonable and inflated costs in addition to the insurance policy? How would we verify that only the cost of the policy was being passed on?
Craig Tracey
My understanding from officials is that only the cost of the additional cover would be passed on. There is always potential for what the hon. Gentleman describes, though, so we do need to prevent it, because we want only the additional cost passed on. However, it comes back to the point that the landlord seems to be the best placed to take out that cover. It gets rid of a lot of the issues and means that the cover could start from day one.
I understand what the amendment is designed to do, but we need a bit more clarity. We do not want the unintended consequences that I have mentioned to prevent people from having a pet in their home, and the lack of insurance being blamed for that being the case.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich for tabling the amendments, and I am glad that we are in agreement about the positive role that pets can play, especially his pup Clem—I wonder who that is named after. We know that pets can bring happiness to their owners and provide a vital source of companionship.
Clause 7 will help tenants to make their house a home by introducing a new implied term that strengthens their rights to pet ownership. In future, landlords will be required to consider each request for a pet on a case-by-case basis and will be unable to refuse a tenant’s request without a reasonable rationale. The clause also inserts new section 16A into the Housing Act 1988, setting out that the landlord has to respond to a tenant’s request to keep a pet within 42 days. The landlord can also request more information from the tenant within this time and will have a minimum of seven days to respond once the information is received. That will give landlords adequate time to consider a request, while preventing them from unfairly avoiding or delaying giving tenants a response.
I turn to amendments 183 to 187. Although I appreciate that tenants will want an answer to their request as quickly as possible, 14 days is simply too little. A landlord could easily be on holiday or in hospital, meaning that they would be in breach of the 14-day deadline. Forty-two days gives enough time for landlords to do more research and give due consideration to requests, but it prevents them from delaying indefinitely.
On new clause 63, we expect that the reforms will increase the number of pet-friendly properties from the outset, as landlords will know that they cannot unreasonably refuse a request once the tenant is in situ. There would therefore be little for landlords to gain if they sought to discriminate against pet owners prior to the tenancy starting. We believe that strengthening the rights of tenants within tenancies means that landlords will have more confidence to advertise properties as pet-friendly from the outset. We are bolstering that by allowing landlords to put an insurance policy in place or to ask the tenant to pay for insurance, so that they can recover the cost of any damage. We therefore do not think that legislation is required to achieve this change.
On amendment 182, I reassure the hon. Member for Greenwich and Woolwich that when a landlord gives permission for their tenant to keep a pet, it is an implied term of the tenancy that the tenant may keep the pet, so consent cannot be withdrawn. It is clearly important that tenants are aware of their rights, and we will seek to make that point clear in guidance.
I turn to insurance and the points made by my hon. Friend the Member for North Warwickshire. Clause 7 provides reassurance to landlords concerned about damage to their property by allowing them to require the tenant to take out insurance covering pet damage, or to be reimbursed for the cost of getting the insurance themselves. Clause 8 amends the Tenant Fees Act 2019 to allow landlords to require tenants with a pet to take out an insurance policy to cover pet damage. Separately, we will also amend the Tenant Fees Act 2019 so that landlords are able to charge the cost of an insurance policy covering pet damage back to the tenant. This will be delivered using an existing power in that Act, and we will bring forward the secondary legislation before the measures in the Bill are implemented.
I am aware of my hon. Friend’s concerns about the single insurance product that is available at the moment. I really do welcome the Labour party’s position on the open market—it is a new one. As has been discussed in Committee, we feel that the lack of products is a result of the fact that very few landlords currently accept pets, so there is simply no market for it. We do think that will change with the introduction of this legislation.
Mike Amesbury
With regard to passing on the costs of those insurance products once the market responds—as a social democrat, I make no apologies for using that phrase—how will we ensure that those costs are reasonable and transparent? There are lots of practices throughout the private rented sector where that is not the case.
Jacob Young
That is certainly a role the ombudsman can play, which brings me on to the point raised by the hon. Member for Greenwich and Woolwich as to whether a tenant requesting a pet could challenge the landlord’s decision. We feel that the ombudsman could play a role in that ahead of any court proceedings.
On new clause 64, tabled by the hon. Member for Greenwich and Woolwich, it would be unusual for an insurance policy to explicitly ban pets as a condition of insurance. It is much more likely that pet damage simply would not be covered. We are grateful to the hon. Gentleman for raising that matter, and we will consider whether further action is necessary in relation to the new clause.
On amendment 181, we must ensure that the Government are able to work flexibly with stakeholders and properly align our planned guidance with implementation. I am happy to commit on the record today to guidance being issued, but it is vital that the Government are not constrained by the imposition of an arbitrary deadline. In the light of those points, I kindly ask the hon. Member for Greenwich and Woolwich to withdraw the amendment.
Matthew Pennycook
I will not press the amendment to a vote. I welcome the clarification from the Minister about guidance being forthcoming and in a number of other areas. I think all our concerns could be addressed if we had greater clarity on what constitutes a reasonable refusal and the circumstances in which a landlord could draw upon that. As I said to the Minister, all I can see in the Bill is proposed new section 16A(1)(b) of the Housing Act 1988, which says thats
“such consent is not to be unreasonably refused by the landlord.”
We need to know whether there is only a very narrow set of circumstances where that can be drawn on by landlords, or a wider range. The 42-day period does not matter in some ways if tenants have robust assurance on the reasonable implied period. There will also be far fewer ombudsman cases if there is only a narrow range of grounds on which a pet can be refused. I urge the Minister to write to us, perhaps before Report stage, to give us a bit of clarification around the circumstances in which landlords can reasonably refuse that request. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clause 8 ordered to stand part of the Bill.
Clause 9
Duty to give statement of terms and other information
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss Government new clause 3—Duty of landlord and contractor to give statement of terms and other information.
Jacob Young
The Government are committed to ensuring that tenants and landlords are aware of their rights and responsibilities. Government new clause 3 will replace clause 9 and insert a new duty requiring landlords to provide tenants with a written statement setting out certain terms of their tenancy. Having terms in a written agreement or statement can help to avoid disputes. If things go wrong, they can provide effective evidence to resolve disputes, and they can provide valuable evidence if the landlord needs to evict an irresponsible tenant. Details of what must be included in the written statement will be set out in regulations made by the Secretary of State, and may include such information as the tenancy start date, rent level and landlord’s address, as well as the basic rights and responsibilities of both parties.
We know that the vast majority of good landlords already put tenancy terms in writing, and we want to formalise that good practice. For those landlords, we intend that there will be little practical difference between this new duty and the tenancy agreement that they already provide. Landlords will need to specify when certain grounds may be used to evict the tenant. These are predominantly specialist grounds, such as where the property is used for a specific purpose or connected to the tenant’s employment.
New clause 3 will help to ensure that all tenants and landlords, as well as those working for the landlord, are aware of their rights and obligations. I commend it to the Committee in place of clause 9.
Matthew Pennycook
Clause 9 would insert proposed new section 16D into the 1988 Act. It places a duty on landlords to provide the tenant, as the Minister made clear, with a written statement of terms and information on or before the first day of a tenancy. Landlords must state in the written statement of terms where they may wish to make use of any of the prior notice grounds 1B, 2ZA, 2ZB, 4, 5 to 5G or 18. Given that prior notice is currently required for use of possession ground 1, but the Government propose to remove that requirement from the new ground 1, may I press the Minister again to explain precisely why the Government believe that that change is necessary?
I would like to make some brief comments about Government new clause 3 and put a number of questions to the Minister about it. These are complex questions, so I have no issue with the Minister writing to me at a later date rather than answering now. New clause 3 replaces clause 9, thereby applying the provisions of the clause to landlords’ contractors as well as landlords; carving out certain tenancies by implication; and modifying specific provisions for certain tenancies. Leaving aside quite how the Government got themselves in the situation where they are replacing entire clauses in Committee, I would be grateful if the Minister clarified why the Government have alighted on applying these provisions to “contractors”, given that the standard term, both in plain English and in statute, is “agent”?
A whole series of further questions arises from the new clause. What is the definition of a contractor? Does it have to be a written contract? What happens if the information is not provided? Did the Government consider whether a rent repayment order might be appropriate in the circumstances, or whether a court should be given the power to order that it be provided? What if the contractor excludes liability for providing the material in question, given that we know that that happens in other instances, for example with letting agents excluding liability to tell the landlord about any relevant licensing schemes? I would appreciate any insight that the Minister can offer today into any of those points. As I say, I am more than happy to accept a written response to my detailed questions, if necessary.
Jacob Young
On the hon. Gentleman’s question about prior notice, we are making it a requirement of the new mandatory written statement of terms that landlords must warn their tenants where they may wish to rely on a certain grounds at the outset of the tenancy. If the landlord fails to comply with the mandatory written statement of terms, the tenant can seek redress and local authorities may issue fines.
Matthew Pennycook
But that does not apply to ground 1, does it? I am trying to understand the Government’s thinking on why they have removed the prior notice requirement on ground 1.
Jacob Young
I shall write to the hon. Gentleman on that point and on the other questions that he raised.
Question put and negatived.
Clause 9 accordingly disagreed to.
Clause 10
Other duties of landlords and former landlords
Helen Morgan (North Shropshire) (LD)
I beg to move amendment 132, in clause 10, page 13, line 11, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.
The Chair
With this it will be convenient to discuss the following:
Amendment 140, in clause 10, page 13, line 11, leave out “three” and insert “12”.
Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.
Amendment 134, in clause 10, page 13, line 13, after “tenancy” insert
“or on a short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Amendment 135, in clause 10, page 13, line 14, at end insert
“or on a short-term let or holiday let”.
This amendment would clarify that a landlord cannot market a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Amendment 133, in clause 10, page 13, line 19, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and the landlord authorising a letting agent to make the property available to rent from three months to six months.
Amendment 141, in clause 10, page 13, line 19, leave out “three” and insert “12”.
Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.
Amendment 142, in clause 10, page 13, line 27, leave out paragraph (b) and insert—
“(b) the tenant either surrenders the tenancy without an order for possession being made or delivers up possession of the dwelling house under the terms of an order for possession.”
This amendment would extend the prohibitions on a landlord reletting or remarketing a property, and from authorising a letting agent to market the property, for which possession has been obtained on the Ground for occupation or selling by court order.
Clause stand part.
Government new clause 4—Other duties.
Government new clause 5—Landlords acting through others.
Helen Morgan
Once again, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests, on which there are two jointly owned properties: a residential property and a holiday let.
During our evidence sessions, we heard that experience in Scotland has shown that grounds 1 and 1A are open to abuse by landlords who are simply looking to re-market their property either at a higher rent or to a different tenant who will not complain about serious defects in the property. We heard about a pretty horrifying case in which a rat and maggot-infested property was simply re-marketed three months later. Clearly, the time in which the property could not be re-marketed was not enough of a deterrent to prevent abuse of such a clause. Amendments 132 and 133 therefore seek to extend from three to six months the period before which a property can be re-marketed.
In our debates over the past couple of days, I have spoken at length about the need to ensure the maintenance of balance between tenants and landlords, so that landlords are not driven from the market, which would exacerbate the chronic shortage of rental property in the whole UK and the decline in the size of the private rented sector in rural parts. I do not think that these amendments would have an impact on that balance. Any landlord who is seeking repossession under ground 1 or 1A and is acting in good faith has no intention of re-marketing the property at the point at which they seek repossession. Extending the period beyond which it can be re-marketed should not influence their decision in any way.
We understand that people’s circumstances can change, sometimes very suddenly. I think six months is a reasonable length of time both to provide a deterrent to abuse of grounds 1 and 1A and to provide fairness for landlords who have acted in good faith but have suffered an unexpected change in circumstances. I would be grateful if the Minister commented on the steps needed to prevent the recurrence of the situation in Scotland that we heard about and, ultimately, to support the lengthening of the period.
Amendments 134 and 135 seek to address the problem facing many tourist areas that properties for private rent are being flipped into holiday lets or Airbnb-style holiday homes. Members of all parties who represent tourist hotspots have raised the issue in the main Chamber, and there is broad consensus that the over-supply of holiday accommodation is having a hugely detrimental effect on those areas.
There needs to be some holiday accommodation, but the balance of holiday and private rented sector accommodation is very important for those areas, because over-supply of holiday accommodation hollows out communities. It has led to a situation in which the workers needed for the tourist industry to thrive have nowhere to live, so hotels and restaurants are unable to operate at full capacity. That is bad for the local economy, as well as for people who cannot find anywhere to live in the area.
Meanwhile, in rural areas, the private rented sector is shrinking rapidly. Local families and people working in essential services, such as care workers, teachers and nurses, are being driven away. The sector is completely out of balance. My understanding of the legislation is that landlords seeking repossession under ground 1 or 1A must not re-market the property as a residential let within a three-month period; I would prefer six months. There is no provision for holiday let-style marketing, because those properties do not require tenancy agreements.
My amendments recognise that problem by adding holiday letting to the three-month, or ideally six-month, moratorium on re-marketing once ground 1 or 1A has been used to regain possession. I think that that is a pretty uncontroversial addition to the Bill; I very much hope that Government Members support me when I press amendments 134 and 135 to a vote.
Matthew Pennycook
I rise to speak to amendments 140 to 142. It is a pleasure to follow the hon. Member for North Shropshire. We agree fully with the spirit behind amendments 132 to amendments 135, and we will support the hon. Lady when she presses either amendment 134 or amendment 135, regarding short-term lets, to a vote. They highlight a valid concern.
As we made clear during an earlier debate on mandatory possession grounds 1 and 1A when considering clause 3, we believe that there is a clear risk that these de facto no-fault grounds for eviction could be abused in several ways by unscrupulous landlords. As a result, we are convinced of the need to amend the Bill to provide tenants with greater protection against their misuse. However, we do not believe that the hon. Lady’s proposal to extend the no-let provisions in clause 10 from three to six months for both standard periodic and short-term lets is sufficient, for reasons I will go on to explain.
We are once again considering mandatory possession grounds 1 and 1A because clause 10 would insert proposed new section 16E into the 1988 Act, prohibiting certain actions by landlords or former landlords, including re-letting or re-marketing a property or authorising an agent to market the property within three months of obtaining possession on those grounds.
We take no issue with the prohibitions that the clause provides for. It is obviously right that the Bill seeks to prevent landlords letting a fixed-term tenancy; serving an incorrect form of possession notice; failing to give prior notice where required; specifying a ground for possession that the landlord is not entitled to use; and issuing a notice for possession proceedings within the proposed six-month protected period that applies to grounds 1, 1A and 6. We also welcome the clause’s explicit prohibition of the re-letting or re-marketing of a property obtained by means of issuing a ground 1 or 1A notice, and the fact that clause 11 provides for financial penalties and offences for a breach of that prohibition.
As I remarked to the Minister in a previous debate, the fact that the Government have introduced that prohibition highlights that they clearly accept that amended ground 1 and new ground 1A could be used as a form of section 21 by the back door. However, we are absolutely convinced that a three-month no-let period is simply not sufficient to deter and prevent abuse of the kind we fear will occur if the two possession grounds in question remain unchanged. We take that view because of our understanding of the English rental market.
Three months of lost income, which is what any unscrupulous landlord who deliberately abuses mandatory possession grounds 1 and 1A in order to evict a tenant will incur, may act as a significant disincentive for some buy-to-let landlords, particularly those with highly geared large portfolios who have seen their rental yields reduced by rising interest rates and the restriction of mortgage interest tax relief as a result of tax changes under section 24 of the Finance Act 2015.
However, a significant proportion of landlords do not have a mortgage; they own their property outright. A recent survey carried out by Shelter suggested that well over half of all landlords come under that category. For landlords who are mortgage-free or have a mortgage but can absorb extended void periods, a three-month no-let prohibition, which could ultimately see them losing only one month of rental income if the tenant serves out the two-month minimum notice period that applies to grounds 1 and 1A, is not a particularly strong deterrent against abuse.
We believe that the no-let prohibition provided for by clause 10 in respect of mandatory possession grounds 1 and 1A must increase from three months to 12 months. That would ensure, taking into account the full minimum notice period, that any landlord not legitimately using the landlord circumstances grounds to occupy or sell the property would lose 10 months of rent—a financial penalty that we think would be sufficient to deter and prevent such misuse. Amendments 140 and 141 would provide for that 12-month no-let period. I urge the Minister to reflect further on the issue and to accept the amendments.
Amendment 142 seeks to address a distinct but related issue with the no-let prohibitions provided for by clause 10 in relation to grounds 1 and 1A. Proposed new section 16E(5) provides that the prohibition is applicable only if the tenant surrenders the property as a result of a notice having been served, without an order for possession being made. To put it another way, the proposed three-month no-let ban will be applicable only in instances where a tenant has left a property voluntarily without court proceedings, not where a court has issued an order. That is genuinely inexplicable, from our point of view.
Is it the Government’s view that where a ground 1 or 1A notice is served and the tenant wishes to contest it, the no-let prohibited period would, in effect, run throughout the possession proceedings, so that if they take three months or more, the period will have been deemed to have already expired prior to any order being issued? Is that the reason? If so, we would welcome clarification. Otherwise, we cannot understand why the prohibition does not apply where a court has issued an order. The Minister must provide a detailed explanation of the rationale behind the Government’s decision, because we cannot understand why it is equitable to apply the prohibition only to instances where a tenant has left a property without court proceedings, vis-à-vis having challenged them by taking the matter to court.
We are also concerned that the decision to do so will prevent tenants themselves from seeking redress in instances where they have good reason to believe that grounds 1 and 1A have been misused. It stands to reason that tenants who have challenged their eviction in court are inherently more likely to suspect that they are being wrongfully evicted and to be willing and able to pursue their landlord if they are abusing the grounds subsequent to losing their home.
To reiterate a point I made in an earlier debate, it is almost certain that a minority of unscrupulous landlords will abuse grounds 1 and 1A to unfairly evict tenants they perceive as problematic, and will then proceed to re-let those properties in short order. As things stand, if and when they do so the courts will be able to do nothing. Indeed, how will they even know what happened subsequent to a ground 1 or 1A possession case? The obvious mechanism to ensure that grounds 1 and 1A are used legitimately in each instance is to require landlords to evidence and verify prior and subsequent to a notice being issued, but the Government rejected our amendments 138 and 139 out of hand.
Lloyd Russell-Moyle
I rise to support the amendments tabled by our Front Benchers and to ask the Minister about holiday lets. The holiday or short-term let market is due to be regulated, so this is an opportunity for the Minister to explain to us how the Department foresees those regulations pairing with the property portal or the Bill.
If someone is not allowed to re-market their property, but they could market it for short-term let, the short-term let registration portal—I understand that the plan is for that to be separate—will need to interact with the other portal. The Minister might genuinely not mind that properties are being re-let as holiday rentals in the no-let period, but I suspect this is more a case of needing reassurance from him that that loophole will be closed in the regulations to prevent holiday lets. That seems simple, but we need that reassurance from the Minister so that we know that it will be squared off.
On the period that the property cannot be let for, some amendments have been tabled about the evidence that needs to be provided, but what is important here is that the landlord or family members moving in, or the intention to sell, should be genuine. At the moment, there do not seem to be protections to ensure that they are. One such protection would be ensuring that a landlord cannot benefit financially if they are not making a genuine application. Three months does not seem to cover that. Many properties are already empty for a number of months between tenancies for the landlord to make repairs and update the property. It is not unusual for that period to be one or two months.
Three months, therefore, does not seem to be particularly onerous on the landlord, so 12 months should be a possibility. If the Minister does not think that 12 months is appropriate, it may be useful for him to tell us how he thinks enforcement could be done beyond the three months—for example, if it were demonstrated that the landlord never intended to sell, but that only became apparent four months later. It may well be that a landlord has no real intention to sell but issues that particular ground, and the tenant, the local authority and others do not particularly raise eyebrows because it can take a number of months to get a property on to the open market.
People would not necessarily expect a property to be listed the day after the tenant is out, because the landlord will want to tart it up and ensure that it looks its best for the estate agent’s photos. They will want to ensure that they cover all the dodgy spots in the house. We have all done it when we have sold houses: we show the best side of the house that we can. We deep-clean the oven and do all that stuff, which takes a number of weeks, if not months, before we get the letting agent to come round, take pictures and let the property.
It is therefore not unusual for it to take three months before the property is on the market for sale, but in this case that does not come about because the landlord never really aimed to sell it. The danger is that, because the time has elapsed, they can just shove it back on the open market. If the Minister is going to say, “Actually, in those circumstances the landlord would have to demonstrate that they had had a reasonable change of mind because of material circumstances,” he needs to outline how that would be demonstrated. Otherwise, we would just wait, and there would be no evidence at all.
There are other amendments that would give those protections, but before we decide not to press the amendments that we are discussing, the Minister needs to explain that point. Otherwise, the only form of protection can be a prevention from letting for 12 months, or at least the forgoing of 12 months of rent—they are not necessarily the same thing.
Jacob Young
I thank hon. Members for their amendments. We are absolutely clear that any attempt to misuse these grounds will not be tolerated. That is why the Government’s amendments prohibit landlords from re-letting or re-marketing a property for three months after using the moving and selling grounds, and why we are prohibiting landlords from authorising a letting agent to re-market a property on their behalf for three months when they have used those grounds.
That three-month period represents a significant cost to landlords and will deter misuse of the grounds. It is significant enough to remove any profit that a landlord might make from misusing the grounds in order to re-let, for example, at a higher rent.
Lloyd Russell-Moyle
What is the average profit that someone makes when selling a property?
Jacob Young
I do not understand how the hon. Member could think that I would possibly know that right now.
Jacob Young
I will not give way again.
Amendments 132, 133, 140 and 141 seek to extend the three-month period to six or 12 months. That would be excessive and keep good properties sitting empty if a landlord’s circumstances changed. It is quite possible that a landlord might not be able to sell and might subsequently need to re-let. Amendment 142 would extend the no-let period to cases where the landlord has gone through the court process to obtain a repossession order. We feel that that restriction is unnecessary, as such a landlord will have proved to the court that their intentions are genuine.
Amendments 134 and 135 look to restrict a landlord from letting their property as a short-term let, as the hon. Member for North Shropshire said. It may be reasonable for a landlord to offer a property as a short-term or holiday let within the three months, for example if there is a long gap before a sale completes. However, I have heard her comments and those of the hon. Member for Greenwich and Woolwich, and I know that that is an issue in places such as Cornwall and Devon. I commit to working with the hon. Member for North Shropshire and others to address those points.
If a landlord tries to abuse the system, there are financial repercussions for breaches and offences. We are giving local councils powers to fine landlords up to £5,000 for minor breaches and up to £30,000 for serious offences. The Government think the amendments would cause unreasonable cost to landlords whose sale or plans to move into a property may have fallen through, through no fault of their own.
Turning to Government new clauses 4 and 5, I am grateful to the hon. Member for Greenwich and Woolwich for his questions and confirm that I will write to him on those points. The new clauses replace clause 10, retaining the policy intent in the original drafting but updating it to better reflect its intention. We are clear that any attempt to misuse the grounds will not be tolerated. That is why the Government new clauses prohibit landlords from re-letting or re-marketing a property for three months after using the moving and selling grounds, and why we are prohibiting landlords from authorising a letting agent to re-market the property on their behalf. The three-month period represents a significant cost to landlords and will deter misuse. I therefore commend new clauses 4 and 5, which will replace clause 10, to the Committee and ask hon. Members to withdraw their amendments.
Matthew Pennycook
I thank the Minister for that answer. On the length of the no-let period, I think there is just a genuine principled disagreement between the two sides of the Committee about whether the proposed three months will act as a deterrent. In all honesty, because this is a completely new system—although we have the Scottish experience to draw on—we have no evidence on either side to prove that that is the case, but we genuinely fear that three months is not enough to prevent misuse. I will therefore press amendment 140 to a vote.
On amendment 142, I will go back and check the transcript, but I am not convinced that I understood the Minister’s reasoning when he talked about the court knowing that the landlord’s intentions were genuine simply because, at the point of the notice’s being served, the re-let prohibitions apply. I still do not understand why the prohibition on re-letting should not apply in instances where the court has awarded possession. We still want the landlord not to re-let in that period under either scenario, so we cannot understand why one would be exempt and not the other.
Jacob Young
To reiterate my point, amendment 142 would extend the no-let period to cases where the landlord has gone to court to obtain a repossession order. We think that restriction is unnecessary because, if a landlord has gone to court and the judge has granted the possession order, the landlord has proved that their intentions are genuine on those grounds. That is why we feel the amendment is unnecessary.
Matthew Pennycook
I follow the Minister’s argument, but, under those circumstances, the no-let prohibition should apply from that point under that scenario, just as it would at the point when a notice is served.
Jacob Young
The hon. Gentleman’s argument would suggest that a landlord wanting to move into a property within five months would serve notice on their tenant, the tenant would have two months in the property and could then take the landlord to court because they wanted evidence, which could take six months—and he is suggesting an additional three months on top of that. Does he not see that that would be unfair to a landlord, in a genuine case?
Matthew Pennycook
No, I genuinely do not. In a case where a tenant has felt so strongly that they are potentially being evicted unlawfully that they have taken the matter all the way to the court, it is right that the no-let period should apply from the point that the award is granted. Again, that may be a point of genuine disagreement, but we will press amendment 142 to a vote.
Helen Morgan
I thank the hon. Member for Greenwich and Woolwich for his comments. I am in general agreement with his point about needing to extend the period beyond which a property can be re-marketed, although my view is that 12 months is excessive. If a landlord’s circumstances have changed—for example, if they repossess their house to sell it because they are facing financial hardship but are unable to sell and need to re-let it—12 months is punitive.
Jacob Young
I beg to move amendment 19, in clause 11, page 14, line 24, leave out
“16E (inserted by section 10”
and insert
“16G (inserted by section (Landlords acting through others)”.
This amendment is consequential on NC4 and NC5. It updates the new section numbering to reflect the fact that those new clauses insert new sections earlier in the 1988 Act.
The Chair
With this it will be convenient to discuss the following:
Government amendments 20 to 25.
Amendment 163, in clause 11, page 15, line 14, leave out “£5,000” and insert “£30,000”.
This amendment would increase the maximum financial penalty that local authorities could levy against a landlord or former landlord that they are satisfied beyond reasonable doubt has contravened provisions contained in clauses 9 (inserted section 16D of the Housing Act 1988) or 10 (inserted section 16E).
Government amendments 26 to 41.
Amendment 164, in clause 11, page 17, line 22, leave out “£30,000” and insert “£60,000”.
Government amendments 42 to 49.
Clause stand part.
Government amendments 51 to 54.
Clause 12 stand part.
Government amendments 55 to 59.
Clause 13 stand part.
Jacob Young
As I made clear when I spoke on clause 10, the Government will not tolerate any abuse of the new system. Clauses 11 and 12 give local housing authorities the power to fine the minority of landlords who break the rules, as well as introducing new financial penalties and criminal offences for repeated wrongdoing. Clause 13 provides that those criminal offences do not bind the Crown, although it will be possible for councils to issue fines to private landlords. Under that new provision, local housing authorities will be able to fine landlords and former landlords up to a maximum of £5,000 for less serious and initial breaches of the new tenancy system, including failing to follow process when evicting a tenant and trying to offer a fixed-term tenancy. To be clear, £5,000 is the maximum that a landlord can be fined, rather than the norm.
We expect local authorities to be reasonable, and we are issuing guidance that they must have regard to when issuing fines. We are exploring a national framework for setting fines to ensure a consistent approach. This will ensure that penalties are proportionate to the severity of the breach of conduct, and that local authorities impose them accordingly. If landlords deliberately and seriously flout the new rules, local housing authorities will be able to fine them up to £30,000, or choose to prosecute them, including for re-letting or re-marketing a property within three months of using possession grounds for sale and occupation, or knowingly or recklessly misusing a ground for eviction. Repeated breaches will also be met with those higher fines.
Amendments 163 and 164, tabled by the hon. Member for Greenwich and Woolwich, would increase the maximum fine for initial or less serious breaches from £5,000 to £30,000, and the potential fine for repeated breaches and serious offences from £30,000 to £60,000. I would like to reassure him that multiple fines can be issued where a landlord has committed more than one breach. We will issue guidance to support councillors in making enforcement decisions, but we think that the maximum fines that the amendments would introduce are disproportionate to the severity of the breach or offence. The fines proposed by the hon. Member are out of step with other housing enforcement, such as the existing measures for breaches and offences under the Tenant Fees Act 2019 and the Housing Act 2004. Given the substantial fines that can already be levied repeatedly under the legislation, I ask him not to press his amendments to a Division.
The Government amendments extend the prohibited activities to those acting on a landlord’s behalf. That means that local housing authorities can impose penalties on all relevant persons who breach the rules, not just landlords. That includes those with formal relationships, such as letting agents, and more informal relationships. The amendments apply the penalties to those people.
The Government amendments also further strengthen rules against landlords and agents. Instead of demonstrating that a tenant left a property as a result of receiving an improper notice, local authorities will simply have to prove that a tenant left within three months after receiving the notice. That will make it easier for local authorities to take action against the minority of landlords who break the law.
I commend the Government amendments to the Committee and ask the hon. Member for Greenwich and Woolwich to withdraw his amendments.
Matthew Pennycook
I rise to speak to amendments 163 and 164. As the Minister has just set out, clause 11 inserts four new sections into the Housing Act 1988, setting out the financial penalties and offences he has referred to for breaches of the prohibitions in clause 10, including those relating to mandatory grounds 1 and 1A, which we have just discussed, and for not providing for a written statement of terms, as required by clause 9.
Clause 11 raises for the first time the crucial issue of enforcement, which arises in relation to a number of the prohibitions and requirements in the Bill, including those I just mentioned. It is obviously preferable to ensure that there are sufficient incentives in place to encourage landlords to comply with the various requirements in the Bill, and that abuse of possession grounds is identified before eviction takes place. It is, however, inevitable that some landlords will fail to comply with the requirements in the Bill, including the requirement to provide a written statement of terms and conditions to the tenant on or before the first day of a tenancy, and that there will be misuse of possession grounds 1 and 1A that are identified after an eviction has taken place.
The Government are currently proposing two means by which redress might be secured in those circumstances. First, they are proposing to enable the new ombudsman to award compensation to the wronged tenant. Secondly, as the Minister made clear, they are giving local authorities the power to impose financial penalties if the relevant authority is satisfied beyond reasonable doubt that a landlord or former landlord has contravened provisions contained in clauses 9 or 10, or if a landlord or former landlord is guilty of an offence but is not prosecuted.
I note and welcome the Minister’s comments, in terms of the Government’s intention to look at developing a national framework that might ensure that those fines are properly co-ordinated across the country. We will come on to consider whether those two means of redress could be supplemented by others when we address the issue of whether tenants themselves should be allowed to seek compensation for an abuse of possession grounds by means of a rent repayment order, as provided for by our new clause 57.
Amendments 163 and 164 are probing amendments that are designed to facilitate a debate on whether the amounts that the Government have chosen as the maximum financial penalties that a local authority can impose—namely £5,000 for a contravention and £30,000 for an serious offence—are sufficient. Notwithstanding the point that the Minister has just made—and it is useful to have clarification that multiple fines can be levied—we are concerned that the maximum levels are insufficient.
It is our contention that the type of unscrupulous landlord that might seek to abuse ground 1 or 1A to evict a tenant who has made a legitimate complaint—the rectification of which, if it is a serious hazard, may cost them tens of thousands of pounds—is unlikely to be deterred by the prospect of a fine of £5,000 or less. That is assuming that the local authority has the capacity and capability to investigate and enforce it. The Minister was also very clear that £5,000 is the maximum; the Government do not wish for it to be the norm. Similarly, a fine of £30,000—or less—for an offence strikes us as far too low to act as a serious deterrent.
Amendments 163 and 164 would raise the maximum financial penalty that local authorities could levy from £5,000 to £30,000 in instances where the provisions contained in clauses 9 or 10 were contravened, and from £30,000 to £60,000 where an offence has been committed. We have proposed those higher figures, very deliberately, on the basis that £30,000 mirrors the current maximum financial penalty for housing offences, and by doubling the maximum financial penalty for an offence to reflect the severity of that outcome. I hope that the Minister might go away and reconsider whether the maximum levels that the Government have chosen are sufficient to act as the deterrent that I think we both absolutely wish to see.
Clause 12, which is grouped with these amendments, requires a local housing authority to issue a notice of intent before imposing a financial penalty on a person under two of the new sections—16F and 16H—inserted into the 1988 Act by clause 11. It requires them to do so within six months of collecting sufficient evidence or, if the conduct is continuing, during the period that it continues within or within six months of it ending.
The clause further specifies that after a landlord has been issued with a notice of intent as required, a landlord will have the opportunity to make representations to the authority, which will then decide whether to issue the fine. What is more, even after an authority has heard representations and has still decided to impose a financial penalty, clause 12 gives the sanctioned party a right to appeal to the tribunal.
I ask the Minister—particularly in the light of the Government’s having resisted our efforts to strengthen the Bill to ensure that the replacement possession regime cannot be so easily abused—why the Government have provided landlords, who, let us remember, a local authority is satisfied beyond reasonable doubt have contravened provisions contained in clauses 9 or 10, with a series of opportunities to evade a financial penalty.
Jacob Young
I am grateful to the hon. Member. I did not quite catch his question, so, if it is fine with him, I will write to him on that point. I apologise, because I did not quite follow it.
Jacob Young
I know that the Opposition have a few questions about the clause, so I will allow them.
Matthew Pennycook
I bridle slightly at the use of the word “allow”. [Laughter.] I have two questions for the Minister in relation to this clause. Under the provisions of the Housing Act 1988, landlords of assured tenancies are currently required to pay the tenant’s reasonable moving expenses when they are awarded possession under ground 6, relating to redevelopment, or ground 9, where suitable alternative accommodation is available. This clause restricts that requirement solely to registered providers of social housing.
The Bill’s explanatory notes simply state:
“When the Bill takes effect, all landlords will use assured tenancies, so this provision is necessary to ensure only private registered providers of social housing are required to pay removal expenses.”
From our point of view, that does not explain why the Government believe it is necessary to remove the existing requirement for landlords to pay the tenant’s reasonable moving expenses in instances where possession has been gained under grounds 6 or 9. I would be grateful if the Minister could respond to the following questions: first, why do the Government no longer believe it is reasonable to pay for a tenant’s removal costs in cases under ground 6, where substantial redevelopment cannot take place with the tenant in situ, or ground 9, where suitable alternative accommodation has been identified? Secondly, why do the Government believe it remains appropriate for providers of social housing to cover those costs, if it is now judged inappropriate that private landlords should have to do so?
Jacob Young
I am grateful to the hon. Gentleman for his questions. We think it is an unfair burden to ask private landlords to pay for removal costs, which prevent them from redeveloping and ensuring that good-quality housing stock is available on the market. The purpose of the current requirement is to ensure that social tenants are paid moving costs when a social landlord is using grounds that help them to manage their stock—that is, redeveloping a property and moving tenants into suitable alternative accommodation. It would be unfair to place that burden on private landlords if it were applied to them and widened to include all no-fault grounds: for example, a landlord might find themselves in financial difficulties and need to sell or move into a property. I hope that answers the hon. Gentleman’s questions, but if he wants to reply, he can do so.
Matthew Pennycook
I am still not clear why it is deemed appropriate under those two specific grounds for assured tenancies—as is currently the case—but not under the new system. However, I am not going to press the matter any further.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Clause 18
Accommodation for homeless people: duties of local authority
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 178, in schedule 2, page 77, line 17, leave out “omit subsection (5)” and insert—
“for subsection (5) substitute—
‘(5) A person is also threatened with homelessness if—
(a) a valid notice has been given to the person under section 8 of the Housing Act 1988 in respect of the only accommodation the person has that is available for the person’s occupation, and
(b) that notice will expire within 56 days.’”
This amendment would maintain the homelessness prevention duty owed by local authorities to persons who have received a notice to vacate a property and would extend it to notices for possession issued under section 8 of the Housing Act 1988.
Amendment 179, in schedule 2, page 77, line 26, leave out “omit subsection (6)” and insert—
“for subsection (6) substitute—
‘(6) But the authority may not give notice to the applicant under subsection (5) on the basis that the circumstances in subsection (8)(b) apply if a valid notice has been given to the applicant under section 8 of the Housing Act 1988 that—
(a) will expire within 56 days or has expired, and
(b) is in respect of the only accommodation that is available for the applicant’s occupation.’”
This amendment would ensure that the homelessness prevention duty owed by a local authority cannot end whilst a valid notice under section 8 of the Housing Act 1988 has been issued in respect of the only accommodation available to that person.
Government new clause 7—Accommodation for homeless people under section 199A of the Housing Act 1996.
Mike Amesbury
I rise to speak in support of amendments 178 and 179, which stand in the name of my good and hon. Friend the Member for Greenwich and Woolwich, the shadow Minister. I am part of the Front-Bench team.
I know that everybody in this Committee room shares my firm belief that no one in our society should face homelessness. Research from Crisis and Heriot-Watt University shows that nearly a quarter of a million households across England now experience the worst forms of homelessness. Lots of us will see the visible consequences of that human tragedy as we travel into Westminster day in, day out, and far too many of us deal with those consequences week in, week out through our caseloads—with people who are in temporary or emergency accommodation. In fact, temporary accommodation is becoming de facto permanent in far too many cases.
According to the Government’s own latest data, 298,000 people are homeless—a rise of 6.8% on just a year ago. The end of a tenancy in the private rented sector is a leading cause of homelessness in England, accounting for over a quarter of households seeking support. To their credit, the Government supported the Homelessness Reduction Act 2017, which began as a private Member’s Bill championed by the hon. Member for Harrow East (Bob Blackman)—a Bill that many of us from across the political divide welcomed. Part of the Act ensures that private renters have the right to immediate help from their local authority—the prevention duty, which we are all familiar with—on being served a section 21 notice by their landlord.
Since the 2017 Act came into force in 2018, over 640,000 households have been prevented from becoming homeless or supported into settled accommodation. Hence, it makes little sense that the Bill is diluting that right. It could lead to missed opportunities to help families avoid becoming homeless. I am genuinely perplexed by this and look forward to the Minister’s answer on this matter in the not-too-distant future.
We know that this issue is even more critical right now, as we see a complete lack of genuinely affordable housing options for people who are homeless or at risk, evidenced by the shockingly high numbers of families trapped in temporary accommodation and the rising numbers of people forced to sleep rough on our streets. Everyone In, from the not-too-distant past, seems to be becoming “Everybody Out” at quite a rapid rate. Just over 7,600 homes for social rent were built last year. If we take right to buy and demolitions into consideration, I think on average since 2010 that takes us into the minus 14,000 territory. It is certainly distant from the “building back better” rhetoric that we had in the not-too-distant past. We live in a world where 1.2 million people are in desperate need of social housing.
Currently, a tenant served with a valid section 21 notice can take that notice to their local authority, which automatically accepts the prevention duty and spends the next two months either helping them find somewhere to live or helping to sustain their tenancy. This benefits tenants, landlords and local authorities. It presents a clear opportunity to provide help that could prevent homelessness. When it works, it avoids a traumatic experience for tenants who are facing costly placements in temporary accommodation from local authorities, and a landlord can retain a paying tenant. However, as a consequence of the changes in the Bill, the clarity that a tenant has when served an eviction notice—they are owed a prevention duty—and threatened with homelessness has now been removed.
Tenants served with a section 8 notice will no longer have the right to immediate help from the council, even though there remain no-fault, mandatory grounds within section 8 notices. For example, when a landlord seeks to sell or take back the property for a family member, that could easily result in a tenant becoming homeless, just as the current section 21 notices can lead to. This dilution of rights puts tenants at greater risk of homelessness, which is far from the stated aims of the Bill.
A local authority will instead need to decide whether tenants are threatened with homelessness and make that judgment—on the serving of the notice, when the notice expires, at a court hearing or when the court has granted a possession order? Without the legal trigger or automatic right upon notice, it will take more time to establish what help is needed, making the prevention duty more onerous for local authorities. It risks tenants facing burdensome additional tests and gatekeeping. That gatekeeping is driven in a lot of cases by the precarious finances of local government, not really made any better by yesterday’s autumn statement. Authorities might tell tenants to come back at a later date—maybe when a landlord has started court proceedings—and well beyond the point at which steps to prevent homelessness, such as help with rent arrears, could have been taken. This will create a postcode lottery up and down the nation.
Jacob Young
I am grateful for the hon. Gentleman’s comments. The reforms in the Bill will remove fixed-term tenancies and section 21 evictions. The changes mean that we also need to amend part 7 of the Housing Act 1996 to make sure that councils’ statutory homelessness duties align. Clause 18 makes three changes to homelessness legislation.
First, the clause makes changes to how local authorities discharge their main housing duty. One of the ways in which local authorities may currently bring their main housing duty to an end is by making an offer to a tenant of a suitable private rented sector tenancy with a fixed term of at least 12 months. With the removal of fixed-term tenancies, section 193 of the Housing Act 1996 is amended to refer instead to an “assured tenancy”.
Secondly, the clause amends section 193C of the Housing Act 1996, relating to what happens when a person owed either the prevention or relief duty deliberately and unreasonably fails to co-operate with the local authority. If the local housing authority is satisfied that the applicant is, first, homeless; secondly, eligible for assistance; thirdly, has a priority need; and fourthly, is not intentionally homeless, the applicant is still owed a duty to be accommodated. However, that duty is currently a lesser one than the main housing duty. The lesser duty is to offer a fixed-term tenancy of at least six months, as opposed to the period of at least 12 months required under the main duty. With the repeal of fixed-term tenancies, the lesser offer is redundant and removed by the clause.
Thirdly, subsection (4) repeals section 195A of the Housing Act 1996, which is the duty in homelessness legislation
“to offer accommodation following re-application after private sector offer.”
It is known more commonly as the “reapplication duty”. The reapplication duty is a homelessness duty that offers accommodation following a reapplication after a private sector offer, where the applicant becomes homeless again within two years and reapplies for homelessness support. The duty applies regardless of whether the applicant has priority need. It was introduced to respond to concerns that, due to the short-term nature of assured shorthold tenancies, applicants who accept a private rented sector offer may become homeless again within two years and no longer have the priority need.
The increased security of tenure and removal of section 21 evictions through this Bill means that the reapplication duty will no longer be relevant. The amendment will streamline the management of reapproaches, and make sure that all applicants are treated according to their current circumstances at the point of approaching. There will be no differential treatment between those placed in either private rented or social housing accommodation.
Amendments 178 and 179 seek to broaden the scope of those threatened with homelessness, and thereby owed the prevention duty, to all those who have been served with a valid section 8 eviction notice that expires within 56 days, and to remove the option for local authorities to limit the assistance under the prevention duty to 56 days.
These amendments would prevent a local authority from using its judgement as to whether there is a risk and from deploying its resources to cases where there is a more imminent risk of homelessness. If the amendments were accepted, they could result in local authorities having cases open for a long time. Requiring local authorities to accept a duty in such circumstances, with no time limit, would create significant resourcing pressures. That would ultimately be to the detriment of those seeking homelessness support if local authorities were overwhelmed and unable to manage their increase caseload.
Local authorities are experienced at identifying when someone is threatened with homelessness, as opposed to arbitrary requirements that do not account for individual circumstances.
Lloyd Russell-Moyle
The Minister must acknowledge that local authorities will push lots of constituents back to the very last statutorily permitted minute because their resources are so pressured. That often makes the situation worse: it is saving a penny here, but losing a pound down the road.
Homelessness duties are mixed and varied. Some of them, with early intervention, can mean re-placing in the private sector—that actually does not cost the local authority very much. Without providing a clear duty, many officers will go to councillors saying, “You need to push the policy back to the statutory minimum, because we cannot do anything else. That is all we can do at the moment.” Those conversations are happening in every council. Surely the Minister recognises that without clear statutory guidelines on when they need to intervene, councils at the moment, I am afraid, will not.
Jacob Young
I thank the hon. Gentleman, although I do not think his intervention directly addresses the amendment. The amendment would put more burden on local authorities. For example, if I was served a section 8 notice, I would not need to be covered under the homelessness prevention duty, because just me and my partner would be involved. We do not have any dependants, and would probably find it quite easy to find a new property. It is important that we do not overburden local authorities unnecessarily, as these amendments would.
Lloyd Russell-Moyle
The duty does not mean a requirement for a place for every person; it means that there is a duty to analyse the need of the person, assess their ability to access the market and provide access into the market in different ways. If the Minister was involved, the duty would be for the council to point him in the direction of private letting agents; to ensure that he was able to search properly; and to monitor and ensure that he was getting on with that properly.
The duty is rather light-touch. The danger is that if we do not provide a duty that everyone comes through, including light-touch people—of course, no one has to go to their local authority, so they could just divert that if it was the Minister anyway—the most vulnerable people will not come at all until it is too late. Does the Minister recognise that vulnerable people tend to come only when it is too late if they feel that there is not an earlier duty?
Jacob Young
I understand the hon. Gentleman’s point. That is why we have said, in various discussions throughout the debate, that forms will be provided to people when they are served with such an order. They will be pointed in the right direction. That addresses the hon. Gentleman’s concerns, rather than forcing everyone to be considered under the duty, no matter how light-touch—[Interruption.] I do not think that I need Redcar and Cleveland Council to be worried about me.
Jacob Young
I will end that point there.
Government new clause 7 delivers a technical change that will ensure that a tenancy granted in carrying out a local authority homelessness duty to provide interim accommodation cannot be an assured tenancy, other than in the circumstances allowed for. There is an existing provision in the Housing Act 1996 that already provides an exemption to that effect; however, it does not encompass all instances where the local authorities have an interim duty or discretion to provide temporary accommodation, as section 199A is not included. The new clause remedies that. It allows private landlords who provide local authorities with temporary accommodation to regain possession of their property once the local authority’s duty to provide it ceases. That will ensure that local authorities can continue to procure interim temporary accommodation to meet their duties.
I commend the new clause to the Committee, and I ask the hon. Member for Weaver Vale not to press the Opposition amendment.
Mike Amesbury
It is essential that the prevention duty is extended here. The Renters (Reform) Bill is supposed to be about homelessness prevention. Local authorities use their discretion, as my hon. Friend the Member for Brighton, Kemptown said. I will not press the amendment.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mr Mohindra.)
Renters (Reform) Bill (Ninth sitting)
Tuesday 28th November 2023
(11 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 28 November 2023 - (28 Nov 2023)
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 170, in clause 19, page 24, line 29, after “only if” insert
“both at the date of the service of the notice and the date of the hearing”.
This amendment would ensure that landlords must protect deposits with an authorised scheme and provide prescribed information in connection with it before a notice for possession is served rather than doing so, or repaying a deposit, at any time up to a court making an order for possession.
The Chair
With this it will be convenient to discuss the following:
Amendment 171, in clause 19, page 24, line 33, after “only if” insert
“both at the date of the service of the notice and the date of the hearing”.
This amendment would ensure that landlords must protect deposits with an authorised scheme and provide prescribed information in connection with it before a notice for possession is served rather than doing so, or repaying a deposit, at any time up to a court making an order for possession.
Amendment 172, in clause 19, page 24, line 40, after “only if” insert
“both at the date of the service of the notice and the date of the hearing”.
This amendment would ensure that landlords must protect deposits with an authorised scheme and provide prescribed information in connection with it before a notice for possession is served rather than doing so, or repaying a deposit, at any time up to a court making an order for possession.
Clause stand part.
Matthew Pennycook
It is a pleasure to continue our proceedings with you in the Chair, Mr Gray.
Clause 19 makes a number of amendments to chapter 4 of part 6 of the Housing Act 2004, the effect of which is to ensure that the requirement for landlords and letting agents to place deposits in a Government-approved tenancy deposit protection scheme is maintained in relation to new assured tenancies and tenancies that were assured shorthold tenancies immediately before the extended application date. Currently, any section 21 notice served on a tenant may be invalid if the deposit requirements are not adhered to, but the clause will ensure that, if landlords take a deposit and do not fulfil the relevant statutory requirements, they cannot be awarded a possession order on any of the grounds set out in the amended schedule 2 to the Housing Act 1988.
On the surface, the clause appears simply to apply the existing tenancy deposit requirements to the new tenancy system that will apply whenever chapter 1 of part 1 of the Bill comes into force. However, there is an important difference between the requirements, which speaks to our wider concern about future landlord compliance with the regulatory obligations that have developed around section 21 notices over the course of the 35 years in which the present tenancy system has been in place. We will explore those wider concerns in more detail when we debate our amendment 176 to clause 34.
With regard to tenancy deposit requirements, the main difference between how the relevant protection rules apply to the existing system and how the Government propose that they will apply to the new one is that, under the Bill, they must be adhered to before a court will award possession, rather than, as now, when a notice is served. Put simply, instead of the landlord having to protect a deposit within 30 days of receipt and provide the prescribed information about how that will be achieved before the notice is served, the Bill will allow them to do either of those, or return the deposit, at any time up to the court hearing date.
From a tenant’s perspective, that situation strikes us as a less stringent application of the requirements than we currently have in relation to assured shorthold tenancies. Taken together, amendments 170 to 172 would ensure that landlords must protect deposits with an authorised scheme and provide prescribed information in connection with it before a notice for possession is served rather than doing so, or repaying a deposit, at any time up to a court making an order for possession. I hope that the Minister will consider accepting the amendments.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
It is a pleasure to see you in the Chair again, Mr Gray. I thank the hon. Gentleman for tabling amendments 170 to 172, which seek to change the requirement that landlords must comply with the deposit protection rules before a court can order possession. The amendments would require landlords to comply with the deposit protection rules both before serving a tenant with notice and at the time of the possession hearing. If those conditions are not met, courts could not make a possession order.
The Bill already protects tenants from landlords who are not complying with existing tenancy deposit rules, because clause 19 requires landlords to comply with deposit protection rules before a court may make an order for possession. That will impact only on those landlords who are not complying with existing tenancy deposit rules. If the landlord has stored the deposit correctly in one of the prescribed schemes and has complied with all the applicable rules, the measures in the clause will not hinder or delay the possession process. Landlords will also be able to rectify the problem before the case reaches the court, ensuring that those provisions will not trip them up if they have made an honest mistake. Because we recognise that some possession cases are too critical to delay, that will not apply to the grounds relating to antisocial behaviour.
The aim of our measures in clause 19 is therefore not to prevent or frustrate possession, but to ensure that tenancy deposits are protected for the benefit of the tenant. The hon. Member’s amendments would simply act as another administrative trap that good-faith landlords could fall into. The Bill already ensures that deposits will be protected, while giving landlords sufficient time to comply with the rules before the case reaches the court. I therefore ask the hon. Member to withdraw his amendment.
Matthew Pennycook
I welcome the Minister’s response. What I remain unclear about—if he wishes to clarify this, I will happily allow him to intervene—is whether, in the Government’s view, the change is a less stringent application of the requirements that currently apply to assured shorthold tenancies. That is all we are seeking to probe, and if the Minister can reassure me on that point I will withdraw the amendment.
Jacob Young
The existing possession restrictions have made the possession process more complex for all parties, and we do not feel that they are an effective way to ensure that tenants are living in safe and decent homes during a tenancy. That is part of the reason for the changes.
Matthew Pennycook
I do not know about other members of the Committee, but from the reasons that the Minister stated, I take it that the change is a less stringent application. I will not press the amendment to a vote at this point, but we may return to this issue, and we will discuss another amendment that we have relating to preconditions and requirements of the Bill around section 21 notices. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 ordered to stand part of the Bill.
Clause 20 ordered to stand part of the Bill.
Schedule 2
Consequential amendments relating to Chapter 1 of Part 1
Amendment made: 60, in schedule 2, page 77, line 13, at end insert—
“7A In section 39 (statutory tenants: succession) omit subsection (7).
7B In section 45 (interpretation of Part 1), in subsection (2) omit ‘Subject to paragraph 11 of Schedule 2 to this Act,’.
7C In Schedule 2 (grounds for possession), omit Part 4.
7D In Schedule 4 (statutory tenants: succession), in Part 3, omit paragraph 15.”—(Jacob Young.)
This amendment makes changes to the 1988 Act which are consequential on the changes to the regime for prior notice for some grounds for possession.
Schedule 2, as amended, agreed to.
Clause 21 ordered to stand part of the Bill.
Clause 22
Penalties for unlawful eviction or harassment of occupier
Amendment made: 61, in clause 22, page 28, line 4, at end insert—
“(10) In this section and Schedule A1, ‘local housing authority’ means a district council, a county council in England for an area for which there is no district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.”—(Jacob Young.)
This amendment defines “local housing authority” for the purposes of section 1A of, and Schedule A1 to, the Protection from Eviction Act 1977.
Clause 22, as amended, ordered to stand part of the Bill.
Clause 23
Meaning of “residential landlord”
Matthew Pennycook
I beg to move amendment 173, in clause 23, page 31, line 29, at end insert—
“(c) an agreement to which the Mobile Homes Act 1983 applies; or
(d) any licence of a dwelling”.
This amendment would extend the definition of residential landlord to include park home operators, private providers of purpose-built student accommodation, and property guardian companies.
The Chair
With this it will be convenient to discuss the following:
Government amendments 62 to 64.
Clause stand part.
Government amendment 70.
Matthew Pennycook
Part 2 of the Bill concerns landlord redress schemes and the private rented sector database. We welcome part 2 and the Government’s intention to use its clauses to bring the private rented sector within the purview of an ombudsman and to establish a new property portal, including a database of residential landlords and privately rented properties in England. As the Committee will know, two letting agent redress schemes already exist, but the case for bringing all private landlords within the scope of one, irrespective of whether they use an agent to provide management services on their behalf, is compelling and has existed for some time.
The Government first announced their intention to explore options for improving redress in the housing market in late 2017, and in 2019 committed themselves to extending mandatory membership of a redress scheme to all private landlords through primary legislation. Much like the abolition of section 21, a statutory single private rental ombudsman has been a long time in the making. There are myriad issues with the ombudsman that lie outside the scope of the Bill, not least how the Government will address its role within what is already a complicated landscape of redress and dispute resolution; there are already multiple redress schemes and tenants already have recourse to local authorities, the first-tier tribunal, a deposit protection scheme and ultimately to the courts.
However, we support the principle of bringing the private rented sector within the scope of a single ombudsman. If the ombudsman covering the private rented sector, whoever it ultimately is, makes full use of the powers available to it and is well-resourced, and if the potential for confusion and perverse incentives that might result from multiple schemes is addressed, that should ensure that tenants’ complaints can be properly investigated and disputes can be resolved in a timely, more informal manner. That would help to ease the pressure on local authorities and the courts.
In contrast to the proposal for an ombudsman covering the private rented sector, the commitment to introduce a new digital property portal was made only last year in the White Paper. Nevertheless, we strongly support it. Indeed, I would go so far as to say—I have done so on previous occasions—that we believe a well-designed, resourced and properly enforced portal has the potential to utterly transform the private rented sector and the experience of tenants within it.
We want the Bill to deliver a property portal that makes it easier for landlords to understand and demonstrate compliance with their existing obligations and evolving regulations; which empowers tenants by rendering transparent the rental history of landlords; and which enables landlords to be held to account by those they are renting to. We also want the property portal to help local authorities with enforcement against non-compliant landlords and to monitor and crack down on the minority of rogues in the sector.
We are concerned that chapter 2 of part 2 of the Bill, which deals with landlord redress schemes, is arguably too prescriptive, and that chapter 3 of part 2, which deals with the private rented sector database, are not nearly prescriptive enough. Fundamental to the operation of both measures is the question of which tenancies fall within their scope. As a means to probe the Minister on this issue, we tabled amendment 173, which would extend the definition of residential landlord to include park home operators, private providers of purpose-built student accommodation and property guardian companies. Each of those was explicitly referenced in the White Paper with regard to the schemes. I will make some brief comments on each to explore how the Government might define the scope of the private rented sector database and landlord redress scheme provisions via regulations in due course.
When it comes to residential park home operators, the Government’s October 2018 review of the legislation in this area found that some site operators
“continue to take unfair advantage of residents, most of whom are elderly and on low incomes.”
Furthermore, the Government said in their 2019 report, “Strengthening Consumer Redress in the Housing Market”:
“Currently, if a site operator fails to meet their contractual obligations a resident has little recourse except via the First-tier Tribunal, and those who rent directly from the site operator also lack access to redress. We are satisfied that there is a gap in redress services for park home residents and are committed to extending mandatory membership of a redress scheme to all residential park home site operators.”
When it comes to purpose-built student accommodation, the 2019 report also stated:
“Responses highlighted a gap in redress provision amongst students living in purpose-built student accommodation run by private companies.”
While the majority of such private companies have signed up to a code of practice administered by Unipol, the Government nevertheless made clear that private providers of purpose-built student accommodation, as opposed to educational establishments that provide student accommodation, should come within the scope of a redress scheme. When it comes to property guardians, recent reports in the press have highlighted rising instances of misconduct on the part of some property guardian companies that operate through licences to occupy rather than tenancies, which provide significantly fewer protections.
Research conducted by Sheffield Hallam University, commissioned by the Department and published last year, found that most property guardians
“reported very poor conditions, with properties frequently described as deteriorating and susceptible to adverse weather conditions. Local authorities also reported poor conditions in properties they had inspected. Persistent issues with damp and mould were very commonly reported, including damp from flooding, faulty plumbing and leaking roofs.”
That research also found that local authority enforcement teams are not routinely reviewing, inspecting or enforcing standards in guardian properties. There would therefore appear prima facie to be a strong case for including property guardians as well as park home sites and purpose-built student accommodation within the scope of the ombudsman and property portal as a means of increasing enforcement action and driving up standards.
It may well be the case that the Government fully intend to include each of those within the scope of the ombudsman and the private rented sector database in chapters 2 and 3 of part 2 when they introduce the relevant regulations and to provide access to redress for residents living in each type of accommodation, but we would appreciate a degree of clarity from the Government so that we can understand how extensive the operation of both schemes should be. I look forward to the Minister’s response.
Jacob Young
I thank the hon. Member for moving amendment 173, which proposes to expand the scope of the mandatory landlord redress scheme, which I will now refer to as the ombudsman, and the database, which I will now refer to as the portal. Specifically, the amendment would expand the ombudsman and portal to include park homes and dwellings occupied under licence, such as private purpose-built student accommodation and buildings occupied under property guardianship schemes.
Clause 23 sets out the tenancies that will fall within the scope of the ombudsman and the portal. It currently provides that they will capture assured and regulated tenancies, which make up the great majority of residential tenancy agreements in England, so under the clause the majority of landlords of private tenancies in England will initially need to be registered with the ombudsman and the portal.
We want to ensure that the introduction of the ombudsman and the portal is as smooth as possible, so tenants and landlords will need to have clarity over their rights and responsibilities. The issues that affect students, property guardians and park home owners can often be quite different from those faced by the majority of those in the private rented sector. Given those differences, it is reasonable to first apply the ombudsman membership requirements to the majority of private landlords. That will mean that all initial landlord members will be subject to the same expectations. We can then consider expanding the remit of the ombudsman to more specialised accommodation.
The clause also gives the Secretary of State the power to make regulations to amend the definitions and change the letting arrangements that would be captured by the requirements. We intend to use the regulations to potentially include different types of letting arrangements in future. I assure the hon. Member that we will continue to engage with the sector, and that we have the flexibility to determine the best course of action following such engagement. I therefore ask him to withdraw the amendment.
I turn to Government amendments 62 to 64. The current definition of “dwelling” would potentially preclude shared accommodation from being brought into scope. The amendments change the definition of “dwelling” that could be used in future so that shared accommodation may be included. In addition, clause 23 provides clarity on the meanings of private “residential landlord”, “relevant tenancy” and “dwelling” for the purposes of determining which tenancies are within the ambit of the private landlord ombudsman and the portal. Ministers will be able to make regulations to allow for divergence between the scope of the ombudsman and the portal. That will ensure that each scheme can retain full autonomy and operate independently in the future.
Matthew Pennycook
That was a very helpful clarification from the Minister. I take it from his answer that, although the Government are quite rightly focused on bringing assured and regulated tenancies within the scope of the ombudsman and the portal to cover the majority of private landlords, they are open to considering how their remit and scope may expand in the future to cover important other types of tenancy, as I have described. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 62, in clause 23, page 32, line 5, leave out from second “building” to “it” in line 6.
This amendment removes words that are no longer needed as a result of Amendment 64.
Amendment 63, in clause 23, page 32, line 7, leave out
“so occupied or intended to be so occupied”.
This amendment removes words that are no longer needed as a result of Amendment 64.
Amendment 64, in clause 23, page 32, line 8, at end insert—
“(ia) so that it includes a building or part of a building, and anything for the time being included in the meaning of “dwelling” by virtue of sub-paragraph (i), which is occupied or intended to be occupied as a dwelling that is not a separate dwelling,”.—(Jacob Young.)
This amendment allows the power to amend the definition of "dwelling" that applies for the purposes of Part 2 of the Bill to be used so as to add to that definition places that are not occupied as a separate dwelling. This will enable the power to be exercised to bring shared living accommodation within the definition of "dwelling".
Clause 23, as amended, ordered to stand part of the Bill.
Clause 24
Landlord redress schemes
Matthew Pennycook
I beg to move amendment 174, in clause 24, page 32, line 27, leave out “may” and insert “must”.
This amendment would impose a duty on the government to require residential landlords as defined in clause 23 to join a landlord redress scheme.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 196, in clause 25, page 34, line 17, at end insert—
“(ba) providing that complaints about deposits held in tenancy deposit schemes under Chapter 4 of Part 6 of the Housing Act 2004 (tenancy deposit schemes) may be made under the scheme,”.
This amendment would ensure that where there is a dispute regarding deposits this can be submitted to the ombudsperson for redress rather than just to the private schemes themselves.
Clause 25 stand part.
Matthew Pennycook
Amendment 24 is a simple and straightforward measure that is designed purely to ensure that the Bill guarantees that the private rented sector will be brought within the purview of an ombudsman. The Opposition are slightly concerned by the deliberate choice of the phrase “may make regulations” rather than “must make regulations” in subsection (1) of the clause, not least because it has been four years since the Government committed to extending mandatory membership of a redress scheme to all private landlords through primary legislation. We would be content to withdraw the amendment if we receive firm assurances that the Government will, at the earliest possible opportunity, bring the private rented sector within the remit of an ombudsman and if the Minister provides further detail about the Government’s intentions in that regard.
Turning to clause 25, the Minister will know that all other ombudsman-level redress schemes that have been set up in recent decades, including the new homes ombudsman, the legal ombudsman, the housing ombudsman and the pensions ombudsman, have all been clearly defined in statute as the only bodies responsible for ombudsman-level redress operating within the relevant sector. That is because the Government think it important to avoid having multiple redress schemes in individual industry sectors. As the relevant Cabinet Office guidance sets out, multiple redress schemes should be avoided because they may
“confuse consumers and may introduce uneven practices in investigation and redress”.
The Government have made it clear since the publication of the White Paper that they intend to introduce a new single ombudsman that all private landlords must join, yet clause 25 and others in this chapter deliberately refer to “redress schemes”, rather than a single ombudsman. Clause 25(6)(a) specifically makes clear that the regulations that the Secretary of State may introduce under clause 24 can provide for a number of redress schemes to be approved or designated.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I rise to support my hon. Friend the Member for Greenwich and Woolwich and to speak to amendment 196, which stands in my name.
Amendment 196 aims to include deposits as an area that the ombudsperson can overview, and it touches on my hon. Friend’s point. The deposit schemes are three in number, which causes great problems for many constituents. Most believe that they will never get their deposit back, because they know that their landlords can run rings around the respective deposit schemes.
The outcomes of deposit scheme disputes are not published; they are secret. There is no precedent set when a scheme determines that a particular action puts someone at fault, and there is no cross-referencing between schemes. A constituent could be treated in one way under one scheme and a completely different way under another, even though the scenarios are exactly the same. It is a complete mess, and most other countries have one deposit protection scheme. I am not proposing that—that is outside the scope of the Bill—although I would love the Minister to look seriously at this when the deposit scheme licences come up. The New South Wales model is much more efficient and involves one scheme, the profits of which are rather large and pay for all legal aid in New South Wales. Early estimates of what would happen in Britain show that the amount raised would far exceed the cuts made to housing legal aid previously. There would be some real wins if the Minister got to grips with that.
My amendment 196 would at least allow for an appeal process. If someone does not believe that the deposit schemes have come to a fair and just conclusion, they can go to the ombudsperson for determination—that is important, because the ombudsperson’s deliberations would be public, which would allow the schemes to take into account what they were each doing—just as we would have to go through a local council complaints system, but can then go to the Local Government and Social Care Ombudsman if we feel there is a problem.
I would expect most complaints to still be resolved within the deposit schemes. However, where there is disagreement and the threshold of going to court is too high, and where maladministration, which is the main part of an ombudsperson’s remit, can also be identified, the ombudsperson can redress that and then publish their findings, and we can ensure harmonisation in the deposit system, which does not currently exist.
If we do not explicitly identify deposit schemes as falling within scope, there is a danger that the anomalies in the deposit system will never be addressed. I therefore hope that the Minister will give me some reassurance that there is an intention to address these problems with deposit schemes, where judgments are sealed and there is no idea of the outcome. It is also important, in relation to the property portal, for residents to know whether the landlord routinely—or every time—keeps the deposit. That would show a pattern of behaviour, which would be important information for tenants. Bringing it within the purview of this Bill is therefore also important.
Jacob Young
Amendment 174 would legally oblige the Government to make regulations requiring residential landlords to be members of a landlord redress scheme, rather than giving the Government the discretion to do so. The Government are committed to requiring private landlords to be members of an ombudsman, and a binding obligation is not required on the face of the Bill. We have taken powers in the Bill to allow the Government to ensure that the ombudsman is introduced in the most effective way, and with the appropriate sequencing.
Amendment 196 would require the ombudsman to handle complaints about tenancy deposits. It would be unwise to list in the Bill specific issues that the ombudsman can or cannot look at. The ombudsman would need the flexibility to consider any complaint duly made, but also to direct a tenant elsewhere if more appropriate. As tenancy deposit schemes already provide free alternative dispute resolution, the ombudsman may decide that the case is better handled elsewhere, but it will ultimately depend on the circumstances of each case. The ombudsman will have the final say on jurisdiction, subject to any agreement with other bodies.
We have made provision under clause 25 to enable the ombudsman to publish a Secretary of State-approved code of practice, which would clarify what the ombudsman expects of its landlord members. The ombudsman scheme will also provide more clarity about the circumstances in which a complaint will or will not be considered. I therefore ask the hon. Member for Brighton, Kemptown not to press his amendment.
As discussed, clause 24 provides the Secretary of State with powers to set up a mandatory redress scheme, which all private residential landlords of a relevant tenancy in England will need to join. We intend for the scheme to be an ombudsman service, and will look to require former landlords, as well as current and prospective landlords, to remain members after their relevant tenancies have ended, for a time specified in secondary regulations.
Members have asked for clarity about who the new PRS landlord ombudsman will be. No new ombudsman can be selected until after regulations have been laid following Royal Assent, but we can show the direction of travel. We have listened to the debates and the evidence given to this Committee, and our preferred approach at this time is for the existing housing ombudsman service to administer redress for both private and social tenants. As an established public body already delivering redress for social tenants, the housing ombudsman is uniquely positioned to deliver the private sector landlord redress scheme. Having one provider for all social and private renting tenants would provide streamlined and simple-to-use redress services for complainants.
To be clear, we are not ruling out the possibility of delivering through a different provider; we are still in the early stages of designing this new service. We now intend to explore how best to deliver on our ambition for a high-quality, streamlined and cross-tenure redress service.
To address the point that the hon. Member for Greenwich and Woolwich made about multiple redress schemes, the intention is to approve a single ombudsman scheme that all private landlords will be required to join. However, allowing for multiple schemes in legislation offers the Government flexibility, should the demand for redress prove too much for a single provider to handle effectively. I hope, on that basis, that the hon. Member will withdraw his amendment.
Matthew Pennycook
That is useful clarification from the Minister. Based on the assurances he has given, I do not intend to press amendment 174 to a Division. I understand fully, with the caveats that he has just given, what he is saying about a single ombudsman. We would welcome the Government’s preferred approach—for the housing ombudsman to take on responsibility for the private rented sector. The Landlord and Tenant Act 1985 does not distinguish between tenures, and we think that the ombudsman is probably best placed to provide that service and to do so quickly.
I would push back slightly against what the Minister said about how the clause is drafted, purely because, in a sense, it diverges from precedent. Most other Bills that we have looked at are very clear about establishing a single body and not being too prescriptive about how it operates. The Government have taken a different approach here. The Minister has given as one reason for doing so that the ombudsman might be overwhelmed by demand. Our response would be that we should ensure that the ombudsman that is given responsibility is properly resourced and adequately supported to do its job, rather than contemplate setting up additional redress schemes. However, it has been useful to hear the Government’s response, so we will not push the issue any further at this stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 ordered to stand part of the Bill.
Clause 25 ordered to stand part of the Bill.
Clause 26
Financial penalties
Matthew Pennycook
I beg to move amendment 165, in clause 26, page 36, line 21, leave out “£5,000” and insert “£30,000”.
This amendment would increase the maximum financial penalty that local authorities could impose on a person if it is satisfied beyond reasonable doubt that they have breached the requirement in Clause 24 to be a member of an approved or designated redress scheme or in instances where a property has been marketed where the landlord is not yet a member of a landlord redress scheme.
The Chair
With this it will be convenient to discuss the following:
Amendment 166, in clause 26, page 36, line 22, leave out “£30,000” and insert “£60,000”.
This amendment would increase the maximum financial penalty that a local housing authority may impose on a person as an alternative to prosecution, if it is satisfied beyond reasonable doubt that an offence under clause 27 has been committed.
Clause stand part.
Matthew Pennycook
In precisely the same way that amendments 163 and 164, which we debated previously, sought to raise the maximum financial penalty that local authorities could levy where the provisions in clauses 9 or 10 were contravened or an offence committed, amendments 165 and 166 seek to raise the maximum financial penalty in respect of breaches relating to the requirements in clause 24 to be a member of an approved or designated redress scheme—that is, the ombudsman.
If the ombudsman is to cover all private landlords who rent out property in England, as I think every member of the Committee would wish, the penalty for not complying with mandatory membership must be sufficiently severe to act as a deterrent. We have tabled these amendments because we remain unconvinced that a £5,000 fine for a breach and a £30,000 fine as an alternative to prosecution will deter the minority of unscrupulous landlords who wish to evade regulation from failing to join. We urge the Government once again to reconsider.
Jacob Young
As the hon. Gentleman has mentioned, we discussed related points in earlier debates. His amendments 165 and 166 relate to the requirement for landlords to be members of the Government-approved redress scheme, which we intend to run as an ombudsman service, and a ban on marketing a property where a landlord is not registered with such a scheme. Our proposed fine regime is fair and proportionate. A £5,000 fine will be enough to deter non-compliance for most, yet fines of up to £30,000 are also possible if non-compliance continues. The legislation allows for fines to be imposed repeatedly every 28 days after a penalty notice has been issued. For repeat breaches, local housing authorities can also pursue prosecution through the court, which carries an unlimited fine. This escalating procedure gives our new ombudsman the necessary teeth for maximum compliance without making the fines unnecessarily excessive. I therefore ask the hon. Member to withdraw his amendment.
Matthew Pennycook
I will withdraw the amendment, as I made clear, but there is a point of difference here. We do not believe these fines will be enough. I take on board, as I have previously, the Minister’s point that repeat fines can be levied. For us, these fines are important because of their deterrent effect in cautioning landlords away from ever contemplating a breach or repeat offences. The maximum fine level also has implications for enforcement more generally, which we will debate in due course. In this instance we are probing the Government on the maximum levels, so I do not intend to push the amendment to a Division.
The Chair
On a slight technicality, the Member is seeking the leave of the Committee to withdraw the amendment. Other members of the Committee may press it to a Division if they wish to, although in this case they do not.
Amendment, by leave, withdrawn.
Clause 26 ordered to stand part of the Bill.
Clause 27
Offences
Jacob Young
I beg to move amendment 65, in clause 27, page 38, line 23, leave out subsection (9).
This amendment removes provision that is no longer needed as a result of NC19.
The Chair
With this it will be convenient to discuss the following: 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 24 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 39 (3) Active landlord database entry”
Clause stand part.
Government amendment 68.
Government new clause 19—Rent repayment orders for offences under sections 27 and 48.
New clause 57—Extension of rent repayment orders—
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 9, 10, 24 or 27 of the Bill.
Jacob Young
Clause 27 sets out when a person will be liable for a criminal offence under the redress clauses. The provisions cover landlords who repeatedly fail to sign up with the ombudsman and persons of business who repeatedly market the property of an unregistered landlord. They will specifically include those who breach the same regulations after a previous conviction or who have received a financial penalty for breaching the regulations within the previous five years. These offences will not carry a custodial sentence, but can be subject to an unlimited fine.
Matthew Pennycook
I will speak to new clause 57. I will state up front that we welcome the Government amendments to clause 27 and in this area to toughen the sanctions on landlords who display the types of behaviour the Minister has just set out. As I indicated last week when we debated amendments 163 and 164 and the financial penalties that local authorities could levy for breaches and offences under clauses 9 and 10, we believe that rent repayment orders should be a more significant feature of the Bill as a means to aid enforcement of the new tenancy system; to ensure compliance with the requirements to be a member of the ombudsman and maintain an active landlord database entry; and to fairly compensate tenants for losses incurred due to a failure on the part of landlords to comply with the duties and obligations provided for in the Bill.
As the Committee will know, rent repayment orders were introduced by the Housing Act 2004, and were hugely expanded via section 40 of the Housing and Planning Act 2016. They allow the occupier of a property—usually a tenant—and local authorities to apply to the first-tier tribunal for an order that a landlord or his or her agent should repay rent of up to a maximum of 12 months—although the Minister has just made it clear that, in certain circumstances, the Government propose to lengthen that period to 24 months. Rent repayment orders are an accessible, informal and relatively straightforward means by which tenants can obtain redress in the form of financial compensation without having to rely on another body in instances where a landlord or his or her agent has committed, beyond reasonable doubt, an offence that relates to the occupation or letting of a property.
As Simon Mullings, the co-chair of the Housing Law Practitioners Association, argued in the evidence he gave to the Committee on 16 November:
“Rent repayment orders create, as I have said before to officials in DLUHC, an army of motivated enforcers, because you have tenants who are motivated to enforce housing standards to do with houses in multiple occupancy, conditions and all sorts of things.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 114, Q146.]
We know that rent repayment orders are already being utilised on a scale the dwarfs the use of other enforcement tools. In London, for example, the available data suggests that more properties were subject to a rent repayment order in the years 2020, 2021 and 2022 than civil penalties and criminal convictions relating to licensing in the same period.
The Bill as originally drafted allowed for rent repayment orders to be made only where a landlord had committed an offence under clause 27(9) relating to continuing or repeat breaches after a penalty had been imposed. As the Minister has made clear, Government new clause 19 adds a series of offences under clause 48 concerning the provision of false or misleading information to the private rented sector database and continuing or repeat breaches. We welcome that.
Separately, Government new clause 21 provides that a rent repayment order can be made against a superior landlord, thereby overriding the judgment made in the recent case of Rakusen v. Jepsen and others, which was heard by the Supreme Court. We welcome its incorporation into the Bill. We take the Government’s decision to table it as a clear indication that they view rent repayment orders as a practical and accessible means of enforcement by tenants or occupiers.
However, we want the Government to go further and extend the tribunal’s ability to make rent repayment orders for the following: first, a breach of new sections 16D and 16E of the Housing Act 1988, relating to the duty on landlords and contractors to give a statement of terms and other information, and the no-let prohibition in respect of grounds 1 and 1A; secondly, a failure to register with the ombudsman, as required by clause 24 of the Bill; and thirdly, a failure to keep an entry on the database up to date and to comply with all the relevant requirements of clause 39.
Lloyd Russell-Moyle
Despite my reservations about having three different deposit schemes, one of the reasons that the deposit scheme compliance is so high is because it comes with an element of rent repayment orders. The likelihood of local authorities being able to chase that up is next to zero. The likelihood of tenants being able to do that is extremely high.
Matthew Pennycook
My hon. Friend makes a very good point, which pre-empts one that I am about to make. We think that rent repayment orders can and do provide an incentive for landlords in these areas.
We believe, specifically when it comes to new clause 57, that allowing the tribunal to make rent repayment orders for these additional specific breaches would provide an additional incentive for landlords to comply with the relevant duties, requirements and prohibitions, and enable wronged tenants to be compensated for any losses incurred. Extending rent repayment orders to the relevant requirements of clause 39, for example, would be a powerful stimulus for landlord portal registration, because it would become the norm for tenants to check whether their landlord or prospective landlord was compliant.
Conversely, if the entitlement to apply for a rent repayment order were to apply to the relevant requirements of clause 39, it would provide tenants with a compelling reason to visit the portal, to learn about their rights and access information and resources they might not otherwise come across until the point they had a serious complaint or were engaged in a dispute with a landlord. This example also illustrates how an extension of rent repayment orders could alleviate some of the burdens that would otherwise fall on local authorities as the only mechanism to enforce, by means of financial penalties and criminal offences, a number of the breaches in the Bill to which they currently do not apply.
In the scenario I have outlined, tenants incentivised by the potential to apply an RRO to a landlord who was not compliant would act as an intelligence-gathering mechanism for local authorities, helping them to identify unregistered properties that they might otherwise struggle to locate and register. Put simply, as Dr Henry Dawson said to the Committee in the evidence session on 14 November:
“Using rent repayment orders incentivises tenants to keep an eye on landlords.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 60, Q74.]
The Minister may assure me that the regulations to come may provide for rent repayment orders in relation to clauses 24 and 39(3). If that is the case, we would welcome it, but I would much prefer him to accept the new clause and expand the use of rent repayment orders in the Bill to encourage compliance and give tenants the means to secure, for themselves, redress for poorly behaving landlords. I look forward to the Minister’s response.
Jacob Young
The purpose of rent repayment orders is to provide an effective means through which tenants can hold criminal landlords to account and receive due remedy. Extending rent repayment orders to cover non-criminal civil breaches would mean landlords could be ordered to pay up to two years’ worth of rent for a relatively minor non-compliance. We think that this would be disproportionate. We think that scarce court time should be focused on dealing with serious offences rather than more minor breaches. For first and minor non-compliance, with provisions in the Bill there will be several means of redress and enforcement, including the ombudsman and civil penalties of up to £5,000, but I am happy to continue this conversation with the hon. Member for Greenwich and Woolwich further.
Matthew Pennycook
I welcome the Minister’s response. There may be a difference of principle here, in that we feel quite strongly, actually, that rent repayment orders should be extended to non-criminal civil breaches of requirements set out in the Bill. I take the Minister’s point about this being an excessive response to landlord non-compliance for first or minor breaches. I say to him that perhaps the Government could explore a grace period as the schemes are being introduced, where landlords are not caught within an extended rent repayment order scheme, or some sort of get-out from first or minor offences.
We are trying to address a way, once the scheme is bedded in and landlords—without committing a criminal offence—are regularly not complying with mandatory membership of the ombudsman or registering with a portal, for landlords to be further incentivised, so that tenants are aware of their rights and hold their landlords to account. This may be an issue that we will come back to, but I very much welcome the Minister’s assurance that we will continue the dialogue on this point.
Amendment 65 agreed to.
Clause 27, as amended, ordered to stand part of the Bill.
Clause 28 ordered to stand part of the Bill.
Clause 29
Guidance for scheme administrator and local housing authority
Amendment made: 66, in clause 29, page 39, line 4, leave out “in England”.—(Jacob Young.)
This amendment leaves out words which have no legal effect because a “local housing authority” as defined by clause 57(1) could not be situated outside of England.
Question proposed, That the clause, as amended, stand part of the Bill.
Jacob Young
Clause 29 allows the Secretary of State to issue or approve guidance on effective working between local councils and the ombudsman, who will run the only approved or designated landlord redress scheme. Both must have regard to any guidance published under provisions in this clause. We have designed the guidance alongside local councils and the ombudsman. Local councils and the ombudsman will have different but complementary roles and responsibilities in the private rented sector. We intend for the guidance to provide clarity on a range of situations where communication and co-operation between councils and the ombudsman would be advantageous or necessary. We also want it to set out roles and responsibilities for when a tenant complains about a problem that both the ombudsman and local councils can help to resolve.
Matthew Pennycook
We agree that the new or expanded ombudsman, with responsibility for dealing with complaints from tenants in the private rented sector, will have to work effectively with local authorities given the latter’s enforcement role. When the new ombudsman has been established, a complaint from a tenant concerning the breach of a regulatory threshold will be able to be made either directly to the ombudsman or to the local authority that would have the power to take enforcement action to bring the landlord in question into compliance with the said regulations, and if they fail to do so, to sanction them. There is therefore a clear risk not only that the role of the ombudsman vis-à-vis local authorities is not clearly delineated, but that tenants themselves will be confused about which body it is appropriate to approach in any given circumstance.
This issue was raised during the progress of the Social Housing (Regulation) Act 2023 because there is a general issue about how the ombudsman relates to local authorities. Given the Minister’s indication that the Government’s preferred approach is to have that ombudsman take on a responsibility for the private rented sector, I think—if anything—this point becomes more pertinent. The Government acknowledge, as is clearly stated in the explanatory notes accompanying the Bill, that the new ombudsman and local authorities must have “complementary but separate roles.” I put this point to the housing ombudsman, Richard Blakeway, in one of our evidence sessions two weeks ago. He replied that
“that is a really important point, because there is a risk of duplication between the role of a council and the role of an ombudsman. Again, there is a lack of clarity for residents—tenants—about which route to take. An ombudsman does not operate in isolation—it will not operate in a bubble—so the relationship between the ombudsman and the courts will be critical, as well as the ombudsman discharging its own functions.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 28, Q28.]
It is crucial that guidance on how local authorities and the ombudsman will work together to resolve complaints, including how they share information and how each signpost to the other where appropriate, is fit for purpose. The clause allows for such guidance to be published, and I would be grateful if the Minister, either now or in writing, could perhaps give us a little more insight into how the Government will ensure that the roles of the two are separate but complementary, as the Government have indicated they must be.
Jacob Young
Redress and enforcement achieve different but complementary outcomes. Local councils enforce regulatory standards. Ombudsman schemes are not enforcement or regulatory bodies but instead protect consumer rights by providing redress, in this case where a landlord has failed to adequately deal with a legitimate complaint. Where the complaint from a tenant concerns the breach of a regulatory threshold, local councils may take enforcement actions to bring the landlord or property into compliance with the regulations and use their discretion to sanction landlords. In such circumstances, tenants will be able to complain to both the council and the ombudsman. The local council will address the regulatory breach and the ombudsman will provide redress for the tenant. I hope that that reassures the hon. Gentleman.
Question put and agreed to.
Clause 29, as amended, accordingly ordered to stand part of the Bill.
Clause 30
Interpretation of Chapter 2
Matthew Pennycook
The clause removes the jurisdiction of the housing ombudsman service over private residential landlords and the private rented sector housing activities of social housing providers. I simply want to ask the Minister, given his announcement today about the housing ombudsman being the Government’s preferred provider of private rented sector redress, whether the provisions of this clause are still necessary, as the Government have made it clear that they intend the existing ombudsman to extend its remit to cover the private rented sector. Will the Government review the clause in the light of that announcement?
Jacob Young
Any social housing redress scheme approved under the Housing Act 1996 provides redress services for the private rented tenancies of social landlords. An approved social redress scheme can also provide redress to tenants of private landlords who choose to join voluntarily. Currently, only one approved social housing redress scheme is administered by the housing ombudsman service.
Once brought into force, the clause will remove the private rented sector activities from the general jurisdiction of any approved social housing scheme. The clause will also stop any social housing redress scheme accepting relevant private landlords as voluntary members in relation to their private sector interests. However, the clause allows a social housing redress scheme to retain some jurisdiction over private rented sector activities if agreed with the Secretary of State. It does not prevent one organisation, such as the housing ombudsman, from administering both social and private redress schemes through a single, joined-up service. The clause will ensure that tenants who complain under the joined-up service are treated in exactly the same way as others who rent in the same sector.
The Bill provides a mechanism to bring the clause into force, but only once the new private rented sector ombudsman scheme is established. That will prevent disruption to members of existing schemes and avoid gaps in redress for tenants. If the hon. Member for Greenwich and Woolwich has further questions, I am happy to write to him.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
The database
Matthew Pennycook
I beg to move amendment 175, in clause 32, page 40, line 18, at end insert—
“(ba) details, which may include copies, of all notices seeking possession served by the residential landlord in respect of each dwelling of which he is the landlord, and”.
This amendment would require the database to record details of notices of possession served by a landlord in respect of each dwelling of which they are the landlord.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clause 33 stand part.
Matthew Pennycook
In the debate on our amendment 173 to clause 23, I remarked on the concern among Opposition members of the Committee that, in contrast to chapter 2 of part 2 concerning the ombudsman, chapter 3 of part 2 concerning the private rented sector database is not nearly prescriptive enough.
To be clear, when it comes to establishing a private rented sector database and developing the new digital property portal service that it will support, we do not wish to tie the Government’s hands too tightly. We believe it is right that much of the detail is put in regulation at a later date: how the database will be operated and overseen; how entries are verified, corrected and removed; what the registration fees are and how they will be collected; and how information on the database is shared with third parties. However, we also believe that certain requirements of the functioning of the portal should be placed on the face of the Bill.
In our view, such requirements should include one for landlords to submit key information on their history and for that information to be publicly available so that tenants may make informed decisions when entering into a tenancy agreement and hold their landlord to account. Key information might include details of past enforcement action taken against a landlord or an agent representing them; any rent repayment, banning or management orders made against them; rent levels for the property over time in the form of past section 13 notices; and details of notices of possession served to previous tenants.
Amendment 175 would add to the Bill a requirement for
“the database to record details of notices of possession”
—as one example—
“served by a landlord in respect of each”
of their dwellings let. As I said, we feel strongly that the Bill should be amended to guarantee a minimum set of expectations for the database and the new digital property portal service; the amendment would go some way to ensuring that is the case. I look forward to hearing the Minister’s thoughts on it.
Jacob Young
Clause 32 provides for the establishment and operation of the portal, as we have been discussing. With access to a comprehensive and standardised dataset on private rented sectors across England, local authorities will be best equipped to develop and implement their enforcement strategies. By requiring landlords to undertake a registration process, as provided by clause 34—which I will turn to in due course—the portal will help them to meet standards within the private rented sector by making them aware of their legal requirements.
With legislative backing and clear duties on users, a portal with entries for private landlords and dwellings will support a much richer understanding of the private rented sector and assist the Government in developing targeted policy. As such, the portal will be key to the successful implementation and enforcement of the wider reforms legislated for in the Bill.
Clause 33 sets out who can be the portal operator; a role required to create and maintain a working database of private landlords and their properties. The operator can appointed by the Secretary of State or a person arranged by the Secretary of State. The Government envisage the portal will be centrally co-ordinated by a single operator. Our legislation allows for the portal to be operated by the Department or to arrange for an alternative, such as a public body, to take on that responsibility.
I thank the hon. Gentleman for his Amendment 175. This would require landlords to record their use of possession grounds, under section 8 of the Housing Act 1988, on the property portal. To ensure the portal maintains the flexibility to meet the future needs of the sector, it is necessary that we use regulations to prescribe the information it collects, rather than including these in the Bill.
We intend for the portal to be a source of basic information about properties and their health and safety compliance. This legislation also allows for the ability to record tenancy-related issues, such as details of possession notices. We will consider the matter of recorded possession notices on the portal ahead of passing regulations, and carefully consider the balance of benefits and burden on landlords and local authorities when deciding what information to record. We will continue to work with stakeholders to assess the merits of information requirements, ahead of introducing any regulations. I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
That is a helpful response. I took from it that the Government are considering including a history of past possession notices granted to a landlord. That is very welcome.
We tabled this amendment because it gets to the heart of how the new portal will operate. It could be a source of very basic information about a property, and whether it is strictly compliant with health and safety standards. We would hope the Government—the noises the Minister has made indicate they might—will take a more expansive view of how the property portal might work. Namely, that it will give tenants, as consumers, real power, because of the transparency and the amount of information recorded, to be able to know whether the tenancy agreement they are prospectively entering into is good for them, and whether the landlord is a good-faith landlord—as we know the majority are—or potentially an unscrupulous landlord. I welcome the indications the Minister has given, and look forward to debating—whether between us, or with other Ministers—the regulations in due course. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
Clause 34
Making entries in the database
Lloyd Russell-Moyle
I beg to move amendment 202, in clause 34, page 41, line 33, at end insert—
“(2A) The regulations must provide for information or documents to be provided relating to disputes and their resolution under deposit protection schemes under Chapter 4 of Part 6 of the Housing Act 2004 (tenancy deposit schemes).”
This amendment would require regulations made by the Secretary of State to require the provision of information relating to dispute resolution for deposit protection schemes.
Amendments 202 and 176 both seek to ensure that certain things are included in this property portal. We have just heard from the Minister that he intends to set out in regulations the lists of what needs to be included. I think it is important that we have confirmation that these are the things that the Minister is considering.
My amendment 202 proposes that disputes and outcomes of the deposit protection scheme be included in the property portal. It is so important that tenants know whether their landlord is routinely in dispute over the deposit. I am not talking about situations in which the tenant agrees that there was damage, and there is no dispute about the deposit deduction; I mean those in which a tenant disputes the damage. The tenant should be able to see whether there are regular disputes and whether the outcome is in the landlord’s favour—the landlord might actually be pretty good—or in the tenant’s. The recording of disputes would also allow us to start to develop case law on deposit disputes and their outcomes.
I also support amendment 176—
Jacob Young
I thank the hon. Member for moving amendment 202. As I have said in response to earlier amendments, we will consider these points and others ahead of the regulations on what information is to be recorded on the portal. Our aim is to create a database that is future-proofed and responsive to the needs of the sector now and in future. Tenancy deposit schemes already provide free alternative dispute resolution with respect to deposit deductions. As I say, we will take all the hon. Member’s points and others into consideration when developing the portal and the regulations.
Lloyd Russell-Moyle
As I take it, the Minister has agreed that he will consider including disputes. That is a separate point from whether they are part of the ombudsperson; it is about whether their own processes and outcomes are being recorded properly. I will not push the amendment to a vote, but I do hope that the Minister will keep us in touch with his thinking as matters progress.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 176, in clause 34, page 41, line 33, at end insert—
“(3A) The regulations must provide for the following information or documents to be provided to the database operator as part of the process of creating entries on the database—
(a) an address, telephone number and email address for the residential landlord;
(b) an address, telephone number and email address for all managing agents engaged by the residential landlord;
(c) details of every dwelling that is being let by the residential landlord;
(d) evidence that the residential landlord has supplied a copy of the ‘How To Rent’ booklet to each relevant tenant;
(e) the rent that is currently being charged in respect of every dwelling that is being let by the residential landlord;
(f) details of any enforcement action that a local housing authority in England has taken against the residential landlord;
(g) details of any banning orders that have been made against the residential landlord pursuant to Chapter 2 of Part 2 of the Housing and Planning Act 2016;
(h) in respect of every dwelling that is being let by the residential landlord, copies of the documents required by:
(i) Regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012;
(ii) Paragraph(s) 6 and/or 7 of Regulation 36 of the Gas Safety (Installation and Use) Regulations 1998;
(iii) Regulation 3 of the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020;
(iv) Regulation 4 of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015;
(i) details of whether the dwelling house is required to be licenced under Part 2 (Houses in Multiple Occupation) or Part 3 (Selective Licensing) of the Housing Act 2004”
This amendment would ensure that a number of the regulatory obligations that built up around section 21 notices are maintained by means of the database following the removal of section 21 of the Housing Act 1988.
We discussed, in relation to amendment 175, the fact that we believe that certain requirements relating to the functioning of the portal should be placed in the Bill. In speaking to amendments 170 to 172 to clause 19 in relation to deposit protection, I briefly touched on the fact that a number of regulatory obligations that have developed around section 21 notices over the 35 years for which the present system has been in place will fall away when it is abolished at the point at which chapter 1 of part 1 of the Bill comes into force.
The preconditions and requirements that have built up around section 21 notices, which presently prevent landlords from using the no-fault eviction process unless they can show compliance, include providing copies of gas safety certificates; providing copies of energy performance certificates; providing copies to each tenant of the ever-evolving how-to-rent booklet; and showing evidence of complying with the licensing requirements for houses in multiple occupation. There are no provisions in the Bill to ensure that landlords will have to continue to meet these and other regulatory obligations as a precondition of operating under the new tenancy system.
We fear that that will leave under-resourced local authorities—or tenants themselves, through the pursuit of civil claims—as the only means of enforcing these important statutory duties. We believe that compliance should instead be achieved by making it mandatory for landlords to submit the relevant information and proof of compliance to the database operator as part of the process of creating entries on the database. Amendment 176 would ensure that that is the case in respect of a wide range of existing regulatory obligations. We urge the Minister to accept it.
Jacob Young
I thank the hon. Member for moving amendment 176, which would require certain information to be recorded on the property portal. I very much agree with the sentiment of it; we already intend to record much of that information on the portal. Alongside basic personal and property details, we intend to require landlords to supply evidence that health and safety standards are being met within their rental property. This is likely to include the selected information that landlords are currently legally obliged to provide to tenants, such as gas safety certificates.
To ensure that the portal maintains the flexibility to meet the future needs of the sector, it is necessary that the information it collects be specified in regulations, rather than in the Bill. I therefore ask the hon. Member to withdraw his amendment.
Matthew Pennycook
I very much welcome the Minister’s response and his statement that “much of” that information will be included on the portal. However, I want to press home why we think this is important. These are not add-ons that we might seek to include in the portal; they are existing preconditions and regulatory obligations that have developed around section 21, and surely they cannot fall away under the new tenancy regime. I welcome what the Minister said, but I urge him to ensure that all the preconditions and obligations that exist around section 21 are a mandatory requirement as part of the portal process.
Lloyd Russell-Moyle
It is also important that everything be recorded in one place, not only for tenants but for landlords, who will not have to fill in a plethora of information in different places about the EPC, gas safety and so on. It will make it easier for everyone if the Government get it right. It is so important that they be clear early on, so that we are not in a rush at the last moment.
Matthew Pennycook
My hon. Friend’s point is well made. There is the potential—hopefully the Government recognise it—to reduce the burden on landlords by ensuring that there is a clear set of requirements associated with registration on the portal that do not exist around the serving of a notice, as they do currently. We hope that the Government will take our points on board and bring all these preconditions within the scope of the portal in due course. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 ordered to stand part of the Bill.
Clause 35
Requirement to keep active entries up-to-date
Question proposed, That the clause stand part of the Bill.
Jacob Young
I commend the clauses to the Committee. I am interested to hear the thoughts of the hon. Member for Greenwich and Woolwich.
Matthew Pennycook
I have two brief questions for the Minister in relation to this group of clauses. I am more than happy for him to write to me on these points, as they are quite niche.
First, the powers under clause 38 will be used to set fees in relation to registration on the database. Clause 38(5) allows for all or part of the amount received in fees to be paid to local housing authorities or into the Consolidated Fund. Is the implication of the inclusion of this provision in the Bill that the Government expect there to be a surplus from fees collected by the database? If so, why do the Government not believe, given that they are the relevant enforcement body, that any available funds should be allocated to local authorities alone rather than central Government?
Secondly, we take it from the nature of the charging regime that the Government hope the database will be financially self-sufficient. However, the work needed to maintain and verify entries on the database will be onerous, and the start-up costs could be significant. Can the Minister provide any detail at this stage as to what the Government expect the resourcing requirements of the database to be? Can he provide assurances as to how its implementation and running costs will be met?
Jacob Young
In answer to the hon. Member’s question about landlords having to pay to join the service, we intend to fund the service through fees charged to private landlords when they register on the portal. We will take steps to ensure that these costs remain reasonable, proportionate and sustainable. The new service will bring substantial benefits to landlords as well as tenants, providing a single source of information about their legal responsibilities and helping them to showcase their compliance. It will also support local councils to enforce against unscrupulous landlords, who undercut the responsible majority.
On resourcing for local authorities, the information recorded on the portal will save local authorities time when enforcing health and safety standards in the PRS. Our research has shown that locating landlords and properties takes up a significant proportion of local authorities’ resources. Additionally, we are undertaking a new burdens assessment and will ensure that additional burdens created by the new system are fully funded.
Question agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clauses 36 to 42 ordered to stand part of the Bill.
Clause 43
Access to the database
Lloyd Russell-Moyle
I beg to move amendment 195, in clause 43, page 48, line 32, at end insert—
“(f) tenants and prospective tenants of a relevant property and all other properties linked to the unique identifier of the landlord with whom they are proposing to or have signed a tenancy agreement.”
This amendment would ensure that tenants and prospective tenants have access to information held in the database relating to the landlord of the relevant property.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clauses 44 and 45 stand part.
Lloyd Russell-Moyle
The Bill contains a list of organisations and agencies that will have access to the portal. Tenants are not included in that list. I hope that that is because they have access through some other means, or that the Minister will stand up and say, “Don’t worry, you’ve missed it—it’s in x, y and z.” But my reading is that there is no presumption that tenants and presumptive tenants will have full access to all the information about the house they are moving into and its landlord.
We have heard in evidence that it is important that tenants have the information before they sign a contract. Any effective free market has to be based on the knowledge of the person who is making a choice to purchase something. The tenant is clearly one such person, so the tenant needs to know the background of the person and the quality of the house before they sign.
It might be that the Government plan for such information to be public—that would mitigate the need for the amendment—but I worry that some information will be public and some redacted, particularly information on house prices, former house prices and rental prices. That kind of information should be made available to the tenant. Tenants and prospective tenants should have full, unredacted information about the house and the landlord of the property that they are in or want to be in. I seek reassurances from the Minister on the matter.
Jacob Young
I thank the hon. Gentleman for his amendment, which relates to the publicly available information on the property portal. One of our core objectives is to enhance the information available to tenants so that they can make more informed choices and have a better renting experience. As I have said, we are carefully considering what information will be available to tenants via the portal, but it is likely to include information about property standards. We also intend to publish information about certain relevant offences committed by landlords. As I have set out, we believe that outlining what information is available to tenants through regulations will allow us to respond to changes in the market and to remain sensitive to landlords’ privacy rights. We have the power to amend what information is accessible by tenants in the future if doing so would benefit the operation of the sector.
Lloyd Russell-Moyle
The Minister is talking about what he expects will be available to tenants. Could he outline what he expects might not be available to tenants, so that I can understand his thinking on the other side?
Jacob Young
Specifically on the question of a landlord’s privacy, there will be some information that is relevant for a local authority to know about a landlord but not necessarily relevant for a tenant to know about a landlord. As I say, such things are best set out in regulations.
Lloyd Russell-Moyle
Can the Minister give examples of what that information would be? That would help to flesh out what we are talking about.
Jacob Young
I am not in a position to give an example today. If an example comes to mind, I shall write to the hon. Gentleman with it.
Ms Karen Buck (Westminster North) (Lab)
I just want to press the Minister on this point. It is right that there is an issue about balance, but by asking the Committee to accept that the detail will be brought forward in regulations—without our having any idea of where the balance might lie and what kind of exceptions we are talking about—the Minister is asking us to approve the clause rather in the dark.
Jacob Young
I reject the suggestion that the Committee is being asked to approve the clause in the dark. Obviously, any regulations will come before the House will be debated at that time. These things could breach someone’s human rights or affect their ability to protect their own data, therefore it is right that we properly consider them once we know what the portal actually looks like, and we have information recorded on it and so on.
I encourage the hon. Member for Brighton, Kemptown to withdraw his amendment. A landlord’s national insurance number or date of birth, for example, is key information that should remain private to a landlord and is not necessarily for tenants’ viewing. I respect the hon. Member’s points and the issues that he raised; as I say, we will consider them fully when we come to make regulations after Royal Assent.
Lloyd Russell-Moyle
It might be understandable if, for example, the landlord’s day of birth was redacted on Companies House but the month and year were shown. If we had no national insurance numbers, but we had a contactable address where that person could be found—not necessarily their home address, but a non-PO box address—that might, again, be acceptable.
The Government need to be clear in their intention that this is about privacy grounds only where necessary for the safety and functioning of a landlord, and not about withholding information that would be useful for the tenant in reaching out to the landlord. I will withdraw the amendment, but I expect the Minister to provide some more details in writing about what will be excluded.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 ordered to stand part of the Bill.
Clauses 44 to 46 ordered to stand part of the Bill.
Clause 47
Financial penalties
Matthew Pennycook
I beg to move amendment 167, in clause 47, page 50, line 36, leave out “£5,000” and insert “£30,000”.
This amendment would increase the maximum financial penalty that local authorities could impose on a person for breach of a requirement imposed by clause 39.
The Chair
With this it will be convenient to discuss the following:
Amendment 168, in clause 47, page 51, line 1, leave out “£30,000” and insert “£60,000”.
This amendment would increase the maximum financial penalty that local authorities could impose on a person for committing an offence under section 48.
Clause stand part.
Matthew Pennycook
Amendments 167 and 168 would raise the maximum financial penalty that local authorities can levy when there has been a breach of a requirement imposed by clause 39 for private landlords to be registered on the database before they can market, advertise or let associated dwellings, or an offence has been committed under clause 48.
I intend to speak to the amendments only briefly, as we have already debated the issue of maximum financial penalties on two occasions. Suffice it to say that the Opposition remain of the view that the Government should reconsider the proposed maximum limits of £5,000 and £30,000 respectively, on the grounds that fines of up to those levels are unlikely to act as an effective deterrent. I come back to this point briefly because it has a direct bearing on the ability of local authorities to finance enforcement activity, an issue that we will debate shortly in relation to clauses 58 to 61. That is why the Local Government Association supports the amendments.
I remind the Minister that the amendments would bring the maximum financial penalties in line with others that can be issued by enforcement authorities against landlords who breach the legislation, for example in respect of the Leasehold Reform (Ground Rent) Act 2022.
I do not want to press the point, and I do not necessarily expect a response from the Minister, but we urge the Government to reconsider.
Jacob Young
I thank the hon. Gentleman for tabling the amendments. As he says, we have discussed these points a few times.
Our proposed fines regime is fair and proportionate. Fines of up to £30,000 are possible if non-compliance continues. The legislation allows fines to be imposed repeatedly every 28 days; and for repeat offences, local housing authorities can pursue prosecution through the courts, which carries an unlimited fine. This escalating procedure will give local authorities the ability to effectively enforce the requirements of the new property portal, without fines being excessive. The Department will issue guidance to local authorities to help them to make use of the new fine-setting powers. I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 47 ordered to stand part of the Bill.
Clause 48
Offences
Jacob Young
I beg to move amendment 71, in clause 52, page 55, line 5, after “section” insert “(Financial penalties),”
This amendment provides for the provisions about financial penalties in Schedule 3 of the Bill to apply in relation to penalties under NC10, which relates to discriminatory practices in relation to the grant of tenancies, as well as in relation to penalties under Part 2 of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Government motion to transfer clause 52.
Government amendments 72 to 75.
Schedule 3.
Government amendments 80, 104 and 106.
Government motion to transfer clause 56.
Government amendments 113 and 125 to 129.
Government new clause 8—Prohibition of discrimination relating to children.
Government new clause 9—Prohibition of discrimination relating to benefits status.
Government new clause 10—Financial penalties.
Government new clause 11—Discriminatory terms in a tenancy relating to children or benefits status.
Government new clause 12—Terms in superior leases relating to children or benefits status.
Government new clause 13—Terms in mortgages relating to children or benefits status.
Government new clause 14—Terms in insurance contracts relating to children or benefits status.
Government new clause 15—Power of the Secretary of State to amend Chapter 2A to protect persons of other descriptions.
Government new clause 16—No prohibition on taking income into account.
Government new clause 17—Interpretation of Chapter 2A.
Government new clause 47—Power of Welsh Ministers to make consequential provision.
Government new clause 48—Prohibition of discrimination relating to children or benefits status: Welsh language text.
Government new clause 49—Prohibition of discrimination relating to children or benefits status: English language text.
Government new clause 50—Amendment of short title of the Renting Homes (Fees etc.) (Wales) Act 2019.
Government new clause 51—Regulations under sections 8C and 8J of the Renting Homes (Fees, Discrimination etc.) (Wales) Act 2019.
Government new clause 52—Amendments of the Renting Homes (Wales) Act 2016 regarding discrimination.
New clause 61—Ending blanket bans on renting to families with children or those in receipt of benefits—
“The Secretary of State may, by regulation, specify behaviour which, for the purposes of Part 4, Equality Act 2010, shall be considered unlawful discrimination unless the contrary is shown.”
This new clause would ensure that blanket bans on renting to families with children or those in receipt of benefits are presumed to be unlawful discrimination unless proved otherwise.
Jacob Young
Blanket bans on letting to families with children or people who receive benefits have no place in our modern housing market. We agree that landlords and agents must not discriminate on that basis, and should fairly consider individual prospective tenants. Our package of amendments and new clauses prohibits landlords from discriminating against families with children or people who receive benefits in England and Wales. The blanket ban measures respond to calls for additional safeguards for some of the most vulnerable renters, while confirming that landlords can ensure that a tenancy is affordable, and that they retain the final say on whom they let to.
Matthew Pennycook
Clause 52 simply provides local authorities with the power to impose financial penalties on those who do not meet the requirements of the private rented sector database, as set out in clause 39, or an offence relating to it, as set out in clause 48.
The large group of Government amendments and new clauses that we are considering with this clause add proposed new chapter 2A to part 1 of the Bill. It includes several new clauses, commenced by regulations made by the Secretary of State, that seek to prohibit discriminatory practices associated with children and benefits status in relation to the grant of tenancies, as the Minister made clear. Incidentally, proposed new chapter 2B will provide for the same clauses to apply in Wales, pending commencement by order of Welsh Ministers.
Without question, we welcome the intent behind the amendments and new clauses. As I am sure the Minister can see, we have consistently expressed concern since the Bill’s publication that the commitment in the White Paper to ban so-called “No DSS” or “No kids” practices was not on the face of the Bill. The Government deserve credit, as they do for deciding to extend a decent homes standard to the private rented sector and for seeking to make these important changes through this Bill rather than separate future legislation.
The case for prohibiting “No DSS” and “No kids” practices is indisputable. All renters should be treated fairly in their search for a safe, secure, decent, and affordable place to call home, regardless of whether they are in receipt of benefits or their family circumstances. Yet in addition to the various informal barriers to renting privately that we know exist, some of which we debated when considering advanced rent payments in relation to clause 5, there is incontrovertible evidence that some landlords and agents acting on behalf of landlords actively discourage, or even prevent, people in receipt of benefits or with children from renting their properties.
We know that some landlords refuse to allow benefit claimants to even view an affordable property or to consider them as a potential tenant, and prospective renters across the country will be familiar with messages in property adverts such as “No DSS”, “No benefits”, “Working households preferred” or “Professional tenants only”. The scale of this discrimination is almost certainly significant. Successive YouGov surveys of private landlords in England have made clear not only that a comfortable majority of them prefer not to rent to people in receipt of benefits but that a significant minority operate an outright ban. Outright bans on renters with children may be less prevalent, but they are still extremely commonplace. The result is that hundreds of thousands of families have been unable to rent a home that they wanted and could afford, simply due to their benefit status or because they have children.
As we have touched on numerous times during the Committee’s proceedings, the number of such families in the PRS has increased markedly over recent decades, with woefully inadequate social housing supply and rising house prices making private renting the only option for many families, including working families with children. Of course, such discrimination does not affect all people equally. The reality, particularly in hot, competitive rental markets, is that women, disabled households and people of colour will be disproportionately affected by it. For example, we know that the overwhelming majority of single parents receiving housing benefit are female. I grew up in one of those households; the challenges they face daily are considerable enough without having to navigate discriminatory and potentially unlawful policies in the private letting industry.
Whether they are the result of landlords’ misperceptions, of frustrations with the workings of the benefit system or of ill-informed advice from letting agents, blanket bans of the kind in question are simply unacceptable. They are not only unacceptable but almost certainly already unlawful by virtue of the premises provisions in the Equality Act 2010, which provide for a prohibition against discrimination in letting, managing or disposing of premises. However, although a number of court rulings have confirmed that rejecting tenancy applications because of an applicant’s benefit status or family circumstances is a breach of the 2010 Act, proving discrimination is incredibly difficult. As a result, despite the growing body of case law, “No DSS” and “No kids” practices remain widespread.
The Government amendments in this group perfectly demonstrate the nature of the problem. They specify discriminatory practices that are already unlawful under part 4 of the Equality Act 2010. Indeed, Government new clauses 8 and 9 even mirror the language of the Equality Act—“provision, criterion or practice”—in relation to discriminatory practices, yet they do nothing to clarify that the various practices are henceforth always to be deemed discriminatory. As such, although we welcome the motivation behind the Government amendments in attempting to provide for a strict prohibition of such practices, we are concerned that they will not achieve that objective, because, although they will have the effect of removing terms discriminating against benefit claimants and families with children from contracts, they will not prevent the underlying discrimination from occurring in practice.
What we propose, by way of our new clause 61, is that the weaknesses of the various Government amendments in question are resolved by ensuring that the underlying conduct is clearly unlawful by making it a breach of the Equality Act 2010. Our new clause is aimed at prohibiting indirect discrimination and discrimination arising from disability, by giving the Secretary of State the power to define, by regulation, what behaviour is, for the purposes of part 4 of the 2010 Act, considered to be unlawful discrimination unless the person accused of discriminating can prove the contrary. It would remove, for example, the need for a female prospective private renter to prove that a “No DSS” blanket ban had a disproportionate impact on her as a woman. It would mean that, in any court proceedings, the first threshold stage would always be passed unless the landlord in question could convince the court that the ban had no discriminatory impact—which, of course, would never happen.
By forcing landlords to prove that some objective justification exists for refusing to rent to people in receipt of benefits or with children in order to advertise or market a property on the basis of a “No DSS” or “No kids” ban, our amendment would have the effect of ensuring that such discriminatory practices were finally banned in practice, because the number of privately rented properties where there could be such an objective justification is tiny.
I hope the Minister will respond to this amendment in the spirit in which it is intended—namely, as a constructive means of compelling the Government to consider whether their proposed new chapter 2A to part 1 of the Act may fall short in practice. I look forward to the Minister’s response.
Jacob Young
I am grateful to the hon. Member for tabling new clause 61. As I set out earlier, we agree that blanket bans against letting to families with children or to people who receive benefits have no place in our modern housing market. That is why our amendments to the Renters (Reform) Bill make express provisions to ensure that landlords and agents cannot discriminate on that basis.
Our measures take direct action to address blanket ban practices in the private rented sector, and our targeted approach tackles both overt and indirect practices. We have designed our enforcement approach with the tenants that are most vulnerable to this type of discriminatory practice in mind, and we understand that their priority is finding a safe and secure home in the private rented sector. Unlike the provisions in the Equality Act 2010, we are giving local councils investigatory and enforcement powers to tackle unlawful blanket ban practices. Tenants will not have to shoulder the burden of taking their complaint to court; local councils will be enabled to take swift and effective enforcement action. We think that it is right that prohibitions on blanket bans in the private rented sector are part of the Renters (Reform) Bill and that they are incorporated into the enforcement framework, rather than the Equality Act 2010.
I say to the hon. Gentleman that we are of one mind when trying to stop these blanket bans, so I am happy to have further conversations with him to that effect. I therefore ask him to withdraw his amendment.
Matthew Pennycook
I absolutely agree with the Minister that we are of one mind in wanting to ensure that these blanket bans are prohibited: he is right that they have no place in our modern housing market. However, we remain concerned—I do not think that the Minister addressed the specifics of our new clause—that the Government’s amendments will not achieve that objective. As I said, although they will have the effect of removing, from contracts, terms discriminating against benefits claimants and families with children, they will not, in practice, prevent that underlying discrimination from occurring.
We feel very strongly about this issue. If the Government do not get this right and these practices are not abandoned, we will have to return with a future piece of legislation to ensure that they are prohibited in practice. For that reason, we will seek to press the new clause to a Division at the appropriate time.
Amendment 71 agreed to.
Clause 52, as amended, ordered to stand part of the Bill.
Ordered,
That clause 52 be transferred to the end of line 30 on page 57.—(Jacob Young.)
This amendment is consequential on Amendment 71 which expands clause 52 so that it is no longer limited to penalties under Part 2 of the Bill. This amendment moves clause 52 into Part 3 of the Bill (enforcement authorities). Part 3 is expected to be added to so as to include other provision about enforcement generally. Clause 52 is expected to form its first Chapter.
Schedule 3
Financial Penalties
Amendments made: 72, in schedule 3, page 78, line 8, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 73, in schedule 3, page 80, line 20, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 74, in schedule 3, page 80, line 25, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 75, in schedule 3, page 80, line 33, at end insert—
“(ca) the activities of a superior landlord in relation to such a tenancy,”.—(Jacob Young.)
This amendment ensures that the proceeds of financial penalties imposed under clauses 26 and 47 can be applied towards meeting enforcement costs relating to superior landlords as well as immediate landlords.
Schedule 3, as amended, agreed to.
Clause 58
Enforcement by local housing authorities: general duty
Jacob Young
I beg to move amendment 76, in clause 58, page 57, line 35, after second “of” insert “, or an offence under,”.
This amendment ensures that the duty in clause 58(1) does not prevent a local housing authority from taking enforcement action in respect of an offence under the landlord legislation which occurs outside of its area.
The Chair
With this it will be convenient to discuss the following:
Government amendments 77, 78, 81 and 82.
Clause stand part.
Government amendments 83 to 85.
Clauses 59 and 60 stand part.
Government amendments 86 to 91.
Clause 61 stand part.
Government amendments 92, 93 and 95.
Government new clause 22—Enforcement by county councils which are not local housing authorities: duty to notify.
Government new clause 23—Duty to report.
Jacob Young
I am interested to hear the thoughts of the hon. Member for Greenwich and Woolwich.
Matthew Pennycook
Part 3 of the Bill concerns the enforcement authorities, and clause 58 is the key clause. It imposes a new duty on local authorities to enforce, by means of financial penalties or by instituting offence proceedings, prohibitions of the landlord legislation in their areas. Subsection (4) sets out the definition of “landlord legislation”, referring to sections 1 and 1A of the Protection from Eviction Act 1977 and chapter 1 of part 1 of the Housing Act 1988. Neither of those are new, obviously, but local authorities have never had a duty to enforce them before, and the 1977 Act will require a different approach from the police to unlawful evictions. It also refers to the whole of part 2 of the Bill—all the prohibitions relating to the ombudsman and the property portal. By any definition, that constitutes a significant array of new regulatory and enforcement responsibilities for local authorities to meet.
Various proposals in the Bill could, if they work well, make local authority enforcement of prohibitions of the landlord legislation in their areas easier. The new ombudsman has the potential, for example, to provide an alternative route for dispute resolution and a distinct and effective route to redress when it comes to breaches of prohibitions relating to the misuse of possession grounds and for not providing a written statement of terms, thus ensuring that local authorities are not the only enforcement body for such contraventions. Similarly, the new private rented sector database has the potential, for example, to allow local authorities to far more easily identify poor-quality and non-compliant properties and who owns them, thus addressing a key barrier for local authorities when it comes to enforcing standards.
Ms Buck
My hon. Friend is absolutely right to talk about the variation in performance between local authorities. Enforcement in some of them definitely reflects a variation in interest and concern. Does he also recognise that there is also a fundamental issue of resource capacity for enforcement in local government? As this largely discretionary service is being squeezed by the pressures on local authorities, requiring extra duties from local authorities without resources is a recipe for inaction.
Matthew Pennycook
My hon. Friend’s point is extremely well made. As I have commented already, there is an issue about which local authorities prioritise these services, but precisely because they are a discretionary service, there is an issue of resources and funding. That is the second of the points I wish to put to the Minister.
In assessing why the approach of so many local authorities to enforcement is inherently reactive, one cannot escape the issue of capacity and capabilities. Not only are councils across the country under huge financial pressure at present but many are struggling, and indeed have struggled for some time, to recruit experienced officers to carry out enforcement activity. Yet the White Paper was entirely silent on the challenge of local authority resourcing and staffing. The provisions in the Bill that enable local authorities to keep the proceeds of financial penalties to reinvest in enforcement activity are welcome. However, the funds that will raise—not least because the Government have chosen to cap financial penalties at £5,000 and £30,000 respectively—are unlikely to provide the initial funding required to implement the new system, and even in the medium to long term will almost certainly not cover the costs of all the new regulatory and enforcement responsibilities that clause 58 will require local authorities to meet.
The White Paper committed the Government to conducting a new burdens assessment into the reform proposals it set out, assessing their impact on local government, and, where necessary, fully funding the net additional cost of all new burdens placed on local councils. I would be grateful, therefore, if the Minister can give us today a clear commitment on resources. Specifically, can he tell us whether the commitment to a new burdens assessment will be honoured and, if so, when it will be published?
Matthew Pennycook
Can the Minister also give us a clearer view of the Government’s view of the future of selective licensing following the Bill’s enactment, given that such schemes are crucial sources of local authority funding in a number of areas? I look forward to the Minister’s response to those points.
Jacob Young
I am grateful to the hon. Member for Greenwich and Woolwich for speaking to his amendments, and to the hon. Member for Westminster North for her comments. We expect the vast majority of landlords to do the right thing and meet their new legal responsibilities but, as ever, a minority will fail to do so. The Government are committed to supporting local authorities and taking proactive enforcement against this minority of landlords.
Clause 58 will place a new duty on every local housing authority in England to enforce the new measures in their area. When considering enforcement, local authorities will be able to use a civil penalty as an alternative to a criminal prosecution for an offence, allowing them to decide the most effective method of enforcement in each case.
Government amendments 78, 81 and 82 will extend the power in clause 58, though not the duty, to enforce the landlord legislation to county councils in two-tier areas in England. While local housing authorities have a duty to enforce the landlord legislation in their areas under clause 58, there may be some instances where breaches and offences are better pursued by the authority responsible for trading standards. For example, in relation to advertising a property to rent, county councils also have this responsibility. In this Bill, we make a distinction between less serious breaches of the legislation and more serious offences. Government amendments 76, 83, 84 and 85 strengthen clause 58 to ensure that the ability of a local housing authority to take enforcement action outside its local area extends to offences as well as breaches.
Clause 59 will further support effective enforcement by ensuring that the local authorities are fully aware of the enforcement action in their areas that is going to be taken by a different authority, and of the final results of such action. This will facilitate local authorities to take cross-border enforcement action, and deliver greater efficiency and enable local authorities to provide the most complete case to the courts.
Clause 60 will allow the Secretary of State to appoint a lead enforcement authority for the purpose of provisions in the landlord legislation, which includes many of the provisions in this Bill. We plan to carefully consider whether having a lead enforcement authority for any of the provisions in the landlord legislation will be beneficial. We plan to engage with local authorities and other stakeholders to establish this.
Clause 61 sets out the various duties and powers of a lead enforcement authority. The principal duty is to oversee the operation and effective enforcement. This includes the duty to provide advice to local authorities about the operation of the legislation and may include information relevant to the enforcement of specific cases.
Government amendments 86 to 91 will ensure that a lead enforcement authority’s duties and powers provided in the Bill to help local housing authorities are extended to county councils in England that are not local housing authorities. Government amendments 92, 93 and 95 ensure that county councils in England that are not local housing authorities are required, when requested, to report to a lead enforcement authority, in the same way that a local housing authority is on the exercise of its functions. New clause 22 will ensure that enforcement action is not duplicated when those county councils that are not also local housing authorities take enforcement action in relation to landlord legislation. Government amendment 77 ensures that new provisions of the new clause 22 are referenced in clause 58, which is the clause that encloses the duty to enforce on local housing authorities.
Finally, new clause 23 will place a duty on local authorities to supply data to the Secretary of State in relation to the exercise of their functions—I believe that point was mentioned by the hon. Member for Greenwich and Woolwich—under part 2 of this Bill, and other relevant legislation as and when it is requested. In order to evaluate the impact of our reforms and understand the action that local authorities are taking against the minority of landlords who flout the rules, it is vital that the Secretary of State is able to seek regular and robust data from local authorities. My officials will work with local authorities to agree a data reporting framework that is rational, proportionate and helpful to both local and central Government, and in line with other similar data collections. With their input, we will undertake a new burdens assessment and fully fund any additional costs generated to fulfil this duty. I hope that addresses the points raised in Committee.
Amendment 76 agreed to.
Amendments made: 77, in clause 58, page 57, line 38, after first “authority)” insert—
“, (Enforcement by county councils which are not local housing authorities: duty to notify)(3) (enforcement by county council in England which is not a local housing authority)”.
This amendment is consequential on NC22.
Amendment 78, in clause 58, page 57, line 38, at end insert—
“(3A) A county council in England which is not a local housing authority may—
(a) enforce the landlord legislation;
(b) for that purpose, exercise any powers that a local housing authority may exercise for the purposes of enforcing that legislation.”
This amendment confers a power to enforce the landlord legislation on county councils in England which are not local housing authorities and for that purpose enables such councils to exercise powers equivalent to local housing authorities.
Amendment 79, in clause 58, page 58, leave out lines 1 to 3.
This amendment removes the definition of “local housing authority” for the purposes of Part 3 of the Bill. It is consequential on Amendment 107 which inserts a definition of “local housing authority” for the purposes of the Bill as a whole.
Amendment 80, in clause 58, page 58, line 4, at end insert—
“(za) Chapter 2A of Part 1 of this Act,”.
This amendment adds the new Chapter expected to be formed of new clauses relating to discriminatory practices in relation to the grant of tenancies to the definition of “the landlord legislation” in clause 58.
Amendment 81, in clause 58, page 58, line 9, leave out “a local housing authority”.
This amendment is consequential on Amendment 78.
Amendment 82, in clause 58, page 58, line 10, leave out “that authority”.—(Jacob Young.)
This amendment is consequential on Amendment 78.
Clause 58, as amended, ordered to stand part of the Bill.
Clause 59
Enforcement by local housing authorities: duty to notify
Amendments made: 83, in clause 59, page 58, line 16, after second “of” insert “, or an offence under,”.
This amendment ensures that a local housing authority notifies another local housing authority if it proposes to take enforcement action in respect of an offence under the landlord legislation which occurs in the area of that other authority.
Amendment 84, in clause 59, page 58, line 23, after “breach” insert “or offence”.
This amendment is consequential on Amendment 83.
Amendment 85, in clause 59, page 58, line 27, after “breach” insert “or offence”.—(Jacob Young.)
This amendment clarifies that a financial penalty imposed under the landlord legislation may also relate to an offence under that legislation.
Clause 59, as amended, ordered to stand part of the Bill.
Clause 60 ordered to stand part of the Bill.
Clause 61
General duties and powers of lead enforcement authority
Amendments made: 86, in clause 61, page 59, line 30, leave out “local housing” and insert “relevant local”.
This amendment requires a lead enforcement authority to provide information and advice to county councils in England which are not local housing authorities.
Amendment 87, in clause 61, page 59, line 35, leave out “local housing” and insert “relevant local”.
This amendment provides for a lead enforcement authority to disclose information to county councils in England which are not local housing authorities for certain purposes.
Amendment 88, in clause 61, page 60, line 1, leave out “local housing” and insert “relevant local”.
This amendment provides for a lead enforcement authority to issue guidance to county councils in England which are not local housing authorities.
Amendment 89, in clause 61, page 60, line 4, leave out “Local housing” and insert “Relevant local”.
This amendment requires county councils in England which are not local housing authorities to have regard to guidance issued by a lead enforcement authority under subsection (4) of clause 61.
Amendment 90, in clause 61, page 60, line 14, leave out “local housing” and insert “relevant local”.
The amendment provides for a direction given under subsection (7) of clause 61 to relate to county councils in England which are not local housing authorities.
Amendment 91, in clause 61, page 60, line 16, at end insert—
“‘relevant local authority’ means—
(a) a local housing authority, or
(b) a county council in England which is not a local housing authority;”.—(Jacob Young.)
The amendment defines “relevant local authority” for the purposes of clause 61.
Clause 61, as amended, ordered to stand part of the Bill.
Clause 62
Enforcement by the lead enforcement authority
Amendments made: 92, in clause 62, page 61, line 1, leave out “local housing” and insert “relevant local”.
This amendment requires a county council in England which is not a local housing authority to report at the request of a lead enforcement authority on the exercise of the county council’s functions under the provisions for which the lead enforcement authority is responsible.
Amendment 93, in clause 62, page 61, line 3, leave out “local housing” and insert “relevant local”.
This amendment is consequential on Amendment 92.
Amendment 94, in clause 62, page 61, line 5, at end insert—
“(7) The powers of a local housing authority referred to in subsection (1)(b) include the power to authorise persons to exercise powers of officers under sections (Power of local housing authority to require information from relevant person) to (Investigatory powers: interpretation) (see section (Investigatory powers: interpretation)(2)).
(8) Section (Suspected residential tenancy: entry without warrant)(7) is to be read, in relation to an officer of a lead enforcement authority, as if—
(a) the reference to a deputy chief officer whose duties relate to a purpose within subsection (1)(b) of that section were a reference to—
(i) a person who is employed by, or acts on the instructions of, the body which is the lead enforcement authority and has overall responsibility for the exercise of the functions of that body in that capacity (‘the head of the lead enforcement authority’), or
(ii) a person who is employed by, or acts on the instructions of, the lead enforcement authority, and has been authorised by the head of the lead enforcement authority to give special authorisations within the meaning of section (Suspected residential tenancy: entry without warrant), and
(b) paragraph (b)(ii) were omitted.”
This amendment is consequential on other new clauses which provide for investigatory powers of local housing authorities. It deals with how the references to officers of a local housing authority are to apply in the case where the powers of a local housing authority are to be exercised by a lead enforcement authority.
Amendment 95, in clause 62, page 61, line 5, at end insert—
“(9) In this section ‘relevant local authority’ has the same meaning as in section 61.”—(Jacob Young.)
This amendment defines “relevant local authority” for the purposes of clause 62.
Ordered, That further consideration be now adjourned. —(Mr Mohindra.)
Renters (Reform) Bill (Tenth sitting)
Tuesday 28th November 2023
(11 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 28 November 2023 - (28 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Chair
With this it will be convenient to consider the following:
Government amendments 112, 115 and 116.
Government new clause 20—Decent homes standard.
New clause 60—Extension of Awaab’s law to the private rented sector—
“(1) Section 10A of the Landlord and Tenant Act 1985 is amended as follows.
(2) Omit subsections (1)(b) and (6).
(3) In subsection (7), omit the definitions of ‘low-cost home ownership accommodation’ and ‘social housing’.”
This new clause would require private landlords to deal with hazards affecting their properties.
Government new schedule 1—Decent homes standard.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
It is a pleasure to see you in the Chair, Ms Fovargue.
Everyone deserves to live in a safe and decent home. It is completely unacceptable in this day and age that people are forced to live in homes that do not meet basic standards of decency. There is already a decent homes standard for social housing that has been successful in improving housing conditions. Since the standard was last updated in 2006, the level of non-decency in social housing has fallen from 29% to 10%, but there is no equivalent standard for the private rented sector, and homes in that sector are more likely to be non-decent.
Of the 4.6 million households that rent privately, 23% live in properties that would fail the decent homes standard that currently applies to social housing. That is around 1 million homes. That is why we committed in the levelling-up White Paper to halving the number of non-decent rented homes by 2030 and, in the “Fairer Private Rented Sector” White Paper, to introducing a legally binding decent homes standard in the private rented sector for the first time. It is also why we have tabled the Government amendments, which will allow Ministers to set a new standard to apply the private rented sector and for it to be enforced.
It is imperative that we get the content of the new standard right and that we ensure that it is both proportionate and fair. We are working closely with a range of stakeholders to co-design the standard and make sure the balance is right for landlords and tenants. For most PRS properties, our expectation is that the landlord will not need to do any additional work to meet the decent homes standard beyond what is needed to meet existing requirements and keep their properties in a good state of repair. We will provide further details on our proposals for the standard in due course.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to continue our deliberations with you in the Chair, Ms Fovargue.
Clause 63 is a short and straightforward clause that would require the Secretary of State to prepare a report that sets out the Government’s policy on safety and quality standards in relation to supported housing and temporary accommodation and to publish it within one year of the day on which the measure comes into force. The group of Government amendments we are considering with the clause, which are intended to replace it entirely, will extend part 1 of the Housing Act 2004, which relates to housing conditions, to cover temporary accommodation, and provide for regulations to specify new requirements that will form part of a decent homes standard that applies to temporary accommodation, supported exempt accommodation and rented property more generally. We welcome both the intent and the design of the amendments.
The private rented sector is manifestly failing to provide safe and secure homes for all those who live in it. We fully accept that the absolute number and proportion of poor-quality private rented homes continues to fall—albeit steadily rather than drastically—as part of a half-century, if not longer, of improvement in housing standards. However, it remains the case that some of the worst standards in housing are to be found in the private rented sector. It should be a source of real shame for the Government that after they have been in office for 13 years, an estimated one in four homes in the private rented sector—the Minister made it clear that that equates to around a million properties—do not meet the decent homes standard, and one in 10 has a category 1 hazard that poses a risk of serious harm.
For the considerable number of private tenants who are forced to live in substandard properties—those who wake up every day to mould, vermin or dangerous hazards—what should be a place of refuge and comfort is instead a source of, at best, daily unease and, at worst, torment and misery. More must be done to bear down decisively on this problem. Measures designed to drive up standards in the sector should be enacted as a matter of urgency.
As I made clear during the debate on clause 52, the Government deserve appropriate credit for seeking to introduce a decent homes standard that covers the private rented sector through this Bill rather than through separate future legislation. We believe that Government new clause 20, new schedule 1 and the related amendments are well drafted and that they have the potential to tackle the blight of poor-quality homes in local communities and ensure that renters have safer and better homes to live in; however, I would like to take this opportunity to put to the Minister several questions about those provisions.
My first question concerns enforcement. A decent homes standard that covers the social rented sector has been in place since 2001, yet we know that far too many social tenants still live in damp, cold and mouldy properties that harm their health and their life chances. Indeed, that was one of the chief reasons why the Government felt it necessary to enact the Social Housing (Regulation) Act 2023. That demonstrates that over the 22 years of the decent homes standard’s existence, although it has led to some improvements it has not been enforceable in the social rented sector. That experience suggests that introducing a decent homes standard covering the private rented sector will not achieve its objectives unless it is properly enforced.
Given that the Government intend, by means of new schedule 1, which amends part 1 of the Housing Act 2004, for enforcement of the new standard in the PRS to be undertaken using the same powers as the regime for the housing health and safety rating system, it should be a relatively straightforward matter for local authorities. However, local authorities’ ability to do so successfully depends in practice on their capacity and capabilities. As we debated just prior to the break, in relation to clauses 58 to 61, a great many authorities are struggling when it comes to resources and skills. Will the Minister provide more detail on what steps, if any, the Government intend to take, in addition to the various proposals in the Bill, to ensure that local authorities can appropriately enforce the application of the decent homes standard to the private rented sector where it is not already being met?
My second issue concerns the nature of the standard itself. The Government consulted on the introduction and enforcement of a decent homes standard in the private rented sector in England late last year, and the responses to that consultation obviously fed into the Government amendments we are considering. However, the Government have also committed themselves to a more fundamental review of the standard at some unspecified point in the future. Will the Minister confirm whether that commitment remains in place? If so, will he give us some idea of when that more fundamental review, presumably across both the social rented and private rented sectors, might begin?
The third issue relates to the current enforcement regime for the housing health and safety rating system. The regime is primary means by which local authorities can tackle poor property conditions and compel prompt action from landlords who do not fulfil their responsibilities to provide homes free from dangerously hazardous conditions. We take it from the Government amendments that while the new decent homes standard for the private rented sector will be located in part 1 of the Housing Act 2004, it will not necessarily be the same thing as the HHSRS, which is also in part 1 of that Act. We will presumably need to wait for secondary legislation to work out how, if at all, the decent homes standard and the HHSRS differ, but their workings will need to complement each other.
In answer to a written question that I tabled on 2 May, the then Housing Minister confirmed that a review of the HHSRS, including the statutory operating and enforcement guidance, was under way. Given the obvious implications of that answer for the functioning of the new decent homes standard introduced by this group of Government amendments, will the Minister tell us whether that review has concluded, as the decent homes consultation suggested? If it has, when did it conclude, when will the results be published, and does it remain the Government’s view that any changes will require further legislation? The status and outcome of the review of the HHSRS and its associated statutory, operating and enforcement guidance are important because that guidance is applied when local authorities consider using their statutory powers to remedy defective housing conditions, including and especially damp and mould.
That brings me to our new clause 60. When the Social Housing (Regulation) Act 2023 was on Report, the Government tabled and passed, with our support, amendments designed to force social landlords to investigate and fix damp and mould-related health hazards within specified timeframes, with the threat of legal challenge if they do not, owing to the insertion of an implied covenant into tenancy agreements. The provisions were termed Awaab’s law because they were a direct response to the untimely death of two-year-old Awaab Ishak from respiratory arrest, as a result of prolonged exposure to mould in the rented Rochdale Boroughwide Housing property in which he and his family lived. Although enactment of the new requirements is dependent on secondary legislation, with the consultation having closed last week we are hopeful that the necessary statutory instrument will soon be forthcoming. We look forward to its enactment so that social landlords who continue to drag their feet over dangerous damp and mould will face the full force of the law.
New clause 60 would simply extend Awaab’s law to the private rented sector by amending the relevant section of the Landlord and Tenant Act 1985, and the reasoning behind that is straightforward. The Government were right to introduce Awaab’s law in the social housing sector, but the problem of debilitating damp and mould, and landlords who fail to investigate such hazards and make necessary repairs, is not confined to social rented homes.
A Citizens Advice report published in February made it clear that the private rented sector has widespread problems with damp, mould and cold, driven by the poor energy efficiency of privately rented homes—an issue that we are minded to raise later in the Bill’s proceedings. The report went on to evidence the fact that 1.6 million children in England currently live in cold, damp or mouldy privately rented homes. In the face of such a pervasive problem, we can think of no justification whatsoever for restricting Awaab’s law purely to the social housing sector. We hope that the Government will agree and accept new clause 60, because we can think of no reason whatsoever why they would resist doing so.
Before I conclude, I want to touch briefly on a final issue in relation to this group of amendments. We welcome the inclusion of supported exempt accommodation in a decent homes standard and part 1 of the Housing Act 2004. We believe that will resolve an issue of concern that we flagged in the Social Housing (Regulation) Bill Committee—namely, the loophole that exists, and is being exploited by unscrupulous providers, as a result of non-profit-making providers of supported exempt accommodation being able to let properties at market rents that are eligible for housing benefit support, on the basis that “more than minimal” care, support or supervision is being provided, without those properties coming within the scope of consumer regulation.
The inclusion of temporary accommodation is also welcome, but it is slightly more problematic, because local authorities are responsible both for enforcing part 1 of the Housing Act 2004 and for procuring sufficient temporary accommodation to meet their duty to prevent and relieve homelessness. As such, while there may not be a legal conflict of interest, there is certainly a potential practical conflict of interest, as local authorities will be forced to weigh the case for any potential enforcement action, outside the scope of the contract in question, against the need to retain private landlords as an ongoing source of desperately needed temporary accommodation. It is for precisely that reason that we tried to convince the Government, in the Social Housing (Regulation) Bill Committee, to have temporary accommodation regulated by a third party, such as the Regulator of Social Housing.
The Government amendments will undoubtedly help to improve the quality of some temporary accommodation, and the inclusion of temporary accommodation in a decent homes standard and part 1 of the Housing Act 2004 is to be welcomed for that reason. However, we encourage the Government to consider whether they might go further. For example—here, I again commend my hon. Friend the Member for Westminster North for her Homes (Fitness for Human Habitation) Act 2018—could the Government extend section 9A of the Landlord and Tenant Act 1985 to also cover properties occupied under licences as homelessness temporary accommodation? I would welcome the Minister’s thoughts on that, and I look forward to his response to new clause 60 and all the other issues that I have raised regarding this group of amendments.
Jacob Young
Let me address the hon. Gentleman’s point about local authorities and their ability to enforce. We will establish a new duty on landlords to ensure that their properties meet the decent homes standard. For landlords who fail to take reasonably practicable steps to keep their properties free of serious hazard, local councils will be able to issue fines of up to £5,000. That will encourage those landlords who do not already do so to proactively manage their properties, which will allow local councils to target their enforcement more effectively on a small minority of irresponsible and criminal landlords.
We will also explore requiring landlords to register compliance with the decent homes standard on the property portal. That will support local councils in identifying non-decent properties to target through their enforcement activity. As I have already said in response to different parts of the Bill, we will also do a full new burdens assessment for local authorities, and where there is a new burden, they will be resourced to fund that.
On the hon. Gentleman’s questions about the HHSRS review, the simple answer is that we will publish that in due course. Secondary legislation obviously needs to coincide with that, so I do not have anything further to add at this point. However, I am happy to write to him in further detail on that. Similarly, I will commit to writing to him on on the DHS review too.
Jacob Young
The hon. Member is trying to press me for a specific timeframe, but I am unable to give him that commitment today.
I thank the hon. Member for Greenwich and Woolwich for tabling new clause 60. The tragic case of Awaab Ishak’s death has thrown into sharp relief the need for the Government to continue our mission to rebalance the relationship between landlords and tenants in this country. It is right that all tenants across both sectors should expect safe and decent homes from their landlords. However, our focus for the private rented sector is to strengthen the enforcement of standards by local housing authorities, as well as introducing new means of redress through the PRS ombudsman.
We do not consider it to be of interest to private rented sector tenants to introduce a further route for potential litigation and enforcement. Private tenants already have rights when it comes to repairs in their home and the safety of their home. Private landlords are required to make sure that their homes are free from the most serious health and safety hazards. If hazards are present, the local housing authority can issue an improvement notice requiring them to be remedied within a specific time. Landlords who fail to comply can be prosecuted or fined up to £30,000. Additionally, if tenants consider that their rented home is not fit for human habitation, they can seek remedy through the courts under the Homes (Fitness for Human Habitation) Act 2018, to which the hon. Member for Greenwich and Woolwich referred.
Our focus is on strengthening the new system through the Bill. As I have just set out, we intend to introduce a decent homes standard in the private rented sector for the first time. The Government’s amendment to introduce the relevant provisions will place a stronger duty on landlords to keep their properties free from serious hazards, and allow local housing authorities to take enforcement action if private rented homes fail to meet decent homes standards. Through the Bill, we are also introducing a private rented sector ombudsman, which will be able to help private tenants to resolve repair issues quickly and for free if their landlord has not acted appropriately to remedy an issue within a reasonable timeframe.
Through existing legislation and new measures introduced by the Bill, private rented sector landlords will be held to account for providing safe and decent homes, and for providing timely repairs. We do not consider that it would be in the interest of private rented sector tenants to introduce a further route for potential litigation.
Ms Karen Buck (Westminster North) (Lab)
Before the Minister sits down, will he deal with the issue of licences? Those of us who deal with a large number of people in homeless accommodation know that those in temporary accommodation, whose accommodation is held under licence, often endure the worst conditions of all, and very little of this legislation currently applies to them. Will he bring something forward?
Jacob Young
I am happy to have that conversation with the hon. Lady and the hon. Member for Greenwich and Woolwich at a later date. If there are specific points that I have not addressed, I am happy to write to her, but I ask the hon. Member for Greenwich and Woolwich to withdraw the new clause.
Matthew Pennycook
I welcome that response from the Minister. With regard to Government amendments, I thank him for what he said about the HHSRS and the more fundamental review of the decent homes standard across both tenures. If he has any further detail on that, I would welcome it. I particularly welcome the implied suggestion that the registration of a decent homes standard, when it is forthcoming, will form part of what is required for landlords to submit on the portal. That is a very good idea, and in that way we could help to drive up standards by making it part of the general information that needs to be submitted as part of registration with the database. That is very welcome.
On Awaab’s law and new clause 60, I have to say to the Minister that he gave a particularly unconvincing answer. I entirely understand that when it comes to standards, the Government’s focus is on the measures in the Bill. We all want to see local authorities able to enforce properly, and we all want to see the ombudsman provide a mechanism for redress. However, I still fail to understand—I do not think the Minister responded to this point—why the Government believe that Awaab’s law is appropriate for the social rented sector, but not for the private rented sector.
Matthew Pennycook
I will just make this point. The Minister said that the Government do not think it is of interest to tenants; I would be very interested to know what surveys the Government have done of tenants to find out their views on this matter, because I am certainly not aware of any such evidence. I think it would be of real interest to tenants if their landlords could be forced to respond within specific timeframes to sufficiently serious cases of damp and mould, as Awaab’s law provides for the social rented sector, with the threat of legal challenge as a stock response. I am happy to give way, but I find the Minister’s arguments on this point quite unconvincing. If these measures are appropriate for the social rented sector, with all the other measures in place in that sector, they should be appropriate for the private rented sector.
Jacob Young
I simply say to the hon. Gentleman that there is an obvious difference between a large social housing sector landlord, which has maintenance teams that can quickly act to address an issue, and an individual landlord, who may have only one or two properties, and may not have a wealth of skill behind them to address such issues in the timeframes that we hope to set out for social landlords. As I said, local authorities can request timely changes to properties.
Matthew Pennycook
I thank the Minister for that answer. I fully accept that there is a difference between a large registered social landlord, and a mum-and-dad landlord, who might own only one or two buy-to-let properties. However, we should not therefore say that it is acceptable for the kinds of cases that Awaab’s law would cover, if extended to the private sector, to go on unchallenged. I am not satisfied that there are existing powers to challenge those cases. If there were such powers in the social rented sector, the Government would not have needed to bring forward Awaab’s law. Actually, if the Government were properly resourcing local authorities to enforce, Awaab’s law might not be necessary, but the Government deemed it necessary in the social rented sector.
As the Bill demonstrates, the difference between the private rented sector and the social sector will break down to some extent, whether as a result of the ombudsman, who will cover both sectors, or other measures. We think the law should cover both sectors, and I find the Minister’s response unconvincing. I will press new clause 60 to a Division.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
It is worth pointing out that the Minister himself said that the condition of the housing stock in the private rented sector was now considered to be worse than the condition of the housing stock in the social rented sector. Surely the Minister should therefore argue that we need tougher regulation, because regulation is failing more badly in the private sector than in the social sector, but he seems not to have followed through on his argument.
Matthew Pennycook
My hon. Friend is right. We know that standards in the social rented sector are inadequate; that is why the Government brought forward their recent legislation, which we supported. Things are worse in the private rented sector. I quoted the Citizens Advice statistic: 1.6 million children are in damp, mouldy or cold homes. If anything, there is a stronger case for Awaab’s law applying to the private rented sector than to the social, but the Minister is trying to have it both ways, for the obvious reason that the Government do not want to accept our new clause. I encourage them to go away and think. We will press the new clause to a vote. If the measures are good enough for the social rented sector, surely they are good enough for tenants in the private rented sector; I have seen no evidence that those tenants are not interested in the tougher powers that Awaab’s law would provide.
Finally, I would welcome any further detail from the Minister on whether there is a need to go further on licensed temporary accommodation properties.
Question put and negatived.
Clause 63 accordingly disagreed to.
Clause 54
Crown application
Amendments made: 97, in clause 54, page 55, line 15, leave out “(4), this Part” and insert “(4D), this Act”.
This amendment provides for a default rule which will have the effect that, subject to any specific provision about them, the new clauses which make freestanding provision in the Bill will bind the Crown. This is intended to mean that the Crown will be bound by the new clauses containing prohibitions on discriminatory practices in relation to tenancies and (subject to exceptions in Amendment 98 for powers of entry) the new investigatory powers.
Amendment 98, in clause 54, page 55, line 30, at end insert—
“(4A) Sections (Business premises: entry without warrant), (Requirements where occupiers are on business premises entered without warrant), (Business premises: warrant authorising entry), (Business premises: entry under warrant), (Power to require production of documents following entry), (Power to seize documents following entry), (Access to seized documents), (Appeal against detention of documents), (Suspected residential tenancy: entry without warrant), (Requirements where occupiers are on residential premises entered without warrant), (Suspected residential tenancy: warrant authorising entry), (Suspected residential tenancy: entry under warrant) and (Powers of accompanying persons) do not bind the Crown.
(4B) Nothing in section (Offences) makes the Crown criminally liable.
(4C) The High Court may declare unlawful any act or omission for which the Crown would be criminally liable under section (Offences) but for subsection (4B).
(4D) An amendment or repeal made by this Act binds the Crown to the extent that the provision amended or repealed binds the Crown (but in the case of an amendment of the 1988 Act, this is subject to the amendments made by section 13).”
This amendment provides that the new clauses conferring powers of entry do not bind the Crown. It also provides that the offences applying in relation to the new clauses about requiring information do not make the Crown criminally liable (but can lead to a declaration of unlawfulness) and deals with Crown application of amendments made by the Bill to other legislation.
Amendment 99, in clause 54, page 55, line 31, leave out
“Subsection (2) does not affect”
and insert
“Nothing in this section affects”.—(Jacob Young.)
This amendment is consequential on Amendment 98.
Clause 54, as amended, ordered to stand part of the Bill.
Ordered,
That clause 54 be transferred to the end of line 30 on page 61. —(Jacob Young.)
This amendment is consequential on Amendment 97. It moves clause 54 into Part 5 of the Bill (general provisions). This is necessary because once clause 54 deals with the application to the Crown of new provisions added to the Bill, it will no longer relate only to Part 2, and therefore needs to be moved out of that Part.
Clause 55
Application to Parliament
Amendments made: 100, in clause 55, page 55, line 36, leave out “this Part” and insert
“Part 2 (and Part 3 so far as relating to Part 2)”.
This amendment is consequential on the motion to transfer clause 55. It also makes it clear that the general provisions about enforcement action in Part 3 of the Bill apply in relation to any tenancies and licences referred to in clause 55.
Amendment 101, in clause 55, page 56, line 16, at end insert—
“(2) The following provisions do not apply in relation to premises that are occupied for the purposes of either House of Parliament—
(a) Chapter 2A of Part 1;
(b) sections (Power of local housing authority to require information from relevant person), (Business premises: entry without warrant), (Requirements where occupiers are on business premises entered without warrant), (Business premises: warrant authorising entry), (Business premises: entry under warrant), (Power to require production of documents following entry), (Power to seize documents following entry), (Access to seized documents), (Appeal against detention of documents), (Suspected residential tenancy: entry without warrant), (Requirements where occupiers are on residential premises entered without warrant), (Suspected residential tenancy: warrant authorising entry), (Suspected residential tenancy: entry under warrant) and (Powers of accompanying persons).
(3) Nothing in section (Offences) makes the Corporate Officer of the House of Commons or the Corporate Officer of the House of Lords criminally liable.
(4) The High Court may declare unlawful any act or omission for which the Corporate Officer of the House of Commons or the Corporate Officer of the House of Lords would be criminally liable under section (Offences) but for subsection (3).
(5) Nothing in this section affects the criminal liability of relevant members of the House of Lords staff or of the House of Commons staff (as defined by sections 194 and 195 of the Employment Rights Act 1996).”—(Jacob Young.)
This amendment provides that the new Chapter containing prohibitions on discriminatory practices in relation to tenancies and the new clauses on investigatory powers (except the power to require information from any person) do not apply in relation to premises occupied for the purposes of Parliament. It also provides that nothing in NC41 makes the Corporate Officers of the Houses criminally liable (though there can be a declaration of unlawfulness).
Clause 55, as amended, ordered to stand part of the Bill.
Ordered,
That clause 55 be transferred to the end of line 30 on page 61. —(Jacob Young.)
This amendment is consequential on Amendment 101. It moves clause 55 into Part 5 of the Bill (general provisions). This is necessary because once clause 55 deals with the application to Parliament of the new clauses relating to discriminatory practices and to investigatory powers, it will no longer relate only to Part 2 of the Bill.
Clause 56
Regulations
Amendments made: 102, in clause 56, page 56, line 18, leave out “Part” and insert “Act”.
This amendment provides for the provisions about regulations in clause 56(1) to apply in relation to regulations under the new clauses expected to be added to the Bill.
Amendment 103, in clause 56, page 56, line 28, leave out “Part” and insert “Act”.
This amendment provides for the provision for regulations to be made by statutory instrument to cover all the regulations under the Bill.
Amendment 104, in clause 56, page 56, line 29, after “section” insert
“(Power of the Secretary of State to amend Chapter 2A to protect persons of other descriptions),”.
This amendment provides for regulations under the new clause inserted by NC15 to be subject to affirmative procedure in Parliament.
Amendment 105, in clause 56, page 56, line 33, leave out “Part” and insert
“Act made by the Secretary of State”.
This amendment provides for a default rule that all regulations made by the Secretary of State under the Bill are to be subject to negative procedure in Parliament. The reference to the Secretary of State is included because under other amendments there are regulation-making powers for the Welsh Ministers which are to be subject to procedure in Senedd Cymru rather than Parliament.
Amendment 106, in clause 56, page 56, line 35, at end insert—
“(6) This section does not apply to regulations under section (Power of Welsh Ministers to make consequential provision) or this Part.”—(Jacob Young.)
This amendment is consequential on the motion to transfer clause 56. It ensures that, once clause 56 is moved into Part 5 of the Bill by that amendment, the clause will apply only to the substantive regulation-making powers under the Bill and not to any regulations made under the general powers in Part 5 (Part 5 already contains specific provision about procedure etc in relation to the general powers).
Clause 56, as amended, ordered to stand part of the Bill.
Ordered,
That clause 56 be transferred to the end of line 30 on page 61. —(Jacob Young.)
This amendment is consequential on Amendments 102, 103, 104 and 105. It moves clause 56 into Part 5 of the Bill (general provisions). This is necessary because once clause 56 deals with regulations under provisions outside of Part 2 of the Bill, it will no longer relate only to that Part.
Clause 64
Meaning of “the 1988 Act”
Amendment made: 107, in clause 64, page 61, line 30, after first “Act” insert—
“‘local housing authority’ means a district council, a county council in England for an area for which there is no district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly;”.—(Jacob Young.)
This amendment inserts a definition of “local housing authority” for the purposes of the Bill as a whole.
Clause 64, as amended, ordered to stand part of the Bill.
Clause 65
Power to make consequential provision
Amendments made: 108, in clause 65, page 62, line 1, at end insert—
“(2A) The power to make regulations under this section includes power to make—
(a) supplementary, incidental, transitional or saving provision;
(b) different provision for different purposes.”
This amendment allows regulations made by the Secretary of State containing provision that is consequential on the Bill to include supplementary or incidental provision and to make different provision for different purposes.
Amendment 109, in clause 65, page 62, line 2, leave out from “power”, in the first place, to “for” in line 3 and insert—
“under subsection (2A)(a) to make transitional provision includes power to provide”.—(Jacob Young.)
This amendment is consequential on Amendment 108.
Clause 65, as amended, ordered to stand part of the Bill.
Clause 66 ordered to stand part of the Bill.
Clause 67
Commencement and application
Matthew Pennycook
I beg to move amendment 169, in clause 67, page 62, line 21, at end insert—
“, save that section 2(b) comes into force on the day on which this Act is passed only to the extent that it repeals section 21 of the Housing Act 1988; such repeal will not affect the validity of any notices served under that provision on or before the day on which this Act is passed and the provisions of that section will continue to apply to any claims issued in respect of such a notice”.
This amendment would ensure that the abolition of section 21 evictions would come into force on Royal Assent, with saving provisions for any notices served before that date.
In opening the Committee’s fifth sitting for the Opposition, I set out in exhaustive detail our concerns about the huge uncertainty that surrounds the implementation of chapter 1 of part 1 of the Bill as a result of the Government’s recent decision to tie the implementation of the new tenancy system directly to ill-defined court improvements. As I argued, because of the Government’s last-minute change of approach, private tenants have no idea when the new tenancy system will come into force. They do not even know what constitutes the requisite progress on court reform that Ministers deem necessary before the new system comes into force.
At that point in our proceedings, I put three questions to the Minister. First, do the Government believe that the county court system for resolving most disputes between landlords and tenants is performing so badly that reform is a necessary precondition of bringing chapter 1 of part 1 into force? Secondly, if the Government’s view is that reform of the court system is absolutely necessary prior to chapter 1 coming into force, what is the precise nature of the improvements that are deemed to be required? Thirdly, what is the Government’s implementation timeline for those court improvements? The Minister’s terse response to the clause 1 stand part debate provided no convincing answers whatsoever to those questions; indeed, he failed to respond to almost all the detailed and cogent points of concern raised by Opposition Members in that debate. I hope that he will take the opportunity to respond to them in debate on this amendment, and thus provide the Committee with the assurances that were sought, but not secured, earlier in our proceedings.
Toward the end of the debate on clause 1 stand part, I put a question to the Minister about clause 67. I asked why the two-stage transition process that the clause provides for, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, does not afford the Government enough time to make the necessary improvements to the courts. The Minister’s reply was:
“We will come on to that point when we discuss clause 67.”––[Official Report, Renters (Reform) Public Bill Committee, 21 November 2023; c. 159.]
Well, here we are, Minister, and we would still like to know not only why the Government believe that court reform is a necessary precondition of enacting chapter 1 of part 1, what improvements they believe are necessary, and the timeline for their implementation, but why the two-stage transition process that this clause facilitates is not sufficient to get the job done. We really do deserve some answers from the Government today.
I remind the Committee that clause 67 would give the Government an incredible amount of leeway on when the new system comes into force. It allows Ministers to determine an initial implementation date at any point after Royal Assent, after which all new tenancies will be periodic and governed by the new rules, and also to determine a second implementation date, which must be at least 12 months after the first, after which all existing tenancies will transition to the new rules. Although we want firm assurances that the two-stage process will not be postponed indefinitely pending unspecified court improvements, we take the view that the proposed two-stage process is the right approach. It would clearly not be sensible to enact the whole of chapter 1 of part 1 immediately on Royal Assent. Additional time will be required for, for example, new prescribed forms for the new grounds for possession.
However, landlords and tenants need certainty about precisely when the Government’s manifesto commitment to abolish section 21 no-fault evictions will be enacted. Amendment 169 seeks to provide that certainty. It would ensure that section 21 of the Housing Act 1988 was repealed on the day that the Bill received Royal Assent, with saving provisions for any notices served before that date, so that they remain valid and of lawful effect. By ensuring that section 21 is repealed on the day the Act is formally approved, we would prevent a significant amount of hardship, and the risk of private tenants being made homeless. We urge the Government to accept the amendment.
I want to press the Minister on a final point that I raised about clause 67 during our clause 2 stand part debate. As is clearly specified in guidance published by the Government, they propose a minimum period of 12 months between the first and second implementation dates, but there is no maximum period, so the Bill would allow for all new tenancies to become periodic, but then there could be an extensive period—perhaps even an indefinite one—before existing tenancies transitioned to the new rules.
We believe that the Bill should specify a maximum, as well as a minimum, amount of time between the first and second implementation dates. The Minister agreed to write to me on that issue, but unless I have missed some correspondence, that has not been directly addressed in any of the letters I have received thus far. I would be grateful if he could give me a commitment today that the Government will revisit this issue before Report. Otherwise, we will be minded to return to it then.
Jacob Young
On the hon. Gentleman’s final point, I fully accept his desire for a maximum period. The reason we have not set a maximum is to give us as much flexibility as possible. There is no real incentive for a landlord today to try to get around the system. Were a landlord to introduce a new three-year fixed-term tenancy agreement to try to game the system and avoid the six or 12-month time limit, that would simply block the landlord, and they would not be able to use the powers that section 21 affords them currently. That would be restrictive to that landlord as well as to the tenant, so we do not see a situation where a landlord would try to subvert the rule.
Matthew Pennycook
That is an interesting point. Let me probe the Minister on it. There is no maximum period for the implementation of the second date—in other words, there is no period by which the Government have to have brought forward the date when all existing tenancies are converted. Is he saying that between the first implementation date and the second, when all existing tenancies remain as is, other measures in the Bill will apply to them? That is the logic of his argument about landlords not gaming the system. I do not think we are talking about landlords gaming the system; we are talking about the Government having too much leeway to postpone the conversion of existing tenancies to the new system.
Jacob Young
The vast majority of fixed-term tenancies will be a 12-month agreement, so they would naturally roll on to being a periodic tenancy at the end of that fixed-term agreement. It is unrealistic to expect there to be tenancy agreements that are longer than three years, so they would all naturally convert to this new system anyway. We want to create a gradual process for all tenancies to join the new system; otherwise, it would cause confusion and perhaps overload the portal. If that does not satisfy the hon. Gentleman, I am happy to write to him setting that out further.
On amendment 169, I understand that the hon. Gentleman’s intention is to gain more clarity on the timeline for implementation of our reforms. However, the amendment would mean that on the day of Royal Assent, section 21 would be removed immediately. There would be no transition period; no time, once the final detail of the legislation was known, to make sure the courts were ready for the changes; and no time for the sector to prepare.
As we have said a number of times in Committee, these are the most significant reforms of the private rented sector in 30 years, and it is critical that we get them right. I am as wedded to ensuring that section 21 is abolished at the earliest opportunity as the hon. Member is, in order to provide vital security for tenants, but we have to ensure that the system is ready.
It might be helpful for me to explain how we are improving the courts, and what needs to happen to prepare the courts for the new tenancy system. Court rules and systems need updating to reflect the new law; there is no way that this can be avoided. Furthermore, we have already fully committed to a digital system that will make the court process more efficient and fit for the modern age. Let me reassure the Committee that we are doing as much as possible before the legislative process concludes. The design phase of our possession process digitisation project is under way, and has more than £1 million of funding. That will pave the way for the development and build of a new digital service.
We are also working to tackle concerns about bailiff delays, including by providing for automated payments for debtors. That will reduce the need for doorstep visits, so that bailiffs can prioritise possession enforcement. We are going further with the Ministry of Justice and His Majesty’s Courts and Tribunals Service in exploring improvements to bailiff recruitment and retention policies; we touched on that. It would simply be a waste of taxpayers’ money to spend millions of pounds building a new system when we do not have certainty on the legislation underpinning it. That is why we will set out more details and implementation dates in due course.
Let me be clear that this is not a delaying tactic. There are 2.4 million landlords. Urban and rural landlords, their representatives and business tell us that they have concerns about delays in the courts. We cannot simply ignore that. We have always been clear that implementation would be phased, so that the sector has time to adjust, and we committed to giving notice of the implementation dates in the White Paper last year.
Mike Amesbury
How many people and families does the Minister think will be evicted while they wait for reform of the courts, or wait for them to go digital by default? What is the timescale for digital by default? There are literally hundreds of families a day being evicted through section 21 no-fault evictions; the numbers are starting to go through the roof. That is a massive cost to the state and taxpayers.
Jacob Young
Of course it is, and I entirely accept the hon. Gentleman’s point. However, every one of the 11 million renters in this country has a landlord. We have had representations from all the organisations representing the 2.4 million landlords in this country saying that they are concerned about the courts. Trying to introduce a new system and overriding the concerns of landlords would be unwise.
Matthew Pennycook
The Minister says that this is not a delaying tactic. I take him at his word. Will he therefore explain why the two-stage transition process provided for by the clause does not provide the Government with enough time to make the necessary improvements? He said that the improvements are already under way, and that huge progress is being made in a number of areas. Why is that not enough time for him to say, “By the second implementation date, we will have got the courts to where they need to be, and we can give tenants the assurance that the new system will be in place at that point”?
Jacob Young
As I have outlined, we need to give time for the courts to improve. We need to give them the space to do that. I do not think that the measures in the Bill mentioned by the hon. Gentleman are adequate to do that. However, if there is another mechanism for us to ensure that the courts are prepared before the implementation of the Bill, I am happy to discuss that with him further. I remind all hon. Members that this is the biggest change to the sector in a generation; it is important that we take the time to get it right. The Government are ensuring that we have a smooth transition to the new system, and I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
I thank the Minister for that response. That is probably the most detail we have had on what the Government see as the necessary court improvements, but, to be frank, it is not enough detail. There are no metrics in there by which we can measure the reform that he talked about.
The Minister mentioned that the Government want the reforms introduced at the earliest possible opportunity. We have heard that they are targeting bailiff delays, processes and the new digital system. I take it from his response that the implementation of an entirely new digital system relating to possession grounds is a prerequisite to enacting part 1 of chapter 1. However, there is still too much uncertainty about what constitutes a necessary reform, and we are not convinced that the two-stage transition process provided for by the Bill does not afford the Government enough time to get the courts to a point at which we can introduce the new system. Indeed, in the evidence sessions, we heard different points of view on whether we had not better introduce the measures in the Bill and then see how the courts respond to the new system before phasing it in, so we remain unconvinced.
There is a fundamental point of difference between us on the abolition of section 21. We are deeply concerned about the number of people put at risk of homelessness while the Government have delayed bringing the legislation forward. We are deeply concerned about the additional people who will be at risk of homelessness, and who will be made homeless, while the Government get on with court improvements that, frankly, should already have been delivered, so that the Bill could be ready to go. We very much feel that tenants and landlords need certainty about precisely when section 21 will be abolished, so I will press the amendment to a vote.
Question put, That the amendment be made.
‘8 | Renters (Reform) Act 2024 | section 27(1), (2) or (3) | Landlord redress schemes: continuing or repeat breaches |
|---|---|---|---|
9 | section 48(1) | Private rented sector database: provision of false or misleading information | |
10 | section 48(2), (3) or (4) | Private rented sector database: continuing or repeat breaches’ |
‘Adran 54A | Rhaid i L beidio ag ymyrryd â hawl D-C i fod â phersonau o dan 18 oed yn ymweld â’r annedd neu’n byw yno | |
|---|---|---|
Adran 54B | Rhaid i L beidio â gwahardd D-C rhag hawlio budd-daliadau lles’. |
‘Section 54A | L must not interfere with C-H’s right to have persons under 18 visit or live at the dwelling | |
|---|---|---|
Section 54B | L must not prohibit C-H from claiming welfare benefits’.”—(Jacob Young.) |
Matthew Pennycook
I beg to move, That the clause be read a Second time.
I was going to apologise to the Committee for the slightly obscure nature of my new clause, but after all that, I think it is the Minister who should be apologising for tabling so many Government new clauses to the Government’s own Bill. Perhaps he will do so when he stands up.
New clause 53 is very consciously a probing amendment, in so far as it seeks to ascertain whether there are any safeguards against what we believe might constitute a potential loophole in Bill that could be exploited by unscrupulous landlords.
Clause 14 sets out rules about the period of notice that a tenant can be required to provide when they wish to end an assured tenancy. Specifically, it provides that a tenant’s notice to quit relating to an assured tenancy must be given not less than two months before the date on which the notice is to take effect. That two-month period is intended, rightly, to provide landlords with sufficient time to re-let the property as required. However, the two-month default period of notice can be set aside where both parties agree as much in writing, whether in the tenancy agreement or in a separate document.
There may be entirely legitimate reasons for individual landlords and tenants to agree a shorter notice period. However, we are concerned that some tenants might find themselves informally pressured to agree a shorter notice period in writing as a precondition of being granted a tenancy. For many landlords, there will be absolutely no incentive to agree a shorter notice period than the two-month default; after all, they are likely to need much of that time, if not all, to re-let their property. However, it is entirely conceivable that unscrupulous landlords, particularly in hot rental markets, would have every incentive to get a sitting tenant out as quickly as possible after the point at which that tenant had given a notice to quit, because they will have no trouble in rapidly re-letting their property, probably at a far higher rent level.
We are therefore worried that the freedom for landlords and tenants to agree notice periods shorter than two months in writing could be used to the detriment of tenants—particularly vulnerable tenants, who in all likelihood will not be aware that two months is the default period and who might come under considerable pressure from their landlord to agree to a shorter period. New clause 53 seeks to protect such tenants by simply requiring the court to authorise any agreement in writing that provides for a notice period shorter than the two-month default. I look forward to the Minister’s response.
Jacob Young
I apologise to members of the Committee for how long it took to get through all those new clauses. However, I do not apologise for the new clauses themselves, because they strengthen the Bill and give additional rights to tenants and landlords under it. I am very proud that we have been able to add them.
I thank the hon. Gentleman for moving new clause 53, which would prevent landlords and tenants from agreeing contract clauses that override statutory provisions protecting tenants’ rights unless a court has preauthorised it.
Subsection (1) is an unnecessary provision. It is already the case that contractual clauses cannot affect statutory rights unless legislation expressly so allows. This is a long-standing principle of our legal system.
Subsection (2) would give the courts the power to authorise the waiver of tenants’ statutory rights under the Bill. That could have unintended consequences. More importantly, subsection (2) would weaken tenants’ rights. It would allow a judge to authorise the waiver of the rights that the Bill grants them. We do not think that this is appropriate or required.
Matthew Pennycook
I note the Minister’s criticism of the new clause as drafted, but does he recognise the point it seeks to raise: the concern that vulnerable tenants might come under pressure from a landlord to agree in writing to a shorter notice period that they may not necessarily want but that comes as a precondition of the tenancy? Notwithstanding his concerns about our new clause, will the Government give some more thought to whether it is a potential weakness of the Bill and how that might be addressed?
Jacob Young
I am happy to give the matter more thought in conversation with the Opposition. We intend to give tenants as much information as possible about their rights. That has been discussed at numerous points during the Committee’s consideration. I hope he will consider that assurance sufficient to withdraw his new clause.
Matthew Pennycook
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 56
Extending discretion of court in possession claims
“(1) The Housing Act 1988 is amended as follows.
(2) In Section 9 subsection (6)(a), after ‘Schedule 2 to this Act’ insert ‘, except for grounds 6A, 8 and 8A,’”.—(Matthew Pennycook.)
This new clause would extend the discretion of the court to adjourn proceedings, and stay, suspend or postpone any orders made, to cases where possession is sought under grounds 6, 8, and 8A.
Brought up, and read the First time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
In considering the replacement possession regime that the Bill will introduce, we have been at pains to convince the Government that the courts should be given a greater measure of discretion than the Bill currently provides for. Whether it is through allowing for a very limited amount of discretion in relation to mandatory grounds 1, 1A and 6A so that judges could consider whether the tenant would suffer greater hardship as a result of the possession order being granted, or through seeking to make new ground 8A entirely discretionary rather than mandatory, we believe in principle that we should be putting more trust in the judgment of the court to determine whether to make an award, taking into account all the circumstances that are pertinent in any given case.
In the Committee’s proceedings, we have deliberately not made the case for every possession ground to be discretionary. We take the view that there are some limited circumstances in which it is appropriate for landlords to have the certainty of a mandatory ground to regain possession of their property. However, as things stand, we do not believe that the Government have the balance right when it comes to the amount of discretion that the courts have been afforded in relation to the new possession regime.
New clause 56 is a final attempt to convince the Government to incorporate an additional element of discretion into the new system. It would extend the discretion of the court to adjourn proceedings and to stay, suspend or postpone any orders made to cases where possession is sought under grounds 6, 8 and 8A. In so doing, it would give the courts appropriate flexibility to cater for the circumstances where the ground is already made out, but either it is right to give the tenant more time or there is a way to resolve the dispute that does not involve the tenant losing his or her home.
Currently, for all mandatory grounds for possession, once the ground is made out, the court has no choice but to make an order, and it takes effect 14 days after the date on which it is made. Judges have a limited ability to postpone an order, but only up to six weeks from the date made and only where there would otherwise be exceptional hardship as a result. In short, the court has extremely limited flexibility.
Yet there might be extremely compelling circumstances in relation to individual ground 6 possession proceedings, where a judge might want to make an order that takes effect at a date later than six weeks thence. Take, for example, circumstances in which a landlord could not start to develop until two or three months after the hearing. A judge with the discretion provided for by new clause 56 could postpone the order until around the time at which the development could begin, giving the tenant more time to find a new home and providing the landlord with additional rent or income.
Similarly, in individual ground 8 and 8A possession proceedings, the courts currently have no flexibility to make an order suspended. Providing them with that discretion, as new clause 56 would, would allow judges to suspend an order upon terms that might allow for the outstanding arrears to be repaid under an agreed realistic payment plan, and within a timely manner.
The court could not make such a suspended order on a whim or with the mere hope of repayment without any evidence to provide reasonable reassurance that the rent would be repaid, as Liz Davies KC made plain in her evidence to the Committee on 16 November. By providing the courts with the discretion to suspend an order made in those circumstances, we would be helping both tenant and landlord: the tenant because they get to remain in their home rather than be evicted with four weeks’ notice, and the landlord because the arrears owed would have been paid off. If the tenant were to break the terms, then the landlord would still have the right to arrange for bailiffs to start the eviction process.
New clause 56 would simply give the courts the opportunity to exercise a measure of discretion in circumstances in which they were convinced that that was the right course of action, rather than constraining them, as the Bill currently proposes, in relation to mandatory possession grounds. As James Prestwich of the Chartered Institute of Housing said in evidence to the Committee two weeks ago:
“It is important that we are able to trust judges to make informed decisions based on the evidence of the case”.––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 74.]
That is all that this new clause seeks, in relation to a discrete number of mandatory grounds for possession. I do not hold out much hope, but I hope that the Minister will consider accepting it.
Jacob Young
I thank the hon. Member for moving new clause 56, which would allow the courts to adjourn a possession claim, stay or suspend enforcement of a possession order, or delay the enforcement of an order made under ground 6A, 8 or 8A.
Ground 6A covers situations in which evicting the tenants is the only way for the landlord to comply with enforcement measures such as banning orders; we have already discussed that issue at length earlier in our debates. Delaying enforcement action will therefore mean that the tenant continues to live in an unsafe or overcrowded property, or that the landlord fails to comply with the law. That is not an acceptable situation for either party.
Nor is it fair to ask landlords to bear significant arrears for longer, as applying the new clause to grounds 8 or 8A might. These mandatory grounds already set a high bar for eviction. Asking landlords to bear the cost of significant arrears for longer puts them under unsustainable financial pressure. The Government believe that the new clause strikes an unfair balance that will ultimately hurt tenants. I therefore ask the hon. Member to withdraw the motion.
Matthew Pennycook
I thank the Minister for his response. I do not intend to labour the point at any length, as we have discussed the matter on a number of occasions. I think that there is a clear difference of principle as to the amount of discretion that the courts are afforded regarding mandatory possession grounds. We think that they require a bit more flexibility to be able to exercise their judgment when there are compelling circumstances. The Government clearly do not, but I think we may return to the issue at a later stage. I beg to ask leave to withdraw the motion. 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 24 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 39 (3) Active landlord database entry”
Clause, by leave, withdrawn.
New Clause 57
Extension of rent repayment orders
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
—(Matthew Pennycook.)
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 9, 10, 24 or 27 of the Bill.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Lloyd Russell-Moyle
I beg to move, That the clause be read a Second time.
I am speaking to the new clause to push back a bit on the idea that the courts should not have discretion about some of the grounds. The harm caused to an individual by their being moved out of a property could be far greater than any advantage for someone moving into it. A relative of someone who is ill might have another house for a period of time, for example. Rather than there being two months’ notice, the courts should be given the discretion to decide, “You’re undergoing cancer treatment. Your relative has somewhere to live for six months, and that should be grounds for a delay of six months.” Such discretion should be permitted to the courts. Discretion is permitted in some cases: courts can rule in favour of deferred possession in other areas, but not when it comes to issues involving the non-discretionary grounds.
We have had this debate before. The Minister will respond, but I hope he is open to thinking about how the courts can be involved in areas where there can clearly sometimes be exceptional circumstances. At the moment, it is just a case of the courts asking whether the form has been filled in correctly. That does not do justice to our judges and lawyers, who usually get these things right.
Jacob Young
New clause 67 would make all grounds discretionary. That would remove any certainty for landlords that they could regain possession if they were seeking to sell or move in. Even more seriously, landlords would not even be guaranteed possession if their tenant was in a large amount of arrears, or had committed serious crimes. That could fatally undermine landlords’ confidence in the process for recovering possession.
In last week’s debate, we talked about getting the balance right between tenant security and a landlord’s ability to manage their properties. Where grounds are unambiguous and have a clear threshold, they are mandatory. That includes where a landlord has demonstrated their intention to sell, or a tenant has reached a certain threshold for rent arrears.
However, we completely agree that in more complex situations it is important that judges should have the discretion to decide whether possession is reasonable. Hon. Members talked last week about ground 14—the discretionary antisocial behaviour ground, which is one of those where judicial discretion is required and will remain so. The Government think the new clause strikes an unfair balance that will ultimately hurt tenants, and I ask the hon. Gentleman to withdraw it.
Lloyd Russell-Moyle
There remain many grounds that should involve more discretion. For example, rather than compliance with enforcement action being non-discretionary, there should be a discussion. If a landlord has been found guilty of not meeting the standards required, why should that automatically—just ticking the box—mean that the tenant is punished? Surely judges should be able to have some discretion on that ground. ‘Qualifying residential premises Section 2B(1)’; ‘Relevant tenancy Section 2B(2)’; ‘Social housing Section 2B(2)’; ‘Supported exempt accommodation Section 2B(2)’; ‘Type 1 requirement Section 2A(3)(a)’; ‘Type 2 requirement Section 2A(3)(b), and
Equally, there are many reasons why a wider discretion will be important when it comes to grounds for redevelopment; otherwise, there is a danger of abuse. I would like the Government to go away and think about how those thresholds are at least being met in respect of some of the grounds—not all of them, necessarily. How do we ensure that courts do not end up just going through a tick-box exercise? I totally understand the Government’s concerns about security in the sector, so I will not press the new clause to a vote. However, I do expect the Government to come back with some greater clarity on the guidelines that they will be giving to courts to ensure that the provisions are not just tick-box exercises and therefore abused by landlords. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Schedule
Decent homes standard
“Part 1
Amendments of Housing Act 2004
1 The Housing Act 2004 is amended as follows.
2 (1) Section 1 (new system for assessing housing conditions and enforcing housing standards) is amended as follows.
(2) In subsection (3)(a), omit ‘hazard’.
(3) In subsection (8), after ‘This Part’ insert ‘, except so far as it relates to the requirements specified by regulations under section 2A,’.
3 (1) Section 4 (inspections by local housing authorities) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If a local housing authority consider as a result of any matters of which they have become aware in carrying out their duty under section 3, or for any other reason, that it would be appropriate for any residential premises in their district to be inspected with a view to determining—
(a) whether any category 1 or 2 hazard exists on the premises, or
(b) in the case of qualifying residential premises, whether the premises meet the requirements specified by regulations under section 2A,
the authority must arrange for such an inspection to be carried out.’
(3) In subsection (2)—
(a) omit the ‘or’ at the end of paragraph (a), and
(b) after that paragraph insert—
‘(aa) in the case of qualifying residential premises, that the premises may not meet the requirements specified by regulations under section 2A, or’
(4) After subsection (5) insert—
‘(5A) Regulations made under subsection (4) by the Secretary of State may also make provision about the manner of assessing whether qualifying residential premises meet the requirements specified by regulations under section 2A.’
(5) In subsection (6)—
(a) omit the ‘or’ at the end of paragraph (a), and
(b) after that paragraph insert—
‘(aa) that any qualifying residential premises in their district fail to meet the requirements specified by regulations under section 2A, or’
(6) In the heading, omit ‘to see whether category 1 or 2 hazards exist’.
4 (1) Section 5 (general duty to take enforcement action) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If a local housing authority consider that—
(a) a category 1 hazard exists on any residential premises, or
(b) any qualifying residential premises fail to meet a type 1 requirement,
the authority must take the appropriate enforcement action in relation to the hazard or failure.’
(3) In subsection (2)(c), for ‘a hazard’ substitute ‘an’.
(4) In subsections (3) to (6), after ‘hazard’ (in each place) insert ‘or failure’.
(5) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
5 In the heading to section 6 (how duty under section 5 operates in certain cases), omit ‘Category 1 hazards’.
6 After section 6 insert—
‘6A Financial penalties relating to category 1 hazards or type 1 requirements
(1) This section applies where—
(a) a local housing authority is required by section 5(1) to take the appropriate enforcement action in relation to—
(i) the existence of a category 1 hazard on qualifying residential premises other than the common parts of a building containing one or more flats, or
(ii) a failure by qualifying residential premises other than the common parts of a building containing one or more flats to meet a type 1 requirement, and
(b) in the opinion of the local housing authority it would have been reasonably practicable for the responsible person to secure the removal of the hazard or the meeting of the requirement.
(2) When first taking that action, the local housing authority may also impose on the responsible person a financial penalty under this section in relation to the hazard or failure.
(3) In subsections (1) and (2), “the responsible person” is the person on whom an improvement notice may be served in accordance with paragraphs A1 to 4 of Schedule 1 in relation to the hazard or failure.
(4) For the purposes of subsection (3)—
(a) it is to be assumed that serving such a notice in relation to the hazard or failure is a course of action available to the authority, and
(b) any reference in paragraphs A1 to 4 of Schedule 1 to “the specified premises” is, in relation to the imposition of a financial penalty under this section, to be read as a reference to the premises specified in the final notice in accordance with paragraph 8(c) of Schedule A1.
(5) In subsection (4)(b), “final notice” has the meaning given by paragraph 6 of Schedule A1.
(6) The amount of the penalty is to be determined by the authority but must not be more than £5,000.
(7) A penalty under this section may relate to—
(a) more than one category 1 hazard on the same premises,
(b) more than one failure to meet type 1 requirements by the same premises, or
(c) any combination of such hazards or failures on or by the same premises.
(8) The Secretary of State may by regulations amend the amount specified in subsection (6) to reflect changes in the value of money.
(9) Schedule A1 makes provision about—
(a) the procedure for imposing a financial penalty under this section,
(b) appeals against financial penalties under this section,
(c) enforcement of financial penalties under this section, and
(d) how local housing authorities are to deal with the proceeds of financial penalties under this section.’
7 (1) Section 7 (powers to take enforcement action) is amended as follows.
(2) In subsection (1), for ‘that a category 2 hazard exists on residential premises’ substitute ‘that—
(a) a category 2 hazard exists on residential premises, or
(b) qualifying residential premises fail to meet a type 2 requirement.’.
(3) In subsection (2)(c), for ‘a hazard’ substitute ‘an’.
(4) In subsection (3)—
(a) after ‘hazard’ (in the first place) insert ‘or failure to meet a type 2 requirement’, and
(b) after ‘hazard’ (in the second place) insert ‘or failure’.
(5) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
8 In section 8 (reasons for decision to take enforcement action), in subsection (5)(a), omit ‘hazard’.
9 (1) Section 9 (guidance about inspections and enforcement action) is amended as follows.
(2) In subsection (1)(b), omit ‘hazard’.
(3) After that subsection insert—
‘(1A) The Secretary of State may give guidance to local housing authorities in England about exercising their functions under this Chapter in relation to—
(a) assessing whether qualifying residential premises meet the requirements specified by regulations under section 2A, or
(b) financial penalties.’.
10 In the heading of Chapter 2 of Part 1 (improvement notices, prohibition orders and hazard awareness notices), omit ‘hazard’.
11 (1) Section 11 (improvement notices relating to category 1 hazards: duty of authority to serve notice) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
serving an improvement notice under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (3)(a), after ‘exists’ insert ‘, or which fail to meet the requirement,’.
(5) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(6) In subsection (5)(a), for the words from ‘that’ to ‘but’ substitute ‘that—
(i) if the notice relates to a hazard, the hazard ceases to be a category 1 hazard;
(ii) if the notice relates to a failure by premises to meet a type 1 requirement, the premises meet the requirement; but’.
(7) In subsection (6), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(8) In subsection (8)—
(a) after ‘hazard’ (in the first place) insert ‘or failure’, and
(b) after ‘hazard’ (in the second place) insert ‘or secure that the premises meet the requirement’.
(9) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
12 (1) Section 12 (Improvement notices relating to category 2 hazards: power of authority to serve notice) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may serve an improvement notice under this section in respect of the hazard or failure.’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(5) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
13 (1) Section 13 (Contents of improvement notices) is amended as follows.
(2) In subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (b), after ‘exists’ insert ‘or to which it relates’.
(3) In subsection (5), after ‘hazard’ insert ‘or failure’.
14 In section 16(3) (revocation and variation of improvement notices)—
(a) after ‘hazards’ (in the first place) insert ‘or failures (or a combination of hazards and failures)’, and
(b) in paragraph (a), after ‘hazards’ insert ‘or failures’.
15 (1) Section 19 (change in person liable to comply with improvement notice) is amended as follows.
(2) For subsection (2) substitute—
‘(2) In subsection (1), the reference to a person ceasing to be a “person of the relevant category”—
(a) in the case of an improvement notice served on a landlord or superior landlord under paragraph A1(2) of Schedule 1, is a reference to the person ceasing to hold the estate in the premises by virtue of which the person was the landlord or superior landlord, and
(b) in any other case, is a reference to the person ceasing to fall within the description of person (such as, for example, the holder of a licence under Part 2 or 3 or the person managing a dwelling) by reference to which the notice was served on the person.’
(3) In subsection (7), for ‘or (9)’ substitute ‘, (9) or (10)’.
(4) After subsection (9) insert—
‘(10) If—
(a) the original recipient was served as a landlord or superior landlord under paragraph A1(2) of Schedule 1, and
(b) the original recipient ceases as from the changeover date to be a person of the relevant category as a result of ceasing to hold the estate in the premises by virtue of which the person was the landlord or superior landlord,
the new holder of the estate or, if the estate has ceased to exist, the reversioner, is the “liable person”.’
16 (1) In section 20 (prohibition orders relating to category 1 hazards: duty of authority to make order) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
making a prohibition order under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (3)—
(a) in paragraph (a), after ‘exists’ insert ‘, or which fail to meet the requirement,’, and
(b) for paragraph (b) substitute—
‘(b) if those premises are—
(i) one or more flats, or
(ii) accommodation falling within paragraph (e) of the definition of ‘residential premises’ in section 1(4) (homelessness) that is not a dwelling, HMO or flat,
it may prohibit the use of the building containing the flat or flats or accommodation (or any part of the building) or any external common parts;’.
(4) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(5) In subsection (5), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(6) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
17 (1) Section 21 (prohibition orders relating to category 2 hazards: power of authority to make order) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may make a prohibition order under this section in respect of the hazard or failure.’
(3) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(4) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
18 (1) Section 22 (contents of prohibition orders) is amended as follows.
(2) In subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (b), after ‘exists’ insert ‘or to which it relates’.
(3) In subsection (3)(b), after ‘hazards’ insert ‘, or failure or failures,’.
19 (1) Section 25 (revocation and variation of prohibition orders) is amended as follows.
(2) In subsection (1), for the words from ‘that’ to the end substitute ‘that—
(a) in the case of an order made in respect of a hazard, the hazard does not then exist on the residential premises specified in the order in accordance with section 22(2)(b), and
(b) in the case of an order made in respect of a failure by premises so specified to meet a requirement specified by regulations under section 2A, the premises then meet the requirement.’
(3) In subsection (3)—
(a) after ‘hazards’ (in the first place) insert ‘or failures (or a combination of hazards and failures)’, and
(b) in paragraph (a), after ‘hazards’ insert ‘or failures’.
20 In the italic heading before section 28, omit ‘Hazard’.
21 (1) Section 28 (hazard awareness notices relating to category 1 hazards: duty of authority to serve notice) is amended as follows.
(2) For subsections (1) and (2) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
serving an awareness notice under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).
(2) An awareness notice under this section is a notice advising the person on whom it is served of—
(a) the existence of a category 1 hazard on, or
(b) a failure to meet a type 1 requirement by,
the residential premises concerned which arises as a result of a deficiency on the premises in respect of which the notice is served.’
(3) In subsection (3)(a), after ‘exists’ insert ‘, or which fail to meet the requirement,’.
(4) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(5) In subsection (5), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(6) In subsection (6)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
(7) In subsection (8), for ‘a hazard’ substitute ‘an’.
(8) At the end insert—
‘(9) A notice under this section in respect of residential premises in Wales is to be known as a “hazard awareness notice”.’
(9) In the heading—
(a) omit ‘Hazard’, and
(b) after ‘category 1 hazards’ insert ‘and type 1 requirements’.
22 (1) Section 29 (hazard awareness notices relating to category 2 hazards: power of authority to serve notice) is amended as follows.
(2) For subsections (1) and (2) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may serve an awareness notice under this section in respect of the hazard or failure.
(2) An awareness notice under this section is a notice advising the person on whom it is served of—
(a) the existence of a category 2 hazard on, or
(b) a failure to meet a type 2 requirement by,
the residential premises concerned which arises as a result of a deficiency on the premises in respect of which the notice is served.’
(3) In subsection (3), for ‘a hazard’ substitute ‘an’.
(4) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(5) In subsection (5)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
(6) In subsection (8), for ‘a hazard’ substitute ‘an’.
(7) At the end insert—
‘(9) A notice under this section in respect of residential premises in Wales is to be known as a “hazard awareness notice”.’
(8) In the heading—
(a) omit ‘Hazard’, and
(b) after ‘category 2 hazards’ insert ‘and type 2 requirements’.
23 (1) Section 30 (offence of failing to comply with improvement notice) is amended as follows.
(2) In subsection (2), after ‘hazard’ insert ‘or failure’.
(3) In subsection (3), omit ‘not exceeding level 5 on the standard scale’.
(4) in subsection (5), after ‘hazard’ insert ‘or failure’.
24 In section 32 (offence of failing to comply with prohibition order etc), in subsection (2)(a), omit ‘not exceeding level 5 on the standard scale’.
25 In section 35 (power of court to order occupier or owner to allow action to be taken on premises), for the definition of ‘relevant person’ in subsection (8) substitute—
‘“relevant person” , in relation to any premises, means—
(a) a person who is an owner of the premises;
(b) a person having control of or managing the premises;
(c) the holder of any licence under Part 2 or 3 in respect of the premises;
(d) in the case of qualifying residential premises which are let under a relevant tenancy, the landlord under the tenancy and any person who is a superior landlord in relation to the tenancy.’.
26 (1) Section 40 (emergency remedial action) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) they are further satisfied that the hazard or failure involves an imminent risk of serious harm to the health or safety of any of the occupiers of those or any other residential premises, and
(c) no management order is in force under Chapter 1 or 2 of Part 4 in relation to the premises mentioned in paragraph (a)(i) or (ii),
the taking by the authority of emergency remedial action under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (4), for the words from ‘of’ to the end substitute ‘of—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
27 In section 41 (notice of emergency remedial action), in subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
28 In section 43 (emergency prohibition notices), for subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) they are further satisfied that the hazard or failure involves an imminent risk of serious harm to the health or safety of any of the occupiers of those or any other residential premises, and
(c) no management order is in force under Chapter 1 or 2 of Part 4 in relation to the premises mentioned in paragraph (a)(i) or (ii),
making an emergency prohibition order under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
29 In section 44 (contents of emergency prohibition orders), in subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
30 In section 49 (power to charge for certain enforcement action)—
(a) in subsection (1)(c), for ‘a hazard’ substitute ‘an’, and
(b) in subsection (2), for ‘a hazard’ substitute ‘an’.
31 In section 50 (recovery of charge under section 49), in subsection (2)(b), for ‘a hazard’ substitute ‘an’.
32 In section 54 (index of defined expressions: Part 1)—
(a) at the appropriate places insert—
Section 2B(1)’;
Section 2B(2)’;
Section 2B(2)’;
Section 2B(2)’;
Section 2A(3)(a)’;
Section 2A(3)(b)’
(b) in the entry for ‘Hazard awareness notice’, in the first column, omit ‘Hazard’ (and, accordingly, move the entry to the appropriate place).
33 (1) Section 250 (orders and regulations) is amended as follows.
(2) After subsection (2) insert—
‘(2A) The power under subsection (2)(b) includes power—
(a) to provide for regulations under sections 2A and 2B(3) to apply (with or without modifications) in relation to tenancies or licences entered into before the date on which the regulations come into force;
(b) for regulations under section 2B(3)(b) to provide for Part 1 to apply in relation to licences with such modifications as may be specified in the regulations.’
(3) In subsection (6), before paragraph (a) insert—
‘(za) regulations under sections 2A and 2B(3),’
34 Before Schedule 1 insert—
‘Schedule A1
Procedure and appeals relating to financial penalties under section 6A
Notice of intent
1 Before imposing a financial penalty on a person under section 6A a local housing authority must give the person notice of the authority’s proposal to do so (a “notice of intent”).
2 The notice of intent must be given before the end of the period of 6 months beginning with the first day on which the authority has evidence sufficient to require it to take the appropriate enforcement action under section 5(1) in relation to—
(a) the existence of the category 1 hazard, or
(b) the failure to meet the type 1 requirement.
3 The notice of intent must set out—
(a) the date on which the notice of intent is given,
(b) the amount of the proposed financial penalty,
(c) the reasons for proposing to impose the penalty,
(d) information about the right to make representations under paragraph 4.
Right to make representations
4 (1) A person who is given a notice of intent may make written representations to the authority about the proposal to impose a financial penalty.
(2) Any representations must be made within the period of 28 days beginning with the day after the day on which the notice of intent was given (“the period for representations”).
Final notice
5 After the end of the period for representations the local housing authority must—
(a) decide whether to impose a financial penalty on the person, and
(b) if it decides to do so, decide the amount of the penalty.
6 If the local housing authority decides to impose a financial penalty on the person, it must give a notice to the person (a “final notice”) imposing that penalty.
7 The final notice must require the penalty to be paid within the period of 28 days beginning with the day after that on which the notice was given.
8 The final notice must set out—
(a) the date on which the final notice is given,
(b) the amount of the financial penalty,
(c) the premises—
(i) on which the authority considers a category 1 hazard exists;
(ii) which the authority considers fail to meet a type 1 requirement,
(d) the reasons for imposing the penalty,
(e) information about how to the pay the penalty,
(f) the period for payment of the penalty,
(g) information about rights of appeal, and
(h) the consequences of failure to comply with the notice.
Withdrawal or amendment of notice
9 (1) A local housing authority may at any time—
(a) withdraw a notice of intent or final notice, or
(b) reduce an amount specified in a notice of intent or final notice.
(2) The power in sub-paragraph (1) is to be exercised by giving notice in writing to the person to whom the notice was given.
Appeals
10 (1) A person to whom a final notice is given may appeal to the First-tier Tribunal against—
(a) the decision to impose the penalty, or
(b) the amount of the penalty.
(2) An appeal under this paragraph must be brought within the period of 28 days beginning with the day after that on which the final notice is given to the person.
(3) If a person appeals under this paragraph, the final notice is suspended until the appeal is finally determined, withdrawn or abandoned.
(4) An appeal under this paragraph—
(a) is to be a re-hearing of the authority’s decision, but
(b) may be determined having regard to matters of which the authority was unaware.
(5) On an appeal under this paragraph the First-tier Tribunal may quash, confirm or vary the final notice.
(6) The final notice may not be varied under sub-paragraph (5) so as to impose a financial penalty of more than the local housing authority could have imposed.
Recovery of financial penalty
11 (1) This paragraph applies if a person fails to pay the whole or any part of a financial penalty which, in accordance with this Schedule, the person is liable to pay.
(2) The local housing authority which imposed the financial penalty may recover the penalty, or part of it, on the order of the county court as if it were payable under an order of that court.
(3) In proceedings before the county court for the recovery of a financial penalty or part of a financial penalty, a certificate which is—
(a) signed by the chief finance officer of the authority which imposed the financial penalty, and
(b) states that the amount due has not been received by a date specified in the certificate,
is conclusive evidence of that fact.
(4) A certificate to that effect and purporting to be so signed is to be treated as being so signed unless the contrary is proved.
(5) In this paragraph “chief finance officer” has the same meaning as in section 5 of the Local Government and Housing Act 1989.
Proceeds of financial penalties
12 Where a local housing authority imposes a financial penalty under section 6A, it may apply the proceeds towards meeting the costs and expenses (whether administrative or legal) incurred in, or associated with, carrying out any of its enforcement functions under Part 1 of this Act, the Renters (Reform) Act 2024 or otherwise in relation to the private rented sector.
13 Any proceeds of a financial penalty imposed under section 6A which are not applied in accordance with paragraph 12 must be paid to the Secretary of State.
(1) In paragraph 12, the reference to enforcement functions “in relation to the private rented sector” means enforcement functions relating to—
(a) residential premises in England that are let, or intended to be let, under a tenancy,
(b) the common parts of such premises,
(c) the activities of a landlord under a tenancy of residential premises in England,
(d) the activities of a superior landlord in relation to such a tenancy,
(e) the activities of a person carrying on English letting agency work within the meaning of section 54 of the Housing and Planning Act 2016 in relation to such premises, or
(f) the activities of a person carrying on English property management work within the meaning of section 55 of the Housing and Planning Act 2016 in relation to such premises.
(2) For the purposes of this paragraph ‘residential premises’ does not include social housing.
(3) For the purposes of this paragraph “tenancy” includes a licence to occupy.’
35 (1) Schedule 1 (procedure and appeals relating to improvement notices) is amended as follows.
(2) Before paragraph 1 insert—
‘Service of improvement notices: qualifying residential premises which fail to meet type 1 and 2 requirements
A1 (1) This paragraph applies instead of paragraphs 1 to 3 where—
(a) the specified premises are qualifying residential premises by virtue of section 2B(1)(a), (b) or (c), and
(b) an improvement notice relates to a failure by the premises to meet a requirement specified by regulations under section 2A (whether or not the notice also relates to a category 1 or 2 hazard).
(2) Where the premises are let under a relevant tenancy, or are an HMO where at least one unit of accommodation which forms part of the HMO is let under a relevant tenancy, the notice must be served on the landlord under the tenancy unless—
(a) the tenancy is a sub-tenancy, in which case the notice may instead be served on a superior landlord in relation to the tenancy if, in the opinion of the local housing authority, the superior landlord ought to take the action specified in the notice;
(b) the premises are a dwelling which is licensed under Part 3 of this Act, or an HMO which is licensed under Part 2 or 3 of this Act, in which case the notice may instead be served on the holder of the licence if, in the opinion of the local housing authority, the holder ought to take the action specified in the notice.
(3) Where sub-paragraph (2) does not apply in relation to the premises and—
(a) the premises are supported exempt accommodation, the notice must be served on the authority or body which provides the accommodation;
(b) the premises are accommodation falling within paragraph (e) of the definition of “residential premises” in section 1(4) (homelessness), the notice must be served on any person who has an estate or interest in the premises and who, in the opinion the local housing authority, ought to take the action specified in the notice.’
(3) In paragraph 5(1), for ‘1 to’ substitute ‘A1 to’.
(4) In paragraph 12—
(a) in sub-paragraph (1), after ‘hazard’ insert ‘or failure’, and
(b) in sub-paragraph (2)(b), for ‘a hazard’ substitute ‘an’.
(5) In paragraph 17, after ‘hazard’ (in each place) insert ‘or failure’.
36 (1) Schedule 2 (procedure and appeals relating to prohibition orders) is amended as follows.
(2) In paragraph 1—
(a) after sub-paragraph (2) insert—
‘(2A) Where the specified premises are qualifying residential premises which—
(a) are let under a relevant tenancy, or
(b) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
the authority must also serve copies of the order on any other person who, to their knowledge, is the landlord under the tenancy or a superior landlord in relation to the tenancy.’, and
(b) in sub-paragraph (3), after ‘(2)’ insert ‘or (2A)’.
(3) In paragraph 2—
(a) for sub-paragraph (1) substitute—
‘(1) This paragraph applies to a prohibition order where the specified premises consist of or include—
(a) the whole or any part of a building containing—
(i) one or more flats, or
(ii) accommodation falling within paragraph (e) of the definition of “residential premises” in section 1(4) (homelessness) that is not a dwelling, HMO or flat, or
(b) any common parts of such a building.’
(b) after sub-paragraph (2) insert—
‘(2A) Where the specified premises consist of or include qualifying residential premises which—
(a) are let under a relevant tenancy, or
(b) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
the authority must also serve copies of the order on any other person who, to their knowledge, is the landlord under the tenancy or a superior landlord in relation to the tenancy.’,
(c) in sub-paragraph (3), after ‘(2)’ insert ‘or (2A)’, and
(d) in sub-paragraph (4), after ‘(2)’ insert ‘, (2A)’.
(4) In paragraph 8—
(a) in sub-paragraph (1), after ‘hazard’ insert ‘or failure’, and
(b) in sub-paragraph (2)(b), for ‘a hazard’ substitute ‘an’.
(5) In paragraph 12, after ‘hazard’ (in each place) insert ‘or failure’.
(6) In paragraph 16(1)—
(a) omit the ‘or’ at the end of paragraph (b), and
(b) at the end of paragraph (c) insert ‘, or
(d) in the case of qualifying residential premises which—
(i) are let under a relevant tenancy, or
(ii) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
any person on whom copies of the improvement notice are required to be served by paragraph 1(2A) or 2(2A).’
37 (1) Schedule 3 (improvement notices: enforcement action by local housing authorities) is amended as follows.
(2) In paragraph 3, after ‘hazard’ (in each place) insert ‘or failure’.
(3) In paragraph 4, after ‘hazard’ (in both places) insert ‘or failure’.
Part 2
Amendments of other Acts
Land Compensation Act 1973
38 (1) Section 33D of the Land Compensation Act 1973 (loss payments: exclusions) is amended as follows.
(2) In subsection (4)—
(a) in paragraph (b), after ‘hazard’ insert ‘or type 1 requirement’, and
(b) in paragraph (c), after ‘hazard’ insert ‘or type 2 requirement’.
(3) In subsection (5)—
(a) in paragraph (a), after ‘hazard’ insert ‘or type 1 requirement’, and
(b) in paragraph (b), after ‘hazard’ insert ‘or type 2 requirement’.
Housing Act 1985
39 In section 269A of the Housing Act 1985 (appeals suggesting certain other courses of action), in subsection (2)(c), for ‘a hazard’ substitute ‘an’.
Housing and Regeneration Act 2008
40 In section 126B of the Housing and Regeneration Act 2008 (functions of health and safety lead), in subsection (3)(b)(ii), after ‘hazards’ insert ‘and type 1 and 2 requirements’.
Deregulation Act 2015
41 In section 33(13) of the Deregulation Act 2015 (preventing retaliatory eviction: definitions), in the definition of ‘relevant notice’—
(a) in paragraph (a), after ‘hazards’ insert ‘and type 1 requirements’, and
(b) in paragraph (b), after ‘hazards’ insert ‘and type 2 requirements’.
Housing and Planning Act 2016
42 In section 40(4) of the Housing and Planning Act 2016 (offences under sections 30(1) and 32(1) of the Housing Act 2004), after ‘on’ insert ‘, or a failure to meet a requirement by,’.
Tenant Fees Act 2019
43 In Schedule 3 to the Tenant Fees Act 2019 (financial penalties), in paragraph 12(1), after paragraph (c) insert—
‘(ca) the activities of a superior landlord in relation to such a tenancy,’.”—(Jacob Young.)
This new Schedule contains amendments of Part 1 of the Housing Act 2004 that provide for the enforcement of requirements imposed by regulations under new section 2A of that Act, inserted by NC20. The Schedule also allows financial penalties to be imposed for certain breaches of Part 1 of that Act, and makes consequential amendments of other Acts.
Brought up, read the First and Second time, and added to the Bill.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Jacob Young
Ms Fovargue, I would like to put on record my thanks to you and the other Chairs of this Bill Committee; to all the Clerks and parliamentary staff; and to the many other people who have worked hard on this Bill, including all my officials and my private office, who have had to get up to date with this Bill in a matter of weeks.
I thank all members of the Committee, including Opposition Members, for their constructive dialogue. We have had some robust debate on several measures, but I hope we can all agree that these are important reforms—the first in a generation—for landlords and tenants. I look forward to further engagement with all hon. Members as the Bill progresses through its remaining stages.
Matthew Pennycook
Ms Fovargue, may I take the opportunity to put on record our thanks to you and your colleagues in the Chair for overseeing our proceedings? I also thank our exemplary Clerks for all their assistance; the Doorkeepers and Hansard reporters for facilitating the Committee’s work; and officials in the Department and our own staff for the support that they have provided. Finally, I thank the Minister—as well as the occasional Government Back Bencher who has defied the orders of the hon. Member for South West Hertfordshire and contributed to our debate. [Laughter.] There has been the odd robust exchange, but none has been uncivil, and we appreciate the spirit in which consideration of the Bill has taken place.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Renters (Reform) Bill
Wednesday 24th April 2024
(6 months, 3 weeks ago)
Commons ChamberRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
17:26 - The House divided: - Ayes: 283 / Noes: 143 - Question accordingly agreed to.
17:41 - The House divided: - Ayes: 287 / Noes: 144 - Question accordingly agreed to.
18:03 - The House divided: - Ayes: 158 / Noes: 282 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following: 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 48 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 69 Active landlord database entry”. “1, 1A, 1B, 2, 2ZA, 2ZB, 4A, 6, 6A four months beginning with the date of service of the notice 5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”.
Government new clause 30—Assessment of operation of possession process.
Government new clause 13— Sections 1 and 2: effect of superior leases.
Government new clause 14—Powers of Secretary of State in connection with Chapter 1.
Government new clause 16—Power of Welsh Ministers to extend protection to persons of other descriptions.
Government new clause 17—Power of Secretary of State to extend protection to persons of other descriptions: Wales.
Government new clause 18—Prohibition of discrimination relating to children or benefits status: Scotland.
Government new clause 19—Terms in standard securities relating to children or benefits status: Scotland.
Government new clause 20—Terms in insurance contracts relating to children or benefits status: Scotland.
Government new clause 21—Power of the Scottish Ministers to extend protection to persons of other descriptions.
Government new clause 22—Interpretation of Chapter 4A.
Government new clause 23—Power of Scottish Ministers to make consequential provision.
Government new clause 24—Power of Secretary of State to extend protection to persons of other descriptions: Scotland.
Government new clause 25—Landlord redress schemes: no Crown status.
Government new clause 26—Other amendments in connection with landlord redress schemes.
Government new clause 27—Commencement.
Government new clause 28—Application of Chapter 1 of Part 1.
Government new clause 29—Assured agricultural occupancies: opting out etc.
Government new clause 31—Local Commissioners’ investigation of complaints by persons who are not tenants.
Government new clause 32—Unlicensed HMOs and houses: offences.
Government new clause 33—Service of improvement notices on landlords and licensors.
Government new clause 34—Rent repayment orders: liability of directors etc.
Government new clause 35—Report on certain matters relating to tenancy reform.
Government new clause 36—Report on provision of residential tenancies.
New clause 1—Repeal of requirement for selective licensing—
“Part 3 of the Housing Act 2004 (Selective licensing of other residential accommodation) is repealed.”
This new clause would remove the ability of local housing authorities to designate areas as subject to selective licensing.
New clause 2—Expanding the remit of rent repayment orders to company directors—
“In section 249A of the Housing Act 2004, after subsection (1) insert—
‘(1A) If a local housing authority believes that a relevant housing offence has been committed by a body corporate, it may impose a financial penalty on—
(a) a director, manager, secretary or other similar officer of the body corporate, or
(b) a person purporting to act in such a capacity,
if it is satisfied, beyond reasonable doubt, that the offence was committed with the consent or connivance of that person, or that the offence was attributable to any neglect on the part of that person.’”
This new clause would enable local housing authorities to impose financial penalties on certain individuals when it believes a housing offence has been committed by a body corporate.
New clause 3—Evidence to consider when granting possession order for anti-social behaviour—
“In section 9A of the 1988 Act, after subsection (2) insert—
‘(3) In considering evidence of conduct the court may consider evidence provided by way of hearsay and that evidence will be admissible without notice or permission of the court notwithstanding any rule of the court or the common law.’”
This new clause would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of anti-social behaviour.
New clause 5—Review of changes to grounds for possession—
“(1) The Secretary of State must, within two years of the date of Royal Assent to this Act, conduct and lay before Parliament a review of the grounds for possession in Schedule 2 of the Housing Act 1988, as amended by this Act.
(2) The review must include—
(a) an assessment of the effectiveness of the new or amended grounds for possession set out in Schedule 1 of this Act in securing evictions from properties;
(b) an assessment of the impact on the security of tenure of tenants as a result of the use of the new or amended grounds for possession set out in Schedule 1 of this Act;
(c) a report on the use of enforcement action in relation to the new or amended grounds for possession set out in Schedule 1 of this Act;
(d) an assessment of the effectiveness of the grounds for possession listed in Schedule 2 of the Housing Act 1988 in securing evictions from properties that remain unamended by Schedule 1 of this Act.
(3) The review under subsection (1) must make such recommendations as, in the opinion of the Secretary of State, are necessary in the light of the findings of the review.”
This new clause would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.
New clause 6—Requirement to state the amount of rent when advertising residential premises—
“(1) A landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.
(2) A letting agent acting on behalf of a landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.”
This new clause would require landlords or persons acting on their behalf to state the proposed rent payable in the advertisement for the premises.
New clause 7—Not inviting or encouraging bids for rent—
“(1) A landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(2) A letting agent acting on behalf of a landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(3) Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent.”
This new clause would prevent landlords or persons acting on their behalf from inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises.
New clause 8—Limit on amount of rent that a residential landlord can request in advance—
“In Schedule 1 to the Tenant Fees Act 2019, after paragraph 1(8) insert—
‘(9) Where rent is payable in advance, the maximum that may be charged is equivalent to the amount specified in paragraph 2(3).’”
This new clause would ensure that the maximum amount of rent that could be lawfully requested by a residential landlord in advance of a tenancy commencing would be 5 weeks’ rent for tenancies of less than £50,000 per annum and to 6 weeks’ rent for tenancies over £50,000 per annum.
New clause 10—Extension of Awaab’s law to the private rented sector—
“(1) Section 10A of the Landlord and Tenant Act 1985 is amended as follows.
(2) Omit subsections (1)(b) and (6).
(3) In subsection (7), omit the definitions of ‘low-cost home ownership accommodation’ and ‘social housing.’”
This new clause would require private landlords to deal with hazards affecting their properties.
New clause 11—Ending blanket bans on renting to families with children or those in receipt of benefits—
“The Secretary of State may, by regulation, specify behaviour which, for the purposes of Part 4, Equality Act 2010, shall be considered unlawful discrimination unless the contrary is shown.”
This new clause would ensure that blanket bans on renting to families with children or those in receipt of benefits are presumed to be unlawful discrimination unless proved otherwise.
New clause 12—Discrimination relating to care-leaver status—
“(1) The provisions of this section apply to individuals who are—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(2) A relevant person must not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) on the basis that the individual meets either of the criteria set out in subsection (1), prevent the person from—
(i) enquiring whether the dwelling is available for let,
(ii) accessing information about the dwelling,
(iii) viewing the dwelling in order to consider whether to seek to rent it,
(iv) entering into a tenancy of the dwelling, or
(b) apply a provision, criterion or practice in order to make care leavers less likely to enter into a tenancy of the dwelling than people who are not care leavers.
(3) Subsection (2) does not apply if the relevant person can show that the prospective landlord of the dwelling, or a person who would be a superior landlord in relation to the dwelling, is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy from being a care-leaver,
and the conduct is a means of preventing the prospective landlord from breaching that term.
(4) Conduct does not breach the prohibition in subsection (2) if it consists only of—
(a) one or more of the following things done by a person who does nothing in relation to the dwelling that is not mentioned in this paragraph—
(i) publishing advertisements or disseminating information;
(ii) providing a means by which a prospective landlord can communicate directly with a prospective tenant;
(iii) providing a means by which a prospective tenant can communicate directly with a prospective landlord, or
(b) things of a description, or things done by a person of a description, specified for the purposes of this section in regulations made by the Secretary of State.”
New clause 37—Extension of rent repayment orders—
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 11, 12, 48 or 69 of the Bill.
New clause 38—Continuing ability of tenants to sublet—
“(1) In any lease of residential property which is not by virtue of this Act an assured tenancy—
(a) any provision which restricts subletting to assured shorthold tenancies shall be interpreted to refer to assured tenancies; and
(b) any provision which would make the grant of an assured tenancy a breach of that provision shall be void unless—
(i) that provision is an absolute prohibition against subletting; or
(ii) the lease has less than seven years unexpired.
(2) Any provision which requires the consent of a landlord or other person to the grant of a subtenancy shall be interpreted so that consent may not be refused on the grounds that the subtenancy is an assured tenancy or on the grounds of any statutory provision of that tenancy.”
This new clause seeks to ensure that persons who are tenants under a long lease can continue to sublet residential premises in circumstances where they were previously permitted to do so under the long lease on the basis that the sublease was an assured shorthold tenancy.
New clause 39—Payment of relocation payment to tenant—
“In the Housing Act 1988, after section 11 insert—
‘11A Payment of relocation payment in certain cases
(1) Where a landlord issues a notice of proceedings for possession of a dwelling-house on any of the grounds in Schedule 2 to this Act (except Ground 7A or Ground 14) within two years of the start of the tenancy, the landlord shall pay a relocation payment to the tenant.
(2) A relocation payment shall be an amount equivalent to—
(a) one month’s rent in the case of an order for possession on Ground 1 or Ground 1A;
(b) two months’ rent in the case of an order for possession on any other ground.
(3) The relocation payment shall be made no less than two weeks before the date specified in the notice of proceedings for possession.’”
This new clause would require landlords to pay a “relocation payment” to tenants when evicting them from their property within two years of the start of the tenancy, except on the grounds of crime and antisocial behaviour.
New clause 40—Guarantor to have no further liability following death of tenant—
“(1) Subject to subsection (3), a guarantee agreement relating to a relevant tenancy ceases to have effect upon the death of a relevant tenant.
(2) Upon the death of a relevant tenant the guarantor in respect of a relevant tenancy shall incur no further liability in relation to matters arising under the tenancy.
(3) Nothing in this section shall affect the liability of a guarantor in relation to matters which arose before the date of the death of the relevant tenant.
(4) In assessing any liability under subsection (3), account shall be taken of any tenancy deposit paid in respect of the tenancy.
(5) Where there is more than one relevant tenant, this section shall apply only upon the death of both or all of the tenants.
(6) In this section—
‘guarantor’ means a person who enters into a guarantee agreement in relation to a relevant tenancy;
‘guarantee agreement’ means a contractual promise (whether incorporated in or separate from the tenancy agreement) to indemnify or compensate a relevant person in respect of an obligation under the tenancy if the tenant fails to perform or comply with the obligation;
‘relevant tenancy’ has the same meaning as in section 36, and ‘relevant tenant’ is to be interpreted accordingly;
‘tenancy deposit’ has the same meaning as in section 212(8) of the Housing Act 2004.”
This new clause would mean that guarantors in relation to a tenancy have no liability for future matters arising from the tenancy after the tenant has died.
New clause 41—Prohibition of requirement for rent guarantors—
“(1) A relevant person may not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) require the provision of a rental guarantor or an equivalent upfront payment;
(b) let the relevant tenancy on the basis of being offered a rental guarantor or an equivalent payment by a prospective tenant.
(2) For the purposes of this section, ‘relevant person’ and ‘relevant tenancy’ have the meanings given in section 36 of this Act.”
This new clause would prohibit landlords from requiring prospective tenants to provide rent guarantors or equivalent upfront payments, and prohibit them from prioritising prospective tenants who offer them over those who do not.
Government amendments 200 to 205 and 57.
Amendment 14, in clause 3, page 3, leave out lines 21 to 23 and insert—
Government amendments 56, 58 and 59.
Amendment 15, page 3, line 33, at end insert—
“(4) The Secretary of State must lay before Parliament a review of the changes to grounds for possession made under this Act within two years of the date of Royal Assent.”
Government amendment 206.
Amendment 21, in clause 6, page 7, line 4, at end insert—
“13B Recovery of rent
(1) Any increased rent which is paid otherwise than in accordance with section 13 or section 13A is recoverable from the landlord by the tenant as a debt claim in the courts.
(2) The Secretary of State may, by regulations, provide for such claims to be recoverable by proceedings in the First-Tier Tribunal, rather than the courts.”
This amendment would ensure that in instances where a private landlord increases the rent without issuing a section 13 or section 13A notice the tenant can seek to recover costs through a debt claim in the court. It also provides the government with the power by regulation for such claims to be recoverable by tribunal.
Government amendment 207.
Amendment 261, in clause 7, page 8, line 2, at end insert—
“(c) in paragraph (c), at end insert—
‘and,
(d) that it was financed or part-financed by a means-tested grant’.”
This amendment will prevent rents from being increased by a tribunal as a consequence of improvements to properties that have been financed or part-financed by a means-tested grant.
Amendment 22, page 8, line 9, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Amendment 13, page 8, line 20, at end insert—
“(c) no more than the rent proposed by the landlord in the notice served on the tenant under section 13 of the 1988 Act.”
This amendment would mean that the rent payable after a tribunal determination can be no higher than the rent initially proposed by the landlord in the notice served on the tenant.
Amendment 23, page 9, line 5, at end insert
“which must be no earlier than two months following the date of determination”.
This amendment would ensure that in cases of undue hardship tenants would have a minimum of two months from the date of determination before a new rent became payable.
Amendment 24, page 9, line 6, leave out subsection (4) and insert—
“(4A) A date specified under subsection (3)(b) must be no earlier than the date on which the determination becomes final, with a decision only becoming final on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.”
This amendment would remove the requirement for a date determined by a court for rent to become payable in cases of undue hardship to not be later than the date of the determination.
Amendment 31, in clause 9, page 9, line 29, leave out “42nd” and insert “28th”.
This amendment would ensure a landlord gives or refuses consent in writing within 28 days of the request being made.
Amendment 32, page 9, line 30, at and insert—
“(d) the landlord may not review or withdraw consent once given.”
This amendment ensures that a tenant may keep a pet for the duration of their tenancy once consent has been given.
Government amendments 60, 208, 61, 209, 63, 210, 62 and 211.
Amendment 38, in clause 12, page 14, line 18, at end insert—
“(g) unreasonably refuse home adaptations for the purposes of a disabled person's access to or usage of the home.”
Amendment 11, page 14, line 21, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 64.
Amendment 1, page 14, line 26, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 65.
Amendment 2, page 14, line 28, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendments 66, 67 and 212.
Amendment 3, page 15, line 15, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.
Amendment 35, page 15, line 15, leave out “three” and insert “twelve”.
This amendment would extend the restricted period in relation to a tenancy in relation to which Ground 1 or 1A in Schedule 2 is relied on from three to twelve months.
Amendment 36, page 15, line 17, leave out subsection (b).
This amendment would ensure that the restricted period is as specified in (8)(a) in all circumstances.
Government amendments 68 to 75, 213, 214, 195, 215 to 217 and 76.
Amendment 6, in clause 17, page 25, line 18, after “given” insert
“not earlier than four months after a tenant first occupies the premises and”.
This amendment would mean that tenants cannot give notice to quit until they have resided in the property for at least four months.
Government amendments 77 to 80, 218 to 220 and 81 to 85.
Amendment 43, in clause 29, page 32, line 23, leave out “section 27 or 28” and insert
“sections 27, 28 or [Discrimination relating to care-leaver status]”.
Amendment 44, in clause 30, page 34, line 21, at end insert—
“(5) A term of a relevant tenancy or regulated tenancy is of no effect so far as the term makes provision (however expressed) prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(6) Subsection (5) does not apply if the landlord or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit the tenant from being a relevant or former relevant child.
and the provision in the tenancy is a means of preventing the insured from breaching that term.”
Amendment 45, in clause 31, page 35, line 12, at end insert—
“(4A) A term of a lease of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a tenant under that or any inferior lease to prohibit a sub-tenant under a relevant tenancy or regulated tenancy from prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(4B) Subsection (4A) does not apply if the landlord under the lease or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a sub-tenant from being a relevant or former relevant child.
and the provision in the lease is a means of preventing the insured from breaching that term.”
Amendment 46, in clause 32, page 35, line 30, at end insert—
“(3) A term of a mortgage of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a mortgagor to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Amendment 47, in clause 33, page 36, line 2, at end insert—
“(2A) A term of a contract of insurance to which this section applies is of no effect so far as the term makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Government amendments 86 to 113, 115 and 116.
Government motion to transfer clause 40.
Government amendment 117 and 118.
Amendment 39, in clause 42, page 54, line 1, after “section 1” insert—
“(a) omit subsection (3);
(b) in subsection (3A) omit ‘the landlord of a residential occupier or an agent of the landlord’ and insert ‘a person’;
(c) after subsection (3B) insert—
‘(3BA) For the purposes of this subsection, services which are reasonably required for the occupation of the premises as a household include, but are not limited to—
(a) water,
(b) gas,
(c) electricity, and
(d) electronic communications networks and services’;
(d) omit subsection (3C);
(e)”.
This amendment would amend the offence of unlawful eviction and harassment of the occupier of a property under the Protection from Eviction Act 1977 so that the offence can be committed by any person (not just the landlord of their agent), and define the services with which interference can constitute an offence.
Amendment 40, page 55, line 2, at end insert—
“(3A) In section 3A, after subsection (9) insert—
‘(10) In any proceedings under any of the relevant statutory provisions in this Act, it shall be for the accused to prove that the tenancy or licence is excluded by virtue of subsections (2) or (3) above.’
(3B) After section 4 insert—
‘4A Rebuttable presumption of landlord
(1) In any action under Part 1 of this Act (including where a Financial Penalty Notice (FPN) is issued) there is a rebuttable presumption that the person to whom the residential occupier pays rent or other payments in respect of occupation of a dwelling is the landlord of the property.’
(3C) After section 7 insert—
‘7A Notification by the police
(1) Where a constable has reasonable cause to believe that an offence under the Protection from Eviction Act 1977 has occurred the constable must within 24 hours notify the authority named in section 6 as responsible for prosecution of offences in the area with the following information—
(a) the address where the alleged offence has happened;
(b) if known, the name of the landlord;
(c) if known, the name of the residential occupier;
(d) any facts known to the constable about the alleged offence.
(2) A police force has the power to assist an authority included in section 6 in the exercise of their functions under this Act.’”
This amendment would amend proceedings for offences under the Protection from Eviction Act 1977, so that it must be proved that a tenancy is an excluded tenancy, that there is a rebuttable presumption that the person to whom a tenant paid their rent is the landlord, and that the police must inform the relevant local authority when they suspect offences under the 1977 Act to have been committed.
Government amendments 119 to 121.
Amendment 4, in clause 45, page 59, line 36, after “landlord” insert
“who is not otherwise a member of an independent redress scheme approved by the Secretary of State.”
This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 45 if they are not already a member of another independent redress scheme which has been approved by the Secretary of State.
Government amendments 122 to 134.
Amendment 27, in clause 53, page 67, line 18, at end insert—
“(ba) details, which may include copies, of all notices seeking possession served by the residential landlord in respect of each dwelling of which he is the landlord, and”.
This amendment would require the database to record details of notices of possession served by a landlord in respect of each dwelling of which they are the landlord.
Amendment 42, in clause 55, page 68, line 27, at end insert—
“(ba) require the provision of information about the accessibility of the dwelling,”.
Amendment 12, page 68, line 33, at end insert—
“(2A) Regulations under subsection (1) must require—
(a) the energy performance certificate relating to a registrable dwelling to be provided to the database operator; and
(b) details of the energy performance certificate to be recorded in a dwelling entry in the database.”
This amendment would require Energy Performance Certificates in relation to relevant dwellings to be provided to the database operator and details to be recorded in the database.
Government amendments 135 to 137.
Amendment 37, in clause 76, page 84, line 34, at end insert—
“(e) any accommodation which is provided by the Defence Infrastructure Organisation to service individuals and families.”
This amendment would ensure that accommodation rented from the Defence Infrastructure Organisation by service individuals and families is subject to the Decent Homes Standard.
Amendment 7, page 85, line 26, leave out clause 78.
Amendment 41, in clause 78, page 86, line 4, after “(order),” insert—
“(a) in subsection (1), before ‘The First-tier Tribunal’ insert ‘Apart from offences for which subsection (1A) applies,’;
(b) after subsection (1) insert—
‘(1A) The First-tier Tribunal may make a rent repayment order if satisfied on the balance of probabilities that the landlord has committed an offence under section 1(2), (3) or (3A) of the Protection from Eviction Act 1977 (whether or not the landlord has been convicted).’;
(c) at the end of subsection (3) insert—
‘(d) section 46A (where an order is made against more than one landlord or there has been a previous order)’;
(d)”.
This amendment would lower the level of proof required in proceedings for a Rent Repayment Order in the First-tier Tribunal to the balance of probabilities for offences under the 1977 Act.
Government amendments 196, 138 and 139, 197, 140 to 144, 221, 145 and 146, 222 and 147 to 151.
Amendment 8, in clause 116, page 111, line 19, leave out “subsection (2)” and insert “subsections (1A) and (2)”.
This amendment is consequential on Amendment 9.
Amendment 28, page 111, line 19, at end insert
“, save that section 2(b) comes into force on the day on which this Act is passed only to the extent that it repeals section 21 of the Housing Act 1988; such repeal will not affect the validity of any notices served under that provision on or before the day on which this Act is passed and the provisions of that section will continue to apply to any claims issued in respect of such a notice”.
This amendment would ensure that the abolition of section 21 evictions would come into force on Royal Assent, with saving provisions for any notices served before that date.
Amendment 9, page 111, line 19, at end insert—
“(1A) Prior to laying regulations under subsection (1) the Secretary of State must commission and publish a review into the operation of residential possession proceedings in the County Courts used by residential landlords and tenants and the enforcement of possession orders.”
This amendment would require the Secretary of State to publish a review of the operation of residential possession proceedings before determining the commencement date for the provisions of Chapter 1 of Part 1.
Government amendments 152 to 157.
Government new schedule 1—Amendments in connection with landlord redress schemes.
Government amendment 223.
Amendment 48, in schedule 1, page 114, line 10, leave out “6 months” and insert “one year”.
Amendment 255, page 114, line 10, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 224.
Amendment 49, page 115, line 8, leave out “6 months” and insert “one year”.
Amendment 256, page 115, line 8, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 225.
Amendment 33, page 115, line 32, leave out sub-paragraph (a) and insert—
“(a) the landlord who is seeking possession intends to—
(i) sell a freehold or leasehold interest in the dwelling-house or to grant a lease of the dwelling-house for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord;
(ii) re-let the dwelling house to another tenant pursuant to a Rent to Buy Agreement; or
(iii) retain and convert the home to rented housing on either an affordable or market rent basis;”.
This amendment covers the full scope of reasons that private registered providers of social housing may wish to use the new ground for possession 1B for to offer properties to another tenant.
Government amendment 158.
Amendment 34, page 116, line 12, leave out sub-paragraph (b) and insert—
“(b) allows the tenant to rent the dwelling house for a period stated in the agreement, which is not less than 5 years or, for dwelling houses in Greater London, 10 years from the beginning of the tenancy so as to enable the tenant to save for a deposit and, over time, purchase their first home.”
This amendment would ensure the wording for the definition of “Rent to Buy Agreement” at sub-paragraph (b) is an accurate reflection of the Rent to Buy product and is in line with the Capital Funding Guide.
Amendment 29, page 116, line 29, after “tenancy” insert
“(including any tenancy at will or other tenancy arising on expiry of a fixed-term lease)”.
This amendment would extend Ground 2ZA to apply in a situation where a tenancy at will may arise.
Government amendments 159 and 160.
Amendment 30, page 117, line 5, at end insert—
“(c) where the intermediate landlord serves notice under this Ground, the intermediate landlord shall be deemed to continue to hold sufficient interest in the dwelling-house to maintain a continuing right to possession until conclusion of any possession proceedings.”
This amendment would ensure that an intermediate landlord retains possession of the property and remains as the landlord of the occupying tenant until the conclusion of possession proceedings.
Government amendments 161, 163 and 164, and 226.
Amendment 5, page 118, line 4, after “HMO” insert
“or is occupied by one or two students”.
This amendment would mean that the ground for possession for student properties could also be used for properties occupied by just one or two students, which would not otherwise be considered as HMOs.
Government amendments 227 to 229.
Amendment 260, page 118, line 12, at end insert—
“(ca) the tenancy agreement was not signed earlier than March of the year in which the tenancy commenced.”
This amendment would end the pressure for joint tenancies to be signed too early in the academic year, committing students to accommodation before they are ready.
Government amendments 165 to 174, 230, 175 and 231 to 234.
Amendment 52, page 122, line 34, leave out “of an intention” and insert—
“that the landlord may intend”.
Amendment 53, page 122, line 35, at end insert—
“or the Court is of the opinion that it is just and equitable to dispose of the requirement to serve a written statement.”
Amendment 50, page 123, line 3, leave out lines 3 to 9.
Amendment 51, page 125, line 13, at end insert—
“Ground 6AA
A relevant social landlord granted a tenancy of the dwelling house to the tenant as temporary decant accommodation in order to demolish their original home in the context of re-development and the landlord seeking possession requires vacant possession of the dwelling house because—
(a) the landlord has served the tenant with notice that the new home is ready to move into, or
(b) the temporary use of the accommodation has otherwise come to an end.”
Amendment 16, page 125, leave out line 17.
This amendment would retain the existing 12-month period within which the landlord can initiate proceedings on this ground for possession.
Amendment 55, page 125, line 17, at end insert—
“(ab) At the end of the second unnumbered paragraph, insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
Amendment 17, page 125, line 18, at end insert—
“(c) at the end of the last unnumbered paragraph insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
This amendment would limit the use of Ground 7 of Schedule 2 of the 1988 Act to social rented housing.
Amendment 18, page 125, line 30, leave out paragraph 23.
This amendment would remove the new ground for possession for repeated rent arrears.
Amendment 19, page 125, line 30, leave out “After Ground 8” and insert “Before Ground 9”.
This amendment would move new Ground 8A from the list of mandatory grounds for possession (in Part I of Schedule 2 to the Housing Act 1988) to the list of discretionary grounds for possession (in Part II of Schedule 2 to the Housing Act 1988).
Amendment 257, page 126, line 12, at end insert—
“23A In Ground 12, after ‘performed’ insert ‘provided that failure to carry out this obligation could—
(a) be reasonably expected to have a material adverse effect on the safety, health, or lives of any residents in that property or adjoining property; or
(b) cause material damage to the property not contemplated in any form of property safety deposit scheme relating to the tenancy.’”
This amendment would amend Ground 12 (possession due to failure to carry out an obligation of the tenancy) so that a tenant cannot be evicted if the obligation does not pose serious risk to the wellbeing of the tenants or the property (such as putting a poster in a window or putting washing on display).
Amendment 20, page 126, line 14, leave out paragraph 24.
This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.
Government amendments 235 and 236, 176 and 177, 237, 178 to 181, 238, 182 to 184, 245, 258, 246 and 247, 198 and 248 to 253.
Amendment 25, in schedule 2, page 128, line 29, leave out “omit subsection (5)” and insert
“for subsection (5) substitute—
(5) A person is also threatened with homelessness if—
(a) a valid notice has been given to the person under section 8 of the Housing Act 1988 in respect of the only accommodation the person has that is available for the person’s occupation, and
(b) that notice will expire within 56 days.”
This amendment would maintain the homelessness prevention duty owed by local authorities to persons who have received a notice to vacate a property and would extend it to notices for possession issued under section 8 of the Housing Act 1988.
Government amendment 239.
Amendment 26, page 129, line 1, leave out “omit subsection (6)” and insert
“for subsection (6) substitute—
(6) But the authority may not give notice to the applicant under subsection (5) on the basis that the circumstances in subsection (8)(b) apply if a valid notice has been given to the applicant under section 8 of the Housing Act 1988 that—
(a) will expire within 56 days or has expired, and
(b) is in respect of the only accommodation that is available for the applicant’s occupation.”
This amendment would ensure that the homelessness prevention duty owed by a local authority cannot end whilst a valid notice under section 8 of the Housing Act 1988 has been issued in respect of the only accommodation available to that person.
Government amendments 240, 254, 259, 185, 241, 186, 242, 187, 199, 243, 188 to 192, 244 and 194.
Jacob Young
I am delighted to bring the Renters (Reform) Bill back to the House on Report. I express my gratitude to Members across the House for their contributions on Second Reading and in Committee, and for their continued engagement throughout. I thank my predecessors, my hon. Friend the Member for Walsall North (Eddie Hughes), whose Parliamentary Private Secretary I had the privilege of being as he steered the White Paper, and my hon. Friend the Member for Redditch (Rachel Maclean), whose Whip I had the privilege of being as she steered the Bill on Second Reading. I have seen the Bill at every stage of its formation, and I can say to the House that the Bill we are discussing today would not have been possible without their hard work and dedication. I also pay tribute to the hon. Members for Greenwich and Woolwich (Matthew Pennycook) and for North Shropshire (Helen Morgan) for their constructive engagement and commitment to seeing the Bill delivered, so that its benefits can be realised.
The Bill will create a fairer private rented sector for both landlords and tenants, delivering on the Government’s 2019 manifesto commitment. The Bill brings in the most significant reforms for the sector in over 30 years. It will abolish section 21 of the Housing Act 1988 and bring in new decency standards, giving England’s 11 million tenants more certainty of secure and healthy homes. It will mean that tenants will be supported to hold down jobs in their local area, children to stay in the same school, and households to put down roots in their communities. Alongside abolishing section 21, we are strengthening and expanding landlord possession grounds, including stronger protections against antisocial behaviour. Combined with our reforms to ensure a modern court system, that will ensure that landlords retain confidence in getting back their properties when they need to, safeguarding their investment.
The new private rented sector ombudsman will resolve tenants’ disputes and support landlords in handling complaints effectively. That will help to avoid disagreements escalating unnecessarily to the courts, saving both landlords and tenants time and money. Our new property portal will make landlords’ responsibilities clear in one place and support tenants to make more informed choices. We are also providing stronger protections for renters with pets, recognising the joy that pets can bring. However, the Bill must strike a balance between delivering that security for tenants and fairness to landlords.
Caroline Lucas (Brighton, Pavilion) (Green)
This morning, the Secretary of State had the brass neck to suggest that to keep his promise to outlaw no-fault evictions before the next election it is now down to the House of Lords to get on with it. Will the Minister tell us which is more disingenuous: the five years we have been waiting for the Government to keep their promise, or the blatant concessions to the significant numbers of Conservative MPs who are landlords, who have been gifted what amounts to an indefinite delay to the ban on no-fault evictions?
Jacob Young
As I said, we introduced the White Paper in 2022. We published the Bill just last year in 2023, and we are taking it forward today to abolish section 21. She talks about Conservative Members. I can tell her—she will not read this in the newspapers—that I have been lobbied by Members on both sides of this House to ensure that the reforms work effectively. That is what the changes that we are making today on Report will do. They will bring balance to the Bill, delivering security for tenants and, as I said, fairness to landlords. The amendments will ensure that the new tenancy system works effectively.
Feryal Clark (Enfield North) (Lab)
Since the Government promised to outlaw section 21 evictions in 2019, more than 2,000 people in Enfield have been subject to no-fault evictions, costing the council millions of pounds to rehouse them. The Minister talks about fairness to landlords, but does he recognise the cost to renters, and indeed to local authorities through temporary accommodation?
Jacob Young
I absolutely accept that there is a cost. What I would say is that a system that does not work for landlords will not benefit tenants, and a system that does not benefit tenants will not benefit landlords in the long run either. We have to find a balance in the Bill. That is what our amendments will deliver. The amendments we introduced in Committee include expanding the range of factors that a judge must consider when evicting antisocial tenants, providing stronger protections for landlords and neighbourhoods against unacceptable behaviour. We also added a new ground for possession to protect the functioning of the student market and ensure that students’ landlords can continue to evict in line with the academic year.
Turning to housing quality, although the vast majority of landlords provide warm and decent homes, some fall short of that standard. It is unacceptable for any tenant to live in damp, cold or dangerous housing. For that reason, we introduced measures in Committee to apply and enforce a decent homes standard in the private rented sector for the first time. That new standard, which we are designing with landlord and tenant groups, will be set out in secondary legislation. We also introduced measures to outlaw deeply unfair blanket bans on renting to those with children or those in receipt of benefits in England and Wales. Those practices have no place in a fair and modern housing market.
Mr Clive Betts (Sheffield South East) (Lab)
Will the Minister assure us that proper energy efficiency standards will be contained in the decent homes standard? Otherwise, tenants will still be living in damp and cold homes because they will be unable to afford to heat them.
Jacob Young
I commit to working with the Chair of the Levelling Up, Housing and Communities Committee, and indeed with all Members of the House, to ensure that the decent homes standard provides for decent homes of the kind that he describes.
This is the first time we have applied the decent homes standard to the private rented sector, and we have to get it right. In order to target the minority of unscrupulous landlords, in Committee we also gave stronger powers to local councils, and we strengthened rent repayment orders. That will help to ensure effective and proportionate enforcement of the new system.
Let me turn to the Government amendments that we have tabled on Report. They respond to concerns from Members, constituents, and tenant and landlord groups, ensuring security for tenants while giving confidence to good landlords and supporting the private rented market. Several Members from across the House have played a direct role in helping us to ensure that the Bill works as effectively as possible for all those who live and work in the private rented sector. I of course include in that my hon. Friends the Members for Totnes (Anthony Mangnall) and for Northampton South (Andrew Lewer) for their continued engagement and constructive dialogue on the measures in the Bill.
Ms Karen Buck (Westminster North) (Lab)
I am listening to the Minister carefully. From his contribution, we would not think that there was any controversy at all about the position we have got to with the legislation. If everything is so wonderful, why have all the key housing charities and organisations in the field withdrawn their support for the Government?
Jacob Young
They have not withdrawn their support. I accept their disappointment with some of the amendments tabled on Report, but they have also endorsed some of them, including one that I know is very close to the hon. Lady’s heart in relation to expanding the homelessness prevention duty, which has the support of organisations such as Crisis, the homelessness charity. We will continue to work with everyone across the sector to ensure that the Bill is effective when it goes to the other place.
Turning to the amendments, I will address them thematically, starting with our tenancy reform measures. Government new clause 15 will ensure that a tenant’s notice to quit cannot expire within the first six months of the tenancy unless the landlord has agreed that it can expire sooner, thus increasing the amount of time a tenant must remain in a property at the start of the tenancy from two to six months. The change ensures that landlords are able to recover the costs of replacing tenants and will prevent tenants from using PRS properties as short-term or holiday lets.
Once the six-month initial period of commitment has ended, the tenancy will continue as a normal periodic tenancy, so after the six-month period tenants will need to give only two months’ notice. That ensures that tenants will retain the flexibility to end tenancies when their circumstances change or when a landlord does not fulfil their responsibilities. This measure strikes the right balance between providing landlords with the confidence they need to operate within the PRS and ensuring a fairer, simpler tenancy system.
In addition, the Government are exploring potential exemptions to the rule, such as the death of a tenant, domestic abuse or significant hazards within the property. Today I met the Domestic Abuse Housing Alliance to reaffirm our intention on the exemption and make clear that victims of domestic violence will be better protected by these reforms.
Government amendments 239 and 240, which I have just mentioned to the hon. Member for Westminster North (Ms Buck), will give tenants certainty that the homelessness prevention duty will be owed when a valid section 8 notice is served. I pay particular tribute to my hon. Friend the Member for Harrow East (Bob Blackman) for his contributions on this topic, ensuring that his landmark Homelessness Reduction Act 2017 continues to be effective. The prevention duty will apply where the date specified in the notice is within 56 days and the duty may not be ended simply because the 56 days has passed. This means that households can continue to receive support while the threat of homelessness remains. Mindful that that will broaden the scope of the prevention duty, we will carry out a new burdens assessment and provide funding for local authorities for any additional costs.
Alongside expanding the homelessness prevention duty, let me take this opportunity to restate our position on another important issue. The statutory homelessness code of guidance, which local authorities must have regard to, states that authorities should not consider it reasonable for a homeless applicant to remain in the property until a court issues a bailiff warrant or writ to enforce a possession order. We have heard anecdotal evidence that some local authorities are encouraging tenants on a blanket basis to remain in a property until the bailiffs are at the door. That is wrong. Doing so creates further delays in possession, penalises landlords, who have a legal right to their property, can be stressful for the tenant and, in the long run, is not beneficial for them at all. The guidance is clear on the importance of early prevention: authorities should contact landlords at an early stage to understand the circumstances of an eviction and establish what steps can be taken to prevent homelessness.
The Government are also working to ensure that families can move out of temporary accommodation and into stable accommodation, as well as reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place. That is why we are investing more than £1.2 billion in the homelessness prevention grant over the next three years, including a £129 million top-up for the homelessness prevention grant for 2024-25, as part of an unprecedented £2.4 billion to tackle homelessness and rough sleeping.
It is expected, furthermore, that the £1.2 billion local housing fund will enable councils in England to obtain better-quality temporary accommodation for those owed a homelessness duty, providing a lasting affordable asset. It is expected to provide around 7,000 homes by 2026, to ease local homelessness pressures, reduce spending on unsuitable bed and breakfast accommodation and provide safe and sustainable housing for local communities.
Government amendments 64 to 75 extend the restrictions on re-letting and marketing a property following the use of the moving in and selling grounds to cover licences to occupy as well as tenancies. This will mean that landlords and people acting on their behalf, such as letting agents, will be prohibited from letting or marketing a property as a short-term or holiday let following the use of those grants. I thank my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for North Shropshire for raising this matter in Committee. The change closes a loophole in the no re-letting period and helps to ensure that the balance between long-term and shorter-term lets remains stable.
I turn now to Government amendments to the possession grant, starting with the student market—I know this is an issue close to the heart of my hon. Friend the Member for Loughborough (Jane Hunt). As I have said, in Committee the Government introduced a new ground for evicting full-time students, to maintain a yearly churn of student housing. Since introducing that ground, we have heard concerns that the ground would not apply when students are living in smaller properties or in houses of multiple occupation on individual contracts.
Government amendments 226 to 228 expand the circumstances in which the student ground can be used. Landlords will be able to ensure that properties rented to students, whether they are living individually, in pairs or in larger shared housing, will be vacated in the summer, as long as all the tenants on the tenancy agreement are students. To protect tenants, we have strengthened the requirement for landlords to provide notice to the tenant at the outset of the tenancy that the ground may be used to evict them. Possession will not be possible using this ground unless written notice has been given by the landlord at the beginning of the tenancy.
Government amendment 158 will extend ground 1B to allow social landlords to re-let their property to a different tenant on rent-to-buy terms, protecting the supply of such properties. The grant will be available only after the sitting tenant’s discounted rent period has ended and they have been offered the chance to purchase the property. I thank the National Housing Federation for raising this issue.
Government amendments 175 and 184 insert a new possession ground 5H into schedule 2 to the Housing Act 1988, which will allow private registered providers of social housing and charities to continue to operate schemes sometimes known as stepping-stone accommodation. We are keen to support those schemes, which help those who have struggled to access the private rented sector, and I am grateful to Centrepoint and the Mayor of the West Midlands, Andy Street, for drawing that point to my attention. I thank Andy Street for all he is doing to support such organisations.
Government amendments 198 and 199 and new clause 29 serve to replicate an existing mechanism that allows landlords of qualifying agricultural workers to provide assured shorthold tenancies rather than more secure assured agricultural occupancies. The amendment was the main ask of the Country Land and Business Association and is vital to maintaining the supply of homes for rural workers by protecting the status quo. It will ensure that opted-out agricultural occupancies under the old system will continue to be opted out when they transition to the new tenancy system.
Leaseholders have raised the issue that many leaseholder agreements restrict sub-letting on assured shorthold and fixed-term tenancies. Amendments including Government amendments 160 to 164 and new clause 13 will address that ask by ensuring that sub-leases made under those agreements can continue unabated under the new tenancy system and that new agreements can be made if they were previously permitted. We have drafted the provisions very carefully to ensure that superior landlords and leaseholders have corresponding rights and responsibilities, as they did under the previous system.
Government new clauses 18 to 24 extend to Scotland the provisions outlawing blanket bans on letting to tenants in receipt of benefits or with children, in consultation with the Scottish Government. They do so in a broadly similar way to those in England and Wales, with adjustments to align with the Scottish enforcement framework, demonstrating a cross-nation commitment to tackling discrimination in the private rented sector.
In part 2 of the Bill we have made technical amendments to our redress clauses, including ensuring that the PRS landlord ombudsman can co-operate with other dispute resolution services. The amendments will ensure that the ombudsman operates effectively. Although no final decision on the ombudsman provider has been made, our amendments would also allow the housing ombudsman service to effectively administer private landlord redress alongside social redress.
A key driver in having a single ombudsman to resolve private landlord-tenant disputes is making the service simple to use. I reiterate to hon. Members that the Government are absolutely committed to minimising costs and streamlining new requirements for landlords. Our ambition is that fees for the PRS landlord ombudsman will be low cost and will represent value for money for landlords, similar to those for the housing ombudsman, where membership costs for social landlords were just £5.75 per unit in 2023-24. I also reaffirm our commitment to aligning the ombudsman and property portal, with the ambition being that landlords will need to input their details only once in order to be compliant with both services.
Let me turn to enforcement of the new system. We introduced measures in Committee to ensure that all landlords involved in criminal rent-to-rent arrangements can be held to account, including superior landlords where they are aware of illegal activity. Government new clause 32 ensures that superior landlords are liable for the Housing Act 2004 offences of failing to hold the correct licence for a property. Government new clause 33 seeks to ensure that landlords and superior landlords can, where appropriate, be served with improvement notices requiring the removal of hazards. Those changes close loopholes, ensuring that local councils can continue to hold the correct landlord to account to ensure that their properties are safe and well managed.
Jeff Smith (Manchester, Withington) (Lab)
If the Government are putting all that money in and doing all this planning, why can the Minister still not give us a date for when it will happen?
Jacob Young
As I have just said, we have always been clear that we will abolish section 21 when we are confident that the county court system is ready. I cannot give the hon. Gentleman a date today because I cannot say until we are confident that the county court system is ready, but as I have said, we are investing £1.2 million for HM Courts and Tribunals Service to deliver the new process. It is important for him to recognise that if the court system is not ready when we make this change—the biggest change in 30 years—it will not benefit tenants. It will not benefit landlords, but it will certainly not benefit tenants.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I welcome new clause 30, because the reality is that county courts are already under very great pressure indeed. However, carrying out the assessment will itself bring a cost and, of course, Ministry of Justice budgets are already strained. What steps will be taken to support the Ministry of Justice and the Lord Chancellor with the cost of carrying out that important assessment?
Jacob Young
My hon. and learned Friend is absolutely right. We have committed to making the assessment, so we will ensure that the relevant funding is in place. I have said that we have invested £1.2 million for HM Courts and Tribunals Service to deliver a new end-to-end online possession process, but I am pleased also to confirm to him today that we are investing a further £11 million this financial year to deliver a new digital system.
Mr Betts
The Minister has tried to blame the Levelling Up, Housing and Communities Committee for this delay by saying that we noted that there was a problem in the courts, which would need to be ready to deal with the extra work caused by the abolition of section 21. However, the Government have had five years to sort the courts out and get them working properly. Surely that has been planned for right from the last election. On the Select Committee asking for improvements to the courts, I just point out that we asked for a specialist housing court—a bit like a small claims court—that could process things more quickly. We did not ask for that in our report last year; we asked for it in 2018, and the Government rejected it.
Jacob Young
I think I have been quite clear that it is important that we see that the courts are ready for these reforms. The Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), is here on the Front Bench with me. He and the MOJ are working at pace to ensure that the courts are ready for the reforms we are introducing. The hon. Member for Sheffield South East (Mr Betts) asks about a specialist housing court. We do not believe that that is the best way to improve the court process for possession—a view shared by the judiciary who responded to our call for evidence.
Neil O’Brien (Harborough) (Con)
The Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts), rightly said that this should have happened five years ago, but I gently say that in those five years we have had the coronavirus pandemic, which is the main thing that has slowed down the process of improving the courts. I strongly encourage the Minister not to rush into doing this prematurely, because it would benefit neither tenants nor landlords if he did.
Jacob Young
I do not think that it will surprise you, Madam Deputy Speaker, to learn that I entirely agree with my hon. Friend, whom I thank for making those points.
Government new clause 30 will enable the Government to assess the effect that our new tenancy system is having on county courts before our reforms are rolled out more widely, giving us confidence that the sector is ready. I am happy to share with colleagues that we are exploring whether serious eviction cases, such as for antisocial behaviour, can be prioritised in court listings. We will consult on options following Royal Assent.
Dominic Raab (Esher and Walton) (Con)
I recently met Rentstart, a homelessness organisation with a great track record of working with landlords and getting the homeless into rented accommodation. It is slightly concerned that the changes might undermine its relationship with landlords, which it uses to facilitate the finding of homes for many vulnerable constituents and other people who have come into the constituency. In relation to the assessment that new clause 30 would bring about, what reassurance can the Minister give such organisations?
Jacob Young
The assessment is there purely to determine the timeliness of possession proceedings. In addition, we must acknowledge that there are other barriers to possession, such as the role of local authorities and bailiffs in the process. I hope that that is what the assessment is able to draw out. On Rentstart in my right hon. Friend’s constituency, I do not believe that our reforms will affect its relationships with landlords, but I am more than happy to meet him and Rentstart to understand its concerns more clearly and see if we can do anything to address them.
Government new clause 35 requires the Government to arrange for a review of the new tenancy system, in particular the impact of removing fixed terms and the operation of grounds for possession. That review will be carried out by an independent person, who will produce a report of their findings. The new clause requires the Government to lay the report before Parliament within 18 months of the earliest date on which the new tenancy system is applied to existing tenancies. We recognise that removing fixed terms is a significant change for the sector, and the review will explicitly consider the impact of the change. It will also consider how comprehensive and fair the reformed grounds for possession are, as well as the extent to which they are operating effectively, so that all parties can have confidence in them.
As I have said, the new tenancy system is a huge change for the sector—the biggest in 30 years—and it is right that we commit in legislation to reviewing its impact and implementation, and that we consider whether changes are needed based on real-world evidence. That will ensure that the system works as well as possible for all parties in the long term.
Wera Hobhouse (Bath) (LD)
I have mentioned several times in debate, and in a useful meeting that I had with the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), who is here, that there is a need to amend the Protection from Eviction Act 1977 at the same time, because there is a danger that frustrated rogue landlords will refer back to that legislation, which is very badly understood and not well enforced by the police and local authorities. Will the Minister say a few things about that?
Jacob Young
I am more than happy to address those points before the end of the debate, but I think that I have written to the hon. Lady about them. If I have not, I will ensure that I do in order to be clear about the amendments she has tabled.
Government new clause 36 places a duty on the Secretary of State to produce an annual report to Parliament on the stock of residential tenancies in the private rented sector. That report will need to be provided in the five years after the Bill receives Royal Assent. Reports under that duty would cover, but not be limited to, an analysis of the number, location and size of private rented sector properties. The new clause ensures that regular analysis of such information is available for scrutiny and debate.
I am aware that several Members have raised concerns about the interaction between the property portal and the role of selective licensing. The two systems have separate, distinct purposes: the portal will gather data on private rented sector ownership and property standards in England, providing an information source for local authorities to have oversight of the whole private rented sector in their area. It will help landlords to understand their legal obligations and will give tenants the information they need to make informed choices. Meanwhile, selective licensing provides local housing authorities with the powers to license privately rented properties within a designated area to address specific local issues, including poor housing conditions and high levels of antisocial behaviour or crime. While there will be overlap with data gathered through the portal, the information required for licences in these areas will be specific to the issue being tackled and will support more intensive enforcement action in the areas that need it most.
We do not want to see selective licensing abolished, but we do want to ensure that our reforms are streamlined and that burdens are minimised for landlords and local authorities. That is why I am committing to a review of selective licensing and the licensing of houses in multiple occupation to consider how we can reduce burdens and make the system more effective for landlords, tenants and local authorities. I am keen to work closely with Members and the wider sector on this issue, and will provide further details in due course.
I have sat on many Bill Committees in this House, and have now been privileged to lead my first Bill Committee, facing the hon. Member for Greenwich and Woolwich. He has been a great person to work with and has sought at every opportunity to make sure the Bill works and is effective. I said to him in Committee that we would listen to suggestions for how we can improve the Bill, and we are doing so today. For tenants, we are expanding the homelessness prevention grant and closing loopholes in the system; for landlords, we are introducing an initial six-month tenancy and giving them certainty that our reforms will work. The Bill delivers on our manifesto commitments: it gives tenants security and landlords fairness. Our amendments continue to strike that balance, and I commend them to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the shadow Minister, I remind colleagues that if they wish to intervene on a speech, it is important that they have been in the Chamber since the beginning of the speech, just in case the important point they wish to raise has already been addressed. It is also important that they stay for the duration of the speech, in case other colleagues then refer to the important point that they have raised. I clarify that because we may have a longer speech from the shadow Minister, and people may wish to intervene, so I thought it would be helpful to remind colleagues of those rules.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I rise on behalf of the Opposition to speak to the new clauses and amendments that stand in my name.
It is a pleasure to finally be back in the Chamber to conclude the remaining stages of this important piece of legislation. I say “finally” because as you will know, Madam Deputy Speaker, the Bill left Committee on 28 November last year—almost five months ago. Indeed, such has been the delay in bringing it back to the House that in the intervening 147 days, the Department even managed to complete all the Commons stages of another piece of housing legislation—albeit a distinctly limited and unambitious one—in the form of the Leasehold and Freehold Reform Bill.
The reason for the delay is, of course, an open secret, with the ongoing resistance to the legislation from scores of Government Members—including many with relevant interests, as private renters across the country have certainly noted—and the undignified wrangling between them and Ministers splashed across the papers for months. The damage caused by the discord on the Government Benches has been significant: not only have thousands of additional private renters been put at risk of homelessness as a result of being served a section 21 notice in the months for which the Bill’s remaining stages have been delayed; the sector as a whole has been left in limbo, not knowing whether the Bill will proceed at all and, if it does, what form it will take.
Richard Graham (Gloucester) (Con)
The hon. Member is making an interesting point about uncertainty. I understand where he is coming from, and many of us on this side would very much like to see section 21 abolition implemented as soon as possible. Does he, however, accept that there is another uncertainty, which is that if the court system is not working adequately, the amount of private housing stock available for many of our constituents who need it badly could easily shrink fast, as indeed I believe has happened in Scotland? That would be a much greater risk than not laying out at this stage the precise date at which section 21 abolition will be fully implemented.
Matthew Pennycook
I would say two things to the hon. Gentleman, who makes a valid point. First, the Government have had five years, since they first made the commitment to abolish section 21, to get the courts fit for purpose, and they have not done so. Indeed, the timescales for both possession and litigation have remained essentially unchanged since 2019, so there has been no progress in those five years. The actual process of possession proceedings is also probably one of the more efficient aspects of the county court system. We heard extensive evidence in Committee about the fact that the system is essentially working fairly well and is recovering well from covid, and that these changes would not be significant enough to delay the implementation. Even if that were not the case, I would say to him that we should have clarity about precisely what are the improvements the Government think are necessary. Let us have metrics and let us have timelines, and then we can have an open and transparent conversation about precisely what “ready” means. At the moment, we are entirely in the dark.
We will remain in the dark even if Government new clause 30 is incorporated into the Bill, because it will merely require the Lord Chancellor to publish an assessment of the operation of the county court possession order process in England and its enforcement before the extended application date can be set for chapter 1 of part 1 of the Bill. There is no timescale in which that required assessment needs to be published, and there is nothing that specifies the metrics against which the Lord Chancellor would judge the readiness of the court system. There are no corresponding obligations imposed on the Secretary of State, so if a future Lord Chancellor assesses that funding or other specific measures are required to make the courts ready for the new system, there is nothing to compel the Government of the day to implement them. Even if a future Lord Chancellor were to assess that the courts were more than ready, it remains for the Secretary of State to determine whether they wish to make the relevant commencement order, even if clause 116 is amended by Government new clauses 27 and 28.
Sir Robert Neill
Like my hon. Friend the Member for Gloucester (Richard Graham), I understand where the hon. Gentleman is coming from, and I do not have a problem with the abolition of section 21 no-fault evictions. However, as a south-east London MP, he will know that the reality is that the county courts face enormous pressure, particularly in our part of the world. I hope that, before hon. Members perhaps criticise the Government too much, they will talk to their own local county courts, because the data is suggesting that, on average, we could be looking at about 55 weeks from the commencement of a possession claim until the decision is made, and on top of that we have the enforcement period. That is not acceptable, and I want it to be quicker, but we need to accept, therefore, as the Association of His Majesty’s District Judges has pointed out—and I have to say to hon. Members that the data the Justice Committee has is the most accurate—that there has been underfunding of the county courts for many years. Frankly, that has been under Governments of both parties, because I can remember when I was in practice and the hon. Gentleman’s party was in government, and there was underfunding of the county courts then as well. We all have to take our share of responsibility for that, rather than making it a matter of party controversy.
Matthew Pennycook
I thank the hon. and learned Gentleman for that point. We all want the processes to be quicker—I do not think that is in dispute at all—and they certainly could be made quicker. Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do. The question for us today is: should we essentially put the abolition of section 21 on hold until we have reassurance about an undefined amount of improvement and if we do not know when that is going to be delivered?
Feryal Clark
All I have heard is about the importance of ensuring that the courts are functioning quickly enough to enable landlords to evict the tenants they want to evict, but currently renters have just over a month before they are evicted. I had a constituent who lost his son in the most horrific of circumstances—it was in the local papers—whose family was served a section 21 notice. The landlord knew the family had lost a child, but said they had to serve it because the family still had a month and they needed to get them to leave. Where is the protection for renters, and does my hon. Friend agree that kicking abolition of section 21 notices into the long grass means the Government do not care about renters at all?
Matthew Pennycook
My hon. Friend is right to highlight the impact on renters, and that is essentially what we are debating. With every month that passes, more private renters are served section 21 notices. Nearly 85,000 of them have been put at risk of homelessness as a result of being served one of those notices, as the Government have delayed the implementation of their commitment. As the Bill is drafted—even with Government new clause 30—Ministers can determine whenever they want to signal to the House that the courts are ready. We have had no assurances on that point, and that is not satisfactory.
In our view, Government new clause 30 is nothing more than a mechanism designed to facilitate the further delay of the complete abolition of section 21 evictions, and we will look to vote against it. With the Government having previously made it clear that there will be a requirement for advance notice of six months before new tenancies are converted, and a minimum of 12 months between that conversion and the transition of existing tenancies—with a proposal that the latter will also be made subject to the assessment required by Government new clause 30—it could be years before renters see section 21 completely abolished, making a complete mockery of the Secretary of State’s recent claim that such notices will be “outlawed” by the next general election.
We know the Government are in no rush to abolish section 21 evictions because they are not laying the groundwork that is necessary for that to happen. Where are the draft prescribed forms for section 8 notices, and where are the proposed amended court forms and civil procedure rules? There is no sign of them, or of any sense of what the regulations required to bring them forward might be. The truth is that Ministers determined long ago, for reasons that are entirely obvious, to essentially kick the can down the road on abolishing section 21 while disingenuously denying it. Although the passage of the Bill will be taken as a signal of abolition before the next general election, private renters outside will know that is not the case, and that implementation has been pushed back, potentially indefinitely.
We believe that hard-pressed renters have waited long enough for the commitment made by the Conservatives over five years ago to be delivered. They require certainty that it will truly be honoured, and section 21 evictions definitively abolished with the passing of this legislation. Our amendment 28 would provide that certainty by ensuring that section 21 of the Housing Act 1988 is repealed on the day that the Bill receives Royal Assent, with saving provisions for any notices served before that date so that they remain valid and of lawful effect. I commend the amendment to the House.
Government new clauses 27, 28 and 30, to which I have made reference, are only three of the 225 Government amendment tabled just before the deadline last week. Before concluding, I will touch briefly on several of the more substantive among them, starting with the small number that will be genuine improvements to the Bill. We are pleased that the Government have responded to our calls to ensure the maintenance of a number of the regulatory obligations that have built up around section 21 notices over the years by tabling Government new clause 14, which gives the Secretary of State the power by regulation to transpose those preconditions and requirements into section 8 eviction notices.
Tim Loughton (East Worthing and Shoreham) (Con)
There are many amendments on which I could speak—indeed, the book of amendments seems to be almost as long, if not longer than the Bill itself—but I will limit myself to new clause 12, which I have tabled in my name and those of hon. Friends and colleagues, and on which amendments 44 to 47 are contingent. First, I declare my interest in the Register of Members’ Financial Interests as chair of the quality and safeguarding board for a children’s company.
New clause 12 goes to the heart of my interests, as it deals with care-experienced children. Essentially, its purpose is to ensure that landlords do not discriminate against people who have grown up in the care system when making a decision on whom to rent a property to. It would place a specific duty on landlords, preventing them from denying those who have grown up in the care system a tenancy on that basis. Landlords found to be in breach of the new clause could be subject to penalties. That is the thrust of what I am trying to achieve, and it might strike a chord with many colleagues here.
Some may remember a recent case that highlighted the potential problem. The Guinness housing trust, in advertising a property for rent, specifically said that it was not available to care leavers. That was an extraordinary piece of discrimination, redolent of the bad old days when people put up signs saying, “No dogs, no Irish, no blacks”, if we can remember back that far. In that recent case, there was potential discrimination against young people who, through no fault of their own, had been through the care system. Guinness fortunately withdrew that straight away and apologised, but the case reinforced the vulnerabilities of some of the most vulnerable young people in our society when trying to get the most basic of daily requirements: a roof over their head. That is what is behind the new clause.
I thank the coalition of various charities and organisations that have done a lot of the heavy lifting on this issue, led by Barnardo’s and the charity for care-experienced young people, Become, as well as others. Let me say at the outset that new clause 12 is a probing amendment, and I am grateful for the positive engagement I have had from the Minister already. I am wholly optimistic that he will say some helpful and constructive things when he comes to respond. I will flesh out why this is an important amendment to this important Bill, in which I fully admit there are many other priorities.
As you know, Madam Deputy Speaker, I have a long-standing interest in championing care-experienced young people, whether formerly as Children’s Minister or now as the chair of the all-party parliamentary group for children and vice-chair of the all-party parliamentary group for care-experienced children and young people. Why do we need to do more to support care leavers when accessing accommodation in the private rented sector? It is imperative first for us to consider the bigger picture with the issues that our young people leaving care face. More than 85,000 children and young people are in the care system in England, which is a recent high. Every year, more than 12,000 of them leave that care system. We all know that unfortunately, despite all the best efforts and endeavours of successive Governments and Ministers, care leavers still have much poorer outcomes than their peers. They are less likely to gain good qualifications in the education system. Nearly half of the children in the care system have a mental health problem, and it is estimated that a quarter of homeless people have been in care at some point in their lives. They are also disproportionately represented in the justice system and make up over a quarter of serving prisoners.
From the age of 18, care-experienced young people are often expected to be financially independent and manage their own household bills, but research over many decades has shown that care leavers are much more financially vulnerable than their peers. A significant number live on or near the poverty line and struggle to make ends meet. [Interruption.] I am being echoed; as if Members cannot get enough of me once, they are now getting it in stereo with a time delay.
While inflation is beginning to come down, certain sectors continue to see large price increases, including the private rented sector. Private rental prices paid by tenants in the UK rose by some 6.2% in the 12 months to January this year, unchanged for the second consecutive month, and that puts huge pressure on all tenants. Young care leavers living independently at the age of just 18 have no support from the bank of mum and dad, and for them things can be especially tough.
Jeremy Corbyn (Islington North) (Ind)
The Member is making a very important and excellent point about care leavers. Does he agree that one of the problems is that on reaching the age of 18 they are deemed to be able to be independent but they have no support network in the way other young people of 18 often do, and therefore while they are getting housing support they might not be getting the necessary emotional and advice support that all other 18-year-olds get and benefit from? There is therefore a need for some sort of arrangement to ensure there is a continued level of support well after the age of 18, if the individual young person actually wants that.
Tim Loughton
I agree with the right hon. Gentleman up to a point, and of course young people do not magically become much more self-sustainable and resilient the day after their 18th birthday, but there have been many improvements over the years. There is extended support for care leavers up to the age of 25, and there are arrangements whereby they can still have a relationship, including a financial relationship, for example with foster carers, through the “staying put” scheme the Government have come up with, and many charities and organisations do very good work in providing support, but the point the right hon. Gentleman makes is right. Most of us are lucky enough to be able to go running back home to birth families for help and support in difficult times, but that is not always available to young people in the care system, although many do have the continual support of good quality foster carers and other carers they relied on when they were under the age of 18. However, they are vulnerable, and ensuring these young people have a safe and stable home to start their adult lives is really crucial.
Housing can act as a vehicle for stability, and without access to good quality accommodation young people will face challenges in getting a job, staying in education and ongoing training, accessing health services and everything else. However, despite the key role housing can play in helping a young person transitioning to independent living, many care leavers are struggling to find suitable accommodation in those early years after leaving care. It is estimated that one in three care leavers become homeless in the first two years immediately after they leave care, and one in four homeless people have been in care at some point in their lives, as I mentioned earlier.
Young care leavers face many barriers in accessing appropriate accommodation, and many will not be able to be addressed in this Bill. However, it does offer an opportunity to address one of those barriers: that landlords sometimes feel reluctant to rent to young people who have grown up in the care system. Young people in care tell charitable organisations in the youth sector that they come across landlords who are reluctant to rent to them because of their circumstances, and evidence from a survey of care leavers carried out by the charity Centrepoint found that over one in 10—some 13%—said they had been unable to access accommodation because the landlord was unwilling to accommodate them because of their status. That is not fair.
The problem is also likely to get worse given the growing evidence of a reduction in the number of private rental properties available across England. An investigation by the BBC found the number of properties available to rent across the whole of the UK had fallen by a third in the 18 months up to March 2023, and increased competition for the properties that are available has enabled more landlords to pick and choose which tenants they like, often going for the highest bidder, which of course makes it especially challenging for vulnerable groups such as care leavers.
In the last few years Barnardo’s has been running a campaign to try and improve access to suitable accommodation for care leavers. I certainly support the campaign, which calls on all local authorities to offer rent guarantor and deposit schemes for care leavers seeking to rent in the private rented sector. The MacAlister report on children in social care, which the Government commissioned and which was published last year, made a recommendation that being a care-experienced child should be a protected characteristic. So far in excess of 60 local authorities, including my own in West Sussex, have voluntarily acknowledged that, although the Government have not made it a statutory addition at this stage. So some local authorities are already providing help to care leavers, with deposits or a scheme where they can act as a corporate guarantor.
Such schemes greatly help make care-experienced young people more attractive tenants, and a number of local authorities report that such schemes have had significant successes. The scheme operated by Kent County Council has had no rent defaults from when it started in 2018 until 2021; however, such schemes are not offered by most local authorities. A freedom of information request by the Care Leaver Local Offer website to the 151 local authorities in England with a children’s social care department showed that 60% will not act as a guarantor for care leavers.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Before I call the next speaker, I inform the House that I will be giving priority to those Members who have amendments down, so that they can speak to them before we hear from others. I call Chair of the Levelling Up, Housing and Communities Committee, Clive Betts.
Mr Betts
It is disappointing that we are having to focus primarily on the Government back-pedalling on the timetable for the abolition of section 21. The Levelling Up, Housing and Communities Committee looked at this a year ago and concluded unanimously that the principle of the Government’s intention was right. We had some reservations and caveats, and we raised concerns and suggested detail changes, but nevertheless we agreed on the principle. Generally speaking, there is agreement across the House that it is the right thing to do.
In the meantime, people are living in uncertainty in private rented housing. That is why we thought it was the right thing to do. That is what the measure is for: to give people greater certainty about where they will be living in a year’s time. It is not merely that; it is also so that they know, if they do not have a car, that they can get on the bus to their place of work in the morning—if the landlord evicts them and they have to move home, will they be able to get to that job in the future? It is also about children at school: will those children be able to get to the same school if they are evicted from their home and have to find a new property? That is the sort of family certainty that the abolition of section 21 will introduce. So many families are living in uncertainty—not just housing uncertainty but other uncertainty—while we await that abolition. The Minister needs to get on with it and give us some clear time commitments on when it will happen.
We have just discussed the problem of the courts. Of course, covid has affected lots of public services, but I say to the Minister that it is not a surprise. If we look at how long it was taking local authorities to get court hearings to deal with antisocial behaviour cases before covid, we see even then that those ran into months. It has been a problem in the courts for many years. That is why the Committee has suggested—it has been suggested before—a housing court system. I know that Ministers do not want it and that the Ministry of Justice does not want it, but it seemed to us a way of resolving what are often simple or quick problems. A small claims court format could do it in many cases without the need for lawyers to be introduced. I am sorry, but I have no conviction that, with several months of looking at this, several years of contemplation and plans for action, the courts will be any quicker in two or three years than they are now. The court system has delays, and they are likely to remain, so we need to look a bit beyond the existing system to resolve these problems. Obviously, Ministers have set their minds against that.
I turn to the other main problem that we highlighted on implementation: local authorities and their staff. We know that local authorities are desperately short of staff for enforcement in the private rented sector. Once section 21 goes, tenants who are currently frightened—even those living in appalling damp properties—to make complaints against their landlords, because they are concerned they would be evicted as soon as a complaint is made, will feel emboldened to make that complaint, and if their complaint is not listened to, they will be emboldened to go to their local authority and ask for help. Local authorities will get more requests for help, and they have not got the people to deal with that.
Will the Minister assure us that he is starting to talk to the Local Government Association about the new burdens that will be placed on local authorities—this is a new burden that we are imposing on them, albeit a good one—and that there is some agreement on the resource that will be needed? Resources do not produce extra staff overnight, so local authorities will need advance warning so that we have the staff in place to respond quickly.
Anthony Mangnall (Totnes) (Con)
I apologise for interrupting the hon. Gentleman. Given the important point he is making about redress for tenants and who they might go to, would he add any comment on consumer protection for unfair trading, which is one of the remedies for those who have difficulties with either the standard and quality of their property or the landlord, as well as those who have been mis-sold for a rental period?
Mr Betts
I think the reality is that local authorities are generally short of resources right through, as the Committee’s recent report on local authority funding—again, it was unanimously agreed—showed. Because of the demands of social care on local authority budgets, other services are often cut even more than the mainstream. We have previously looked at trading standards and consumer protection, which are an important element—the hon. Member is absolutely right—and I hope that they will be factored in when we have the new burdens discussions.
There are some things that the Minister could resolve fairly quickly. He referred to the important role that the ombudsman can play in resolving disputes. There is sometimes a bit of a conflict between whether someone goes to the ombudsman or to the courts—sometimes, the ombudsman will not deal with a case if it is in the courts. It would be helpful to clarify those issues. But why does he not just decide that the housing ombudsman, who currently deals with social housing issues, will also deal with private sector housing? He should make that decision. Again, if the ombudsman is to have that responsibility, it needs to gear up by starting to recruit more staff and getting in resources to be able to do it. It is a simple decision. He has not ruled it out, but he has not ruled it in. Can we not just do it? It seems obvious. Why set up another body, which would have to start from scratch, when the ombudsman has the skills to do it? Those skills are slightly different in some cases, but why not let it get on with that, and tell it now that it will have that job to do?
I have a couple of other points. The property portal is a really welcome development. We know that when someone is trying to track down a landlord—it is often a local authority, which wants to serve a notice on them—suddenly, the ownership of the property moves, and a different member of the family becomes an owner, or a different company is set up. To know who owns the property, information will have to be given to the property portal, along with all other information about the property. That is a really important step forward, as well as making sure that the portals are digitised so that the information can be kept up to date simply.
I welcome the Minister saying that selective licensing and the property portal are not the same thing, with the property portal to be there for all properties. Selective licensing—it is in the name—will be there for some properties. When there is a review of selective licensing and the relationship with the property portal, will the proposals come back to the House for consideration at some point? I want reassurance on that. Many of us support selective licensing, which we see operating against the worst landlords and the worst properties, and we hope that there will not be a diminution of those powers and responsibilities that would weaken what it can achieve.
Jacob Young
I can certainly commit to working with the hon. Member and his Committee when we are at the point of making a decision on where we go after such a review. I completely agree that selective licensing has its role—it is not overtaken by the property portal—but we must ensure that the two work together.
Mr Betts
That is a helpful assurance, which I accept, and I think he has already given assurance of similar collaboration on the decent homes standard, which is appreciated.
Finally, I come specifically to some complicated amendments that I have tabled—I admit that they even confuse me on occasions—which are about the powers that social landlords have when they come to regenerate areas. The Committee has heard some pretty awful examples of poor properties in the social housing sector, and we have been critical. However, often it is not an individual property that is the problem, but properties in deck-access blocks built in the ’60s, ’70s or ’80s. The property has reached the end of its life and people do not like living there: it might have damp or other problems, such as antisocial behaviour. The management costs are high and the cost of regeneration, making it fit for purpose and bringing it up to decent homes standards, is so great that it is not worth spending the money. In some cases demolition and rebuild is needed, and in others substantial regeneration and improvement is needed, and that means the tenants have to move out.
In those cases, social landlords need to be certain that they have the power to require tenants to move, because in a block of properties of 100 residents, 95 of them will probably be terribly enthusiastic about moving out, particularly if they are going to get a new or refurbished home, but the other five might dig their heels in and try to stick it out, holding up the whole scheme. The Minister believes that social landlords have the power to do that under existing legislation. I have tabled amendment 52 and the related amendments because the National Housing Federation is concerned that social landlords think they have powers, but they do not exist where the initial tenancy with their secure tenant was set up by a nomination from a local authority. It is a complicated legal issue, but an important one.
Jacob Young
The hon. Gentleman makes legitimate points, and I am more than happy to meet him and the National Housing Federation.
Mrs Natalie Elphicke (Dover) (Con)
I am very pleased to follow the Chair of the Levelling Up, Housing and Communities Committee, on which I sit. He expressed very well the importance of the section 21 reforms, in particular to families and to renters who are so reliant on them.
My view is that the Bill does not go far enough in dealing with the fundamental challenges of the private rented sector, which is no longer a flex or transitionary tenure but the main tenure for millions of people for much, if not all, of their lives. There has been a long-term structural shift away from social renting and home ownership into an expanded private rented sector. That shift needs to be addressed by building more homes—affordable homes and for first-time buyers—and by finding a new balance that reflects the new reality for millions of people in our country.
Sadly, the original principle of the Bill, which was to create a fair and responsible new rented sector, has been undermined by the Government’s amendments. That change of position undermines not just the Bill but the very manifesto commitment on which the Conservative Government were elected in 2019.
Turning to the amendments and new clauses that stand in my name, new clause 39 would require a landlord to make a relocation payment to the tenant if the tenant is evicted within two years of the start of the tenancy, other than on exempted grounds such as antisocial or criminal behaviour. Evidence from Shelter and Generation Rent shows that unrecoverable costs—the wasted cost to the renter of an unwanted move—can be between £700 and £1,700. My new clause proposes that a payment would be made by the landlord in recognition of those unrecoverable costs to the tenant. Being evicted places a great emotional strain on tenants, who find themselves in insecure housing. It should not place them under a financial strain as well.
Amendment 257 would amend ground 12—possession due to a failure to carry out an obligation of the tenancy—in schedule 2 to the Housing Act 1988, setting out the grounds for possession. That provision will gain much greater importance following these changes, for it is the catch-all provision for evictions. The amendment is intended to address the risk of being served a notice for eviction for trivial matters, such as hanging up washing outside, displaying a poster on a wall, or a teenager putting up a poster with Blu Tack. Those are real examples written into existing tenancy agreements by letting agencies that are members of their relevant professional bodies. Amendment 257 would provide that ground 12 could be used only for material breaches, not for Blu Tack.
The Minister has written to me to say that there were landlords who wanted to make the ground 12 position mandatory. These are landlords who want to be able to serve notice and evict tenants for using Blu Tack. In my book, if you are to lose your home it should be for a serious reason, not for Blu Tack or hanging the washing outside or any other trivial thing. All the more so, because we know that the majority of evictions take place when notices are given to the tenant without court applications, let alone court repossession orders.
The Law Society has raised the issue of the scarcity of legal advice available to tenants across the country. We have heard already today that the Government have not yet produced even working drafts of what the new forms might be for the new eviction grounds. That also matters, because at the moment the court forms require the ground to be set out in the document. They do not require, for example, for that to specify whether it is in fact a discretionary or other ground for the courts. So this does impact directly on tenants’ understanding and ability to challenge their potential eviction. As such, the Government’s position, which is to allow ground 12—the Blu Tack ground—unamended, is to invite every landlord to invoke spurious and unfair reasons for evictions. This is apparently not the intent of the Bill. I am grateful to the Minister for his engagement with me on that ground. I ask him to reconsider that position and see what more can be done to ensure that ground 12 applies only in relation to serious matters. That seems much more reasonable, and fair to landlords and tenants alike.
On Government new clause 30, when I spoke to major landlords recently, they confirmed that they are not yet ready to digitise. They are not yet ready to put in place and work with the very provisions for which they have so strongly advocated. I understand that it might take some more than two years to put their own systems in place to engage with the new measures they have asked for. Meanwhile, and after all this time—nearly five years—the Government have no detailed plans about what these court changes might be. In November, in Committee, the Minister denied that this was a delaying tactic. However, since then the Ministry of Justice has published its digitisation and reform programme all the way through to 2025. There is absolutely no reference—not even an indicative reference—to this reform programme relating to repossessions. I asked the House of Commons Library for assistance, but it too has been unable to find any specific reference to the changes that may come up in the court process. So I am afraid that the truth is that new clause 30 is a delaying tactic to benefit landlords.
As has been mentioned, the Levelling Up, Housing and Communities Committee has written to the Minister on the implementation of these measures. It has been noted by the Committee that court guidance is already in place to deal with repossession claims in a timely manner. They are contained already in civil procedure rules 55.5. Of course, the courts can always be improved—indeed, it is most welcome that there is a commitment that they should be so—but it should be noted that the Ministry of Justice’s data shows that last year the target set out for repossession has, in fact, been met. The courts’ performance in landlord repossession cases stands in marked contrast, in the recovery since covid, to many other court backlogs.
That was confirmed in written evidence to the Justice Committee. I am grateful to the Chair of the Justice Committee, my hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—he is not currently in his place—for whom I have the greatest respect. I note that in the written evidence to that Committee, the MOJ confirmed, just in September, that 95% of courts were meeting that target. I understand that the much larger number of weeks to which my hon. and learned Friend referred may relate to personal injury and other matters that were brought before the Committee, but I will discuss that with him later, given that he is not currently in the Chamber.
These are important reforms and it is important for the court processes to work in the right way, but they are working within their current targets, in marked contrast to other court backlogs. That is why new clause 30 is not necessary, and is properly considered to be a delaying tactic.
This is a Bill that the 2019 Conservative manifesto promised would benefit tenants, but it has become a Bill in which the balance too often favours the landlords, particularly if it includes new clause 30, which could indefinitely delay the abolition of section 21 no-fault evictions. That would be nothing short of a betrayal of the promise that was made in 2019, and for that reason I am unable to support the new clause.
Munira Wilson (Twickenham) (LD)
I am delighted to speak about this important Bill on behalf of my hon. Friend the Member for North Shropshire (Helen Morgan), who unfortunately could not be here today but who has done a huge amount of work on it, including her work in Committee. I thank the Minister for his comments about her, and for the constructive way in which he has worked with her throughout the Bill’s passage so far on specific amendments, some of which I will discuss in due course.
The Liberal Democrats support the Bill in principle because we want to ensure that the private rental market is fair for all, and we have long called for section 21 no-fault evictions to be scrapped. Barely a week goes by when I, a London MP, do not hear from yet another family who are being turfed out of their home for spurious reasons under section 21. I am sorry to say that, as many others have pointed out, the Government have been far too slow in introducing these measures. They have been dragged into it kicking and screaming at every turn, and having made the commitment five years ago and having had plenty of legislative time available in the last and current Sessions, they have delayed and delayed. Meanwhile, a cost of living crisis has meant even more people becoming homeless, and rising pressures on councils that are having to pay for emergency accommodation.
Amendment 3, tabled by my hon. Friend the Member for North Shropshire, would increase the time that must elapse between a landlord’s taking ownership of a property and making the property available for rent to six months, from the currently proposed three. This six-month period is designed to act as a more effective deterrent for landlords wishing to evict tenants in order to remarket a property quickly, or “flip” it into a holiday let. I note that a similar amendment tabled by the Opposition would extend the time to 12 months. The Liberal Democrats believe that would risk driving landlords from the market, and that six months strikes the right balance between protecting tenants from sharp practice and not driving reputable landlords away.
“Flipping”, or quickly remarketing property for holiday letting, has caused serious injustice in some of the most beautiful places in the country, such as Cumbria. Local people living in tourist hotspots often struggle to afford a home in their area because of the rapid increase in the number of properties taken out of residential let and used solely as short-term holiday lets. That has a knock-on impact in terms of workforce pressures, especially in the hospitality and care sectors. Of course there needs to be some holiday accommodation in beautiful areas that benefit economically from attracting tourism, but we must find a balance between holiday and private rented sector accommodation.
I am grateful to the Government for accepting that point and working constructively with the Liberal Democrats by tabling amendment 66. Although their amendment does not go quite as far as we would have liked and include a six-month restricted period, it will ensure that landlords cannot remarket a property as a short-term or holiday let within three months of purchase. That is a much-needed step towards levelling the playing field in the housing market for local people in tourist hotspots and helping local economies and communities to thrive.
Amendment 37, which was tabled by my hon. Friend the Member for North Shropshire, would ensure that accommodation rented from the Defence Infrastructure Organisation by service individuals and their families is subject to the decent homes standard. Servicemen and women are housed in accommodation rented from the DIO, which is currently not subject to a minimum standard. This means that individuals who have put their lives on the line for our country are not necessarily guaranteed a warm and safe place to live in return. Across the country, and specifically at RAF Shawbury and Tern Hill barracks in north Shropshire, there have been reports of service family accommodation being plagued by black mould, rat infestations and chronic overcrowding. That is no way to treat people who have put their lives on the line to serve this country. Frankly, they deserve better.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Before I call the next hon. Member speaks, I have now to announce the result of today’s deferred Division on the draft Economic Growth (Regulatory Functions) (Amendment) Order 2024. The Ayes were 395 and the Noes were 50, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Anthony Mangnall
I rise to speak to the amendments that stand in my name, as well as on a number of Government amendments. I feel that I should start by thanking both the Minister and the shadow Minister for their conversations over the last five months on this topic.
I should be clear about my position in leading a number of amendments to the Bill. At no point have we ever sought to stop section 21 coming in, and I hope that I will be able to make that clear in the course of my remarks. What we have sought to do is to stop the ending of fixed-term tenancies—something I believe would have a dramatic impact on the supply of properties, including long-term rental properties. That, to me, is the concern. I believe that it will cause far greater upset in the short and long term in respect of whether people can have the houses that they need.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
In rural areas such as mine where housing is already very expensive, more and more landlords are already deciding that letting their properties out is not worth the candle. They will therefore sell them, and the effect will be that there are fewer and fewer properties to rent. Those that are available will therefore go up and up in price and our youngsters will struggle to get on to the rental ladder.
Anthony Mangnall
I thank my hon. Friend for making that point. It is one that I will come on to, in terms of both the impact that the Bill will have on the attractiveness of short-term lets and the bureaucracy and hassle that will arise from this legislation.
From the outset of the Bill’s arrival in Parliament, I have worked to ensure that it strikes the right balance between tenant and landlord—a balance that ensures that the rights of tenants are respected and enshrined in legislation while the rights of landlords, property ownership and contract law are maintained and safeguarded. I believe that a failure to strike that balance would have a disastrous impact on the private rental market in the United Kingdom. Complicating the rental market with onerous requests, bureaucratic measures, additional costs and an inability for people to operate their personal property as they wish would only result in large swathes of the private rented sector throwing up their hands and selling their properties, just as a failure to support tenants would only embolden rogue landlords, diminish standards and increase unfair treatment.
From the start, it has been my mission to find a level playing field that ensures that tenants and landlords can co-operate together in a fair market that has a healthy supply of rental properties, with rights and standards enshrined, costs low and bureaucracy minimal, in a system that respects the rule of law and, perhaps most importantly, has a structure and a court system that is effective and that delivers. All of this has been done because we are in the midst of a supply crisis in the private rented sector, on which we have yet to touch.
On average, 25 prospective tenants inquire about every available rental property, up from eight in 2019, according to Rightmove. Hamptons estimates that between 2016 and the end of 2023, individual landlords sold almost 300,000 more homes than they bought. Last year, the Bank of England warned that demand for rental properties continued to outstrip supply as the number of landlords choosing to exit the market increased. It is therefore vital that responsible landlords have confidence that pragmatic changes are being made to the Bill. Failure to do so would only deepen the crisis.
I have said previously that the failure to have a sensible rental period at the start of a tenancy would likely result in the flourishing of long-term rental properties being used as short-term lets. Given the substantial price difference between short-term lets and long-term lets in constituencies like mine and the constituencies of the hon. Members for North Shropshire (Helen Morgan) and for Westmorland and Lonsdale (Tim Farron), there would be a very real likelihood of people exploiting that loophole.
Landlords incur costs and expenses when entering into a tenancy, and they need the certainty of a minimum period. Many buy-to-let mortgage lenders also require a minimum six-month tenancy agreement when lending to residential landlords. As a result, I tabled amendment 6 with the support of 58 colleagues to ensure that tenants cannot give two months’ notice to leave a property until they have resided in it for four months. I believe that this is in line with the recommendations of the Levelling Up, Housing and Communities Committee. I therefore welcome that the Government have accepted this argument and tabled new clause 15, which mirrors amendment 6. I will therefore not press my amendment.
Matthew Pennycook
I wonder whether I can tease out the hon. Gentleman’s reasoning in thinking that the possibility of rental properties being used as short-term lets is so serious. It is an entirely hypothetical problem. Renters who take out a tenancy agreement will have to provide a five-week deposit—they will probably be charged the maximum—and they have to go through a lengthy process to try to get that deposit back. What evidence does he have to suggest that, en masse, tenants will try to game the system in the way he expects?
Anthony Mangnall
With the greatest of respect, I am saying that that is one of the reasons why I fear not having a minimum notice period. My constituency has the highest number of second homes and short-term lets of almost anywhere in the country. There is a significant price differential, and a significant amount of hassle is being heaped on landlords by this Bill, which might push them in that direction. This may be one of the foreseeable consequences. I have raised it on Second Reading and in private conversations with the hon. Gentleman.
New clause 2, on rent repayment orders, would enable local housing authorities to impose financial penalties on certain individuals where they believe that a housing offence has been committed by a body corporate. Last year, the Supreme Court delivered a landmark ruling in which it said that, where a rent-to-rent company takes over the running of a property, it cannot pass its legal liabilities on to the property’s landlord. The Government have amended the Bill to reverse that decision, which will mean that landlords can be fined even in cases where a rent-to-rent company or similar has, without the landlord’s knowledge, been asked by a tenant to illegally sub-let a property. According to data from Direct Line, one in 10 renters admits to sub-letting part of the home in which they live, of whom 48% did not disclose it to their landlord and three quarters did not review their existing lease agreement to determine whether sub-letting was permitted. The amendment would deal with the main concern associated with the use of rent-to-rent companies. It would address the problem of landlords and others who willingly hide behind such companies to let properties while avoiding liability for rent repayment orders, without penalising those who are innocent victims of such companies. I welcome and recognise the fact that the Government have seen sense and tabled their own amendment, mirroring my proposed new clause 2, in the form of proposed Government new clause 34. I therefore withdraw proposed new clause 2.
Jacob Young
As I said in my opening speech, we are exploring expediting possession for serious antisocial behaviour claims. I am happy to work with my hon. Friend on how we go about that and ensure that it happens before these reforms are fully implemented.
Anthony Mangnall
The Minister will find in this part of my speech we will be agreeing vehemently, although the latter part of my speech might not be so agreeable. I am grateful to him for his intervention; I always welcome the opportunity to work with him.
Likewise, in the case of rent arrears, it cannot be acceptable to have a system that allows rent arrears to continue to build for seven months. The amendment would make good on the Government’s commitment that the justice system is fully prepared for the impact of the end of section 21. Again, I am grateful that the Government have decided to accept the point in principle and introduce proposed Government new clause 30, which mirrors my amendment 9, which was supported by so many colleagues. I therefore withdraw amendment 9.
Proposed new clause 1, the repeal of requirement for selective licensing, under my name, would remove the ability of local housing authorities to designate areas as subject to selective licensing. The Bill provides the Secretary of State with the power to develop a new property portal that all landlords would have to join to demonstrate to prospective tenants that the properties they rent meet all required standards. It would be effectively a national licensing scheme. As selective licensing deals only with management quality and not property standards, the changes in the Bill are likely to do more than selective licensing to improve properties.
Since councils will be able to use the portal to access information on all private rented properties and landlords operating in their area, and in view of plans for a decent homes standard for the sector, local selective licensing schemes will be made redundant. In Wales, the introduction of landlord registration led to the end of almost all selective licensing, so it is unlikely that local authorities would pursue costly and complex schemes in future. I take on board the Minister’s comments in his opening remarks.
Selective licensing is an additional cost to landlords, in addition to the property portal and redress scheme. Landlords should not have to be regulated twice and pay twice for much the same thing. Proposed new clause 1 would scrap selective licensing schemes for private rented housing when the property portal goes live. Having both would not enhance protections for tenants, but merely be a duplication. Scrapping them would remove an unnecessary layer of bureaucracy and cost for landlords. I am grateful for the Minister’s opening remarks. I will take the Government at their word that the Dispatch Box commitment to conduct a review of selective licensing will take place at the earliest opportunity.
My new clause 3 would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of antisocial behaviour. It is vital that, when section 21 ends, swift and effective action can be taken against tenants committing antisocial behaviour who cause misery for so many neighbours and fellow tenants. To support this, the Government have changed the wording of the discretionary ground to repossess a property due to tenant antisocial behaviour—ground 14. They clarify that any behaviour “capable” of causing “nuisance or annoyance” can lead to eviction. Previously, it was behaviour “likely” to cause a problem.
However, that is not the true problem. The current problem, which is not dealt with by the Bill, is that the main evidence of nuisance is provided by neighbours, as they are closest to the person involved. The changes to the definition of nuisance do not alter the fact that evidence of behaviour needs to be provided, and that will still come from neighbours. However, in so many instances, neighbours are reluctant to attend court and give evidence, in part because the slow speed of the court system means that they will be forced to live near the person that they have reported or helped to evict for several months afterwards.
A better solution would be to allow landlords to use evidence of problematic behaviour that is provided by neighbours complaining by text or email to the landlord or the letting agency. This evidence is not currently admissible, and the courts cannot give sufficient weight to it when deciding whether the tenant is committing antisocial behaviour. This amendment would allow for such evidence to be used by the courts.
In the negotiations and discussions that we had in the run-up to this debate, the Minister’s Department and his civil service team were extremely helpful in highlighting Civil Procedure Rule part 33.3 in relation to
“circumstances in which notice of intention to rely on hearsay evidence is not required.”
Again, the comments made by the Minister are welcome, although I hope his Department will follow this up with the Ministry of Justice. I therefore withdraw new clause 3.
Amendment 5 covers houses of multiple occupancy relating specifically to students. This would mean that the ground for possession for student properties could also be used for properties occupied by one or two students, which would not otherwise have been considered as HMOs.
Ending fixed-term tenancies will be problematic for the student housing market—it would be problematic for the whole Bill—which operates on a yearly cycle, from one academic year to another. Although the Government have recognised that by allowing fixed-term agreements to continue in purpose-built student accommodation, it will not apply, as I understand it, to traditional off-street private-rented housing, often rented to those in their second or third year of studies. This is a concern shared by many in the industry and, indeed, by the Levelling Up, Housing and Communities Committee, which has noted:
“Currently, the proposal is to include this part of the PRS in the tenancy reform, but we conclude that abolishing fixed-term contracts could make lettings to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies.”
I hope that I have quoted the Select Committee report accurately.
A Government amendment to the Bill made at Committee stage established a new ground for possession—ground 4A—to protect the student housing market. This is to be welcomed. It will ensure that landlords can guarantee that most student properties will be available for each academic year, but it will not protect all student housing. The new ground will cover only houses of multiple occupation; it will not apply to those properties occupied by one or two students. This oversight would be rectified by my proposed amendment. Again, I thank the Government for recognising this and introducing their own amendments 226 and 228, which have addressed that problem.
As I come to my concluding remarks—at last—I wish to make some comment on amendment 10, which has not been selected.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I have been listening carefully to what the hon. Gentleman has been saying. He has a range of amendments and it is perfectly in order for him to speak to those, but it is not in order for him to speak to amendment 10, because it has not been selected. Not only has it not been selected for a Division, but it has not been selected for debate. There might be a general point to which he could make reference, but he may not speak to amendment 10.
Anthony Mangnall
I thank you, Madam Deputy Speaker, for being so generous in your explanation on that.
The problem that I see with this Bill is that, while the intent to remove section 21 is a good and necessary one—yes, it has taken time to get to this point—it is not one that those who have signed my amendment have ever objected to. The principle that explains why the amendments have been so widely supported is that there must be some leeway around ensuring that fixed-term tenancies can remain. Indeed, they still remain in certain instances within the student market.
Mr Marcus Fysh (Yeovil) (Con)
My hon. Friend is making a powerful speech. Does he agree that it is in renters’ interests, more than anything else, to be able to agree tenancies longer than six months, in order to have security of tenure? If they have a young family, they will not want grounds such as sale to get in the way.
Anthony Mangnall
My hon. Friend is right to make that point. In essence, the Bill forbids a contract being agreed with a date on which the tenant would have to leave the property. The noble Lord Hannan of Kingsclere pointed out in February in the other place that
“language matters in politics and tendentious phraseology has consequences. How have we reached the point where the expiry of a contract, freely entered into by two parties, at the end of its term is now widely referred to as an eviction, let alone a no-fault eviction?”—[Official Report, House of Lords, 20 February 2024; Vol. 836, c. 519.]
To be clear, the Bill will make it illegal to sign a fixed-term tenancy. The lack of clarity when describing the end of a contract has meant that we are now terming simple cessations of contracts as no-fault evictions. Who is at fault when a previously agreed contract comes to an end at a future date? No one. I believe that there are ways to retain fixed-term tenancies and scrap section 21.
Caroline Lucas
Will the hon. Gentleman concede that, although in principle it is perfectly possible to imagine a scenario where the tenant and landlord mutually agree to a set length of tenancy, the reality is that, because so many tenants are rushing for so few properties, the amount of free will that the tenant has in signing up to that contract is not very great? The idea of its being mutually agreeable is rather more suspect than the hon. Gentleman suggests.
Anthony Mangnall
I come at it from a different angle: we are heaping so many rules and regulations on people, and making things so difficult, they are leaving the market as a result. This was one of the pioneering policies of Thatcher, bringing in the idea of the free market in property, and ensuring that millions of people across the country could realise the social value of having a buy-to-let property on a long-term basis. The hon. Lady will not agree with me; I do not think that we agree on very much. That is okay; it is good to be able to debate the issue, especially in this Chamber.
We must be honest about this: removing fixed-term tenancies is essentially the state telling individuals what they can and cannot do with their own private properties. It is conceivable to remove section 21 while retaining fixed-term tenancies. I have said that the Conservatives have long prided ourselves on being the party of free markets, and we should keep that in mind when we vote later. We are sending completely the wrong message, with dire consequences for future levels of housing supply. We are making an enormous mistake, which will reduce long-term lets in favour of short-term lets and result in many properties being taken off the rental market. I would hate to be back here, having to repeat the figures that I gave at the start of my remarks—in 2019, there were eight people for every one property; now there are 25—and say that the number is going up and up. I fear that, as a consequence of the Bill, that will happen.
Mr Betts
The hon. Gentleman seems to be in favour of abolishing section 21, but then giving landlords the right to bring in fixed-term tenancies, which end with a section 21 notice. If the landlord chose, therefore, section 21 would not be abolished, would it? It would be a figment of our imagination here, because in practice it would never be delivered with his proposal.
Anthony Mangnall
The hon. Gentleman is right to make that point, and he has far greater expertise in this area than I, but I am saying that we can retain fixed-term tenancies, scrap section 21 and amend other parts of the Bill. There is breach of contract. Indeed, we could make notice periods longer. I know that the Department discussed that idea when this was mooted after the 2019 election: we could scrap section 21 but increase the notice period for an eviction. Those are ways we could do it, but to throw the baby out with the bathwater and to become so restrictive on someone’s private property is a problem. People go into the buy-to-let market to let their property out, but unfortunately I think this Bill will have the opposite impact, pushing people out of the market who will no longer want to deal with the hassle.
Simon Jupp (East Devon) (Con)
My hon. Friend is making a fantastic speech and I commend him for all of his efforts on the Bill. One of the challenges is that sometimes our thinking about this issue is constrained to, for example, a metropolitan area. He and I both represent rural constituencies that are really affected by short-term holiday lets, and the unintended consequence of this Bill is that landlords will be pushed towards using those, because the rules and regulations will become so tight and constraining on long-term landlords. Does he agree?
Anthony Mangnall
My hon. Friend is absolutely right to raise that point, and it comes back to the question of trying to incentivise long-term lets over short- term lets. In rural constituencies in the south-west, we face a rising tide of short-term lets. However, we are not legislating on the basis of our own respective constituencies, but on a nationwide approach. We should look very carefully at other countries and other examples of where things have gone so badly wrong through, sometimes, the simplest tinkering of housing legislation: Scotland on rent controls might be one, and Finland or Berlin might be another. They are examples of things having been got horribly wrong.
Steve Brine (Winchester) (Con)
I have been listening very carefully to an excellent contribution, as always, from my hon. Friend—they are lucky to have him in Totnes. Further to the intervention from our hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), is my hon. Friend saying that the irony of this debate is that we are effectively legislating to no-fault evict tenants because we are pushing landlords out of the market through this legislation? Can he back that up with any more evidence that he has heard in his deliberations while creating this excellent speech?
Anthony Mangnall
My hon. Friend is absolutely right. I will use my constituency as an example: I have seen a significant decline in the number of long-term lets over the last four-year period. They are going straight into short-term lets at a far greater cost, making renting totally unaffordable and leaving us to come up with innovative ways to supply the correct amount of rental properties for people who live and work in south Devon. I think that is also reflected in east Devon, in Yeovil in Somerset and, I am sure, in the Cotswolds.
I will finish by saying that I am grateful for the work Parliament has done on this. At no time do I think the Government have dragged their feet; at no time do I think they have tried to block me. By virtue of tabling quite so many amendments, I am probably responsible for some of that hold-up, and for that I apologise. Ultimately, however, it comes down to a belief in whether we are overreaching. I feel that this Bill is overreaching. There are ways we can help to ensure that the rights of tenants and landlords are enshrined and balanced, but removing fixed-term tenancies is a step too far for me—it will be significantly negative for the future rental market, and I will unfortunately have to vote against Third Reading.
Alex Sobel (Leeds North West) (Lab/Co-op)
The Renters (Reform) Bill had the potential to bring much-needed security and safety to renters, yet amendments to water it down, brought forward in Committee and even on Report, are a backward step that will significantly undermine the Bill’s intent. As an MP with one of the largest student populations in the country, I am all too aware that students are experiencing a housing crisis on top of a cost of living crisis. We have seen landlords asking students renters for guarantors, as well as for deposits of up to 100% of their annual rent, the criterion for which is that the guarantor must own a UK property.
That requirement has an impact on the accessibility to working-class students of private rented sector accommodation at their university. It also has an impact on the ability of care leavers and those estranged from their families to access higher education altogether, as well as that of international students who do not have family members with property in the UK. To mitigate that, I have tabled new clause 41, which seeks to end one of the most illogical parts of the rental process: guarantor schemes. The expectation that, despite entering into a legal contract that outlines the responsibility of the landlord and the tenant, a nominated individual takes responsibility for fulfilling the contract seems to undermine the purpose of the contract itself. My new clause seeks to tackle financial pressure on students, supporting the amendment tabled by my hon. Friend the Member for Sheffield Central (Paul Blomfield) to stop landlords from signing up tenants months before an academic year, which creates an arms race for student lets.
We must also consider those who have come through the care system or have become estranged from their parents, for whom living at home has never been an option. If students do not know a guarantor who owns a house in the UK, they may be stuck paying extra to a private company, paying six months’ rent or more up front, or being unable to rent at all. Guarantors are not expected for most people of the same age who are not students, so why is there this discrepancy for students?
An international postgraduate student at Leeds University told me:
“My only viable option was using the Guarantor service ‘Housing Hand’ which costs me an additional 50 pounds a month on top of rent and bills. I am a PhD student receiving the UKRI minimum stipend which is paid monthly.
The cost of living for food and rent alone is already difficult on this stipend and during final week before the stipend is paid each month I often struggle to maintain a healthy and balanced diet due to financial strain.
This is not only demoralising but effects my academic progress on a physical level as I am often hungry and unable to afford fresh fruit and vegetables which are a staple of my diet. It may not sound like much, but not having to pay for this guarantor service could make a considerable difference to my overall wellbeing on a monthly basis as this money could instead be used on fresh food.”
Research conducted by students from the Centre for Homelessness Impact found that just 36% of universities provide help on rent guarantors, that even fewer provide a rent guarantor service for students, and that, as universities themselves face financial issues, such a service will become more unlikely. Renting as a student is already an uphill struggle. We know, for example, that student accommodation prices have increased by 61% since 2012, and information from the National Union of Students UK shows us that two in five students have considered dropping out because of the cost of rent and bills. When we are trying to encourage people to attend our world-leading institutions, which strengthen the skills potential of our country’s workforce, why do we put up so many barriers?
Our universities are the UK’s strongest soft power. International students in particular are left with nothing but bad choices—they must either find a UK guarantor or pay six months’ rent or more up front to their landlord. As one student recently relayed to the all-party parliamentary group on students:
“International students often face more challenges than home students. We have heard stories of students paying months of rent upfront, only to find out they have been scammed and the place they thought they'd secured doesn’t even exist. We had one case where international students paid a whole year’s rent in advance, only to find out their landlord went bankrupt. While they eventually got their money back, the stress and uncertainty they went through was unbearable.”
The Bill was a welcome opportunity to rectify so many of the scandals in the private rented sector, yet there has clearly been a continued and concerted campaign to force the Government to create an unprecedented two-tier rental market in which students would be at the mercy of section 21 evictions that other tenants would be protected from.
Sir Robert Neill
I refer the House to my entry in the Register of Members’ Financial Interests, as I am the owner of a single residential flat that is let out. I simply want to say that, in housing policy, we must always try to strike a balance between the legitimate interests and rights of tenants, and those of landlords, not all of whom are large corporations by any manner of means, and not of all whom make any great profit from those premises—they often operate at quite small margins—but who are a necessary part of the whole eco-structure. Equally, having served in local government for many years, I am conscious of the pressure that unwarranted evictions can place upon families and then upon local authorities, which have to pick up their housing duty towards those families. I believe that the Government are doing their level best in the Bill to get the right balance as far as that overall picture is concerned.
I want to speak in particular to Government new clause 30. We have already heard some rehearsal of the logic behind the new clause and the concerns about whether it will cause a delay to the abolition of section 21 evictions, as well as concern about the pressures on the county court. It is in that context, and wearing my hat as Chair of the Justice Committee, that I want to flag up to the House the inquiry that the Justice Committee is currently undertaking, and receiving evidence on, in relation to the work of the county court. I particularly welcomed the Minister’s commitment of £11 million to be transferred to the Ministry of Justice to carry out the assessment, because, of course, like local government and housing, the Ministry of Justice is an unprotected Department. It is also a downstream Department: either through the courts service or other parts of its work, it picks up many things that have gone wrong, whether elsewhere in our public services or in society as a whole. The courts system, including the civil courts and the county court in particular, is very much part of that: a great deal of social problems go through the county courts, and we know from all the evidence we are receiving that those county courts are under very great pressure.
As such, I support the new clause—but not because I want to delay the introduction of the reforms to the housing procedure that are envisaged, or the abolition of section 21 evictions as they currently exist, although as my hon. Friend the Member for Totnes (Anthony Mangnall) said, there may be other ways of striking the right balance that we could look at. I do not want to delay that reform, but we have to be frank and open about the pressure it will potentially put on what is already a strained county court system. If we are going to make those reforms—this applies to both parties—we need to will the means to make sure the county courts work as efficiently as they should do for all parties, whether landlords or tenants. That is the topic that I wanted to refer to some of the evidence on.
The overall picture, based on some 43 submissions that have been published on the Justice Committee’s website, is that of a very troubled situation as far as delays in the county court are concerned. There are delays in two areas that are germane to this debate: the first is the time it takes to see a possession action through the courts, and the second is enforcement, and particularly delays in getting bailiff appointments where necessary and then getting the enforcement carried out. There are real difficulties with both; it is fair to say that those difficulties vary across the country, but especially in many urban areas, there is considerable pressure. That is particularly acute in London and the south-east, where my constituency is.
Although the majority of those submissions came from landlords, they are based on data that I think is accepted and verified, whichever way one looks at this issue. The Large Agents Representation Group represents the largest letting and estate agents in London and the south-east. It has collected a deal of data, and it says in its submission that
“on average, the county court is taking approximately 276 working days to process a repossession claim from initial enquiry to a decision being given.”
Some of the other data that we get does not cover the whole of that process, which is why it is important to have the overall picture. That comes to an average of about 55 weeks, which does not include the enforcement time afterwards. That is unacceptable on both sides of the equation, so we need the resources to put that right.
Midland Heart, a housing association based in Birmingham—a well-established register of social landlords—says that
“typically, possession claims may take a minimum of 8 months, and sometimes up to 18 months, to conclude”.
The Hyde Group, another major social housing provider, said that
“the current level of delays is extreme and unacceptable”.
A number of those submissions also highlighted the serious delays in bailiffs executing warrants of possession when they are obtained under the current process. Of course, that is not unique to possession hearings: as has been observed, in some cases possession hearings proceed with more speed than other parts of the county court process, but they are still painfully slow in many areas. For example, we have had pretty clear evidence that there has been an increase in possession actions of roughly 16% from the equivalent quarter in 2019, before the pandemic. There was obviously a drop-off during the pandemic itself for a number of reasons, and as has been observed, the county court has done well to pick up the backlog that was created during the pandemic.
We ought to pay tribute to everybody in the county court: not just the judges, but the office staff who have worked phenomenally hard to try to turn that situation around. I hope all Members of this House will try to find the time to visit their local county court and see the work that is done by people on the admin side, who are often not the best-paid people in the public sector by any means. Indeed, recruitment and retention of staff in the county courts is itself a real challenge, which means that we must have continuing investment in those courts. I hope the assessment that the Lord Chancellor carries out under the terms of new clause 30 will help us to trigger greater investment and make the case for funding the county courts much better than it has been for many years under Governments, dare I say, of all political complexions.
Caroline Lucas
It is four months since the Bill concluded in Committee and five years since the Government promised to legislate for renters’ rights, so I start by saying that it is totally unacceptable that it has taken so long for the Renters (Reform) Bill to be on Report. It is deplorable for nearly a million renters to have been issued with section 21 eviction notices in England since the Government promised to abolish them, according to recent YouGov data. Renters have been badly let down by this delay, and aspects of the legislation before us continue to let them down.
My amendment 12 would require energy performance certificates for properties to be provided to the database operator and for the details to be recorded in the portal. This simple amendment would make a big difference. It would recognise that information is power and allow tenants to know whether the home they are about to rent will be damp and leaky or warm and efficient.
Amendment 12 also builds on the existing rules that require EPCs to be commissioned before properties are put on the market and for them to be clearly displayed in adverts in commercial media. Fairness and logic demand that renters should be able easily to compare energy efficiency information when considering properties to rent. A cold and damp home can end up costing renters dearly, both in high energy bills and health and wellbeing impacts.
Renters in cold and damp homes run an increased risk of problems associated with mould and of health conditions such as asthma and heart disease, as well as of poor mental health. We all know that the UK has some of the leakiest homes in Europe and that tenants are particularly exposed to high global gas prices, because the private rented sector is the least energy efficient of any tenure. A staggering quarter of renting households are living in fuel poverty today, so urgent action is essential to improve standards across the sector and to ensure that all renters have a warm and decent home in which to live.
It therefore beggars belief that the Prime Minister announced last September that he was scrapping the requirement to upgrade energy efficiency standards in private rented properties to EPC grade C. That was despite it being essential to deliver on our climate and fuel poverty targets. That upgrade would save tenants more than £250 a year, even at so-called normal prices, according to the Climate Change Committee. As well as harming renters, that regressive move was also contrary to the wishes of landlords, 80% of whom are in favour of stricter energy efficiency regulations.
My amendment 13 seeks to tackle the crippling private rents that so many people are paying. In Brighton and Hove, in which my constituency rests, a new study of more than 50,000 renters found that tenants in the city were spending a scandalous 56.9% of their pay on rent, making it the most expensive city in England in which to rent. As the Bill stands, the measures on rent increases are wholly inadequate. They rely on a resource-intensive and time-consuming appeals process that could even see tenants worse off at the end of it, because the tribunal would have the power to impose a higher rent than the one the tenant is appealing. That is frankly outrageous and goes directly against the promise made in the Secretary of State’s White Paper, which said:
“We will prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase.”
Amendment 13 would simply make good that broken promise by ensuring that the rent payable after a tribunal determination can be no higher than the rent initially imposed by the landlord in the notice served on the tenant. One would have thought that that would be pretty straightforward. Given that the landlord is proposing that rent level in the first place, that must surely be the upper limit of what the tribunal can determine. The Secretary of State obviously understands that principle, since he put in in his own White Paper.
The removal of this commitment in the Bill shows the Government are determined to bend over backwards to tip the balance of power even further in favour of landlords. In short, amendment 13 would get rid of what seems to be a deliberate disincentive to discourage tenants from using the process that is supposed to protect them from unfair rent hikes. In the absence of a national system for rent controls with local flexibility, which is what we really need, amendment 13 is a modest rebalancing of the rent tribunal process, and I would welcome the Minister’s consideration and response in summing up the debate.
There is limited time in the debate, but I very much support the amendments seeking to prohibit evictions within two years of the beginning of a tenancy where the landlord wants to sell or move family in. As the Bill stands, tenants can be served two months’ notice just four months after a tenant has moved in, making a mockery of ministerial claims to improve security of tenure. I also sincerely hope that Ministers will accept amendment 14, which addresses the deeply concerning fact that the notice period for eviction under the new landlord grounds is just two months. This amendment extends it to four months in recognition of the huge difficulty many people face in finding somewhere suitable and affordable to rent when they are evicted, which, as we know, is a major cause of homelessness.
Neil O’Brien
I have never been a landlord, but I have been a private renter and I greatly welcome some of the measures in the Bill as they would have helped me and other private renters a lot. I was offered some extraordinary properties when I was a private renter. I remember that one had dog mess all over the floor, while another in Elephant and Castle had bare wires hanging out of the wall and a gas cooker hanging off the wall. I welcome the extension of the decent homes standard to the private rented sector through this legislation, and it is striking how little controversy there has been about that given how big a deal it is. The proportion of private rented homes that have a major category 1 hazard in them has already come right down, from 24% when we came into office in 2010 to just 12% now, but that is still too high, and it is three times higher than in the social rented sector. So it is great that today we are pressing on with fixing this.
The Government amendments we are debating today are welcome. They strike a good balance between the interests of tenants and of landlords. For example, new clause 30, which makes the commencement of the end of no-fault evictions dependent on county courts being ready, is sensible. The slow recovery of the courts from the covid backlog has been frustrating, and there is a much wider question about how we can get rid of old-fashioned court practices that slow things down. My hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill), Chair of the Justice Committee, made important points about the paper-based nature still of a lot of what goes on there.
However, a lot of good ideas can be wrecked if we do not get the implementation just right and my hon. and learned Friend also mentioned that it currently takes about 55 weeks from commencement to possession, which is much too long. Although I agree with what we are doing here in terms of no-fault evictions, it is a big deal and it is right and reasonable that those who let out properties do at least know that they can rely on a slick and well-functioning court process before we bring this measure in. Even those on the Opposition Front Bench said the courts were recovering from the pandemic, rather than being fully recovered, so I think they recognise that up to a point as well.
The Government have made a range of other sensible reforms in the new clauses before us to ensure that there is fairness for landlords as well as tenants, including new clause 15 which gives those who let out properties some confidence in the first six months. There are the new student grounds as well, and I note that even landlord groups such as the National Residential Landlords Association are now saying we should get on with this legislation, so I think this is about right.
A large number of Government amendments are before us today, but the overall effect is to get a good balance in the legislation. I know some have concerns about the end of section 21, but many countries have a similar system and the sky has not fallen in. Germany, Austria, Denmark, Switzerland and the Netherlands all banned no-fault evictions, and they have a higher share of private renting than us, and in the US and Canada states including California and Quebec do the same and the sky has not fallen in there either. Even Scotland has had this since 2017 and, again, although it has done some other things that are pretty unwise in terms of rent control, the sky has not fallen in.
Landlords will still be able to cite a lot of reasons to ensure that they can get their property back. Indeed, my hon. Friend the Member for Dover (Mrs Elphicke), who is not in her place, suggested that perhaps there were still too many, but I think it is essential that people can get their property back. The end of section 21 changes the balance a bit, recognising that it is no small thing to ask people to move homes.
There are more people living in the private rented sector with children these days, and it is hugely disruptive to have to move. I remember how, in a place that I was renting, we were all moved out because the landlord was supposedly going to do massive works, but he ended up installing about 1 square metre of linoleum and let the place out again for the same rent. It was just a huge amount of disruption to no particular end. For those in a more vulnerable position than I was, it is not a small thing to be asked to move home, so by ending section 21 but still enabling landlords to get control of their property when they need it, we are striking the right balance.
Paul Blomfield (Sheffield Central) (Lab)
While I respect the views of the hon. and learned Member for Bromley and Chislehurst (Sir Robert Neill), who raised some valid points about the county court system and the pressures on it, as someone representing a large number of private renters, I must nevertheless express my concerns and share those raised by the shadow Minister and others about the Government’s failure to deliver on their promise on no-fault evictions. I rise, as chair of the all-party parliamentary group for students, to comment specifically on the proposals in relation to students, to support new clause 41, tabled by my hon. Friend the Member for Leeds North West (Alex Sobel), and to speak to amendment 260, which stands in my name.
Students form a substantial part of the private rented sector. Back in July, the all-party parliamentary group organised a meeting to ensure that their views were heard. We brought together people from different nations of the UK and from all parts of the country. The Minister—sadly, he is not currently in his place—would have found it useful, because it highlighted a number of issues in the Bill that have not been properly thought through. I have discussed with the Minister the issues that came out of our meeting, and I am grateful to him for having found that time, but I want to share some reflections at this point in the Bill’s progress.
First, on the decision to extend grounds for eviction from purpose-built student accommodation to houses in multiple occupation and potentially to other student renters, there are mixed views across the country. Some are worried that exempting students makes them more attractive to less scrupulous landlords as potentially second-class, less protected tenants. Others, though, were concerned that giving students the same protection as other renters would force landlords to leave the student market, with that point made by landlords in areas where there was significant pressure on the housing market. Overall, we reached the same view as the Select Committee: on balance, the exemption is probably right, but it needs to be kept under review.
There is, however, a wider problem with the whole approach to students in the Bill. It seems that the Government have approached students with a one-size-fits-all model: they are undergraduates aged 18 to 21, living away from the parental home from the first time, and living there during term time only. However, students at our meeting were at pains to point out that they are not a homogeneous group. There are mature students who are renting in their home city and need to be there all the time, and students with families. Many courses do not start in September and are not on the cycle on which the Government’s amendments are premised. There are postgraduate taught programmes on a different, longer cycle. There are postgraduate research students on full-time programmes over several years, who are like any young professional. There are mixed households of students and non-students, particularly where groups of friends form and perhaps one member graduates.
I discussed all those variations with the Minister— I am glad to see him back in the Chamber—and his view was that any atypical student would simply not be subject to the exemption, partly because these issues have not been thought through properly. That might be in their favour because they will have greater protection, or it might leave them out in the cold because landlords will find them less attractive within the student market. Again, that emphasises the need to keep the impact of the student proposals under close review.
As the Minister resumes his seat I will move to my amendment 260, which raises a further issue that he referred to: the cycle of student tenancies, which I have discussed with him and on which he was sympathetic. When some of us were students, undergraduates would start university in September, settle in and make friendship groups, and towards the end of the academic year, after Easter, they would start looking for accommodation for the subsequent year. We have seen a landlord-driven arms race, as my hon. Friend the Member for Leeds North West referred to it, in which they have pressured students ever earlier in the year to enter into contracts for the subsequent academic year.
It is now the norm in many parts of the country that students starting a course in September are put under pressure by landlords the following month to enter into a contract for the following year. That forces them to pay a substantial deposit at a point in their life when they already have significant additional costs. It also forces them into joint tenancies with groups of people who they might discover later in the year are probably not who they want to live with in the subsequent year. Appeals to landlords to step out of the contract into which they entered are invariably rejected.
As the Government’s proposals are to regulate on the basis of that tenancy cycle, my proposition is that we try to make that cycle work better by saying that designated student contracts should not start sooner than March of the year in which students will take occupation in September. That would be in the interests of tenants, for the reasons that all of us who represent students will know. Setting a defined starting point will also end the arms race, in the interests of landlords.
Wera Hobhouse
The tendency that the hon. Gentleman refers to is not new. My daughter, who graduated in 2011 and therefore started in 2008, was already under that pressure. He is right that for a lot of young people it is incredibly difficult to find a group of people they want to live with the following year within a month of arriving at university. His proposals are commendable and I hope the Government are listening.
Paul Blomfield
I thank the hon. Lady for her intervention. It does vary in different parts of the country, but the way in which it has come earlier and earlier each year, to the ludicrous position where students are being forced into contracts for the subsequent year almost at the moment they start their first year, clearly needs to be addressed. As I said, I have discussed this issue with the Minister. When we talked about it he seemed sympathetic, so I hope it is an issue we can address as the Bill progresses.
Wera Hobhouse
Before I start my remarks, I refer the House to my entry in the Register of Members’ Financial Interests.
My amendments—amendments 39 to 41—all refer to the Protection from Eviction Act 1977. I have raised this issue with the Government for the past two years, after one of my constituents, who is a lecturer in law at Bristol University, came to me with his concerns. To be fair to the Government, the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), had a meeting with that group of academics, but then I heard nothing, which was a little bit disappointing. I have, just this afternoon, received a reply from the Minister. I thank him for that, but it was dated yesterday and only sent to me today. I will look at it very carefully, but it is still important that I raise here what I have to say.
There are two parts to amendment 39, which relates to the law on harassment of a residential occupier. At the moment, the law is complex and confusing, particularly for lay people, and difficult to enforce. I have glanced over the response from the Minister. The Government believe that there is currently enough power of enforcement. As I understand it, the 1977 Act is quite unknown. Local authorities and the police do not know enough about it. I wonder how we can work in that space to ensure that any unintended consequences brought in by the new legislation will not allow rogue landlords, or those who do not want to do the right thing, and refer them to other pieces of legislation.
First, the amendment would change the law so that everyone who is harassing a residential occupier to try to get them to move out of the property is subject to the same law. Currently, if a criminal landlord is harassing the tenant, the law is fairly clear. However, it might be another individual who is harassing the tenant to get them to move out. In this case, the local authority has to try to find out whether the person doing the harassing is an agent acting for the rogue landlord.
There is also often deliberate obscurity about the identity of the landlord. Investigating the relationship between individuals to establish their precise legal relationship is time consuming and unnecessary, where the aim of the legislation is to protect residential occupiers from harassment. The amendment changes the law to make enforcement easier for local authorities. The change will not affect the position of landlords. They will continue to be subject to the same law. It is only the local authority that can prosecute this offence, and it would still need to prove that a rogue landlord, their agent or any other person knew, or had reasonable cause to believe, that their actions would have the result of causing the occupier to leave.
The other thing that the amendment would do is clarify the law. Currently, if a rogue landlord interferes with services that are reasonably required for the occupation of the premises as a household, that can constitute harassment. However, it is not clearly stated what those services are—I can think of essential services, such as electricity, cutting the water off or even changing the locks—so it is important that we take that into consideration. We are not talking about decent landlords, as I have always made very clear. It is about getting to those landlords who are clearly not doing the right thing.
As I said, it is not clearly stated what the services are. Amendment 39 sets out a list of such services, including water, gas and electricity, as well as access to “electronic communications networks and services” as defined in section 32 of the Communications Act 2003.
Amendment 40 deals with three issues. First, the law on whether certain occupiers are protected by the legislation on illegal eviction is very complex, and it can be very difficult to establish. That is because some occupiers—for example, those who live with the landlord—are excluded from the protections in the law and can therefore be evicted without a notice or court order. That creates an incentive for sham arrangements whereby a rogue landlord might pretend to live with a tenant to circumvent the protections in the Protection from Eviction Act 1977. The amendment reverses the burden of proof, placing it on the landlord, who must establish that an occupier is not protected by the law. It is based on the idea that everyone has the basic protection of the law unless they are in an exclusionary category for a good reason. The presumption should be that they are protected.
Helen Hayes (Dulwich and West Norwood) (Lab)
I rise to speak in support of new clause 40, which stands in my name, but before I do so I will say a little about the Bill more generally.
Legislative reform of private renting is urgently needed. My constituency is in the eye of the storm of the housing crisis, and every year since 2010 the situation has worsened. The waiting list for a genuinely affordable social home has become longer, the number of people living in temporary accommodation has become higher, and private sector rents have continued to spiral. Despite many promises, the Government have delayed action for far too long. Private renters, housing campaigners, charities and Members from across this House are united in their support for bold reform of private renting. But now, after years of delay, we see a Government unable to deliver the effective and urgently needed reforms that were promised, because they are too weak to face down their own Back Benchers.
At the heart of the matter is the urgent need for an end to section 21 evictions, which I have been calling for since the debates on the Housing and Planning Act 2016. Section 21 is the basis of insecurity in private renting, because it gives landlords the ability to evict tenants for no reason at all. Time and again, I have seen in my constituency how section 21 is used egregiously to ratchet up rents and to stop tenants complaining about basic repairs or safety issues, such as damp and mould. Because a section 21 eviction does not need to be justified with a reason, all the power is in the hands of the landlord. Tenants live with the daily threat that they will be told to leave their home, with all that that entails, such as having to find a new home as rent costs continue to rise.
In a housing crisis characterised by an acute shortage of genuinely affordable social housing, private renting is a form of tenure on which millions of people rely. They must have a degree of security so that they can put down roots, know that their children will be able to remain at the local school, and live without insecurity and the constant fear that they may have to move. Section 21 is destabilising for families and communities. It is therefore beyond disappointing that the Bill will not result in an immediate end to section 21, and that the Secretary of State cannot give a date for when it will end.
The reason for the delay is the shocking mess that the Government have made of the court system. My constituents, who used to be able to attend Lambeth county court, now have to travel to Shoreditch, because the court was closed in 2017. When we challenged the closure of Lambeth county court on the grounds that it would involve a much more complicated and costly journey for constituents facing eviction who wished to attend court, we were promised digital reforms of the court service. We were promised investment in infrastructure to make hearings accessible to anybody who had to attend court, and to ease the complexity of the distance and journey time being increased, but no such investment has been forthcoming. Legal aid lawyers in my constituency who work in the courts speak of the chaos, the crumbling infrastructure and the overburdening workload falling on staff, yet this is the excuse today for why section 21 evictions cannot be brought to an end.
New clause 40, which I tabled, arises from a tragedy that happened to a family in my constituency. Their son, a first-year university student, had signed a tenancy agreement on a house for his second year. In common with parents of university students across the country, his parents were the guarantors for his tenancy, but before their son had finished his first year at university and the tenancy had even started, he tragically died by suicide. Faced with one of the most terrible tragedies that any of us can imagine, these bereaved parents were then pursued by their late son’s letting agent for the rent he would have owed on a tenancy that he would never take up. I wrote to the letting agency several times on behalf of my constituents, but it refused to budge. It maintained that a contract was a contract and that my constituents were liable as the guarantors, so they would just have to pay. Surely we in this House can agree that a contractual provision that financially penalises bereaved parents for the suicide of their child is straightforwardly wrong.
After I raised that case during Prime Minister’s questions, I was contacted by a number of families who had signed guarantor agreements on similar contracts, but also by a number of landlords and letting agents who said that they did not use such clauses in their tenancy and guarantor agreements. This demonstrates that such clauses are simply not necessary. Loss of rental income due to the death of a tenant is an insurable risk for landlords, and it should be a matter for insurance, not for bereaved guarantors.
I am grateful to the Minister for meeting me to discuss new clause 40, but I am baffled by the Government’s response, which is to suggest limiting the obligations of a bereaved guarantor to two months, including during the proposed six-month minimum commitment at the start of a new tenancy. While two months’ rent is clearly preferable to six months or a year’s worth of rent, it is still quite literally a financial penalty for the death of a loved one. Bereavement is one of the hardest things anyone can experience, and the Government should use the powers at their disposal to provide comfort, security and peace of mind to the bereaved so that they can focus on grieving the loss of their loved one. It is simply not fair for bereaved guarantors to be charged for the rent that their loved one is no longer alive to pay, and it is not necessary because the loss of rental income due to the death of a tenant is an insurable risk.
New clause 40 would bring this practice to an end and give peace of mind to guarantors that, should the unthinkable happen, they will not have to find hundreds or even thousands of pounds as they grieve. The Minister has said that he will continue to reflect on this issue. I urge him to do the right thing and to accept new clause 40 into the Bill. It is a simple measure that would prevent anyone else from experiencing the additional distress that my constituents suffered when their son passed away. This new clause has not been selected for a separate decision today, but I will continue to pursue this reform. It is the right thing to do. I urge the Government to look again at this issue. It is a reform that would cost the Government nothing, but it would give peace of mind to anybody facing bereavement, as my constituents have had to do, that egregious landlords and letting agencies will not come after them for a cost that they may not be able to afford at a time when they need help, support and comfort, not additional financial penalties.
Jacob Young
I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement throughout the Bill’s passage. I will respond to some of the issues raised during the debate, but I might not be able to respond to all of them in the time remaining.
I will start by addressing the points made by the hon. Member for Greenwich and Woolwich (Matthew Pennycook) and the amendments tabled by the Opposition. As I said in my opening speech, I thank him and others on the Labour Front Bench for their continued engagement and their support for the Bill. I believe that we share the ambition to see the Bill on the statute book as soon as possible.
New clause 10 would extend Awaab’s law to the private rented sector. The tragic and avoidable death of two-year-old Awaab Ishak is the most shocking reminder of the danger of damp and mould. I am clear that no tenant should have to live in dangerous housing conditions, but our approach to tackling this issue must reflect the differences between the social and private rented sectors. Awaab’s law was designed for social housing. Most social landlords manage large portfolios and have dedicated repair and maintenance teams, enabling them to tackle issues to specific timeframes. In contrast, the vast majority of private landlords own a small number of properties, with 82% of landlords having fewer than five properties and 43% owning just one.
The Bill takes a different and, I believe, more suitable approach to ensuring that private tenants have safe homes. It gives councils powers to immediately fine private landlords up to £5,000 if their properties are dangerously unsafe. It also introduces a decent homes standard for the first time and a new means of redress through the ombudsman. We will publish statutory guidance for councils on enforcement, and we will explore how this guidance can strengthen the onus on private landlords to deal promptly with tenant complaints about hazards, including for larger institutional private landlords that may have resources similar to those of social landlords. Amendment 28, which the hon. Gentleman spoke to, would remove section 21 immediately upon Royal Assent. This would mean there is no transition period, as is currently planned, leaving no time at all for landlords, letting agents, tenant groups and local authorities to adjust to the new system. There would be no time to conclude the necessary secondary legislation, leaving the statute book a confusing mess.
Importantly, without having the new possession grounds in place, amendment 28 would prevent landlords from regaining possession of their property even where they have a legitimate reason to do so, which the new grounds reflect. Landlords could not repossess to sell their property or to deal effectively with antisocial behaviour or repeat rent arrears. Most concerningly of all, temporary and supported accommodation would not have access to the critical new grounds, which would have an immediate impact by clogging up those sectors.
Although it might seem appealing and sound good to say, “Let’s just abolish it on Royal Assent,” amendment 28 would create chaos in the sector. It is far better for tenants and landlords alike if we ensure that the change happens in an orderly way. For those reasons, I ask the hon. Gentleman not to press his amendment.
Amendment 37, tabled by the hon. Member for North Shropshire (Helen Morgan) and given voice today by the hon. Member for Twickenham (Munira Wilson), seeks to bring accommodation provided by the Defence Infrastructure Organisation into scope of the decent homes standard. I make it clear that everyone deserves a safe and decent home, none more so than the heroes who serve in our armed forces. Although 96% of service family accommodation already meets the decent homes standard, bringing such accommodation within scope could provide a further safeguard to ensure that all service personnel and their families have a home of the quality they deserve. We therefore strongly agree with the intent of the amendment.
Service family accommodation has unique features, however, including a significant portion being located on secure military sites where there will be issues around security and access for inspections. This would create a challenge in applying and enforcing the decent homes standard. The Government intend to ensure that service accommodation meets the decent homes standard, while recognising that work is needed to determine the appropriate monitoring and reporting arrangements given the unique nature of this accommodation. My Department will therefore work closely with the Ministry of Defence to explore these challenges and how we can best ensure that there are strong safeguards for service personnel and their families that work effectively in practice.
I assure the hon. Members for Twickenham and for North Shropshire that we are seriously considering this issue, and that the Minister for Defence Procurement and I intend to meet the hon. Member for North Shropshire in the coming weeks to discuss these issues in more detail before the Bill is in Committee in the Lords. I therefore ask her not to press her amendment.
New clause 12 and amendments 43 to 47, tabled by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), seek to extend the core blanket ban provision in chapter 3 to care leavers. I am grateful to him for raising the important issue of care-experienced young people’s ability to rent a home in the private rented sector. The Government have already reserved a power in the Bill to extend blanket ban provisions to additional cohorts in future, should we find evidence that it is needed. This power could be used to extend the provisions to care-experienced people if evidence suggests that it would be effective.
Helping care leavers to make a successful transition from care to independence is a priority for this Government, and we recognise that care leavers can face significant barriers to securing and maintaining affordable housing, including providing a guarantor or rent in advance. We are already seeking to improve care leavers’ access to housing, as set out in the “stable homes, built on love” strategy, which sits alongside existing duties owed to care leavers by local councils as corporate parents.
Furthermore, we understand that at least 78 councils have passed motions granting care leavers the same protected characteristic status as other cohorts under the Equality Act 2010 in their local area. I am happy to continue working with my hon. Friend the Member for East Worthing and Shoreham to hear the challenges that care-experienced people face and how we can make private rented accommodation more accessible to them.
I can confirm to my hon. Friend that the measures to prohibit blanket bans on the basis that a child will live with or visit a person at a property include foster children and, in response to the hon. Member for Twickenham, kinship carers. Landlords and letting agents will not be able to discriminate against potential tenants on the basis that they foster children. No further legal provisions are needed to do this. More broadly, during this spending review we are investing over £36 million in a foster carer programme and a foster carer recruitment and retention programme. That is the largest ever investment in fostering in England. For that reason, I ask my hon. Friend to withdraw his amendment.
New clause 39, proposed by my hon. Friend the Member for Dover (Mrs Elphicke), effectively requires landlords to compensate tenants when using any possession grounds found in schedule 2 of the Housing Act 1988 within two years, other than ground 7A or ground 14. While I appreciate the intent behind my hon. Friend’s amendment, I do not agree that landlords should be made to pay compensation to tenants when they have a legitimate reason to evict. Landlords looking to move into or sell their property, or dealing with tenants in rent arrears, may find themselves to be in financial difficulty too, and the change proposed by the amendment could exacerbate that.
Amendment 257 seeks to tighten the breach of tenancy grounds, so that a tenant can be evicted if the tenancy breach impacts the wellbeing of other tenants or neighbours, or could cause material damage to the property beyond what would be covered by a tenancy deposit. As I have indicated to my hon. Friend the Member for Dover previously, I am sympathetic to the intention behind her amendment but it could have adverse consequences. For example, significant breaches of a tenancy agreement, such as subletting, may not lead to an eviction if they were proven to not have a material impact on other housemates or immediate neighbours.
I am also concerned about the impact on existing contracts, signed between landlord and tenant on the basis that this ground would be available. I assure my hon. Friend that ground 12 is discretionary, meaning that a judge will consider whether the ground has been met and whether the possession is reasonable in each case. We therefore think it is unlikely that a tenant would be evicted for minor breaches. I will seek to clarify in guidance when this ground ought to be used. I am happy to explore what more could be done in legislation to ensure tenants are not unfairly evicted for minor and unfair breaches to their tenancy agreement. For those reasons, I ask my hon. Friend to withdraw her amendment.
Turning to proposed new clause 40, the hon. Member for Dulwich and West Norwood (Helen Hayes) set out a deeply moving and tragic case in her consistency. I am grateful to her for meeting me yesterday to discuss the case. New clause 40 would prevent guarantors being held liable for rent after a tenant’s death. The hon. Lady has campaigned on the issue for some time and I appreciate her work on it. By moving to a system of periodic tenancy, tenants and their estates will no longer be locked in after the first six months. In the event of a bereavement, the tenant’s representative would be able to serve two months’ notice to end the tenancy and end the guarantor’s liability. Attempts to hold a guarantor liable for rent past the end of the tenancy would be in breach of the Tenant Fees Act 2019 and a landlord could be fined for doing so. I am aware that our new six-month term may mean guarantors being held liable for longer. That is why we have committed to looking at an exemption where a tenant tragically dies, as I discussed with hon. Lady yesterday, so that a notice can be served in the usual way. For that reason, I ask the hon. Lady to withdraw her amendment.
Turning to the points made by my hon. Friend the Member for Totnes (Anthony Mangnall), in his speech he acknowledged that the Government have accepted not one but almost all his amendments. I regret that he still feels opposed to the Bill overall, but I hope he will reconsider his position having listened to the debate and heard the significant changes we have made. He mentioned Margaret Thatcher’s reforms of the 1980s. Her reforms sought to smash a disastrous system of sitting tenants, where landlords were blocked from moving into or selling their homes, or were forced to let their properties below market rents. Our reforms build on her reforms. Landlords will still have a mandatory right to move into or sell their homes. Nothing in our Bill introduces rent caps, despite calls from Opposition parties and the Mayor of London.
Five years ago, the late James Brokenshire, as Secretary of State for Housing, Communities and Local Government, promised that we would abolish section 21 evictions. Eight months later, every English Member of this House stood on manifestos to abolish section 21. In 2022, we published the White Paper into how we would reform the tenancy system. In 2023, we brought forward this Bill, which gave the White Paper legislative form. And today, we have the opportunity to move forward a Bill that strikes the right balance between security for tenants and fairness for landlords.
For tenants, this Bill abolishes section 21 evictions and moves to a more flexible system of periodic tenancies for all. It applies a new decent homes standard to the private rented sector for the first time and outlaws blanket bans on tenants with children, or those on benefits. It gives renters a legal right to request a pet. It also expands the homelessness prevention duty to protect vulnerable tenants. Together, these changes will give tenants the opportunity to put down roots in their communities, their children in local schools and to live in a secure home.
For landlords, the Bill strengthens possession grounds, giving landlords certainty that they can get their property back. It provides stronger protections in cases of antisocial behaviour and repeated non-payment of rent, and protections for the student market and rural communities. Tenants will have to give two months’ notice to leave a tenancy instead of one, and we are making improvements to the court system to ensure that they can properly support the new system.
The new private rented sector ombudsman will also help prevent issues escalating to the courts, offering quicker and cheaper resolution to disputes. And the new property portal will provide a one-stop shop for landlords to understand requirements and to demonstrate compliance.
Above all, the Bill delivers for landlords and tenants, because it drives out the bad actors in the system. That is what we aim to do—to build a sector that gives tenants security and protections, and landlords fairness, not pitting one against the other, but working with both to drive out the bad actors.
This Bill is the culmination of years of work in a sector that has not seen meaningful change in three decades. I ask all Members to join me and back the Bill tonight.
Question put, That the clause be read a Second time.
Jacob Young
I beg to move, That the Bill be now read the Third time.
This Bill is an opportunity for us to improve the life chances of millions of private renters across the country, and I hope that we have also given reassurance to the millions of good landlords who endeavour to provide homes for those who rely on the private rented sector. When the Government set out their levelling-up missions in 2022—as the Levelling Up Minister, I feel this keenly—we made a clear commitment to halve the number of poor-quality homes by 2030 to
“Restore a sense of community, local pride and belonging especially in those places where it has been lost.”
When housing is secure and safe, it is the launch pad for rich and fulfilled lives and gives people
“a place they’re truly proud to call home”.
This Bill marks the biggest change to the sector in more than 30 years. Rightly, Members have pressed the Government to ensure that it strikes the right balance, improving the sector for all while ensuring that no party is unduly burdened either by cost or by process. I believe that the Bill now strikes that balance, and I am proud to have taken it through the House as my first Bill as a Minister. I should add that taking it over 24 hours before the beginning of the Committee stage was an added excitement that I shall not forget. Let me again pay tribute to my predecessors, my hon. Friends the Members for Walsall North (Eddie Hughes) and for Redditch (Rachel Maclean).
At this point, I invite the hon. Member for Brighton, Pavilion (Caroline Lucas) to intervene, if she wishes to do so.
Caroline Lucas
I am grateful to the Minister. As he knows, I tried to intervene earlier during his summing-up speech. I merely wanted to pursue the point about rent tribunals that I made in my initial intervention. In the White Paper, the Government said that they were going to prevent tribunals from increasing rents beyond the amount that landlords initially asked for when they proposed a rent increase. Why have the Government gone back on that? Why do they now envisage a scenario in which someone could go to a tribunal and end up with a higher rent than the one against which they are appealing? That is surely a massive disincentive.
Jacob Young
Large rent increases should not be used as a back-door method of eviction, but it is crucial that landlords are able to increase rents in line with market levels to maintain investor confidence. We have listened to concerns, and we think it fair that the tribunal is not limited when determining that market rent. This means that, as the hon. Lady said, the tribunal has the freedom to make full and fair decisions, and can continue to determine the market rent of a property. I understand the hon. Lady’s concerns, but it is important that all our measures are proportionate and that we do not allow the tribunal to become overburdened by too many complaints. I therefore think that this is a necessary safeguard.
Caroline Lucas
The Minister is being very generous in giving way. I am not the only person to have said that it should not be possible for rents to rise in these circumstances; the Government’s own White Paper said it only a short time ago. I wish that the Minister would address the point about the disincentive. If a tenant knows that by going to a tribunal they could end up with a higher rent than the one against which they are appealing, surely that will be a massive disincentive.
Jacob Young
Obviously, in a number of areas we have listened to the sector and moved on from the White Paper. The hon. Lady’s point is legitimate, but the reason the tribunal is able to set a rent that is above the landlord’s initial request, and to set a market rent, is that we want to ensure that it is not overburdened with repeat requests that challenge rent increases that are perfectly reasonable.
Sir Geoffrey Clifton-Brown
Surely the whole point of a tribunal is for the tribunal judge to set what he thinks is a fair market price. It might go up, it might go down or it might stay the same, but that is the whole point of a tribunal.
Jacob Young
I entirely agree with my hon. Friend, and that is why we have acted in this way.
We have heard from Members in all parts of the House, and I thank them all for their contributions during the Bill’s passage. They have worked collaboratively and diligently to ensure that this important legislation becomes law. I want to record my thanks to all my officials—I cannot name them all, but a few of them are Leah, Guy, Steph and Ross—as well as those in my private office team and the Clerks. I thank Members on both sides of the House, notably my hon. Friends the Members for Northampton South (Andrew Lewer) and for Totnes (Anthony Mangnall), for all their work, and of course I thank those in the Government Whips Office. Above all, I thank all the groups that I have had the pleasure of meeting as they represent the interests of both tenants and landlords across the wider sector.
I hope that our colleagues in the other place will take the collaborative approach that has been taken in this House, and will pass the Bill with the speed that it now deserves to give certainty and security to landlords and tenants throughout the country.
Matthew Pennycook
Let me start by thanking the Clerks, the House staff and the Library specialists for facilitating our debates on the Bill, along with all the experts and external organisations that have engaged extensively with us on it. I also put on record my thanks to all hon. Members who have contributed to our proceedings at all stages, particularly those who served on the Public Bill Committee. I especially thank my hon. Friends the Members for Weaver Vale (Mike Amesbury), for Westminster North (Ms Buck), for North Tyneside (Mary Glindon), for Mitcham and Morden (Dame Siobhain McDonagh) and for Brighton, Kemptown (Lloyd Russell-Moyle) for their forensic scrutiny of the Bill’s provisions, and the considerable efforts that they have made to strengthen it as a whole.
I offer my sincere thanks to the Minister for the manner in which he has approached our exchanges on this important piece of legislation. In being handed this as his first Bill to take through the House, he has been given an unenviable task, to put it mildly, but he has borne his troubles with good grace. I have very much appreciated the civil way in which he has engaged with me throughout and his efforts, within the severe constraints under which he is no doubt operating, to make a number of small but sensible improvements to the Bill.
Once again, I put on the record the thanks of Labour Members to all those who have campaigned tirelessly—in many cases, over decades—for a reformed private rented sector. I particularly thank all the organisations that have joined Labour over recent months in urging the Government to amend the Bill so that it levels decisively the playing field between landlord and tenant, especially the 20 that make up the Renters Reform Coalition.
Labour has consistently argued that the case for fundamentally reforming the private rented sector is as watertight as they come. A state of affairs in which more than 11 million people in England—not just the young and mobile, but many older people and families with children—live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and where a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction, is intolerable. The sector should have been transformed a long time ago.
The Bill as introduced was a good starting point for the reform that is necessary, but Ministers could and should have strengthened this legislation, rather than progressively watering it down in a forlorn attempt to appease a minority of malcontents on the Government Benches. As a result of the Government’s unwillingness to face down that minority, the Bill that we send to the other place today is not only far weaker than it need be, but in danger of being fatally compromised.
We will not oppose the passage of the Bill tonight, because it is essential that it progresses, but we hope that the noble Lords address that danger and that over the coming months we can convince the Government to think again and ensure that this long-overdue piece of legislation truly delivers for renters.
Sir Christopher Chope (Christchurch) (Con)
It is a great tribute to my hon. Friend the Minister that he has got the Bill into a form that is far better than it was on Second Reading, and that it is so much improved that there will not be a Division on Third Reading. That does not mean that everybody on the Conservative Benches is satisfied with all of the content of the Bill, although it is significantly improved.
I recall the enthusiasm with which those on the Conservative Benches greeted the Third Reading of the Housing Act 1988, which is being substantially amended by tonight’s proceedings. That Act introduced a fundamental supply-side reform and was at the heart of the Thatcher revolution, which transformed the private rented sector from one in which nobody wanted to engage. The sector was shrinking, and young barristers like me were making a living by trying to defend the interests of landlords who had haplessly found themselves on the wrong end of the legislation.
We have moved a long way since then, and one of the essential elements of the 1988 Act was the shorthold, which was a privately arranged agreement between a landlord and a tenant. For a period, the tenant would be able to have exclusive possession of a property that was rented by the landlord. During that period, neither the landlord nor the tenant would be able to renege on the agreement. The rent would remain the same, and the landlord would not be able to say that they needed to get repossession of the property for any reason at all.
It seems to me that the shorthold principle is still missing from the Bill. There was an amendment that would have brought back something like a shorthold provision to provide privity of contract between a landlord and a tenant who wish to enter into an agreement on a property, in the same way that one can agree to rent somebody’s car or caravan. The principle of privity of contract, which is fundamental to conservative beliefs, was enshrined in an amendment that was deemed to be a wrecking amendment. I hope that that amendment, which was signed by more than 50 colleagues, will be resurrected in the other place, where the rules are different, that the principles enunciated in it will be taken forward and that the Bill will be further improved in the other place.
We need to ensure that we support conservative legislation that is designed to increase the size of the rented sector rather than shrink it. I fear that the inevitable consequence of this—we have already seen a bit of this in Scotland—will be that, because the Bill will reduce the supply of private rented accommodation, the cost of that accommodation will go up faster than the rate of inflation. The sort of people who have been campaigning in the alliance to which the hon. Member for Greenwich and Woolwich (Matthew Pennycook) was referring, will then say, “Stop there! We must have rent controls and price controls over rents”, because one set of regulations creates another set of regulations. Then we will be back to where we were in 1977.
That consequence is likely to flow from what we are approving tonight, and I just hope that it will be amended in their lordships’ House so that the supply-side reforms, which are so fundamental to the 1988 legislation, can be carried forward and we can give fresh confidence to people who are thinking about entering the private rented market, and fresh confidence to those already in it so that they do not withdraw from it as they are doing at the moment in increasing numbers. It does not help constituents who are trying to get rented accommodation if that accommodation continues to escalate in price.
I hope that, if there is to be a response to this short debate, we will be able to have a guarantee that under no Conservative Government will we ever have any system of rent controls. I hope that the Government will be able to assure us that, as a consequence of this legislation, we will be able to increase the size of the private rented sector rather than diminish it further.
I want to conclude by congratulating my hon. Friend the Member for Totnes (Anthony Mangnall) on having waged his campaign, although it was not a one-man campaign because a large cohort of people behind the scenes supported of his amendments. As a result of those amendments, the Bill has been improved significantly. One of his amendments was not selected, and that is still, in my view, unfinished business, but we should not shirk from congratulating him on having carried this campaign forward so effectively and successfully.
When the Bill comes back from the other place—maybe in another year and a half since it was first presented—we might be on the other side of a general election. Some of us might think it would be better if we did not have the Bill on the statute book by the time of the general election, but that is another story. I will not go into that now. Whenever the Bill comes back, I hope that it will be in an improved form and that even more of my hon. Friend’s amendments, which are well supported on the Government Benches, will be included in the text of the legislation.
Jacob Young
With the leave of the House, I would just like to confirm to my hon. Friend the Member for Christchurch (Sir Christopher Chope) that we do not intend to introduce any sort of rent controls.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Renters (Reform) Bill
Wednesday 1st May 2024
(6 months, 2 weeks ago)
Lords ChamberRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
Renters (Reform) Bill
Wednesday 15th May 2024
(6 months ago)
Lords ChamberRead Full debate Renters (Reform) Bill 2022-23 Read Hansard Text Watch Debate Read Debate Ministerial Extracts 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.
Baroness Taylor of Stevenage (Lab)
My Lords, I am grateful for the opportunity to open this debate for the Opposition. I thank the Minister for her comprehensive introduction, and for all the time she has taken in meeting us prior to the Bill coming to the House.
Given the expectations generated among renters that the Bill will make improvements to their situation, it is of considerable regret that the Government have dragged their heels in getting it through the other place. The Bill finished its Commons Committee stage last November, but did not return for Report until last month. In the meantime, the concessions made considerably watered down the initial potential. However, as the Bill delivers some improvements, it is not our intention to hold things up any further.
It is also very regrettable that the Government appear to have put the priorities of some grumpy Back-Bench MPs—I do not blame them for being grumpy—before the needs of millions of aspirational renters, people who simply want the secure, affordable and comfortable home that they have every right to expect. For a fifth of UK households—over 4.6 million people—who live in private rented housing in England, this Bill held out a great deal of promise that they would see much-needed fundamental reforms of the sector. As the Local Government Association put it:
“We have argued for the Bill to go further in supporting tenants’ rights and providing stronger regulatory and enforcement powers, and for government to ensure sufficient funding”
for councils to enforce these measures. However, during the Commons stages, concessions were made on a number of these key measures, and the Bill no longer lives up to its stated intention of creating a fairer and more secure private rented sector. That is from the LGA’s briefing. I apologise—I should have declared my interest as a vice-president of the LGA.
I thank the many organisations that have sent through briefings, met with us, and expressed their concerns about the Bill. There are too many to mention them all, but I particularly thank the LGA, the Renters Reform Coalition, Generation Rent, the National Residential Landlords Association, Shelter, Crisis, Citizens Advice, London Councils, Universities UK, Battersea Dogs & Cats Home, and the Law Society for keeping us informed of their campaigns and for their views on the Bill.
Unfortunately, and at the risk of my sounding like a stuck record on legislation I have dealt with in your Lordships’ House, the reforms that the Bill delivers come hand in hand with a missed opportunity to improve the situation of the UK’s growing band of renters. Of course some elements of the Bill are very welcome; it changes possession grounds, introduces compulsory periodic tenancies, extends the decent homes standard, and introduces a new ombudsman and a property portal, as well as introducing the very important right for tenants to keep a pet. We very much welcome the Minister’s comments about blanket bans; she is absolutely correct in saying that they have no place in a modern housing system.
However, other key elements have been watered down in the Commons. Absolutely critical, and of fundamental importance, are the barriers put in place to delay the commencement of the abolition of the punitive and much-abused Section 21 no-fault evictions. Recent figures show that more than 80,000 households have been threatened with homelessness and had to approach their local authority for support following a Section 21 eviction notice, since the Government’s 2019 pledge to end them. As the charity Crisis tells us, this equates to 52 households a day being threatened with homelessness.
In my time as a councillor, I saw the dreadful impact of that on families. Having to move on short notice is incredibly expensive; the Renters Reform Coalition estimates that each move costs around £1,700—that is quite a low estimate. These moves disrupt employment and education, and shatter connection with communities and family support.
Indeed, it has a particular impact on vulnerable children. Imagine spending months trying to get your child with special needs into a suitable school and then being evicted from the home near that school. It also takes a terrible toll on people’s health and mental health, with parents often feeling guilty that they are not able to provide the stability they know would benefit their children. There is a very significant economic cost of this as families present as homeless to their local council. The cost of temporary and emergency accommodation has risen to £1.74 billion and consumes around 30% to 40% of net revenue budgets for some local authorities.
It is surely time for a definitive ban on Section 21 no-fault evictions, but recent amendments made in the other place just kick the can down the road. The Bill now requires the Lord Chancellor to publish an assessment on the readiness of the courts. Of course the court system must work effectively to get decisions made in a timely way for the benefit of both tenants and landlords but, with that pledge having been made five years ago, why was this work not already under way or even thought about until the final stages of the Bill? We are now left with an indefinite timeline for court reform and, although the Minister has today given us some indication of the necessary steps, there is no clear route map to say what needs to change and how it will be done and funded, and families are left with sword of Damocles-like evictions still hanging over them. The Secretary of State repeated his pledge this weekend that this court reform would be completed before the general election. Will the Minister say which general election he was referring to? It is shameful that the Government did not have the courage to face down Back Benchers in the Commons on this and put their concerns over the trauma of eviction faced by private renters. We will try again with amendments to enact a ban on Section 21 evictions on Royal Assent of the Bill, although I suspect this too will have to wait for a Labour Government.
We have significant concerns about the introduction of what could represent a tenant trap in the Bill. One of the key purposes of this legislation was to bring the UK more into line with the longer-term tenancies enjoyed in most other parts of Europe by creating open-ended tenancies. In Germany, for example, the average length of a tenancy is 11 years compared with just over two years in the UK. We welcome these more flexible tenancy proposals but, in a move which runs completely counter to this flexibility, the Bill now extends the right to move out from within two months’ notice from the start of the tenancy to six months. This could lead to some real issues in certain circumstances—for example, if a property has been mis-sold and the renter finds themselves living in a property not fit for purpose, whether through damp and mould or other maintenance issues. Being trapped in this way for six months could be extremely damaging to their health or that of their family. Yes, there are consumer protections, but these are difficult to enforce and may not be enacted as quickly as would be necessary.
Noble Lords know that I have a particular passion for supporting victims and survivors of domestic abuse, and indeed set up our local organisation, Survivors Against Domestic Abuse. It is of great concern therefore that victims and survivors may find themselves trapped in a property in a dangerous situation, potentially even with their abuser, because of the six months’ notice period. We are also concerned that there may be other vulnerabilities, such as mental health issues, which make it inappropriate to force this fixed period on certain tenants. Does the Minister feel that there may be some scope to amend the Bill to allow for those exceptions? Domestic abuse and support charities are also very concerned that the vague definition of anti-social behaviour as a ground for eviction could lead to people being evicted on ASB grounds while still undergoing their trauma.
We have outstanding concerns about why the Government have not used the opportunity of this Bill to extend the provisions of Awaab’s law to the private rented sector. It seems nonsensical that protective provisions introduced for the social rented sector to give tenants more power to have issues such as damp and mould rectified are not available to those in private rented properties—or in Army properties, which were debated earlier today in your Lordships’ House. My noble friend Lord Khan has detailed knowledge of them and will say more later in the debate.
Like many noble Lords, I have been lobbied heavily by student bodies regarding the provision to exempt landlords of student properties from the move away from fixed-term tenancies. We understand the purpose of that but, as Universities UK has pointed out, there may be significant unintended consequences. I quote Universities UK:
“We note the government’s amendment which would see landlords serving notice between 1 June and 30 September. This is welcome as it would not be in the interest of students if landlords could evict tenants at any point in the year. However, given the increased diversity of how and when courses are delivered there will be some courses which are inappropriate for this model. The government should consult with the sector to identify where this is the case and what amendments can be made”.
Students and professionals in higher education have made the point strongly to me that there may be students who cannot live at home—care leavers, for example—and need longer tenancies than an academic year. If this measure is too rigid, it may cause significant problems for those whose study pattern is different from the traditional undergraduate pattern. Can the Minister outline what discussions have taken place or will take place with the sector in this regard?
On the appointment of the ombudsman, I know that my noble friend Lady Warwick has questions about whether there will be a process to appoint the most appropriate body. I look forward to hearing the Minister’s response on that.
We welcome the pet-friendly provisions in the Bill, including those that prevent the unreasonable refusal of pet requests from tenants. I have seen from personal experience the great health and social benefits that pet ownership can bring, and for those who live alone or who have other vulnerabilities it can be extraordinarily life-enhancing. Passing the legislation would mark a significant step forward for renters across the country who have pets, as well as those who aspire to do so. However, pet charities and organisations, including Battersea Dogs & Cats Home and Cats Protection, have asked for some strengthening of the Bill—for example, shortening the time limit within which landlords must respond to a written pet request from the current 42 days to 28 days, and giving a presumption of acceptance if no response to a legitimate request is forthcoming. I hope the Minister will give due consideration to amendments in that regard.
We have no intention of holding up the Bill as it will put in place some provisions that will improve things for renters, but we wanted to see a much more fundamental reform and have called for that for many years. Regardless of whether you are a home owner, leaseholder or tenant, we believe that everyone has the right to a decent, safe, secure and affordable home. Hopefully, a Labour Government will soon be able to build on the foundations put in place by the Bill. In the meantime, I look forward to the debate today and to hearing the Government’s response.
Baroness Pinnock (LD)
My Lords, I remind the House of my relevant interests as a councillor, a vice-president of the Local Government Association and an accidental landlord. I too thank all the groups that have provided informative briefings on a wide range of issues, which I and my colleague, my noble friend Lady Thornhill, have found immensely useful.
There is much in the Bill that we support. Legislation that rebalances the rights and responsibilities of landlords and tenants in the private rented sector is long overdue. However, the context in which the Bill is being debated is important. Much has changed in the rental sector since the Housing Act 1988. The private rented sector has continued to grow, with, according to the latest figures from the ONS, 5 million households renting from a private landlord—the equivalent of 20% of the housing market—whereas 17%, or 4.2 million households, are renting in the social housing sector.
The private rented sector has doubled since 2002. The stark fact is that for many households, especially families with children, private rent is the only option. Even 20 years ago, the first choice for families on low incomes would be social housing. Rents in social housing are within the local housing allowance, and there is a much higher degree of security. That is not to deny that some social housing fails to be of a decent standard, and that some social landlords neglect the needs of their tenants. However, the right-to-buy legislation without the right-to-build replacement housing has resulted in a large reduction in social housing, putting the most vulnerable households at risk of homelessness or leaving them with limited, or often no, choice as to where to live.
The solution to this fundamental problem is not provided by the Bill. What is needed is a substantial increase in the number of homes for social rent being built every year. This is not “affordable housing”—the vast majority of homes provided through that route are not for social rent. The Government have a much-vaunted principle of choice for consumers but tenants needing housing at a social rent are not given that choice. Can the Minister explain why the Government deny the choice of housing at a social rent to so many families in need?
I will be more positive now. Many of the changes in the Bill are positive, although they do not go far enough, as my noble friend Lady Thornhill will demonstrate. The key change must be the abolition of Section 21 eviction notices—without delay. The disruption to family life by the constant need to find another rental property is not considered anywhere near enough by the Bill. Children having to change schools on a regular basis because of the insecurity of tenure must be a thing of the past. Ending Section 21 and implementing the decent homes standard are key to the Bill.
Apart from the fundamental policy changes that the Bill offers, there are inevitably consequences for areas of housing provision that may not be fully recognised by the Bill as it stands. My colleague in the other place, Helen Morgan MP, raised the issue of decent housing standards being required for military accommodation. The Government gave her a commitment that they would table an amendment to do so. On these Benches, we look forward to that amendment from the Government in Committee.
Student accommodation is the first issue I want to raise. On Report in the Commons, the Government introduced new provisions regarding student accommodation, as the Minister outlined. This has the effect of enabling landlords of student accommodation to ensure that student tenancies end with the academic year. I ought to say, perhaps, that I am vice-chair of the council of the University of Huddersfield. I know that many courses start in January and many, particularly master’s degree courses, last 15 months. Many students, particularly international ones, need permanence in their accommodation. I would like to hear from the Minister what protections there are for these students. Can she explain the reasons for expecting students to pay six months in advance for accommodation?
I turn now to what I hope are the unintended consequences of the Bill. With regard to social housing, the National Housing Federation raised concerns in its briefing about the impact of ground 1B, rent to buy, in the possession orders because in its current form it prohibits social landlords from converting rent-to-buy properties into social or affordable rented homes. Perhaps the Minister can consider concerns from the sector on this and on ground 6 where social landlords are redeveloping properties. I am sure that we can overcome these issues but I think they are very important to social landlords.
In its helpful briefing, the Domestic Abuse Housing Alliance seeks remedies for specific concerns regarding the use of the repossession order at ground 14, where safeguards are especially needed for the victims of domestic abuse; and ground 8A regarding rent arrears, where women in controlling relationships may not have the financial oversight of domestic bills and fall foul of that particular reason for repossession.
Finally, there are 10 clauses which give new statutory responsibilities to local housing authorities. For these reforms to be effective, it is vital that enforcement powers are clearly defined and able to be implemented; therein lies the crux of the challenge for government. Councils are experiencing very significant financial pressure—local authority external auditors are regularly making that case. The Bill gives councils the right to retain financial penalties but, quite obviously, that will be inadequate to fund the enforcement teams necessary. The Minister rightly pointed out that the new burdens agreement between government and local authorities is to fully fund new duties. However, in practice that rarely occurs in full, so the Bill relies on strong enforcement; the powers are there, but currently not the means. I really look forward to the Minister reflecting on that, because the whole of the Bill depends on enforcement powers being effective.
It is good that the Bill is tackling some of the long- standing injustices in the sector. However, to be the sea-change Bill that was promised, it needs to put consideration of individuals and families at its very heart —and on that important test, currently the Bill fails.
Lord Best (CB)
My Lords, I draw attention to my housing and property interests as on the register. This Second Reading provides an opportunity to review the current state of the PRS—the private rented sector—and to consider the impact on this sector of the Renters (Reform) Bill. Does the Bill address the key problems facing renters and, if so, will it fix those problems?
Let us take a quick look at the private rented sector today. By the late 1980s, the PRS accounted for only some 9% of the nation’s homes. Then, in the early years of this century, the sector dramatically doubled in size to around 20% of the stock, and it achieved this growth without building virtually any new homes.
Two factors propelled this extraordinary turnaround. First, the Housing Act 1988 removed rent controls and security of tenure for new shorthold lettings. This created a profitable opportunity, enhanced by low-interest buy-to-let mortgages for investors: today, there are 2.3 million private landlords. Despite tax and regulatory changes to dampen this phenomenon and the recent interest rate hikes, the PRS has continued to sustain its new-found size, bolstered by the shortages that have pushed up prices and rents.
The second big change, which has led to today’s dependency on the PRS, was the demise of council housebuilding. At its peak, local councils regularly accounted for some 150,000 to 200,000 new homes built in a single year. The housing associations have only ever built a fraction of these numbers. Along with council house sales under the right to buy, now approaching 2 million homes sold, the social housing sector—that is, councils plus housing associations—has suffered a huge decline. It has gone from around 34% of the country’s housing stock to just 17% today. Those who would have looked to the social housing sector in the past must now turn to private renting instead.
Has this switch from social housing to private renting been a success? Although PRS rents are higher and security is lower, the PRS has provided a satisfactory home for many. But the switch has not helped with the nation’s biggest housing problem: supply. There are simply not enough homes to go around. Building new homes has not kept pace with increases in households. PRS landlords do not build new homes, with the exception of a valuable but modest program of build-to-rent and purpose-built student accommodation; rather, private landlords have inevitably outbid others, particularly first-time buyers, to acquire existing properties. Critics argue that this has inflated house prices and led directly to a reduced number of people being able to become home owners. We are left with acute housing shortages, which only a big expansion of social housing can fix.
However, the Bill does try to address other serious criticisms of the private rented sector. These criticisms are, put simply, that landlords can—and some do—take advantage of the acute housing shortages and lack of options; and that the power imbalance between landlord and tenant means that renters have had to put up with rents that absorb half their incomes, with poor conditions and appalling service, all because they have nowhere else to go. Underpinning this imbalance is the constant threat—whether articulated or not—of retaliatory eviction, whereby the landlord can get rid of a complaining tenant through the notorious Section 21 no-fault eviction route.
The Bill takes some important steps to correct the landlord-tenant imbalance. It does not have much to say about the affordability of rents, because it is a fundamental characteristic of a private rented sector that rents are set by the market. As economists frequently tell us, tough rent controls could lead to an exodus of landlords. While a gentle reduction in the size of an overextended PRS could rebalance the sectors, too many landlords exiting the market at the same time because of controls on rents would create chaos. However, the Bill does seek to block rent increases in excess of market levels, to stymy an underhand way of forcing a tenant out when no legitimate grounds exist.
On other matters, the Bill has some valuable ingredients. Landlords will have to meet a set of decent standards, which will be established to address poor conditions such as cold and mould. Renters will all have access to a new ombudsman who will handle complaints and will be able to levy quite serious fines for incompetence and bad behaviour. As in Scotland, Wales and Northern Ireland, a register will be available online: a property portal will be maintained of all PRS properties, covering their compliance with legal requirements, to enable prospective tenants to check for health and safety features, and so on. The Bill will also make it more difficult for landlords to refuse a tenancy for those with a pet.
All these changes empower tenants in helpful ways. However, there are modest changes, which your Lordships’ scrutiny may achieve, that would amend the Bill for the better. There is also a desperate need for energetic enforcement. In addition, renters need a good online advice service to explain all their rights and responsibilities —one is being developed by the TDS Charitable Foundation.
However, a cloud hangs over what was the centrepiece of the Bill: the fundamental issue of renters’ security—their consumer protection against arbitrary evictions. As well as particular concerns about lettings to students, there are at least three further issues here. First, new grounds for possession will allow landlords to get the property back for a family member’s occupation or their own, or because they are selling. This means, perhaps inevitably, that any private sector tenant could still be evicted through no fault of their own. These are understandable grounds for repossession because a sector based on private investment has to enable the investor to sell up at some point, but could this change be made less sudden and less painful?
Secondly, the new measures to speed up the gaining of possession in arrears cases introduce some tough changes that may have gone a step too far. This needs exploring.
Thirdly, the biggest problem with the Bill is not content but implementation. The all-important ending of no-fault Section 21 evictions is now to be delayed until such time as the Lord Chancellor reports that the county courts are likely to process cases speedily. This could take a long time and, with no fixed date and no backstop for triggering the end of Section 21, the central plank of the Bill is missing.
In conclusion, the doubling of the size of the private rented sector and the halving of the social housing sector has exacerbated shortages and led to some cases of poor performance and exploitation of tenants. The Renters (Reform) Bill introduces some welcome measures, for which the Government deserve full credit, to redress the landlord/tenant imbalance. But last-minute government amendments to delay the ending of no-fault evictions for an indefinite period have led to anger and frustration from tenants’ representatives, such as Generation Rent and the Renters Reform Coalition. Perhaps the Minister can head off a Lords rebellion on this issue by indicating a willingness to address this concern, alongside more modest changes to a Bill that is worth having but could be much better.
The Lord Bishop of Chelmsford
My Lords, it is a pleasure to follow the noble Lord, Lord Best, from whose wisdom and experience I have personally gained such a lot. I am grateful for his contribution today. I declare my interest as the Church of England’s lead bishop for housing. Also, as I am in clergy-tied housing myself, my retirement house is currently let to a long-term tenant.
My starting place is that good homes are the building blocks of strong communities. Bad homes threaten mental and physical well-being, hinder personal and economic development, and compromise safety. Everyone needs a good home so that we have a good society where people can flourish. As others have said, there is much to welcome in the Bill. Private renting is the most insecure and expensive tenure, and it requires significant reform. I am pleased that the decent homes standard will be applied to the private rented sector for the first time. I am also pleased that the Government have tabled amendments to prohibit landlords and letting agencies from discriminating against families with children and people in receipt of benefits. I will seek more details on how this will work in practice.
I have three children, all of whom are young adults. Without a significant shake-up of the entire housing market, it is likely that they will struggle ever to buy their own property. With more than 11 million people renting privately, they are not alone, and young people face particular difficulties in switching to home ownership or social rent. With some notable exceptions, young people are not particularly well represented in either House, which might be one reason the Bill has taken so long to reach us. I am determined to speak up for them as the Bill progresses. Those 11 million, including my three children, know how important it is to improve the private rented sector. The old phrase that we are a “nation of home owners” is now outdated. We are a nation in which many people are in the private rented sector for long periods, if not permanently.
So there is much to commend in the Bill. However, I am concerned that it has lost some of its most important measures during its passage through Parliament so far. As drafted, the Bill will not provide a significantly better private rented sector. The most well-publicised reversal is the delay in abolishing Section 21 evictions, and I add my voice to the calls of other Peers for the Government to set out a series of tests for the courts, or a timeline, for abolition. Without this, I fear that this reform will be delayed indefinitely.
This Bill provides us with an opportunity to make significant reforms to one tenure, but the private rented sector houses only around 20% of the population. We need to think bigger to fix our housing crisis. Nothing short of a long-term strategy which considers all tenures as interconnected parts of a whole system will do. A few weeks ago, I was pleased to launch a report from Homes For All, which set out a vision for England’s housing system and the need for a long-term strategy—and I am grateful to the Minister for being there. I commend the report and its ambitious proposals to all noble Lords who have an interest in fixing the UK’s housing crisis. I am grateful to those noble Lords who have supported it, including the late and much mourned Lord Stunell.
A vision for better housing which delivers for everyone requires a set of values that we can all support. The Archbishops’ Commission on Housing, Church and Community set out five values that should underpin good housing. It said that housing should always be safe, secure, sociable, sustainable and satisfying. As it stands, the private rented sector is often unsafe, insecure, unsociable, unsustainable and unsatisfying—and it is frequently the most expensive tenure for tenants. I shall be assessing the quality of this Bill against the five values outlined by the commission.
Achieving these five goals may require a certain amount of sacrifice. To reverse pervasive issues of low quality and high costs, a new balance must be struck between the needs of landlords and renters. This might involve some sacrifices if we are to reform the tenure meaningfully. The needs of landlords and renters are often presented as being in opposition but, in reality, the vast majority of landlords demonstrate a duty of care in line with legal obligations, and the vast majority of tenants treat their homes with respect. We need both groups to come together to make this tenure work.
To turn to specifics, a sense of security is vital for renters. I would like to see the notice period for tenants extended from two to four months, which would provide more time for them to find a new home or for local authorities to offer homelessness prevention support. At the other end of the tenancy, there are questions to ask about the newly introduced six-month tenancy commitment for renters. If the Government will not commit to removing it altogether, will they set out the extenuating circumstances that would allow tenants to serve notice earlier, such as the death of a resident or a serious hazard in the property.
Judges should have more discretion to consider extenuating circumstances when assessing Section 8 evictions. Repeated non-payment of rent can be for a huge number of reasons, some of which will not persist beyond just a few months. Judges should be able to use their discretion about whether they issue an eviction notice on those grounds. We also know, and have heard already, that domestic abuse is often misreported as anti-social behaviour. Given those sensitivities, why has the threshold for a Section 8 eviction been lowered to
“capable of causing a nuisance”?
That framing is extremely broad and will inevitably capture behaviours that should not count as anti-social behaviour.
One other issue that I would like to raise affects providers of retirement housing for clergy, including the Church of England’s pensions board. I should declare I am part of the Church of England’s pension scheme, but I am unlikely to turn to it for housing in retirement. However, many members of the clergy enter retirement without owning a home. It is then that pensions boards or similar schemes are able to step in to provide affordable and assured housing for them in later life. Some changes will be needed to this Bill to ensure that the Church’s model of provision is still financially viable. I have set these out in a little more detail in a letter to the Minister, and I look forward to corresponding further on the matter.
Finally, the Bill presents us with the first opportunity in a generation to make our most expensive and insecure housing tenure fit for purpose. Will we take the opportunity or will we squander it? I hope that this House and the other place will work constructively to pass legislation that protects renters, reassures landlords and ensures that everyone has access to good housing that is safe, secure, sociable, sustainable and satisfying.
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 Warwick of Undercliffe (Lab)
My Lords, I declare my interest as chair of the Property Ombudsman. I warmly welcome the Bill. I am sure the Minister is well aware of the large number of organisations from which we have all had briefings. The Bill has taken a long time to get here, and expectations are riding high.
That is not surprising. Since 2001, the number of families forced to rent privately has doubled. High housing costs both cause and worsen poverty. The number of family homes available to social rent has reduced dramatically. For households on low incomes, this has significantly worsened living standards. The Bill needs to be seen in that context. We must not miss the opportunity to tackle long-standing issues of unfair eviction, rent increases and access to dispute resolution.
A number of issues will be raised in this debate from organisations such as Shelter, Crisis, Marie Curie and others, which I hope to be able to support in Committee. Today I will say a few words about Section 21 —in effect, the centrepiece of this legislation. I will then look briefly at some points that affect social housing providers and the property portal, the front door that will be crucial to enabling enforcement, then focus my main attention on the new PRS landlord ombudsman.
There is now some real doubt about when Section 21 evictions will actually be abolished. This part of the Bill has near-universal support, and tenants and landlords need certainty. The Government have said that it would be wrong to introduce it before the courts are ready, but have not defined what ready means or how we—or they—will know. It is five years since the Government made this commitment, yet there is still no progress. I hope the Minister will take the opportunity to give the House, as well as landlords and tenants, the certainty they need, by providing a plan for court reform and a timetable for when the abolition will come into effect.
The Bill largely concentrates on the private rented sector, but it will also have an impact on social housing providers, particularly where they use assured tenancies. The Government responded to some of these points on Commons Report and introduced amendments, but these themselves are likely to have unintended consequences, which I hope the Minister will be ready to consider. I refer to the new rent-to-buy ground 1B, introduced in the Commons as Amendment 158, and ground 6. The noble Baroness, Lady Pinnock, has given the House the details of these and I will not repeat them, but this has been raised by the National Housing Federation and I am sure it would welcome a meeting with the Minister to discuss the technical detail.
Next, I would like to mention the new portal. The Government have recognised the need for local authorities to have information about PRS properties in their area, for landlords to be clear about their responsibilities, and for tenants to know where to go for help if their landlord fails to put right a problem. The TDS Charitable Foundation’s survey work raises serious concerns about the ability of tenants to enforce the new rights that the Bill will give them. It is developing a new “My Housing Issue” gateway or portal, to which the noble Lord, Lord Best, referred, which will act as a signposting service. I understand that it will identify for tenants the correct route to solve their problems, encourage an early resolution of disputes and provide relevant information about housing rights and options. I certainly encourage the Minister to look at this in relation to the new portal; it may be very helpful.
I now turn to my main concern: the way the new PRS ombudsman will be selected. The new ombudsman will play a vital role in delivering the Government’s objectives to improve experience in the sector for tenants and landlords alike. I declared my interest as chair of the board with responsibility for the Property Ombudsman. TPO deals with complaints and requests for assistance from private sector tenants of the 39,000 property agents who subscribe to this service. The new ombudsman will provide that service for PRS tenants whose landlords do not use an agent. This has been a huge gap in redress, as my ombudsman knows all too well from the thousands of requests for help that we have to refer elsewhere or to the courts.
We should not underestimate the scale of the new regulatory role proposed. The latest data from HMRC states that there are almost 2.4 million incorporated private landlords in England, with almost half owning only one property. Moreover, local authorities, which are responsible for investigating poor housing standards and taking enforcement action against rogue landlords, are overstretched, as we know. At the same time, many tenants struggle to enforce their rights through the courts, not least because, as the Law Society notes, 44% of people in England and Wales do not have access to housing legal aid providers in their local authority area.
The scale of, and challenges for, an ombudsman for this part of the private rented sector will be completely different from those presented, for example, in the social housing sector. Given the size of the task, it seems right that the Government have said they have yet to decide how the new position will be filled and supported. Clearly, this requires an open competition among the existing bodies in this field, to determine which might provide the best service.
However, the Minister made clear today that their preference is for the Housing Ombudsman, which covers the social rented sector, to have its remit extended to cover private sector landlords. I find that quite confusing because, although the decision about who should operate the service looks like a foregone conclusion, the Government have been at great pains to explain that no decisions have yet been made about whom to appoint to run the service. Indeed, the Housing Ombudsman has indicated that he is undertaking preparatory work, funded by the Government, to investigate how the PRS ombudsman could work and how it should be funded.
In a Written Question I put to the Minister some weeks ago, asking for the extent of the support provided to the Housing Ombudsman and the terms under which it was provided, the Government declined to provide that information. I can tell her that the gossip in the sector is that it is about half a million pounds. That does not bode very well for fair, open and transparent processes. Given what the Minister said about the Government’s preferred option, has she considered that TPO has uniquely detailed knowledge and experience in the private rented sector and is certainly well placed to be considered to deal with complaints for the landlord part of the sector?
This is my main point: in making important appointments for this role, it is imperative that the Government follow a clear and transparent procurement exercise, not least to ensure the best value for the taxpayer. Given that, can the Minister confirm that the Government will publish clear criteria setting out how they expect the new PRS ombudsman to operate and ensure that they fully consider all potential providers of the service? I reiterate that I broadly welcome the Bill as a chance to empower tenants to call out bad practice in the private rented sector, while supporting the vast majority of private landlords who do the right thing.
Lord Etherton (CB)
My Lords, I declare at the outset that, although I do not own any property in the private rented sector, my husband owns a number of such properties. I am grateful to the Minister and the Bill team for engaging with me on some of the issues that I will raise in this debate.
Like others, I warmly welcome the Bill’s additional protection for tenants. But, in judging the overall merits of the Bill, it is necessary to have regard to the state of the PRS and the possibility of unintended consequences. In that respect, I will elaborate to some extent on the description of the PRS given by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Best.
Paragraph 8 of the Explanatory Notes states that
“4.6 million households (c 11 million people) … rent from a private landlord”,
representing 19% of the entire housing market. According to a DLUHC publication in June 2022, it appears that this includes some
“1.3 million households with children and”
nearly 400,000 households with people over 65. The crucial importance of the PRS is highlighted by the fact that there is a shortage of about 1 million homes. In excess of one in five households in England—and one in four in London—rely on the PRS for accommodation.
Who are the landlords of the PRS housing? According to figures given by the Department for Communities and Local Government in 2010, 89% of landlords in England were private individuals, and 98% of these owned fewer than 10 properties. In 2019, the successor housing department indicated that 45% of private landlords, representing 21% of tenancies, owned a single property—the noble Baroness, Lady Warwick of Undercliffe, alluded to that—and a further 38% of landlords, representing 31% of tenancies, owned between two and four rental properties. What does that show? First, the PRS plays an absolutely crucial role in the provision of accommodation; secondly, the overwhelming majority of landlords in the PRS are private individuals; and, thirdly, nearly 50% of them own a single property for let and some 83% own four or fewer properties for let.
All this is important background for the Bill. It demonstrates the need for an extremely careful balance between, on the one hand, protecting tenants in the PRS from bad landlords and giving them appropriate redress in the case of landlords’ defaults, and, on the other hand, not imposing on the many small investor landlords standards and obligations that drive them from the sector. Does the Bill achieve that balance? I ask the Minister what steps have been taken by the department to obtain data on the possible number of private landlords who are likely to leave the market because of fears arising from the Bill. In the absence of such data, I consider that in some respects the Bill does not achieve the right balance and runs a high risk of driving many small investors from the sector. I will focus briefly on four areas.
First, local housing authorities are given powers in some cases to impose a fine on a landlord of up to £30,000. Those are cases where the local authority is satisfied beyond reasonable doubt that the landlord has committed an offence under the Bill, and instead of prosecuting the landlord, the local housing authority can impose such a fine. The reality is that, because of financial constraints, the local housing authority will usually wish to impose the fine itself rather than pursue the matter by way of prosecution in the criminal courts.
I do not consider that it is appropriate for a local authority official to act as judge and jury in relation to a criminal offence, enabling the local housing authority to impose a fine of as much as £30,000 on small investors in the PRS. I have no objection to the court deciding on whatever fine it wishes, but it is not appropriate for a local authority employee to impose fines of this size. For them to do so will result in litigation as to whether the criminal standard of proof has been satisfied and whether the amount of the fine is appropriate. It will lead to a lack of consistency across the country in the amount of fine for any particular infringement. I suggest that, if an offence has been committed and the local housing authority is not willing to limit the fine to £5,000, it should be left to the court to decide whether an offence has been committed and what is the appropriate remedy. It must be remembered that the rental return on many of these rented properties, particularly those owned by a single investor, is relatively modest. Even a small fine will push the investment into an unprofitable one.
Secondly, the standard of proof that is required in the case of a fine by a local housing authority under the Bill is inconsistent. For example, in some places— I will not elaborate today—the local housing authority may impose a financial penalty of up to £5,000, whether or not an offence has been committed, provided the authority is satisfied beyond reasonable doubt of the matters constituting the offence. In other cases, one in particular, it can impose a penalty of up to £5,000 if satisfied on a balance of probabilities that the landlord has breached certain provisions in the Act. There is no obvious reason for such differing standards of proof for the same £5,000 level of fine.
Also, the standard of proof should always be beyond reasonable doubt. Anything less than that, which depends upon probabilities assessed by a local authority employee, will undoubtedly give rise to dispute and appeals.
Fourthly and finally, in relation to two offences under the Bill, the landlord can be liable only if his or her mental state is one of knowledge or recklessness as to the relevant facts. The mental state of recklessness in criminal law is an extremely difficult one and has given rise to case law. It is something less than intention but more blameworthy than carelessness. In broad terms, recklessness will arise if the accused consciously—that is, looking at the matter subjectively—takes an unjustified risk. Such difficult concepts should play no part in this legislation, which will mostly affect landlords who own one or at most relatively few homes. It certainly should not be left to a local authority which wishes to impose a fine of up to £30,000 to reach its own conclusion on the application of recklessness in criminal law. The only state of mind which should be capable of giving rise to an offence under the Bill is intention—actual knowledge or an actual intention of the landlord to do the matters comprising the ingredients of the offence. This is clear, easy to understand and fair. At the end of the day, that is the test of good legislation.
Lord Truscott (Non-Afl)
My Lords, I declare an interest as a landlord of almost 30 years and before that as a renter in the private rented sector, so I have seen the private rented sector from both sides of the fence. It has been a long time coming, but this Bill is welcome. I support the creation of an ombudsman for the private rented sector and the application of a decent homes standard. There are some rogue landlords and action needs to be taken against them. The fact is that 81% of private renters are satisfied, according to the English Housing Survey.
Some seek to blame the current housing crisis on landlords, but I think that is a little unfair. The issue with rising rents and lack of supply is a failure of government housing policy over a long period, a point that the noble Lord, Lord Frost, mentioned earlier. His Majesty’s Government have repeatedly failed to meet their housing targets of 300,000 new homes per year—a point made by the noble Lord. As the noble Lord, Lord Best, pointed out in the recent debate on affordable housing, an estimated additional 90,000 social rented homes need to be built every year, partly to offset the 1.5 million social homes sold under the right to buy. The Government are nowhere near to achieving this.
It is also estimated that an additional 50,000 private rented homes are needed to help fill the gap, yet that does not look feasible. It is undeniable that renters are having a tough time, with sharply increasing rents. While I wholeheartedly agree that tenants’ rights should be protected, let us also look at this from the landlords’ perspective so that we have a balanced debate.
We must be wary of unintended consequences—a point referred to by the noble Baronesses, Lady Pinnock and Lady Warwick of Undercliffe. I am reminded, in that context, of a documentary that I saw about Chairman Mao’s response when told that sparrows were damaging China’s crops. He ordered all sparrows to be killed—millions of them. The next year, locusts, which were previously kept in check by the sparrows, destroyed all the crops, leading to the great Chinese famine of 1958 to 1962 that killed up to 30 million people. The documentary was a brilliant piece of anti- communist propaganda, but it showed in colours how policies must be properly thought through.
Due to the macroeconomic climate, landlords are being seriously squeezed. Some 1.7 million landlords have buy-to-let mortgages, and some face a tripling or quadrupling of their mortgage interest because of interest rate hikes. Over the last year, the number of landlords defaulting on their mortgages has doubled. Landlord profits are at their lowest for 14 years. According to recent research, approximately one-third of landlords plan to retire or exit the buy-to-let market altogether, and over a quarter are considering selling more than one rental property. There are some new entrants to the market, but these are not enough to meet private rental demand.
This crisis in the PRS has been building for years and can be dated back to the then Chancellor George Osborne’s decision in 2015 to end mortgage tax relief. As a result, the private rented sector, unlike any other business, is taxed on turnover rather than profit. Some saw this as the City’s attempt to destroy the PRS as a viable and rival form of investment. However, the PRS survived during buoyant times, but it is now in serious trouble. In parts of the country, investing in rental property just does not add up. Capital values are so high, and rentals so relatively low, that the return on capital, even without a mortgage, is less than 2%. The noble Lord, Lord Etherton, referred to most landlords owning only one or two properties: they are, in a way, small-scale investors, but the returns for many of them are very low. With tax and voids, a landlord may end up paying a tenant to rent from them in parts of the country. It is simply better to put the money in a bank. Even those with properties bought many years ago, with no mortgage, would be better off putting their money elsewhere.
One former Housing Minister told me that, if landlords sold off their properties, it would be good for the market and first-time buyers. Landlords generally do not want to sell off their properties, but some will have to in the current circumstances. Others will move their properties to Airbnb or similar ultra-short-let platforms, which make better returns for landlords but result in fewer long-term homes for residents and less student accommodation in cities and resorts. These ultra-short lets create a growing black hole of lost long-term rental property, including a growing black market in the rental sector. The headline in yesterday’s Evening Standard summed it up: “London’s Airbnb Wild West: capital ‘hollowed out’ by short-term lets eroding the private rental market”.
In some blocks of flats in the capital, 90% of the flats are Airbnb or similar ultra-short lets. Last year in London, between July and September alone, 455,000 stays were booked in short-term lets. It was found that more than a fifth had previously been long lets—so you can see the shift away from long lets to ultra-short-term lets. That means fewer homes available for London residents, and fewer B&B and hotel bookings. It reduces the supply of long-term lets, pushes up rents and forces tenants out to the suburbs and beyond.
The same is happening in many of our cities and resorts. If we want to provide more long-term rentals, Airbnb and other ultra-short let platforms need to be properly regulated and restricted. Incidentally, that is why I support the amendment to the Bill which provides for tenants to stay for at least six months initially. Purely short-term tenancies would be a disaster. Most banks require six-month minimum tenancies to lend in the first place. Long-term tenancies should be allowed when all parties agree—in that sense, I also agree with the noble Lord, Lord Frost. This can provide more security, not less, for both parties.
Regulation of the private rented sector is welcome to rein in poor landlords—of course it is. According to Foxtons, there are already over 150 pieces of legislation governing letting a property. When a landlord lets a property, they have to ensure there is an annual gas safety certificate, a portable electric appliance certificate and an energy performance certificate. In addition to the letting agent’s letting fees, often payable in advance, the landlord has to pay a tenancy paperwork charge, a professional cleaning charge, charges for tenant reference checks and tenant right-to-rent checks, and an annual TDS deposit check charge. Then there are insurance and service charges, which the landlord pays—plus they need to make good any damage or wear and tear to the flat not covered by the deposit or insurance. This can all come to several thousand pounds or more. The idea that this could happen every couple of months would simply mean landlords would further increase rents to cover this and repeated voids.
HMRC is currently piloting quarterly returns for landlords, who normally have just one or two flats as their pension, as I mentioned. This fails to take into account the nature of letting: many costs are up-front in the first few months, and then there can be a period of a couple of quarters of full rental, followed by a later period of voids and no rent. Landlords will potentially be changing tax brackets every quarter and chasing tax refunds at the end of the financial year.
While I am in favour of an ombudsman scheme and property portal, I am concerned that the fee for this would be yet another burden on landlords. Similarly, some local authorities are charging landlords to license their rental properties, which can result in landlords becoming local authority milch cows and increasing rents for tenants. In the light of all the reforms in the Bill to bring the PRS up to standard, which I welcome, selective licensing should be abolished.
With the right to request a pet, I hope that the Minister will reconfirm that, where these are banned under the lease or accepted at the discretion of the RTM or RMC, this will be maintained. Dogs can be a nuisance, particularly in blocks of flats, and even dangerous; we have seen a dramatic increase in dog attacks across the country.
On Section 21 no-fault evictions, I agree that these should go, but only when courts are ready. Landlords must have the ability to sell their property, move back into it or deal with significant rent arrears or anti-social behaviour in a timely manner. As the Law Society mentioned,
“without investment for housing, legal aid and the courts, the bill will not achieve its aims and may lead to an increase in backlogs and landlords and tenants alike will be unable to enforce their legal rights”.
I welcome that the Housing Minister in the other place said the Government were taking significant steps to ensure that the county court system would be ready to deal with the expected rise in possession-related caseload once Section 21 had been abolished.
His Majesty’s Government are investing £1.2 million in His Majesty’s Courts and Tribunals Service to deliver a better end-to-end online possession process. But I ask the Minister a question that a lot of noble Lords have asked: when will this system be ready and up and running? It is clearly of crucial importance.
There will be much to discuss as the Bill progresses. I suggest that we focus on the practical application of the Bill and avoid unintended consequences. Some have argued that, instead of sorting out the housing sector and focusing on providing more affordable homes, we should instead try to shore up renters at the expense of landlords. For example, there is the idea of a rent cap. That is fine, but will His Majesty’s Government or local authorities cap mortgages, service charges, and insurance and maintenance costs? If landlords default on their mortgages or are otherwise driven from the housing market, there will no security for tenants at all.
In the past, rises in capital values have enabled landlords to subsidise tenants, but this is not the case today. In Scotland, rent controls have not worked out well. Scotland has the shortest time for rental listings in the UK: properties are listed for just 15 days on average before being snapped up. There is an acute shortage of long-term rentals.
We need to make homes affordable again, by building and providing more homes, stemming the massive rise in ultra-short lets, and making home purchases attainable once more, especially for young people. I take the point made by the right reverend Prelate the Bishop of Chelmsford about the housing plight of young people. In its remit, the Bank of England should consider the state of the economy as a whole, not just the rate of inflation, and never forget the aspirations of British people to be part of our property-owning democracy.
Lord Adonis (Lab)
My Lords, I will address the fundamental change that the Bill makes, which is to Section 21 evictions. Although there is a difference between the two sides of the House on this issue in terms of what will happen, and Ministers have rightly been asked what their timescale is, the Minister set out some measures that will be taken. She mentioned one or two figures but did not give any timescale as to when the courts would be ready. None the less, given what my noble friend on the Front Bench said, it is pretty clear what will happen: by the time the Bill is enacted, and we have had a general election and probably a change of Government, the Government will not have brought this Section 21 abolition into play, but the next Government will do so, so we will get the change.
However—and this goes to the fundamental issues that have been raised about the PRS—the question then, given that we are likely to see the abolition of Section 21, probably within the next year to 18 months, or however quickly legislation can be brought in by the next Government, is what will happen in the courts in respect of the new requirements for eviction, and the new burdens there will be with Section 8 procedures, anti-social behaviour requirements, and so on. What will happen to see that the courts interact with the private rented sector in a way that does not stymie supply and lead to another generation of seriously dissatisfied and maltreated tenants?
The House needs to understand the scale of the issue here. The backlog in the county courts, which deal with these issues at the moment, is not minor. On the latest figures, published at the end of last year, the average time taken to go to trial in the county court is over a year—52.3 weeks—for small claims, and 78.2 weeks in respect of multi/fast-track claims, which will encompass quite a number of those envisaged under the Bill. Compared with 2019, that is 15.7 weeks longer for small claims, and 19.1 weeks longer for multi-track claims, so it is no exaggeration to say that the county court system has, in effect, broken down in dealing with housing cases at the moment. Unless that can be rectified—it appears it will be rectified on the basis of introducing the new regime, not before the new regime can be brought in—we will get a crisis in the management of the private rented sector, which needs to be addressed.
Apart from some fairly unconvincing measures so far for improving the county court system, we do not have any answers to this. The Minister referred to digitisation; well, as a habitué of these schemes in government, I think the idea that a nationwide county court digitisation scheme will produce dramatic improvements any decade soon is probably remote, but it will certainly not do so in the next few years. The sums of money the Minister referred to—I think it was £12 million—in her opening statement are trifling in this respect.
Therefore, I scouted around for the best course of dealing with these issues, if we do not want to see a crisis in the private rented sector as we bring in the new regime and while we have a problem in the court system. The best solution I have come across, scouting all of those that have been put forward over the last 10 years or so, is bringing in a dedicated housing court: a streamlined judicial process focusing specifically on housing cases—eviction, anti-social behaviour and enforcement measures.
It turns out that this has been considered seriously. There was a consultation on it in 2018. The case for it, which was put forward by the Government at the time, seems to me still to be compelling. The consultation looked at the problems with the current system and at streamlining redress schemes and considered the options for doing so. Paragraph 10 of the call for evidence stated:
“The government wants to explore whether a specialist Housing Court could make it easier for all users of court and tribunal services to resolve disputes, reduce delays and to secure justice in housing cases. The potential of establishing a Housing Court has been raised by some members of the judiciary. Presently, housing cases are heard in a range of settings. The First-tier Tribunal (Property Chamber) deals with a variety of specialised housing and property disputes. However other housing cases, including possession cases and claims for disrepair and dilapidations, are heard in the county court … The processes and procedures involved can often be confusing for tenants, landlords and property owners in leasehold cases”.
That was the Government’s view in 2018 when there were far shorter queues in the county courts for dealing with these issues, so should we be considering a more radical answer to this problem of judicial overload if we are going to see, as we clearly are going to see under this new regime, a great onus on the speedy resolution of housing cases? A Select Committee of the other place recommended a dedicated housing court at the same time as the Government were consulting on it. Clive Betts, the chair of that Select Committee, said that
“many more tenants may go to court over landlords refusing to do repairs, because they will no longer fear retaliatory evictions”—[Official Report, Commons, 23/10/23; col. 639.]
under Section 21, so we could see an escalation in the number of cases. A dedicated housing court that can bring together the various different parts of the judiciary that deal with these issues at the moment and set in place clear and expeditious timelines for dealing with these cases seems to me to be an option well worth exploring. I say this to my noble friend on the Front Bench as well because we will have to deal with exactly the same issues in a year’s time.
The noble Lord, Lord Frost, set the wider context, which is a massive undersupply of new homes in both the private sector and the public sector. I think he said that 1978 was the last year when we got anywhere remotely close to the 300,000 a year target, which went back to Harold Macmillan when he was Housing Minister after 1951. Actually, it is only in the 1960s that there were more than 300,000 new homes being built per year across a whole decade, which is a crucial thing to understand about the last phase of significant housebuilding in line with projected demand. The noble Lord said that if we had continued at the rate that the French have built since the late 1970s there would be 4 million new homes. The French now have 12 million more homes than we have, population-adjusted, so there is a huge supply problem. When you go back to the 1960s, when more than 300,000 homes were being built, with a peak in 1967 when 400,000 new homes were built, developments were almost equally balanced between the private sector and the state. It was the huge effort on the part of local authorities and new town corporations which produced a big surge in housebuilding in the 1960s.
We cannot get away from the fact that, if we are going to see a return to the levels of home building that are required to meet demand, and to get to or exceed the 300,000 figure, then not only will we need planning reform that incentivises the private sector to build but we will have to fundamentally change the role of the state. The state is going to have to become a major property developer again for the first time since the demise of council housebuilding in the 1970s. That means hugely empowering local authorities; it means looking at the case for significant urban extensions on the model of the new town corporations, which did so much of the building in the 1960s and 1970s; and it means a readiness to make significant new public investments, which would also mean harnessing the potential of pension funds and others with big concentrations of capital to undertake these investments.
My final point is that the peak year for home building since the Second World War was 1967, which was also the year when Milton Keynes, the largest of the new towns, was established. There is a clear connection between those two events, which demonstrated the mentality of a state that was prepared to take the responsibility for significant home building at scale in new communities. That level of ambition is going to be fundamental in dealing with the housing crisis. It is the only way that we will deal with the underlying issue of supply, which is what is leading to the pressures that we are debating today.
The Earl of Lytton (CB)
My Lords, it is a pleasure to speak in this debate. I have interests to declare as a chartered surveyor and a small-scale private rented sector landlord, both of some 50-plus years’ standing.
I welcome the Bill, which contains much good, for no other reason than that I hope it consolidates the good and prevents a small proportion of bad actors from providing a reason for criticism and discord. I thank the Minister for her willingness to engage, although I remind her that I sent her a list of questions beforehand that are not covered in what I have to say, and I hope she will be able to answer them.
The test will be whether the Bill results in more choice, supply and competition, with better outcomes for renters, while providing a balance of flexibility, opportunity and returns for lessors. The Minister said much about existing standards by landlords but nothing about ensuring good behaviour by tenants, and I suggest that we need both. There would be little purpose in giving renters a better deal if overall supply failed to grow or even shrank, so a polarised critique of supply side is rather unhelpful.
Current PRS market dynamics are opaque at best; the statistics are not sufficiently granular to enable cause or immediate effect to be established. Recent research by Savills, generally considered a reliable sector source, shows a modest but potentially significant decline in rental stock, but the reasons remain unclear. Some suggest that highly geared buy-to-let investors are put off by poor returns due to higher interest rates and fiscal changes. Even the Bank of England, in its note on that subsector, admits that it cannot definitively establish cause and effect. There are too many variations in circumstances and aspirations to reach a pan-sector conclusion.
I am particularly interested in an excellent piece on right to buy in the latest House magazine by the noble Lord, Lord Bird. I know of no focused research into lessor views other than that of the CLA, of which I am a member, and that only in the rural context, where it suggests that its member lessors are spooked. Poor yields and higher risks discourage new entrants—that must be obvious—and it is safe to say that the private rented sector, with its costs of entry, exit and interim returns, competes with other investment opportunities here at home or anywhere else in the world. There is nothing special that mandates investor participation in the PRS or that it must match unmet need for a place to live. The impact assessment suggests a ready replacement of departing lessors, but without evidence or research into that—and I find none—I conclude that the policy enters unknown territory. So far, not so good.
It is a common ground here that there are currently large numbers of people wanting to rent and far too few available properties. It is likely demand is rising because of severe social housing shortages, and because getting on the housing ladder has become so expensive—this despite those already having mortgages and in occupation having lower debt servicing costs compared with equivalent rental payments. However, I must say at this point that that is a bit like comparing apples and pears. More broadly, I consider that this is due to other government policies impacting on a sector that has become more volatile over the years. Such policies are characterised by the word “buy”—right to buy, help to buy, buy to let—and other fiscal prompts and exhortations to build, build, build, which cannot keep up. Stoking demand which necessitates housebuilding rates never achieved without council housebuilding—a point made by the noble Lord, Lord Adonis—is at best unwise. Relying on affordable housing on the back of market sales while selling off existing social housing at a discount is equally questionable, however popular that might be.
Near where I live, new market housing totally unaffordable to the locals is being offered to Far East buyers. We need a new model altogether for providing housing that the nation can afford, and to take some of the heat out of the PRS demand sector. My fear is that we are tinkering with the fallout from much bigger historic decisions about commoditisation of the roof over one’s head, stretching back to the Thatcher era. We have little or no idea what the effects of this Bill will be. The intention seems simply to accommodate demand. On supply, for which it has obvious implications, if it does not foster an increase then the policy will simply fail.
In turning to some of the Bill’s specific provisions, I will keep clear of the Section 21 question for a moment but simply remind your Lordships that the exit route under the Housing Act 1988 from the 25-year impasse of rent control and security of tenure created in the 1960s was to free up and revitalise the PRS through something called a shorthold tenancy. Superimposing longer-term aspirations of some renters on an essentially short-term model designed to give mobility both of occupation and investor finance may be a tactical error. Proper provision should be made in parallel for longer-term lettings. Measures which now make things less flexible inevitably alter supply-side dynamics. Demanding higher levels of competence and compliance raises fears of added cost and risk. These may increase rents, as we have already heard, especially if quality improves and/or the numbers of available properties, or of lessors, shrink.
On the exceptions in the Bill, I note the points made by the CLA that carving out an exemption for agricultural and forestry workers fails to address the wider diversified rural business need, where parks, gardens, hotels, food processing and the like also involve providing staff with accommodation. Dealing with the normal turnover in staff housing needs has to be considered further.
A promise that Section 8 terminations will not be caught up in a severely underresourced court system— I am grateful to other noble Lords who have pointed this out—does not remove the suggestion of a process less certain and more contestable, protracted and costly. In the market, you cannot achieve vacant possession value if there is a tenant in place as it prevents immediate occupation by a purchaser. For a lessor intending to sell, this can impede choice of the moment to enter the market—a market characterised by seasonal fluctuations, with political and financial sector volatility. It is how markets work and how investors react.
As to blanket bans, I totally accept that unfair discrimination is completely unconscionable. A prudent lessor who already has responsibility for checking a renter is entitled to be in the UK—which I always thought to be a UK Border Force task until this Government decreed otherwise—should not object to complying with standards many already observe, or to acting with proper probity. These are likely no more onerous than the scrutiny that they themselves apply to would-be renters. However, I would venture to suggest that deliberate misrepresentations by either party to the other should have consequences, and merit access either way—from a landlord or a tenant point of view—to dispute resolution.
The renter should be no less fit for purpose and conduct than the lessor and the description of the property. Logically, the renter’s net income should be sufficient to pay the rent and outgoings and meet living expenses, as a minimum. After all, if the renter subsequently finds that they cannot afford the heating costs, the property and the renter’s health are both at risk. I remind your Lordships that the majority of PRS lessors are not big corporates but, as we have heard, private individuals who are just as entitled to the reasonable use and enjoyment of their assets as the renter is to quiet enjoyment of a residence that may or may not be their only home. Professionally, over the years, I have encountered both poor renters and rubbish landlords.
On decent homes, I agree with the principle although I have yet to see a revised standard. Arguably, quite a lot of PRS properties are of older construction and may be difficult to upgrade to anywhere near modern thermal standards. If this becomes a fitness issue, there will be failed properties that become uneconomic to rent and will go on to the freehold sale market. The Bill is silent, however, on what happens if a property cannot be upgraded without the tenant moving out. That needs clarification.
I accept some of the generality of the claim that terminations of tenancies are a major source of homelessness, but it rather overlooks the practice of local authorities insisting on an eviction order before acting by stepping in themselves, thus exacerbating an already difficult situation and making even reasonable lessors look like ogres. I hope the Bill will improve that, but if the view is that it is the role of the PRS to underwrite social support and be a safety net for those who would otherwise be homeless, then that needs a better and upfront justification.
There is provision for possession on grounds of redevelopment, but I am unsure what this means in practice. If a lessor has a project substantially to convert, remodel or otherwise carry out major works—it might be a developer assembling a site—with a view to eventual sale or re-letting but in the meantime decides they wish to let short term, do the Government consider that reasonable or would they rather that such properties were held vacant? It is a waste of a resource if you cannot let short term.
That is where I have concerns about the elimination of the fixed-term lease. It quite obviously suits lots of people if they are on secondment or whatever it happens to be—they may be away on a job or know that something is going to happen—that they can enter into a fixed-term contract. It is perfectly legitimate for a renter to decide they want only that. What is it about adults that we cannot trust them to freely contract in a market environment? I find that really strange. Clearly, there must be some safeguards against misuse, but I really do not see what the problem is. I would like to know what would happen to a sublet flat in a block requiring a decant for fire safety remediation, a matter that I have raised on many occasions in this House. Will frustration of that renter’s contract apply?
Other noble Lords have said that the private rented sector has a fundamental and pivotal role in housing provision. Much ultimately depends on whether there is political consensus on the measures in the Bill or whether the Opposition would wish to go further. It is unlikely that the availability of homes to rent will be improved until this is settled, possibly at some stage after the next general election. Much doubt and uncertainty are generated by this political fog. If there is an identifiable, serious decline in the availability of homes to rent, that will be a significant part of the reason. The language we use, therefore, has considerable significance for how things turn out.
Lord Marlesford (Con)
My Lords, I declare my interests in the register as a Suffolk farmer with rented residential properties.
I will focus primarily on the rural implications of the Bill. I start from the premise that it is the role of the state to protect tenants—as it is to protect consumers, investors, savers, employees and everyone else—from abuse or exploitation. Of course, there are bad landlords, and they should be firmly and severely dealt with, but I am with the noble Earl, Lord Lytton, and the noble Lord, Lord Frost, in that I do not accept that to allow tenants and landlords to enter into mutually agreed contracts is wrong.
During the 1960s and right into the late 1980s, rural housing was subject to severe constraints on both tenancies and rents. Rents set by rent officers were extremely low, often providing zero return on capital, and cash flow was so fragile that there was no surplus to finance the proper maintenance—let alone improvement and modernisation—of rural dwellings. Farmers were advised to sell all the housing they did not need for their own employees. The supply of affordable housing accommodation withered and its condition deteriorated.
As mechanisation advanced, farmers found themselves with a surplus of housing. The big leap forward came with the introduction of the assured shorthold tenancy in 1988. John MacGregor was then the Secretary of State for Agriculture and Nick Ridley was the Secretary of State for the Environment. The AST gave security by mutual agreement to both tenants and landlords for initial fixed terms of six, 12 or 24 months, with annual rent reviews and the ability to continue leases on a rolling two-monthly basis. The AST has worked very well for 36 years. It has greatly reduced the proportion of inadequate rural housing, yet Clause 1 of the Bill abolishes AST. This is inexplicable. Section 21 of course needs reform—no legislation that could be described as no-fault eviction can survive—but that does not justify throwing the baby out with the bathwater.
Significantly, the Government seem to have recognised the folly by modifying the Bill in the Commons to allow a fixed term of six months. If that is legitimate, why not 12 months, with the continuation of a two-monthly basis? There are market forces the Government do not seem to understand. The long and troubled journey of the Bill through the other place has already become a deterrent to the supply of affordable housing. Supplying housing for rent is now a key diversification for farmers, at a time when agriculture in Britain and elsewhere is in crisis due to falling yields and prices; it is a very relevant factor.
Affordable housing needs a clear definition. Traditional government guidance that rents should be no higher than 30% of gross tenant income is a valid test. Wise landlords would apply clear financial tests in selecting tenants. Landlords cannot be expected to subsidise tenants whose job insecurity—of whom there are many—makes them vulnerable to being unable to fulfil their rental obligations. The Work Foundation at Lancaster University claims that in 2023 1.4 million people were in severely insecure work and were living in privately rented accommodation. This is why it is better to subsidise tenants rather than houses. That is the role of housing benefit. To subsidise rents would mean that changes in tenants’ circumstances would result in tenants getting either more or less than they needed. This has profound implications for public finances.
Rents are a return on capital. Housing supply in the private rented sector depends on adequate rents. It is unlikely that a gross rental return of much less than 3%, from which the costs of maintenance and administration have to be deducted before arriving at any taxable profit, will produce much more housing for letting.
The Bill proposes an ombudsman to adjudicate between tenants and landlords. This may be a sound idea, provided that it is not a signal for the return of the rent officer. There is no justification for also retaining the First-tier Tribunal system in addition to the ombudsman. Membership of the ombudsman scheme will be mandatory for private landlords; I hope the Minister will offer some guide on the expected cost to landlords. The ombudsman will collect a great deal of information about both landlords and tenants. Surprisingly, the privacy implications have not been spelled out, and this aspect does not seem to have been raised in another place. We will have to deal with this in Committee. It would be quite wrong to publicise details of all individual leases. There can be no obligation on landlords to make such information public. Provided market rents are not exceeded, landlords should be entitled, at their discretion, to offer lower rents to particular people for good reason.
My overall concern is that the Bill has not been properly prepared or fully debated before it came to your Lordships’ House. It is crucial that this important and potentially useful legislation should not be enacted with details of crucial aspects of its administration left to secondary legislation at a later date—we simply cannot legislate like that. That would mean regression from increasing private sector supply of good housing and fair rents to the bad old days of bureaucratic domination. An overall consequence could be the taxpayer having to finance an increasing supply of housing for rent, with little hope of the resources to do so. Frankly, the problem I see with the Bill is that it is a superficial political solution to a tough economic and migration challenge.
Lord Thurlow (CB)
My Lords, I declare my conflicts: I am a former chartered surveyor and I have buy-to-let properties, as declared and set out in the register. I began research on the Bill by trying to establish its primary purpose—what is its core objective? I know it sounds obvious, but I was not convinced; it is not clear. It was revealed as a 2019 manifesto pledge and relates to key proposals from the 2022 private sector rental report, but there is no real indication of the underlying purpose.
However, there is much good in it: the key measures to abolish Section 21, new grounds for repossession, amending rent increase provisions, the ombudsman, blanket bans, pets and other key measures. All these are interesting, helpful and, for the most part, constructive, but there is no real underlying core purpose, and none of these things needs a new Bill, particularly bearing in mind the shortage of parliamentary time. They could have been accommodated in the concurrent debates we are having on the leasehold and freehold Bill or even in the levelling-up Bill last year. I believe the real root of this should be, and indeed lies in, the shortage of housing and, in this case, of properties to rent, as we have heard particularly eloquently from the noble Lords, Lord Frost and Lord Adonis, and the noble Earl, Lord Lytton.
There have been numerous attempts by successive Governments to deal with housing supply—we all know that. Some imaginative ideas have been proposed to attract private finance into it, and the measure whereby Section 106 agreements were attached to planning conditions for the larger developments was quite successful. But the sale of council housing goes on, and we seem no nearer to reaching anything like the levels of new housing required to provide a sustainable balance between supply and demand. The noble Lord, Lord Frost, in his comments could not have made this clearer.
There is no point in expecting the Treasury, or the taxpayer by any other means, to finance the level of development required to meet the necessary demand. We have heard some impressive statistics. If we look back and reflect on the housing market after the Second World War, we see that tens of thousands of residential units were owned freehold by City institutions. This was an ideal scenario; they were socially responsible landlords, who invested in residential properties to meet their obligations to customers, and they were largely made up of life insurance companies and others. It is the perfect formula for housing supply: it does not involve the Treasury but comes from the private sector and is socially responsible. However, this pattern of responsible ownership was shattered by the Rent Acts in the post-war era. Rent controls arrived, and probably necessarily so, but with a sledgehammer rather than with negotiation by the City institutions.
The result was disaster for the sector. Tens of thousands of units were sold, or dumped, by the City institutions. I spoke to some of them in the early days of my career, and they explained the reasons for it. It was an avoidable tragedy for society as a whole. City investment was lost, and low-income tenants found themselves at the mercy of private landlords, many of whom were ruthless or simply uninterested in looking after their properties. The era of tenant exploitation, exemplified as some of us will remember by tales of Rachman, had begun in earnest. We must recreate an institutional market in social housing—and we can.
The long-term problem is not about rental levels; the market does that. The long-term problem is shortage of housing for rent. It is about supply and demand. Capping rentals is a catastrophic solution. The SNP-led Government in Scotland have done this; they have done the market testing for us. So many landlords have abandoned the market that one nationwide letting agency has closed its renting department permanently—and it represents an entire region of Scotland.
We can fix this problem by attracting private investment, particularly institutional investment. I am convinced that it can be done. There are examples, such as the Legal & General insurance company, which tried with great purpose and financial commitment recently not only to invest in rented housing but to build modular homes, keeping down the costs, removing layers of the development process and enabling an economic return from affordable rents. It built a factory to construct prefabrication and showed the commitment that the challenge requires. It invested millions of pounds—but I believe that it has given up on the project, sadly. I shall inquire as to why, but I suspect that the challenges were simply too great. The political commitment has been lacking.
We have heard that, when the ASTs was introduced, it was hugely successful in bringing private capital into the rental market. Initially, the private sector responded cautiously; the doubt was about whether it could trust in long-term stability and long-term freedom from political interference. The bruises of the Rent Acts have a long tail. However, ASTs have worked, as we have heard, and now the private sector is responsible for thousands of units. Sadly, the number is declining. Successive Governments have interfered, with the removal of mortgage interest as a legitimate cost, for example. Any AST landlord with a reliable tenant would not dream of serving a Section 21 notice; it is the unscrupulous few who neglect their properties and squeeze the last penny of rent from their tenants against the threat of eviction who spoil the system for everyone else. They should be the focus of this Bill and of government attention—and indeed they have their place in this Bill.
The free market must be allowed to operate with private capital. Now, the rout of private investor-owners continues, as we have heard, and more and more are selling up. The ASTs probably never replaced the provision of those early City institutions, but it was a good attempt, until political interference spotted a tempting opportunity to use it as a source of revenue. What a political mistake. The taxpayer now houses thousands of council house waiting list families and others in hotels, at public expense.
It is not all bad, however. A key positive is the reference to penalties and forfeiture to penalise bad landlords, but this is subject to a process managed by local authorities. That is a logical choice, I agree, but we all know that local authorities are strapped for cash. They are pruning their meagre resources and will have little chance of effective intervention. Without significant further central government funding, it will fail; proposals that it should be self-financing ring hollow, certainly in the early years.
Perhaps the most loudly trumpeted feature of this Bill is the abolition of Section 21. However, the government amendments have effectively delayed this by years; it may never happen under this Government.
As I explained at the beginning, the Bill at its heart should be encouraging the provision of more rental housing. We are tinkering with the details surrounding the challenge, but even the effectiveness of the tinkering has been diluted in the other place through its tsunami of amendments. We need to accelerate the supply pipeline as a priority. Wholesale investment by City institutions is required. The residential rental market needs to become an accepted, accredited investment sector in the eyes of these investors. It can be done. It has been done before. It was done 30 years ago—long after the Second World War—with shared ownership. The Government must work with these organisations and the advisory fraternity which understands it to create an investment product that will be sustainable to all parties and provide the hundreds of thousands of homes we need. It can be done.
Baroness Jones of Moulsecoomb (GP)
My Lords, I think I have received more briefings on this Bill than on any other Bill in the nearly 11 years I have been here. It is clearly a very important issue. It hits a vast number of people, but often especially the poorest in society. It is a human right to have shelter, and we are apparently failing on that.
It would be wrong of me to pick out a particular briefing—but I will. The briefing from the Renters’ Reform Coalition was excellent and starts by saying:
“The private rented sector in England is characterised by poor standards, a lack of affordability, discrimination and insecurity”.
That is a very fair summary, but it is obviously very worrying. In the 2019 Conservative Party manifesto, there was a promise to make a “better deal” for renters, but this Bill probably does not solve the problems.
I grew up in a council house on an amazing estate in the days when working-class communities took pride in their environment and neighbourhoods, and the NHS took care of us and kept us healthy. We felt incredibly lucky. We did not own our own house, we did not have a car—when I was very young, we did not have a phone or a fridge—but we had a huge garden and a relatively car-free street to play in. It was a good life. My parents just thought they had won the lottery—which did not exist at the time.
However, then Thatcher happened along, with deindustrialisation and the right to buy. All the well-built and desirable council housing was sold and resold. In my home town of Brighton, 86% of the right-to-buy social housing is now relet by private landlords. That means that most of our £23 billion housing benefit bill goes straight into private hands: a big subsidy payment going from taxpayers straight to those who can afford to own and sometimes rent out multiple homes.
I completely understand why my old neighbours bought their homes at bargain discounts and resold them to get themselves a retirement plan, but the scandal is that Thatcher effectively stopped councils recycling and reusing the funds to build more homes. Some noble Lords have agreed that supply is the problem, although we might have different ideas about how to solve that problem. The Thatcherites hated social housing, and that legacy has resulted in a largely privatised housing market. Since 2020, rents have risen by 28%. Over 200,000 people have been served no-fault eviction notices in that same period, as landlord businesses aim to squeeze more money from their properties, and 1.2 million people are on local authority waiting lists. What many people feel, at the mercy of private landlords, is failure and frustration. So, what are the solutions?
The Renters (Reform) Bill is the smallest of steps; it must be tougher in order to be fairer. We need rent controls, first of all. The Mayor of London has asked for these powers and Greens at all levels of government will fight to give him them. Local mayors and local authorities know their areas and understand the local housing market. This Government should give them the power to make that choice.
Secondly, we Greens would lengthen the notice periods for rent increases and stop landlords using spurious grounds to evict people.
Thirdly, we will support all the amendments that aim to make life easier for student renters. I declare an interest here, as I now have grandchildren who are starting out in the world as students, so they clearly have a vested interest in this.
Above all, we would end the right to buy council properties and start to rebuild social housing. Our dream is to return to the days when we were spending as much taxpayer money building homes as we currently do on housing benefit. Because the more social homes we have, the less we will be filling the pockets of landlord businesses with taxpayers’ money. This includes buying back the supply, with local, regional and national schemes to bring properties back under the ownership of local government. It is estimated that in many coastal towns, up to a fifth of the housing is empty. We must bring those communities back to life.
The cross-party London Assembly Housing Committee, when chaired by the Green Party’s Siân Berry, assessed that there are around 6,000 to 8,000 affordable homes in London that could be immediately added to the social housing mix. These do not have to be built from scratch, because they are empty homes that already exist. There are a lot of empty properties all over the country sitting in investment portfolios—so-called ghost flats—that should be actual homes for actual people. We can amend the Renters (Reform) Bill to turn it into legislation that will really help people, but it is a small step compared to the building of new social housing, buying back the supply, and rent controls. Those are the policies that will have the biggest impact on the housing market and reduce rents in the private sector. I really hope that the Government will accept some of the amendments that will be coming forward.
Baroness Lister of Burtersett (Lab)
My Lords, I am grateful to the Minister for last week’s very helpful drop-in briefing session, which was particularly helpful for those of us who cannot claim expertise in housing law. I come to the issue from my long-standing concern about poverty. A growing proportion of those in poverty live in the private rented sector, and as many as 46% of children living in the sector are in poverty after taking account of housing costs. The failure to uprate local housing allowance annually as a matter of course does not help, especially at a time of spiralling rents, which the Bill will do little to curb. Issues of affordability and security are of particular importance to those whose housing options are limited by lack of money, or by vulnerable circumstances such as those stemming from domestic abuse or disability. For all too many, homelessness is then the outcome.
I would therefore like to be able to welcome the Bill, and indeed there are some welcome provisions, including the expansion of the homelessness prevention duty, and the creation of a decent homes standard for the PRS. Nevertheless, the 20 leading housing organisations which make up the Renters Reform Coalition are clear that it fails to achieve the White Paper’s promise of quality, affordability and fairness, and comes from the Commons watered down and fundamentally weakened. Their concerns are echoed in most of the many other briefings received, for which I am grateful.
I applaud the aim articulated by the Minister at our briefing to create a fairer balance of power between landlords and tenants. However, according to the coalition, the Bill
“preserves the central power imbalance at the root of why renting in England is in crisis”.
Moreover, as the National Residential Landlords Association stresses, quoting the Law Society, without investment in housing legal aid
“the Bill will not achieve its aims”,
and neither tenants nor landlords may be able to enforce their legal rights, a point raised too by Crisis and the Large Agents Representation Group. To enforce their rights, tenants first need clearer information, as the TDS Charitable Foundation argues. If local authorities are to deploy their enforcement powers effectively, they need adequate resources to do so.
To put it charitably, the indefinite pause on the abolition of Section 21 is disappointing to say the least, and increases the vulnerability faced by, for example, older tenants, renters with children, and domestic abuse survivors. Justice challenges the idea that the courts are not ready. I hope that at a minimum, we might be able to subject total abolition to a clearer timeline.
However, I was also struck by the coalition’s plea to us to focus on the inadequacies of the new tenancy system proposed by the Bill. In particular, it is concerned that first, the notice period remains at only two months, despite over 100 council leaders urging an increase to four months, and the Government’s initial highlighting of the short eviction notice period as an important factor in why reform is needed. Secondly, the coalition is concerned that the period of protection against eviction under grounds 1 and 1A remains at six months rather than the two years proposed in the Government’s original 2019 consultation. This will not provide the greater security promised. Its third concern is the lack of strong legal safeguards to prevent abuse of the new grounds for eviction. In addition, my inbox has been flooded by emails from students who fear that their exclusion from the Bill’s safeguards will mean, among other things, that they will in effect remain subject to Section 21-type evictions in all but name.
One provision that I warmly welcome is making illegal the introduction of a blanket ban on renting to tenants in receipt of social security benefits or with children, which will widen the protection that already exists in theory for those with protected characteristics. However, if the Government’s aim that
“no family is discriminated against”
is to be achieved, I hope that they will consider amendments put forward by Shelter to ensure that landlords cannot indirectly discriminate against social security claimants by making a new tenancy unaffordable. This is all the more important given the provision in the data protection Bill that could mean landlords’ bank accounts being made open to scrutiny if the LHA is paid directly to them, thereby making them even more reluctant to rent to tenants on social security. I am pleased to see the noble Viscount, Lord Younger, in his place as I make that point. The amendments would place a limit on rent in advance, restrict the scenarios under which a landlord could legitimately require a guarantor, and remove the requirement to prove intent to discriminate.
In addition, reflecting the principle enunciated earlier by the Minister, Justice recommends that the provision should be extended to prevent blanket bans on other groups which have experienced discrimination, such as prison leavers and non-UK passport holders. The latter, I would suggest, points to the abolition of right-to-rent checks.
Another group particularly vulnerable to the power imbalance that exists between landlords and tenants is disabled people. Disability Rights UK, Inclusion London and many other groups have raised concerns about the proposed change to the definition of anti-social behaviour as grounds for eviction. As we have heard, instead of
“conduct causing or likely to cause a nuisance or annoyance”,
the Bill proposes to define it as behaviour “capable of causing” nuisance or annoyance to a person, and so hearsay evidence will become admissible. They fear that the new wording could be open to interpretation in such a way as to cover some behaviour of, for example, neurodiverse people and those with learning disabilities or experiencing mental distress. The admissibility of hearsay evidence could open disabled people up to potential abuse, harassment or even extortion.
The briefing also raises concerns about the implications of the new wording for those experiencing domestic abuse, as do Generation Rent and the Domestic Abuse Housing Alliance—DAHA. The former points out:
“Victims and survivors of domestic abuse are more likely than other tenants to have ASB complaints made against them”.
Given the considerable concern, can the Minister please explain the justification for the new wording? As the “capable of causing” formulation is being removed today from the Criminal Justice Bill, will she undertake to reconsider its usage here in this Bill?
Two other main issues have been raised in relation to domestic abuse victims and survivors. One concerns what has been dubbed the “tenant trap”, introduced by the government amendment that means that tenants cannot end a contract during the tenancy’s first six months, as we have already heard. It was welcome that the Minister in the Commons confirmed that there will be an exemption for domestic abuse victims and survivors, as the Minister here mentioned in her opening remarks, but we do not yet know what it will be. Can she tell us more, including whether the exemption will be included in the Bill itself? It is important that it is. Can she assuage the anxiety of DAHA that it will require tenants taking court action, which is likely to take too much time and money for it to be an effective remedy for those who have good reason to leave a property before six months?
The other issue relates to the new repeated rent arrears ground for eviction. Both Generation Rent and DAHA warn that victims and survivors of domestic abuse are particularly likely to be in rent arrears, especially if they have been and/or continue to be subject to economic abuse. Moreover, because this ground for eviction is mandatory, judges will not be able to use their discretion where, for instance, the arrears can be linked to abuse. I hope that the Minister will be willing to take another look at that issue. We cannot have a Bill which purports to offer greater housing security threatening even greater insecurity for those in vulnerable circumstances, such as domestic abuse survivors.
Another group of renters who face especially vulnerable circumstances is those living with a tenant who has died. Surely the idea that the death of a tenant can constitute grounds for eviction is unconscionable, when we think of what the bereaved survivor will be going through. Marie Curie argues that the Bill offers an opportunity to bolster protections and rights for grieving private renters, but that, in its current form, it would actually make the situation of bereaved renters worse. I hope that the Minister can also take a look at that.
In conclusion, on Report in the Commons, the Minister referred to his willingness to
“listen to suggestions for how we can improve the Bill”.—[Official Report, Commons, 24/4/24; col. 987.]
Unfortunately, in too many cases, that listening has resulted not in improving but in weakening the Bill, so that it neither provides tenants with the security originally promised nor adequately tackles what the impact assessment calls the “systemic issues” that underpin their poor experience. It would be a real shame if the improvements the Bill does contain are overshadowed by the clauses that take us backwards. I hope that we will be able to make changes in line with the Government’s original intention to strengthen tenants’ security and achieve a fairer balance of power between tenants and landlords.
Lord Carrington (CB)
My Lords, I declare my interests in the rural private rental sector, as set out in the register. I thank the Minister for her time in briefing me, as well as all the organisations that have also sent me such excellent briefs. I thank all noble Lords who have iterated many of the points that I will make.
I welcome this Bill, including the removal of the sometimes misused Section 21 for the ending of tenancies. The Bill attempts to balance the interests of tenants and landlords, to both improve the letting experience of tenants and to secure the future of the PRS through protecting the possession rights of landlords. The Bill deals with a wide spectrum of industry interests and characteristics, and is principally demand-driven. Sadly, it is unable to address the underlying supply problem of insufficient housing, which has a direct effect on the availability and cost of rental properties—points made by the noble Earl, Lord Lytton, and many others. In the five or more years that we have been waiting for the Bill, the supply of rental accommodation has worsened. Hamptons has calculated that there were 43% fewer homes available for tenants to rent in the first 10 months of 2023 compared to the same period in 2015.
Leaving aside the supply of housing, another major challenge facing the Bill is the perceived inadequacy of the court system, which, of course, is not under the control of DLUHC. I would be most grateful if the Minister could assure us that the two ministries involved are united in their efforts to make the necessary reforms.
The abolition of Section 21, under which some unfair evictions have taken place, involves the reform of the court system and the efficiency and timeliness of procedures under Section 8. Although Section 21 notices are now referred to as no-fault evictions, they are typically used for justifiable reasons, including rent arrears, anti-social behaviour, or landlords needing to sell or move back into a property. It is the unjustifiable reasons, such a landlord seeking to up the rent or failing to properly maintain a property, that have brought it into disrepute. Currently, Section 21 is being used as a substitute for other methods to secure possession because it is easier and quicker. Its abolition will add to the court’s workload under Section 8.
The loss of Section 21 notices means the loss of the ability to issue accelerated possession proceedings. There is therefore a practical fear on the part of landlords that, without reform, the courts will be even more overwhelmed and will not be able to deal with cases in a reasonable time. This is a major reason for landlords exiting the sector.
The Government are now committed to abolishing Section 21, but only when reforms are made to the court system, including the need to increase resources and ensure a timelier resolution of justified possession cases. In addition, in order to secure fairness for both tenants and landlords, a properly functioning justice system is essential. This involves access to and funding for housing and legal aid, as well as the courts. Landlords and tenants need to be able to enforce their legal rights in a timely and efficient manner.
Reviews, reports and surveys are all part of the reform process, but there is an absence of published information on the metrics of improvement. This all resembles the age-old question: how long is a piece of string? Please can the Minister give us a timeline, and even consider a drop-dead date, for the abolition of Section 21? What are the parameters for an improved court system?
My other concern is the proposal to make all tenancies assured periodic tenancies. With the abolition of Section 21, there is no need to abolish fixed-term tenancies or assured shorthold tenancies. The Government, by accepting the minimum term of six months, whereby a tenant can serve two months’ notice at the end of the first four-month period, concede the importance of securing landlord and lender confidence to make private renting financially viable. The problem is that, for some tenants and landlords, six months is too short, bearing in mind the favourable terms that can be negotiated under these agreements.
Last year, the cross-party Levelling Up, Housing and Communities Committee agreed a strange statement, indicating that
“fixed-term tenancies should remain available where both parties want them, but … given the current shortage of private rental properties, this would likely result in tenants having fixed terms forced on them”.
This is plain wrong. No one is forcing a fixed term on anyone. A landlord cannot and should not be held responsible and suffer for a lack of housing supply that is out of his control. That would be a very good reason for exiting the business, whereas, conversely, the continuation of fixed terms for a year or more would stop more landlords exiting the private sector.
As other noble Lords have said, fixed-term tenancies suit many landlords and private renters, and have the attraction of solid security of tenure that allows the landlord to gain possession in mid-term only in the case of anti-social behaviour and non-payment of rent. If a landlord fails to adhere to his obligations, including the proposed decent homes standard, the tenant should be able to terminate the tenancy with the advice and support of the local authority. This could also be dealt with by amendment to Section 30 of the Housing Act 1988.
Since the late 1980s, ASTs have worked well for most tenants and landlords. They are based on the freedom of contract between consenting parties. The average tenancy length in the most recent English housing survey was 4.3 years. Allowing tenants to fix a longer period that suits them is in a tenant’s best interest—surely a vote of confidence in the system. There is a place for them in the new world, albeit as an option open to both parties if they wish to fix a term rather than accept the new norm of periodic tenancies. At the end of the fixed term, the tenancy would revert to being a periodic tenancy, but surely there should be an option for the landlord and tenant, if they agree, to opt out of this periodic tenancy and agree a further fixed term.
At Third Reading in the other place, as referred to by the noble Lord, Lord Frost, several Members raised the abolition of ASTs leading to some landlords moving to short-term lets and the holiday-let market. The amendment of the MP for Totness asked for a fixed-term tenancy option, but it was not called, although it had secured 50 signatures of support, as well as a powerful speech at the end of the debate from Sir Christopher Chope regretting the move away from privity of contract. He also warned of the potential loss of housing available to rent and the likely increased cost.
My third major concern with this legislation is much the same as that of the noble Earl, Lord Lytton, but I am pleased to say that the Government have largely accepted that it is a problem: that is, the housing of agricultural and other workers in the rural context, where housing, particularly affordable housing, may be in short supply. Access to affordable accommodation is a key part of rural employment, and we should remember that 85% of rural businesses are not farming or forestry. In Schedule 1 to the Bill there are listed the various grounds for possession, which partly cover my concern, but I will be supporting various amendments to strengthen these clauses, which are so important in the rural economy.
I welcome much that is in the Bill, from the new decent homes standard to the creation of a private rental property portal and an ombudsman scheme that will, I hope, resolve matters that might otherwise go to court. However, student letting requires more amendment, including measures to allow flexibility for students to alter accommodation arrangements during the academic year.
This Bill has many of the right ingredients for reform of the PRS, but there is room for sensible refinement to enable both landlords and tenants to be comfortable at the same time as ensuring that the supply of housing for rent is not threatened but encouraged. In parallel, government should concentrate on housing supply, particularly in the social and affordable sectors, as mentioned by many other noble Lords.
Baroness Lawlor (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Carrington, and I thank my noble friend the Minister for her helpful introduction to take us through the Bill. Before speaking, I should declare my interest as in the register of interests; I am and have been a landlord, as well as a tenant and a leaseholder. I am not confident that this Bill will do what paragraph 1 of the Explanatory Notes says it aims to do, which is
“to ensure private renters have access to a secure and decent home and that landlords retain the confidence to repossess their properties where they have good reason to”.
I think we all agree with this very important aim; the Government are right to want it, but I am not sure that the Bill is the best method for achieving it. Rather, it will make for uncertainty in a number of ways. Here are some of them: the ending of assured fixed-term tenancies under the 1988 Act; the ending of no-fault evictions under Section 21 yet the introduction of alternative provision for landlords to repossess their properties when the Bill says they have good reason to do so; and the provision for a two-stage transition period for these arrangements—the second stage uncertain, to be fixed by the Secretary of State once the arrangements for the courts have been changed to accommodate the new system.
Other problems have been discussed by noble Lords. The noble and learned Lord, Lord Etherton, spoke about the powers granted to local authorities to impose fines of £30,000—powers which I agree, and I urge your Lordships to think along the same lines, are properly for the courts to impose. The noble Lord, Lord Marlesford, discussed the implications for privacy around the data that will be collected on individuals. The noble Lord, Lord Adonis, talked about pressure on the courts, as did the noble Lord, Lord Carrington, and others. The noble Lord, Lord Truscott, spoke about the costs for private landlords.
Like the noble Lord, Lord Marlesford, the noble Earl, Lord Lytton, and my noble friend Lord Frost, I am particularly concerned about ending assured fixed-term leases. I will focus on what I see as the most problematic and unsettling proposal in the Bill: the abolition of assured fixed-term tenancies under the 1988 Act, which lays down that tenancies can be periodic, renewable after the rent period—typically a month—or fixed-term. We have heard today about some of the lengths of tenancy which are already in use and popular. This arrangement gives both landlord and tenant the security of knowing how long their letting is for and the option to propose and agree a variation to reflect wishes and circumstances, including renewal. Instead, the Bill proposes that in future all tenants will be on a single system of periodic tenancies, which are little more than a rolling tenancy of a month where tenants give notice of leaving and landlords cannot provide any notice of ending the lease other than on the stipulated “reasonable grounds” set out in the legislation. This is conceived in the Bill as part of a package, along with abolishing no-fault evictions. The overall aim is said to be to give greater security to the tenant to deal with problematic landlords who use no-fault evictions to end the tenancies. I understand that was a manifesto commitment by the Conservative Government, but getting rid of fixed-term tenancies was not, and, as other noble Lords pointed out, it is unnecessary to do so given the aims of this Bill. Yes, there are bad landlords, and the problem can and should be addressed, but you do not need to overturn the arrangements under settled law to address the problem of shameful properties let in appalling conditions.
I disagree with the Secretary of State, who told the House of Commons that this is a Conservative measure in the tradition of measures introduced by Conservative Prime Ministers. Previous measures were based on the principles of common law and the protections that it offers both parties, while improving on how they operated. Labour’s Rent Act 1977 did not permit no-fault eviction, but subsequent Conservative measures did. The Housing Act 1988 introduced the concept of the assured shorthold tenancy only when complex notice procedures were followed, while the Housing Act 1996 introduced amendments to make the assured shorthold tenancy the default option unless the parties agreed to the tenancy. I am grateful here to iHowz and Andrew Butler KC, who made available to Parliament an analysis of the background and have provided a more nuanced proposal than that provided in the Bill.
We have seen the extension of the private rental sector to account for one in five households. It seems rather silly, to put it mildly, to end the arrangements on which the private rental sector is based and has succeeded so well, and mushroomed, since the 1980s.
In a free society, the less interference there is by the state in people making contracts with each other the better, rather than politicising transactions in an area that should be a politics-free zone under the principles and protections of settled law. Yes, there should be regulation against unfair contracts. People should be able to enter into a contract with full knowledge of what they are taking on—each party, tenant and landlord. Entering an agreement with each other with full knowledge, openly, protected by law, should be for them to decide. Tenants should be able to stipulate their conditions, and so should landlords, and an agreement met. I agree that fixed-term tenancies should be an option for landlord and tenant alike.
Our think tank has been a commercial tenant. We have been on the receiving end of a request—not an obligation—to end a lease early, and the landlord made a generous offer of a rent-free period of a few months which gave us a cushion on which to perhaps find a more expensive property, have confidence and sort out problems before the lease would have otherwise come to an end. Indeed, during the pandemic, when the service charges amounted to more than the cost of the lease per annum, I asked a landlord whether we could leave because of our not-for-profit status being charitably funded. In both cases, these requests were met with due consideration by the tenant and the landlord —I being the tenant and the landlord making an offer on another occasion—and without any interference or bureaucracy on the part of the courts. This is how it should be when we enter into a transaction in this country: two parties under the rule of law.
I hope that we can amend this measure to leave in place fixed-term assured tenancies so that landlords and tenants alike will have the option of the certainty, if they want it, of a fixed-term lease, and that the security that the Bill aims for can be achieved by compensation clauses; for instance, by giving tenants a rent-free period in the case of a no-fault eviction. Such arrangements leave in place the clarity of contractual arrangements, rather than replacing them with a cocktail of written statements, responsibilities, letters, property portals and an ombudsman, the individual parts of which will become opaque under the bureaucracy that will surely follow in the Bill’s wake—that is, unless, with your Lordships’ help, we can ensure the real security at which the Bill aims.
Baroness Boycott (CB)
My Lords, I declare my interests, in particular my interest with Peers for the Planet, which probably provides a clue as to what I will talk about in, and contribute to, this debate—energy efficiency in the private rental sector. I have much enjoyed other noble Lords’ contributions; it has been incredibly interesting. I totally agree with the noble Baroness, Lady Jones: I have had more things coming into my inbox about this debate than about pretty much anything I can remember. Noble Lords have dealt with all the points I agree with, but I will make a few specific points about the environmental effectiveness of the PRS.
Energy efficiency improvements always contribute to better living conditions, as well as tackling emissions from home heating: that is a crucial part of meeting our climate commitments. By improving air temperature, humidity levels and air quality, energy efficiency can help address multiple physical and mental health issues: we have heard a lot about that this afternoon. It can also help reduce fuel poverty by reducing energy demand, and therefore landlords—good for them—can increase the value of their properties; it is a win-win.
However, this is an area where the Government are seriously delaying action. This is particularly disappointing when the CCC highlighted in its last progress report to Parliament that the Government was “off track” in relation to energy efficiency measures in all buildings, with progress in the private sector remaining “slow”. Government policy in this area has been piecemeal and consultation subject to delay. Plans for all tenancies to meet EPC band C by 2028 followed a consultation that ended in January 2021. There has been no response from the Government since then; that is a long time. Instead, in September last year, the Prime Minister “scrapped” the plan on the basis of the financial pressures it could place on landlords—despite evidence, from numerous corners, of the financial and wider benefits for renters, as well as potential benefits for so many landlords, in the form of property value increase and tenant demand, if there is a clear and supportive plan in place.
On the other hand, this Bill offers the Government a real opportunity to reconsider their approach and inject ambition back into making the private rented sector more energy efficient. Indeed, their own 2022 White Paper on making the PRS fairer recognised the impact of poor-quality housing on renters’ health and well-being—which we have heard a lot about today—and their educational attainment, as well as the impact on energy bills and the pressures on low-income renters, and the burden we know it causes on public spending. It also recognised:
“To meet our net zero target, we need to have largely eliminated emissions from our housing stock by 2050”.
This is an important part of it.
I believe that businesses and good landlords would support the Government delivering on their commitments, if they are given the confidence, long-term policy certainty and support they need. Following the Prime Minister’s row-back last September, the National Residential Landlords Association—one of the many groups emailing—said that the Government’s delay in responding to their consultation meant
“there was never any hope of meeting the originally proposed deadlines”,
and that it
“wants to see properties as energy efficient as possible, but the sector needs certainty about how and when”.
The UK Sustainable Investment and Finance Association, a finance and investment community of over 300 members managing £19 trillion in assets, also lamented the “stop-start nature of policymaking”, and that the Prime Minister’s announcements had removed the “clear targets” that would give investors confidence. More broadly, hundreds of leading businesses and professional organisations from within the built environment have expressed their concern over the decision to delay or weaken green policies, and disagree with the
“narrative that delaying climate action would reduce costs to households”—
that is something we have debunked in this Chamber many times. They said:
“The longer we delay and the more we see stop-start piecemeal policy … the harder and more expensive the task becomes”.
They have also asked for a national retrofit strategy, which will ultimately pay dividends in tax returns.
The Bill offers the Government an opportunity to respond positively but, as I have mentioned, it is not just about business but about the impact on households, including vulnerable ones, and the question of fairness around delaying action. As the Bill’s Explanatory Notes say, the PRS increasingly provides homes for families and older tenants.
The decision to delay energy efficiency improvements has led to additional costs on fuel bills. Analysis by ECIU showed that, if minimum energy efficiency standards had already been in place, private renters could have saved more than £400 million in total, or £140 per home, in gas bills over the last winter. That is a lot of money if you are on universal credit. Generation Rent research shows that fuel poverty has fallen by only 4% for private renters since 2010. This is compared with 35% for owner-occupiers and 54% for council tenants. If we introduce energy efficiency measures to bring a home up to EPC band C, we could take households completely out of fuel poverty.
Citizens Advice has reported the widespread problems of damp, mould and cold, driven by the really poor energy efficiency of some privately rented homes. Some 31% of renters said they were unable to heat their home to a comfortable temperature. That rises to 45% of people with disabilities. That is awful. By its analysis, upgrading all homes could prevent 670,000 children developing asthma and 6,000 winter deaths per year. This must be something we all want.
In the other place, the Housing Secretary said that improvements needed to be balanced against the costs to individual landlords and tenants. There will be costs, but there are solutions for providing support and incentives to make the investment for landlords much more attractive. As business has said, the sooner the Government commit to a proper plan in the PRS and for all housing, the sooner the costs will come down and we will be closer to decarbonising our housing sector.
Lord Hacking (Lab)
My Lords, I should begin with a short disclosure that my wife and I have in the next-door house under our ownership five one-bedroom flats, which are occupied by tenants whom we do our very best to look after well.
I do not often speak in your Lordships’ House, but in recent times I have found myself always at the bottom of the speakers’ list. I had higher hopes for this debate— I see that the noble Lord, Cromwell, takes bottom place and I am one away from that—because I was next to the noble Lord, Lord Frost, in the earlier draft of the list of speakers. He has kept his place and I have tumbled down to the bottom.
However, speaking late in a debate does give one the opportunity to refer to earlier speakers, and I do so most willingly. I thank the Minister for her excellent introduction, with which I found myself largely in agreement. I also take the opportunity to thank my noble friend Lady Taylor of Stevenage for her opening speech on behalf of my party. I particularly agreed with her comments on the impact of the changes in the many amendments that were moved in the House of Commons, and also with her comment that the Government have ended up just “kicking the can down the road”. I also agreed with her reference to the need for fundamental reform.
I am not going to go through all the speakers. I could do, because there were excellent speeches to comment on, but I will just refer to the noble Lord, Lord Best. His description of the switch of social housing to PRS was quite excellent. I am sure we are all grateful to him for his brilliant analysis of the current status of the landlord/tenant market.
I turn to the complexity problem. This is not the first Bill that inflicts much complexity on us and then on the users of our Bills. If only our parliamentary draftsmen could remind themselves of the Occupiers’ Liability Act 1957, which sets out in the simplest and clearest terms the liabilities of all occupiers of land.
What about this Bill? Its size is colossal. It is 194 pages long, containing 140 clauses and six complex schedules. In mastering this torrent of proposed legislation, we have had the benefit of excellent briefings from the Law Society, Justice and, most of all, our Library staff in their excellent briefing paper. Therefore, should we not remind ourselves, as we can remind ourselves in other Bills, that this Bill is directed to the fundamental right of all our citizens in the private rented sector to have the security of a decent home and to pay a fair rent, while likewise enabling landlords to provide just that?
I will return later to the great importance of such ordinary citizens having proper access and an understanding of the provisions of the Bill, but for now I will speak about when I first became aware of the relationship between landlord and tenant in the private rented sector. I was a young barrister in the 1960s when we were operating under the old rent Acts, where there was security of tenure and protection from unaffordable rent increases. It was in the terms of those Acts that no eviction could be made without cause.
There was one interesting provision in the old rent Acts that enabled a landlord to move a tenant from one property to another on the grounds of offering suitable alternative accommodation. That has not reappeared in this Bill. I criticise that not, but it is a rather nice memory.
I remind the House that under the old Acts the rents were controlled by the rent tribunals. What went wrong was that the rent was too low for landlords to invest in their properties, and many were in shocking condition. That was brought home to me in the 1980s, when my wife and I moved into a square in London then dominated by rent-protected properties, and we learned some appalling things. I will refer to two of them. There were two spinster ladies, I think well into their 80s, next door to us. They had no hot water in their rented property, nor indeed any heat provided except perhaps from the electric fire. They had a bath but no hot water to go into it. So they bought a washing machine and put it through all its motions without putting in any detergent, and when the hot water exited from the washing machine they had some water in the bath in which they could bathe themselves. We also learned in the square of a top-floor tenant who had no supply of electricity, and his only form of getting light into his flat was using a gas supply.
We should therefore be aware of what happened in this Bill’s long journey through the House of Commons. This was referred to by my noble friend Lady Taylor of Stevenage, but let us look at it in a little more detail. In Committee the Government tabled 183 amendments, including 52 new clauses and one new schedule. Well, bravo—but has the balance, as my noble friend suggested, been disturbed? My party tabled 81 amendments in the other place but they were all rejected. Those amendments were non-political, dealing with such things as proposed rent levels, notice-to-quit periods and financial penalties for landlords in breach. There are other examples that I could give.
On Report the Government excelled themselves even more. They moved 225 amendments, 24 new clauses and one further new schedule. Bravo again, but was the Bill improved? My noble friend Lady Taylor suggests the very opposite. Once again, all my party’s amendments were rejected. I have to say that the treatment of the legislature during the passage of the Bill through the House of Commons was most shoddy. As is the custom in this House, the Government can expect constructive amendments from all quarters. May all our amendments be properly treated.
The creation of the obligatory requirement for landlords to enter into the ombudsman scheme, the setting up of a digital property portal and the application of the decent homes standard are all most welcome, but they will all be defeated unless the court system can promptly deal with eviction or possession cases. Also, unless housing legal aid is massively increased to the levels that I remember in the 1960s, tenants will be forced to appear in the county courts as litigants in person to deal with the complexities of the provisions of this Bill. This is a burden on the judiciary and a cause of delay in the courts transacting this business. I look towards the Minister: may the Government in this House listen to us on the Back Benches and be willing to consider our amendments and judge them on their merit.
Lord Cromwell (CB)
My Lords, I am neither a landlord nor a tenant, I have managed properties in the past and I have a property qualification. All four of my children were tenants during their student days and remain as tenants at the start of their professional lives. I have also had extensive briefings from both landlords and tenants and their respective representative bodies, providing their perspectives and their chosen statistics.
As the last Back-Bench speaker today, I will not re-run all the statistics because most of them have already been cited, so I hope that will be appreciated. I am also not going to namecheck everybody, but we have had, I think we can agree, a diverse but fascinating set of speeches. I congratulate all those involved—forgive me if I do not namecheck them.
There are some emotive issues here. For a tenant, the property they rent may become emotionally their home. For the landlord, the property is often their most valuable asset—they paid for it and they maintain it. It is their source of income or pension, and renting it out also means taking on costs, regulations and the risks of placing it into the hands of strangers. Into this sensitive environment have come terms such as “no-fault evictions” and “kicking people out on the street”, even stating paradoxically that landlords actually create homelessness. There have been distressing anecdotes—and I underline this—from both tenants and landlords.
In recent days I have heard a good deal of pantomime stereotypes, and I really hope we can set these aside and address the underlying issues. There certainly are some rogue landlords—albeit that the Government assure us they are a small minority—who provide substandard accommodation and treat their tenants badly. I support those aspects of the Bill that are helpful in addressing that minority. But I add a note of caution, as others have, about enforcement.
The Bill will not touch the rogues unless it is enforced vigorously against some nasty, elusive and, in some cases, dangerous people. The Minister, in very kindly meeting me with her officials yesterday, for which I thank her again, advised that fines levied by local authorities would fund enforcement. I remain sceptical, not least because local authorities are already so strapped for cash. I welcome the requirement to have a written agreement; I suggest that it should automatically include, as an annexe, an inventory of contents and condition, as the lack of one of these frequently leads to disputes later on. I also support the register portal idea, provided that it is better than the Companies House register, which we discussed in some detail during the economic crime Bill and where there are many companies registered to an “M. Mouse”, et cetera.
In acknowledging that there are bad landlords, however, we should also accept that there are bad tenants who will play the system and abuse the landlord-tenant relationship. There are also market and other factors beyond the control of landlords and tenants. The underlying issue is a simple one that many speakers have addressed: lack of supply. A recent debate in this House referred to a shortfall of more than 1 million homes and many speakers have also touched on this today. Private landlords were encouraged, in particular under the Housing Act 1988, to reduce this gap between supply and demand but the difference between them remains stark. The Bill is presented as achieving a better deal for tenants, not through increasing the supply but rather by altering the landlord-tenant relationship, primarily perhaps by reducing the rights of landlords. It begs a simple but fundamental question to the Minister: will the Bill lead to an increase in the supply of rental accommodation?
Section 21 notices are at the heart of the debate around the Bill. Introduced as an incentive for the provision of accommodation by private landlords, they have enabled an increase in the private rented sector, as many speakers have covered. This is based largely on landlords having the confidence that they could recover their property when they required to do so. To lose sight of this confidence—the understanding that, even if they never use it, landlords know that they can get their property back through serving a notice—is to put the sustained supply of rental accommodation at risk.
Tenant representative bodies tag these notices as no-fault evictions, but we should also remember that tenants can and do—to coin a phrase—make no-fault departures should they, without needing to give any reason, decide to move out on just one or two months’ notice. This leaves the landlord with costs and no income until a new tenant is in place, and quite possibly a lengthy overhanging dispute; for example, about the deposits of tenants who are now departed and possibly even out of the country. The Bill would mean that tenants can leave on short notice and without a reason, while landlords would be able to recover what is, after all, their property only on limited and specific grounds. That does not feel equitable to me.
An underlying concern for tenant representatives about Section 21 is that once the initial tenancy period—a security that the Bill seeks to reduce or remove, as others have said—is over, a Section 21 notice can be used should the landlord want their property back. In some cases, it is to seek—or, if noble Lords wish to use emotive language, to extort—an increased level of rent. As regards wanting their property back, the landlord can do so, and the Bill reasonably supports this, if they wish to sell the property or make it available for a family member. As regards raising the rent, I believe there is a point here. I would support rental movements being limited to inflationary increases but, again, supply and demand are relevant. A landlord cannot expect to succeed in renting out a property for more than the market rent. To bring the rate down, we need more supply rather than fewer landlords.
The underlying concern for landlords, apart from the psychological aspect of restriction on their ownership rights, is that to recover their property is going to mean going to court. It has been put to me that a landlord would perhaps have to go to court anyway, if a tenant refused to leave under the current Section 21 notice provisions. I contest that: given the clear simplicity of the Section 21 notice, the great majority of tenants accept its validity.
Speaking to landlords in recent months, I have learned about a couple of reality checks that we need to think about. First, Section 21 notices are already being served by landlords who want to get their properties back and avoid the drawn-out, adversarial and expensive legal processes in due course to recover their property. Secondly, landlords are becoming far more risk averse, and tell me they will continue to be, as to which people they might rent to. As one landlord put it to me starkly, “After this Bill, I will never rent to a family again”.
Speaking to those who say that they represent tenants, I have been struck by how sanguine they seem to be about the impact of the Bill on rental accommodation. They tell me that they assume landlords will sell up, perhaps to a first-time buyer, a local authority or another private landlord—although that seems a circular expectation. Not only is this dismissive of those who provide rental accommodation, it is a pure gamble. Depending on which statistics you choose, some say that there will be a decrease in rental accommodation—this is borne out by the discussions I have just referred to—and others say that there will be no impact. I find that hard to believe. In any event, no one is saying that there will be any increase in the availability of rental property, which is what we are all seeking to achieve.
Given the risks and costs involved for landlords by the removal of Section 21, what mitigation does the Bill provide? It has a, yet to be created, swift and fair court system, which is perhaps even cost-free. There seems to be no objective metric, as many have mentioned, for the Lord Chancellor to deem that the county courts will be working sufficiently well. I hope that we can address this in later stages of the Bill. Court hearings on property matters are already increasing. By definition, a great increase in such cases will be inevitable as all tenancies are now being ended under Section 8. These will be cases brought by tenants and by landlords.
This swift judicial process is a fantasy, and it is strictly for the birds. Speaking of birds, it was the noble Lord, Lord Bird, who warned us some months ago that the last time the Government meddled with the rental sector the supply shrank. I think the noble Lord, Lord Bird, knows more than many in this House about homelessness. In short, making responsible landlords recover their property via legal action will reverse the expansion of rental accommodation, and rogue landlords will probably continue to enforce their will via less formal methods.
I turn to the question of initial fixed terms. We are told that tenants need security of tenure so that they can put their children into school, develop a sense of community and hold down a local job—all of which makes complete sense, at least in some cases. But its logic must surely therefore support long initial terms, and not their abandonment by making them legally void beyond six months, as the Bill does. Tenants and landlords can both benefit from longer fixed terms. Both get continuity, less frictional cost and less disruption. Tenants will also benefit where landlords offer rental discounts or property enhancements to tenants wishing to enter longer-term agreements. I have seen that in practice.
I was struck by the repeated comments on this from tenants. One simply said to me: “There is absolutely no way I would be willing to sign up for less than a one-year fixed initial term. I do not want the prospect of having at last found a place I can afford and having to move on in a shorter period than that”. A tenant such as this—there are many—who wants to be sure that they have security for longer than six months is prevented by the Bill from obtaining it. The circumstances in which the landlord can remove them—to sell the property or provide it to a family member—would be limited, but beyond six months the tenant has no protection should the landlord serve a notice to that effect. The problem presented to me is that a tenant may get “trapped”—this has been referred to by some speakers—for a fixed initial period in a property that is not what they were led to believe.
I do see that issue, but two points occur to me. First, this is a caveat to both parties when signing up. After all, the landlord may find themselves trapped with a bad tenant. Secondly, a correctly drafted tenancy document provides for either party to quit in the event of contract breaches by the other. A long agreed fixed term is still escapable—if that is the right word. A system where tenant and landlord lose the ability to agree a tenancy for any period over six months of secure occupancy seems perverse. It is a further disincentive to the supply of accommodation.
Landlords face the risk of tenants changing every few months, with the associated costs and delays of repair, redecoration, reletting and disputes over deposits. I have not mentioned tenants bringing in livestock, but this could also be a feature if they are seeking insurance payments for damage by the tenants’ assorted livestock, which landlords would not now be able to refuse to allow to be kept on the property. In that situation, landlords would probably have to seek higher rents to cover the associated costs of tenant turnover.
However superficially well intentioned the Bill is, it satisfies neither tenants nor landlords. Both need certainty —certainty of tenure balanced with certainty of recovery—but none of this is attainable without certainty of supply, which is the core issue that we must return to. Although the elements of the Bill that deal with standards of accommodation and portal registration are largely to be welcomed, its approach to landlord and tenant relationships will deplete supply and exacerbate the problems that it seeks to solve. I am most grateful for noble Lords’ indulging me going on at such length.
Baroness Thornhill (LD)
I declare my interest as a member of the cohort of Local Government Association vice-presidents. This has been an interesting, informed and wide-ranging debate. Noble Lords have shown their different expertise, in the time-honoured tradition of this Chamber. It is clear that the Bill has given us all food for thought and that we will have our work cut out during its passage. It is also clear that noble Lords have some serious concerns and that views are somewhat polarised.
The state of the private rented sector was clearly outlined by the noble Lords, Lord Best and Lord Truscott, and the noble and learned Lord, Lord Etherton, so noble Lords will be pleased to know that I will not go into detail. But the bottom line is clear: there is a significant shortfall in the availability of homes for private rent. Rightmove data—nobody has quoted this, so I will go with it—tells us that the number of available rental properties is 26% below 2019 levels, and the number of people looking for a rental home is 54% above 2019 levels. Staggeringly, some 50,000 properties are needed to bring the supply back up to pre-pandemic levels. Yet, at the same time, agents are receiving three times as many inquiries about every home available to rent. This leads to a rationing of a scarce and precious resource, which one agent described to me recently as a “beauty parade”. Landlords can now pick the best tenants—and we all know who they are and, more importantly, who they are not.
As my noble friend Lady Pinnock and the noble Lord, Lord Best, said passionately, the real issue at the heart of this shortage is the lack of homes for social rent. What is noticeable about all the charities lobbying us about the Bill is their commendable protection of the most vulnerable in society: the elderly, those suffering domestic abuse, families on low incomes and those who need additional support to get and keep their lives on track, as well as, lately, students, who clearly feel that the Bill turns them into second-rate tenants denied the rights of other tenants. Excepting students, 10 or 15 years ago all those groups of people would have been living in social housing, with a landlord who would give them not only stability through security of tenure but additional support if needed.
Let us turn to the detail of the Bill. This is a selective gallop around the course to show our areas of concern on these Benches, and where we will be working across the House to try to persuade the Government to make some changes. To the Minister I would say, while I acknowledge that there are good aspects, and some very good aspects, I shall not be mentioning those.
The big one is the non-abolition of Section 21, which is the cruellest and biggest disappointment in the Bill for some of us, for sure. So much has already been said most ably by the right reverend Prelate the Bishop of Chelmsford, the noble Baroness, Lady Taylor, and others. We know that Citizens Advice has seen significant increases in those seeking help with Section 21 evictions and facing homelessness, and that the numbers being served Section 21 notices have risen. We know that the number of families in temporary accommodation is rising month on month, and that those costs are spiralling, causing serious issues with the budgets of some councils. Of course, this has ultimately led to an increase in the number of homeless people on our streets. On what basis is that delay truly justified? We will be seeking to ensure that the Government put a date for ending Section 21 in the Bill, which should be no later than six months after Royal Assent. That is optimistic, you might say. Perhaps, but there is hope. We welcome the Labour Party’s announcement that it would introduce this on its first day in government.
The new tenancy regime was broadly welcomed by all stakeholders when the Bill was introduced in the other place, but I note today that the debate on the abolition of fixed-term tenancies will certainly exercise us in Committee. However, we have concerns about the government amendment whereby tenants cannot give notice until they have been in the property for four months. We understand that landlords will want to know that they get six months from each tenancy and, as the noble Lord opposite said, that tenants will want security. But things happen and circumstances change, and sometimes the property is not all that it should be.
It is worth pointing out that the present market conditions and the stresses of finding and funding a tenancy mean that a tenant will not usually give notice unless something is seriously wrong, either with the property or with themselves or their family. Most renters want that security of tenure, so they do not want to move unless forced to, as it costs them, as the noble Baroness, Lady Taylor, said, around £1,700, according to figures from Generation Rent. We believe that it should be possible to make compassionate exceptions in cases of fleeing domestic violence, or illness or death, for example, as mentioned by several noble Lords. I was heartened by the Minister’s comments in her introduction.
In lieu of the abolition of Section 21, Section 8 will contain the grounds for terminating a tenancy, and those grounds have been extended in the Bill. We have concerns, particularly about grounds 1 and 1A, and landlords evicting a tenant if they wish to move one of their family into the home or sell it. Both are entirely reasonable scenarios, but the Bill as it stands means that a tenant can be out after six months. We would seek to extend that period, I hope to a year. We are concerned that these two grounds will be used in much the same way as Section 21, because of the very low burden of proof on the landlord. Who do we think will be checking that the home is sold, or that a family member has moved in? What will be in place to prevent landlords gaming the system? We will support amendments requiring landlords to prove the use of those grounds. We note that the Bill provides for a three-month ban on landlords letting the property following the use of these grounds, but that simply is not long enough to disincentivise its use.
Whether the Government will agree to a longer protected period or not, we believe that the notice period for eviction under grounds 1 and 1A should be extended to at least four months to give a little more time to sort a new place to live. Shelter has said that, under the present circumstances, it takes 40% of renters with families longer than two months to find a home. We fear that, without this extension, even more renters will be forced into homelessness—so the burden on councils increases, not to mention the very human cost. I remind the House of the letters signed by more than 100 council leaders asking for a similar extension period because of the rising costs of temporary accommodation and the lack of suitable properties. We hope the Government will think again on this.
Unfortunately, the dire situation in the courts, as very well amplified by the noble Lord, Lord Adonis, has led to this back-pedalling. It is true that the length of time a landlord currently waits to get a court hearing varies, with the mean time being seven months. We agree that this is far too long, but we do not accept that this should lead to a delay in abolishing Section 21; rather, the Government must and should be investing in the courts and, in particular, housing legal aid. The situation regarding access to legal aid is particularly poor in rural areas. The Law Society has drawn attention to this, stating that almost 44% of the population of England and Wales do not have a housing legal aid provider in their area.
We are concerned that, while the Bill seeks to introduce stronger powers to evict anti-social tenants who are persistently disruptive—we completely agree with that—the definitions are not suitably defined and appear too subjective or open to abuse. There are also serious issues regarding victims of domestic abuse where such abuse is regularly mistaken and reported as ASB. These need to be listened to and taken seriously. We cannot just ignore the unintended consequences of this Bill on such a group—remembering that, on average, two women a week are killed by a former or current partner. On this, I agree with much of what the noble Baroness, Lady Lister of Burtersett, said in her excellent contribution.
It is good to see that the Bill will make it illegal to have blanket bans on renting to tenants on benefits and those with children. Let me say to the noble Lord opposite, I do not see what is in this Bill that could possibly make a landlord not want to rent to a family. Perhaps he can explain it to me afterwards.
Lord Cromwell (CB)
I would be happy to speak to the noble Baroness afterwards.
Baroness Thornhill (LD)
This will hopefully end that discrimination towards—yet again—the most vulnerable.
We would, however, urge the Government to look at several other practices where discrimination occurs. If a landlord insists on several months’ rent up front—and they do—that disadvantages many people for obvious reasons. Likewise, on the use of a guarantor, not everyone has family or friends willing or able to act as a guarantor. Both these measures in effect marginalise the less well off.
On rent rises, we feel that the Bill does not go far enough. The proposed annual limit of one rent rise is positive, but it still gives no guarantee as to how much the rent could rise, and the process to challenge an unfair rent rise is complex and lengthy. I was concerned by the statement that tenants could find themselves in a position where the First-tier Tribunal could say that the rent is worth more. That felt like a bit of a veiled threat that this would act as a deterrent to challenge a rent rise. Surely, to link increases to CPI or median wage growth would be fairer and transparent, and would obviate the need to appeal to the First-tier Tribunal at all.
We cannot escape the fact that the real issue is lack of supply. We know that much supply has been lost to short-term lets, which was expanded on very well by the noble Lord, Lord Truscott. There are no incentives in this Bill for landlords to return to long-term rentals—as opposed to the damaging overprovision, in some areas such as Cornwall, Cumbria and other tourist spots, of the more lucrative Airbnb. These should include making the playing field level between the two tenures using taxation, regulation and health and safety requirements.
There is much more to say and time to say it in detail at later stages, but I end by reinforcing the words from my noble friend Lady Pinnock and others regarding the role of local authorities in making this Bill work. As things stand now, they cannot do the job that we or they want them to do. These additional demands will only make things worse. The fact that the Bill—at last—expects the private rented sector to meet the decent homes standard and has given some additional powers to councils will come to nothing without the resources to do the job properly. Likewise, extending the homeless duty on councils sounds admirable, but some councils are barely coping now.
Finally, we do not feel that the Bill as it stands has rebalanced the relationship between landlord and tenant. It still feels to us like the landlords have the upper hand, which is perhaps why, in their briefing, they wish to see the Bill passed as soon as possible, and why the Renters Reform Coalition has branded it a failure.
Lord Khan of Burnley (Lab)
My Lords, it is a pleasure to close this Second Reading debate for the Opposition, and I thank all noble Lords who have participated at this stage of the Bill. The expertise, skills and knowledge on this subject in your Lordships’ House have been demonstrated in a most eloquent manner, and I agree with the noble Lord, Lord Cromwell, that it has been a fantastic and diverse debate. I also pay tribute to all the campaign groups and organisations that have campaigned consistently on the Bill. I thank all of them for their very helpful briefings, and I agree with the noble Baroness, Lady Jones of Moulsecoomb, that I have never had this number of briefings on any Bill I have worked on in your Lordships’ House.
On these Benches, we welcome the Bill. As the noble Lord, Lord Best, said, this is an improvement, with steps to redress the landlord and tenant imbalance. As my noble friend Lady Lister rightly said, it achieves a fairer balance between landlord and tenant while increasing tenant security. In fact, I actually welcome much of what the Minister said in her opening remarks. However, the point has to be made that, unfortunately, three Prime Ministers and 10 Housing Ministers later, and five years since committing to abolish Section 21, nearly 85,000 households have been threatened with homelessness by a no-fault eviction. The Government’s dither and delay have had a catastrophic effect on families across the nation.
I want also to turn to a point made by my noble friend Lord Hacking—I apologise that he was not at the top of the list; nevertheless, he made some very important points. There were 225 amendments and 24 new clauses tabled in Committee in the Commons, and 183 amendments and 52 new clauses tabled on Report. The amendments and new clauses were actually lengthier than the Bill when it started out, which I think is cause for concern. We are seeing too many Bills coming here with huge numbers of amendments tabled in Committee and on Report.
Renters are at the sharp edge of the current housing crisis and urgently need the protections and support in the Bill. We will be pleased to finally see the abolition of Section 21, whenever that actually happens—let me repeat, “whenever that abolition actually happens”, a point made by noble Lords across this House. Since October 2023, the Government have stated that they
“will not commence the abolition of section 21 until stronger possession grounds and a new court process is in place”.
The Bill as drafted already provided for a two-stage commencement process for the introduction of the new regime, with precise dates for new and existing tenancies to transition to be determined by the Secretary of State. However, the government amendment on Report in the other place was very widely drawn, with no time limits or obligations on the Secretary of State to enact the ban on no-fault evictions, regardless of the outcome of the Lord Chancellor’s assessment. This would effectively allow the Government to stall on the enactment of the ban indefinitely. As the noble Lord, Lord Thurlow, said, this could happen in a year, in 18 months or not happen at all. Landlords and tenants should be given certainty about precisely when the Government’s manifesto commitment to abolish Section 21 no-fault evictions will be enacted. As my noble friend Lady Taylor of Stevenage said in her opening speech, we will bring forward an amendment to ensure that Section 21 of the Housing Act 1988 will be repealed on the day the Bill receives Royal Assent.
We also welcome the simplification of tenancies, which will give renters more flexibility and more rights. It is right that periodic tenancies should become the norm. For too long, renters have lacked basic power and control over one of the fundamentals of life, their home. Tenants have struggled to challenge unfair treatment without undergoing lengthy and expensive court proceedings, a point made very eloquently by my noble friend Lord Adonis.
Hence, we welcome the creation of a new ombudsman who has the potential to be an essential part of the redress system. I agree with my noble friend Lady Warwick of Undercliffe on the need for the proper steps to ensure that there is a fair process for the procurement of the new private sector ombudsman. If this ombudsman is given the proper teeth and resources, they will have an important role to play in levelling the playing field.
The tragic death of two year-old Awaab Ishak, caused by the damp and mould in his home, shocked the whole nation. With our support, the Government introduced Awaab’s law in the social housing sector, and they were right to do so. But the problem of debilitating damp and mould, and landlords who fail to investigate such hazards and make the necessary repairs, is not confined to social rented homes. A Citizens Advice report published last year made it clear that the private rented sector has
“widespread problems with damp, mould and cold, driven by the poor energy efficiency of privately rented homes”.
The report went on to evidence the fact that 1.6 million children in England currently live in cold, damp or mouldy privately rented homes.
According to the English Housing Survey, 23% of homes in the private rented sector do not meet the decent homes standard. That is around 1 million homes. This compares with 13% of owner-occupied and 10% of social rented homes. In the face of such a pervasive problem, we can think of no justification whatever for restricting Awaab’s law purely to the social housing sector. We hope that the Government will agree and accept the same law for the private rented sector, because we can think of no reason whatever why they would resist doing so.
In the other place, in relation to the issue of safe and decent homes, Minister Jacob Young said it would be dealt with through enforcement by local housing authorities as well as the private rented sector ombudsman, and that the Government considered that this was of no interest to tenants. We are not convinced by the Government’s response. How have the Government determined that there is no interest in Awaab’s law among tenants in the private rented sector? Have the Government consulted with them?
If anything, there is a stronger case for applying Awaab’s law in the private rented sector. Things are worse in the private rented sector, as illustrated by the Citizens Advice statistics I have just read out. We will come back to this at a later stage in the Bill. If the measures are appropriate for the social rented sector, they should be appropriate for the private rented sector. Does the Minister accept that conditions in the private rented sector are far worse than in either the social rented or owner-occupied sectors, with 1.6 million children living in cold, damp or mouldy homes? If so, why does she not support tougher measures to compel landlords to rectify these problems?
I further ask the Minister to tell us what estimates the Government have made of the number of households likely to be threatened with homelessness by a Section 21 notice, from now until the time when the Lord Chancellor completes his assessment of the courts. Is the Minister concerned that the new, more vague definition of anti-social behaviour could lead to victims of domestic abuse being evicted on anti-social behaviour grounds while undergoing the trauma of abuse? This point was made by my noble friend Lady Lister, as well as by the noble Baroness, Lady Thornhill. My noble friend asked for justification for the wording; I look forward to seeing what response the Minister will give.
There have been a number of excellent contributions, but I want to pinpoint the interesting historical significance that the noble Lord, Lord Best, provided us with. The noble Lord outlined that, in the 1980s, the private rented sector was 9% of the nation’s rented homes. In the 2000s, that became 20%. Some 2.3 million private landlords are still looking to this Bill to ensure that their life gets better. The noble Lord talked about the demise of council house building, and how social housing has gone from 34% to 17% of the sector. The noble Lord also reminded the House that there has been a doubling of the private rented sector, and a halving of the social housing sector. At the heart of what he said—the very centrepiece of the Bill—is the lack of housing: there has not been enough housing built.
I was delighted to hear from the noble Lord, Lord Frost, who also made this very important point. In fact, he outlined that the target of 300,000 was last met in 1977. I liked the fact that he talked about reforming planning and building 300,000 houses per year; he sounded like he was reading the Labour Party manifesto for the next general election. I understand the point that we need to create better housing. There is a dysfunctional housing market, as the noble Lord stipulated, and the Government are consistently missing the housing targets.
The Bill is an important step forward. Supporting renters at the sharp edge of the cost of living crisis is very important, so we should all support this. On these Benches, we will work constructively throughout the passage of the Bill. This is a vital piece of legislation, because it seeks to provide greater security and stability for renters. This matters, because housing instability destroys wealth creation, damages life chances, restricts educational prospects and harms health. It is not just about policies; it is about people and their dreams, fears and aspirations. We need to build a system that uplifts everyone, regardless of their housing situation—a point that the right reverend Prelate the Bishop of Chelmsford made in terms of “safe, secure and sustainable”.
On these Benches, we strongly support fundamental reform of the private rented sector and have called for it for many years. Regardless of whether they are a home owner, leaseholder or tenant, everyone has the basic right to a decent, safe, secure and affordable home. Much more needs to be done to decisively level the playing field between landlords and tenants, and a Labour Government will seek to truly strengthen protections for private renters, so that they finally get the long-term security and better rights and conditions that they deserve. We look forward to working with noble Lords across the House to strengthen this much-delayed Bill and commit to a future where renters are empowered and their rights protected, and where housing stability is not a privilege but a fundamental right. We need to build a fairer, more compassionate housing sector that truly serves the people. I look forward to the Minister’s response.
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.