(1 day, 11 hours ago)
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Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, it may not surprise noble Lords that, before we start the debate on the first group, I again remind the Committee of the protocol around declaring interests. As I mentioned last week, noble Lords should declare relevant interests at each stage of proceedings on a Bill. That means that in Committee, relevant interests should be declared during the first group on which a noble Lord speaks. If a noble Lord declared an interest during the previous two days in Committee, that is sufficient, but if this is their first contribution, any relevant interests should be declared.
Lord Shipley (LD)
My Lords, I thank the noble Lord for what he has just said, reminding us of the importance of declaring interests in Committee if they have not been declared so far, but will he make a statement to the Committee about the Government’s plans for further consideration of this Bill, given that we were promised six days of consideration? We lost more than two hours last week through dinner-hour business, and today—for extremely good reasons—we have now lost more than five hours of consideration. I hope the Government have now decided that they must give this Committee an extra day, because we were promised six days and we have not had six days. I hope the Government’s intention is not simply to go through the night tonight and through the night on Wednesday. This would not mean reasonable discussion of the 132 amendments that still stand to be debated in your Lordships’ Committee.
Lord Wilson of Sedgefield (Lab)
I thank the noble Lord for those comments. We will try to resolve this through the usual channels, but there are six days and this is the fifth day. We want to make progress today and we want to complete Committee on the sixth day, which is Wednesday this week.
Clause 17: Landlords etc: financial penalties and offences
Amendment 145
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment, and another in the name of Baroness Scott of Bybrook, seeks to apply the normal standard of proof for civil cases for these fines and probes the Government’s reasons for applying the criminal standard of proof.
Baroness Scott of Bybrook (Con)
My Lords, I want to make it very clear that we will not have had six days in Committee. I quite agree with the noble Lord, Lord Shipley.
I do not feel that I can open this group without paying tribute to the late noble and learned Lord, Lord Etherton. His amendments are why we are debating this important issue tonight. We will miss his insightful contribution to this Bill and to the House more broadly. We are a poorer place without him, and I send my heartfelt sympathies to his partner, his friends and his family for their loss. May his memory be a blessing.
This group follows on from a group on the previous day in Committee, but it focuses more specifically on the burden of proof applied in the determination of penalties. I will be brief, as on these Benches we simply have two questions for the Minister. I draw your Lordships’ attention to probing Amendments 145 and 152. We are concerned about the Government’s proposal to grant local housing authorities the power to determine whether a person is guilty of an offence under Section 16 without proper due process. Can the Minister kindly set out for the Committee how this provision is intended to operate in practice, and whether it will be subject to any appeal or review process?
I wish to draw attention to the principal reason for these probing amendments—the selected standard of proof. We are seeking to understand why there appears to be a lack of consistency in the standard of proof applied across different parts of the Bill. I have no doubt that many distinguished lawyers in your Lordships’ Committee will address this matter with far greater clarity and precision than I can. However, the question remains: why should different standards of proof apply within the same piece of legislation?
I appreciate that the Minister is herself not a lawyer and may wish to take some time to reflect and return to the Committee with a considered response, but can she kindly set out, either today or at a later stage, the rationale behind this apparent inconsistency? I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 148, 197, 200 and 242 on behalf of the noble Earl, Lord Kinnoull.
First, I join my noble friend Lady Scott of Bybrook by expressing my sincere condolences to the family and friends of the late noble and learned Lord, Lord Etherton. His reputation as an exceptional legal mind represents the very best that this House has to offer.
Secondly, I remind noble Lords of my own interest as a practicing solicitor.
These four amendments seek to make two substantive changes to the Bill. First, the removal of “reckless” would ensure that a landlord is guilty of an offence only if it can be proven that they wrongly relied on a ground for possession with actual knowledge of the offence. Secondly, the replacement of
“on the balance of probabilities”
with “beyond reasonable doubt” raises the standard of proof for these offences when the local authority is determining a case.
I expect that the Minister will oppose these amendments on the grounds that they will make it less easy for a local authority to find a landlord guilty of an offence. But surely the crucial point is that they would put a proper check on the incorrect prosecution of landlords that may arise from the new system of penalties that will be imposed by local authorities.
There is also a legitimate question about how we can be certain that local authorities will have the resources they need fairly to assess cases in which landlords are accused of an offence. We need a system that ensures that landlords are held to high standards, but surely that system has to be seen to be fair. Any system that makes landlords feel that they are perennially at risk of being found guilty of an offence, even without their knowledge, will only add to the chilling effect of the Bill on our rental market.
I also agree that the standard of proof where a local authority is making a decision on a case without recourse to the courts should be high. Local authority officers should be absolutely sure when making these decisions.
I have two questions for the Minister. First, will she take this opportunity to explain how a landlord who has been found guilty of an offence by a local authority will be able to appeal that decision? Secondly, will she please answer the question about appropriate local authority resources to enable them to administer these offences?
Baroness Thornhill (LD)
My Lords, first, I echo from our Benches the sincere condolences to Lord Etherton’s husband, Andrew, and their family. They really do have our most sincere condolences.
I also echo the concerns that were delivered in a rather measured way by my noble friend Lord Shipley regarding the way that things have gone along. I have also communicated that to the Minister.
We come to another key plank in the Bill, perhaps one less explored or spoken of but, in our view, massively important, that of enforcement. It is important to remind ourselves of the current state of affairs in the enforcement world, albeit very briefly, as this is not Second Reading. The reality is, as the noble Lord has just mentioned, that after decades of cutbacks, councils have gradually been reducing the number of staff in the areas of housing enforcement, decent homes and tenant matters. It is arguable that, as a result of this, they have failed over that same time to carry out proper proactive enforcement work, inevitably leading to more substandard housing, as, let us be blunt, the rogue landlords know they can likely get away with it.
The big change is, of course, Clause 107. It is an important section in the Bill and, in short, it very boldly states:
“It is the duty of every local housing authority to enforce the landlord legislation in its area”.
That is a very powerful change—it is not optional nor desirable, it is mandatory. The landlord legislation wraps up, of course, other requirements from other Acts, such as the Protection from Eviction Act 1977 and various housing Acts. It is a real step change from the current situation and it cannot happen too soon.
However, our concern is whether local authorities are tooled up for this. Are they ready and will they have the right resources? This is not a blame game; it is the reality. The Bill, as we discussed in a previous group, allows for two main activities to fund their enforcement activities—civil penalty notices, as previously discussed, and rent repayment orders, which we will get to sometime later. The importance of these funding streams is why we opposed any reductions in the previous group and why we have amendments in the next.
The amendments in this section centre around the burden of proof that local authorities can apply when taking civil action. I agree with the noble Baroness, Lady Scott, that we need to understand the rationale for using the criminal standard of proof “beyond reasonable doubt” as opposed to the civil standard “on the balance of probabilities”, and vice versa—all the more so given the increased powers that are being granted under the Bill. It needs to be stated that there are many and they are quite complex. I confessed earlier that I am no lawyer, but even I could see that some of our officers might need to get their heads around some of these changes.
Given that I have argued previously that local authorities will need this money to fund enforcement activities, Amendments 145 and 152 seek to lower the burden of proof to
“on the balance of probabilities”,
thus making it easier for local authorities to impose civil penalties, whereas Amendments 197 and 200 seek the opposite.
I also note that in the Renters (Reform) Bill, Clause 15 had the higher proof. I look forward to hearing the reasoning as to why there has been a change. In short, these are legitimate questions. Consistency and clarity are essential and I look forward to the Minister’s replies, particularly on the notion of recklessness and the culpable mind in Amendments 242 and 148.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, may I say how sorry I am to have to deal with Lord Etherton’s amendments after his sad passing? I did not have a long time to get to know him, but during my time in this House, I truly appreciated both his engagement and his wisdom on this Bill and his courtesy and kindness. I know that he will be greatly missed by the House and I add to what other noble Lords have said in sending my condolences to his husband and his close friends and family. I understand that his wonderful legal brain will be a sad loss to this House, and we will all miss him. I am very sorry that he is not here today to complete the work that he started on the Bill. As the noble Baroness, Lady Scott, said, may his memory be a blessing to all those who knew him.
I thank the noble Baroness, Lady Scott, and the noble Lord, Lord Hunt, for speaking on behalf of Lord Etherton in this debate on the amendments on financial penalties, and also the noble Baroness, Lady Thornhill, for her comments on these. I will make the declaration up front that I am not a lawyer either, so I rely on others for legal advice on this part of the Bill.
Starting with the amendments in the name of the noble Baroness, Lady Scott, Amendment 145 would replace the criminal standard of proof with the civil standard of proof for breaches of the tenancy requirements which are not criminal offences. These breaches can, by virtue of continuing or being repeated, form part of a criminal offence. We consider that it is necessary, therefore, for the criminal standard of proof to apply.
Amendment 152 would reduce the standard of proof from “beyond reasonable doubt” to “on the balance of probabilities”, where local authorities are imposing civil penalties as an alternative to prosecution for tenancy offences. Where civil penalties are imposed as an alternative to criminal prosecution, it is necessary for the same criminal standard, “beyond reasonable doubt”, to apply. That is already the case, for example, for civil penalties imposed as an alternative to prosecution for offences under the Housing Act 2004, such as failure to comply with an improvement notice. For these reasons, I ask the noble Baroness not to press her amendments.
I now turn to the amendments tabled by Lord Etherton, and spoken to on his behalf today by the noble Lord, Lord Hunt. Amendments 197 and 200 would, conversely, require local authorities to meet the criminal, rather than civil, standard of proof when imposing civil penalties for rental discrimination and rental bidding breaches.
The standard of proof is lower than that which applies to the imposition of financial penalties for breaches of other requirements introduced by the Bill. This is because, unlike those other breaches, rental discrimination and rental bidding breaches cannot lead to a criminal offence if the conduct is repeated or continued. As such, rental discrimination and rental bidding cannot result in the landlord being prosecuted or given a £40,000 civil penalty, and are subject only to the lower £7,000 penalty. We therefore think it appropriate that local authorities need to prove these breaches to the civil standard, “on the balance of probabilities”, rather than the criminal standard, “beyond reasonable doubt”.
The noble Lord, Lord Hunt, raised the issue of resources, and I will answer that with two points. One is that the Government have committed to assess the financial impact of this on local authorities, and have committed to new burdens funding. Secondly, those fines will be available for local authority use for this purpose, or other purposes, if they wish to use them in that way.
The noble Lord, Lord Hunt, asked about appeals. Local authorities can consider evidence and decide whether, for example, the individual concerned was aware that the information they provided might be false or misleading, and if so, whether it was reasonable for them to submit it, or if they took an unjustified risk in doing so; that is the point about recklessness.
The legislation also provides safeguards. In the case of prosecution it would be for the court, not the local authority, to decide whether the accused had been reckless. In the case of a financial penalty, the landlord has the right to make representations before a penalty is imposed, and a right of appeal against the imposition or the amount of the penalty.
Amendment 148 would narrow the offence of misusing a ground for possession to evict a tenant when possession would not be obtained on that ground. It would do so by removing the element of recklessness from the offence. Amendment 242 would narrow the offence of providing information to the database operator that is false or misleading in a material respect in the same way.
To commit the first of these offences, a landlord, or person acting or purporting to act on their behalf, would need to know that the landlord would not be able to obtain possession on that ground. If a landlord, or person acting or purporting to act on their behalf, was simply being reckless as to whether the landlord would be able to do so, it would not amount to an offence.
I do not think that limiting the offence in this way is necessary or helpful. Clearly, landlords should not be penalised for minor mistakes, but recklessness goes beyond making a mistake. It entails taking an unjustified risk, and landlords should not take an unjustified risk when their action may result in someone losing their home. It is, of course, the case that the offence is committed only if the tenant actually surrenders possession. Making enforcement in every case dependent on being satisfied to the criminal standard that the landlord, or those acting or purporting to act on their behalf, knew that the landlord would not be able to obtain possession using a ground for possession, would make it too easy for unscrupulous landlords and agents to escape enforcement.
Similar arguments apply in relation to the database offence. To require knowledge to be proved in every case would make it too easy for unscrupulous landlords to submit false or misleading information in purported compliance with database requirements.
It is well-established in legislation for offences relating to the provision of false or misleading information to include the mental element of recklessness, including in housing legislation. It is used, for example, in relation to the provision of false and misleading information to local authorities in connection with their functions under the Housing Act 2004—an offence that is prosecuted by local authorities.
In short, we consider that the mental state of recklessness is appropriate to apply to these serious offences, so I kindly ask that the noble Baroness considers withdrawing her amendment.
Baroness Scott of Bybrook (Con)
My Lords, first, I am really disappointed because a number of noble Lords who have been involved in all these debates over the past four days in Committee are unable to be in their seats because of the later time of day. That will not help us scrutinise this Bill as we should.
I thank all those who have contributed on Amendments 148, 197, 200 and 242, which are now in the name of the noble Earl, Lord Kinnoull. Noble Lords are absolutely right to highlight the issue of consistency —an issue we on these Benches intended to raise today —but my noble friend Lord Hunt also introduced an important new concern: the threshold of proof required by local authorities before a financial penalty can be imposed. On matters such as these, it is vital that we draw on the expertise of the legal profession to improve the Bill’s drafting, and I hope the Minister will seek the wise counsel of noble Lords such as my noble friend as these matters are taken back to the department.
As noble Lords have rightly pointed out, the financial penalties under consideration are significant. Many landlords are small-scale or so-called accidental landlords, who may not be in a position to absorb such fines. It is therefore entirely appropriate that the Committee seeks clarity on the methodology, consultation process and factors, such as the ability to pay, used in determining these thresholds.
Given the scale of these penalties, the standard of evidence and the threshold for their imposition must be carefully examined, and my noble friend set out with clarity the issues that may arise without a sufficient burden of proof, and the legal argument underpinning these amendments. There is legitimate concern about penalties being applied without adequate legal scrutiny, potentially undermining due process. We therefore welcome these amendments and believe my noble friend Lord Hunt has made a compelling case. When large fines are at stake, a high level of rigour and certainty must be reflected in the legal standard applied. What is more, any concerns expressed on these matters should not be dismissed too readily and should be carefully considered, but at this point I withdraw my amendment.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment seeks to probe the Government’s willingness to recognise in law the close family ties many people have with their first cousins once removed and other removed cousins.
Baroness Scott of Bybrook (Con)
My Lords, the amendments I have tabled in this group are to probe the Government’s decision to define a family in the way they have in Clause 21. The Explanatory Notes to this part of the Bill state:
“Subsection (4) provides that where there are two or more tenants and one of the tenants is a family member of the guarantor, if the family member dies then the guarantor will not be liable for rent on or after the date of their death”.
The Bill defines a family member in such a way that excludes anyone more distant than a first cousin. It is essential that the definition of a family in law reflects the family units we see in our day-to-day life. In many tightly knit communities across this country, families still live close together, with many cousins, both near and distant, having strong family ties to each other. In these communities, it seems very likely that a second cousin might step in to help as a rent guarantor, and surely that person falls within the intention of this part of the Bill.
It seems strange that the Government would seek to recognise the relationship between two first cousins but ignore the relationship between second cousins. The example I gave shows how a second cousin might, because of their close family ties, help a family member out as their guarantor, but the Bill would not include that person within the tightly defined family under the Bill. Will the Minister explain why the Government have defined the family in this way? Will she also explain why a second cousin who acts as a guarantor for their family member is treated as a second-class citizen compared with their other closer cousins? We are also interested in the case of smaller families, where perhaps an only child chooses to help a family member who is more distant on paper but who in reality is their nearest kin. There will have to be a definition of “family” in the Bill. We understand that, but we need an explanation about why this definition of the family is being proposed. I beg to move.
Baroness Grender (LD)
My Lords, while it is understandable that some individuals have close bonds with more distant relatives, extending the definition of “family member” to include removed or second cousins could complicate the interpretation and enforcement of these provisions, which currently offer a clear and practical framework. Broadening the definition further could introduce uncertainty for landlords and tenants alike, potentially leading to disputes over familial links and undermining the protective aims of the clause.
For those reasons, we do not support these amendments but look forward to getting on to the next group of amendments, where we believe that the issue of guarantors will become less important if a certain amendment is accepted, therefore diminishing the need for this debate.
Lord Northbrook (Con)
My Lords, I support the amendments in the name of my noble friend Lady Scott of Bybrook, but I want first to express great sympathy to the husband of Lord Etherton.
It seems entirely sensible to widen the definition of family within the Bill to include first and second cousins. I cannot see any reason for refusing that.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for her amendments relating to guarantors and family members, as well as the noble Baroness, Lady Grender, and the noble Lord, Lord Northbrook, for contributing to the debate.
Amendments 167, 168 and 169 would expand the definition of “family member” used in Clause 21 to include the grandchildren of aunts and uncles as well as siblings of grandparents. This would absolve these individuals from liability for rent owed after a tenant had died when they acted as guarantor.
I understand the noble Baroness’s motivation in probing this definition of family. She sometimes accuses me of not listening, or of not thinking these things through, but I have carefully considered the balance of these provisions. They protect bereaved guarantors from financial hardship while allowing landlords to keep guarantors in place where it is reasonable to do so.
The definition of “family member” reflects the need to encompass more distant family members who might commonly be used as tenancy guarantors. While we understand that more distant relatives than those covered in the definition may rarely be used as guarantors, defining family members for the purposes of this legislation means that a line needs to be drawn somewhere. This definition does not seek to disregard or downplay any family links between relatives who are not included within that definition—some of my second cousins might have something to say if I tried to do that.
It is worth noting that landlords holding guarantors liable in these scenarios is already uncommon, and most landlords would already act compassionately towards a deceased tenant’s family. Furthermore, by removing fixed terms, a personal representative of the deceased tenant can end the tenancy by giving a landlord two months’ notice. We believe that this strikes a balance that is fair to tenants, guarantors and landlords alike. I therefore ask the noble Baroness, Lady Scott, not to press her amendments.
Baroness Scott of Bybrook (Con)
I am grateful to the Minister for her response, but I do not think that we have quite got to a better understanding of the Government’s reasons for defining a family in this way; it is just that they are going to define a family in this way.
I point out once again that many families are of different shapes to the one described in the Bill. We feel strongly that it would be a strange outcome if slightly more distant cousins were not protected by the legislation, but close cousins were. We have set out clearly that many people have very close family ties with their slightly more distant cousins. We feel that the Government have failed to adequately explain why those individuals should not have the same rights based on their family ties as other members of the family.
We reserve the right to come back to this on Report, but we hope that Ministers will listen to the argument that we have made today and consider improving this part of the Bill to properly reflect the family relationships that many people have in in this country. At this point, I beg to leave to withdraw my amendment.
“Restriction on landlord’s ability to require tenant to provide guarantor(1) A relevant person must not, in any of the circumstances set out in subsection (3), require a person, as a condition of the grant of a relevant tenancy, to provide a guarantor in relation to the observance or performance of the tenant’s obligations under the tenancy.(2) For the purposes of this section, requiring a person to provide a guarantor includes accepting an offer by that person to provide a guarantor.(3) The circumstances are—(a) that the person has paid a tenancy deposit or has been assisted under a deposit scheme,(b) that the person is required to pay rent in advance of one month’s rent or more, (c) that on a reasonable assessment of their means the person’s income (including state benefits received and any other lawful source of income) is sufficient to enable them to pay the full rent due under the tenancy,(d) that arrangements will be made for housing benefit or the housing element of universal credit to be paid directly in respect of rent to a relevant person,(e) that the relevant person has entered into a contract of insurance under which they are insured against non-payment of rent, or(f) such other circumstances as may be prescribed by the Secretary of State.(4) In any other case where a relevant person lawfully requires a person, as a condition of the grant of a relevant tenancy, to provide a guarantor, the sum for which the guarantor may become liable under the relevant guarantee may not exceed a sum equal to six months’ rent.(5) In any case where a relevant person lawfully requires a person, as a condition of the grant of a relevant joint tenancy, to provide a guarantor, the sum claimed under the guarantee may not exceed such proportion of the loss as is attributable to the act or default of the individual tenant on whose behalf the guarantee was given; and if such proportion cannot be proved, may not exceed the sum obtained by dividing the total loss by the number of tenants.(6) In this section—a“guarantor” is a person who enters into a guarantee in relation to a relevant tenancy;a“guarantee” is a contractual promise to be responsible for the performance of an obligation owed by the tenant to a relevant person under the tenancy if the tenant fails to perform the obligation;a“deposit scheme” includes a scheme whereby a sum payable by way of deposit or a bond or guarantee is provided by a local authority, registered charity or voluntary organisation for the purpose of providing security to a landlord for the performance of a tenant’s obligations under a tenancy;a“tenancy deposit” has the same meaning as in section 212(8) of the Housing Act 2004;“relevant person” has the meaning given by section 16M(1) of the 1988 Act.”Member's explanatory statement
This new clause would restrict the circumstances in which a landlord can request a guarantor.
Baroness Lister of Burtersett (Lab)
My Lords, I shall speak also to Amendment 265. Both amendments aim to strengthen the very welcome anti-discrimination provisions in the Bill. I am grateful to colleagues who have added their names and to Shelter for its help.
Amendment 170 sets out the circumstances in which a landlord may not require a tenant to provide a guarantor, a practice that has increasingly become a precondition of a tenancy for certain tenants—namely, those in receipt of social security, black renters, women, families and disabled renters—and one that could therefore be used as a way of circumventing the Bill’s anti-discrimination clauses.
The spirit of the amendment is the same as that behind the government amendment in the Commons which will prevent landlords demanding multiple months’ rent up front. To quote Independent Age, which is among the many organisations supporting our amendment,
“this is a sensible measure that safeguards against the risk of solving one problem (excessive rent in advance demands) only for it to be replaced with another (excessive reliance on guarantors)”.
Already, over the last five years, 550,000 private renters were unable to rent a home that they wanted because they did not have a guarantor that met the landlord’s requirements.
I know and respect that the Government do not want to prohibit the use of guarantors altogether, and my noble friend the Minister explained why in her helpful post-Second Reading letter. However, the amendment would not do that. It simply sets out the circumstances in which a landlord could not ask for a guarantor, and those circumstances reflect the National Residential Landlords Association’s guidance on appropriate guarantor use—that is, where a tenant cannot prove that they can afford to pay the rent. However, recent research by Shelter has shown that in practice guarantor requests often do not follow that guidance. Thus, the amendment is not radical but merely serves to ensure that guarantors are used as intended.
The case for ensuring that the use of such requests is limited is a strong one and is very much in line with the aims of the Bill. First, as noted already, it would help to safeguard the Bill’s anti-discrimination measures. Requests for a high-earning or home-owning guarantor are too often used in a discriminatory manner. Renters who receive social security, have a disability or are members of a racialised minority are all significantly more likely to be asked for a guarantor. Similarly, as Independent Age notes,
“requiring a guarantor can be a way for landlords to discriminate against older renters”.
Secondly, and related, the groups most likely to face a guarantor request are also those least likely to be able to meet one. Some 45% of benefit recipients and 43% of families struggle to provide a guarantor, compared with just 24% of those not receiving benefit or without children. The NUS believes that the amendment would make a huge difference to student renters, especially working-class, international, estranged or care-experienced students, who are likely to face difficulties finding a suitable guarantor. Become has highlighted the problems finding a guarantor faced by care-experienced young people more generally; its FoI research found that only around two in five local authorities provide a guarantor scheme for them.
Thirdly, in practice, fewer than 3% of landlords have attempted to pursue a guarantor for unpaid rent in the past two years. Moreover, insurance offers a sensible option for covering that risk.
Fourthly, the argument that the unfettered freedom to request a guarantor provides an essential lifeline for tenants with poor credit and/or problem debts is, Shelter argues, “a disingenuous one”, because there is evidence that landlords already avoid such tenants because of the manner in which tenant referencing is done. Those are not the tenants who are most likely to be able to find a suitable guarantor.
As well as the Renters’ Reform Coalition, of which Shelter is a member, and Independent Age, those calling for limitations on the power to require guarantors include the Mayor of London and Unison. I very much hope that my noble friend the Minister will be willing to discuss what is possible between now and Report and that if she cannot accept this amendment would consider proposing an alternative. Otherwise, I fear that some of the good intended by the Bill’s anti-discrimination measures will be undone in practice.
Amendment 265 would repeal the right to rent provision introduced in the Immigration Act 2014. It requires landlords, including those taking lodgers, and letting agents to check prospective tenants’ immigration status to confirm they have the right to rent in England before granting a tenancy. Letting a property to someone without the right to rent can now be punished with a fine of up to £20,000 or a five-year prison sentence.
Baroness Kennedy of Cradley (Lab)
My Lords, I rise briefly to support Amendment 170 in the name of my noble friend Lady Lister of Burtersett. I declare my interests as a trustee of the Nationwide Foundation.
There is a growing use of guarantors in the PRS. Generation Research last year found that 30% of renters who moved in 2023-24 had been asked to provide a guarantor. Requesting a guarantor is clearly being overused and is moving towards becoming standard practice. Moreover, a guarantor in many cases has proved to be unnecessary. Shelter found that only 2.9% of landlords attempted to pursue a guarantor for unpaid rent in the last two years, despite its estimate showing that 1.85 million renters had been asked to provide one. Guarantors are overused, unused and inherently discriminative, and make renting unnecessarily burdensome. Where a renter can prove through an affordability assessment that they can pay their rent, a guarantor should not be asked for.
Amendment 170, or one like it on Report, is a necessary addition to the Bill. Will my noble friend Lady Taylor of Stevenage consider this amendment favourably or bring one very close to it back on Report? Will she also consider developing national guidance for fair and proportionate referencing? Although we may talk about this tomorrow, will she also consider adding information on guarantors to the private rented sector database?
Baroness Grender (LD)
My Lords, I support Amendment 170 in the name of the noble Baroness, Lady Lister of Burtersett, to which I have put my name, along with Amendment 265 from my noble friend Lord Tope. As the two previous speeches have explained, the amendments attempt to ensure that the dangers of discrimination are not unintended consequences of the Bill. As we dismantle one source of insecurity—the abolition of Section 21—we must be vigilant that new discriminatory practices do not simply rise in its place.
Requiring a guarantor is often presented as a simple piece of standard referencing—a lifeline for vulnerable tenants—but in reality it is quite the opposite. It adds a significant and often insurmountable hurdle for many prospective tenants, typically imposed in addition to demanding a deposit, the first month’s rent in advance and passing an affordability assessment. Landlords already possess simple tools to assess a tenant’s ability to pay and to mitigate potential financial risk. Tenant referencing, rent guarantee insurance and deposit protection schemes provide those robust safeguards. When tenants can demonstrate they can afford the rent, requiring a guarantor becomes unnecessary and serves only to narrow the pool of renters.
The demand for guarantors is an unnecessary additional hurdle that disproportionately impacts those on low incomes, those from low-income backgrounds, those without family support networks, benefit recipients, women, single-parent households, black and Bangladeshi households in particular and, most shockingly, people with disabilities. A renter with a disability is 20% more likely to be asked for a guarantor, and a black renter 66% more likely. This is not a lifeline for the vulnerable; it is more like drowning. Independent Age tells us that this is a problem for older people, too. An older renter who can perfectly afford the rent, secure in their pension income, has recounted facing questions about their income and being asked for a guarantor.
A self-employed single mother who could pay six months in advance, topped up with universal credit, was asked for a guarantor with an income of £45,000 per annum. That is £15,000 above the UK median income. And there will be people, of course, who do not know someone with that level of income.
Throughout our debates, we have heard much about arrears, sometimes as if the problem is endemic. However, government statistics state that 2% of private rented sector tenants reported being in arrears in 2023-24; even the English Housing Survey put it at around 5%. While that is still too high, it does not reflect certain assumptions that all tenants are inevitably going to be in arrears and therefore need a guarantor.
Amendment 170 seeks to bring sense and proportionality to this practice. It does not ban the use of guarantors; it simply and reasonably restricts their use to circumstances where a prospective tenant cannot demonstrate that they can afford the rent. As the noble Baroness, Lady Kennedy of Cradley, so ably put it, over the most recent two-year period, only 3% of landlords have attempted to claim lost rent from a tenant’s guarantor. When landlords have attempted this route, it has proved much harder than the standard insurance products to indemnify against non-payment.
The Government have rightly listened to calls to limit excessive upfront payments. If we tackle one form of financial barrier used to exclude tenants, we must tackle the other to prevent some landlords simply switching tactics—which I think is the greatest fear of noble Lords who support this amendment. Without this amendment, there is a significant risk that limiting rent in advance could inadvertently lead to an even wider reliance on guarantor requests, thus undermining the Bill's anti-discrimination provisions.
This amendment is a sensible, proportionate step that ensures landlords can still use guarantors when genuinely needed, while protecting vulnerable renters from being unfairly shut out of the market. I hope the Government will consider and adopt this amendment or agree to discuss a possible alternative.
Lord Tope (LD)
My Lords, I added my name to Amendment 265 and, in speaking briefly on it, I thank the noble Baroness, Lady Lister, for the way she introduced both Amendment 265 and 170, which I also support, although I did not have the opportunity to add my name to that one as well.
First of all, I declare an interest a co-president of London Councils, which is the body that represents all 32 London boroughs and the City of London. I am also, inevitably, a vice-president of the Local Government Association.
I think the point has been very well made, not least by the noble Baroness, Lady Lister, and I do not want to repeat the arguments at this time of night—although I would very much like to have done so. Instead, I shall ask the Minister one thing. I hope, in a minute, she is going to say that the Government are going to take this opportunity to repeal that part of the Act and, I hope, support these amendments. If she does not, however, I say that it is widely agreed, and indeed has been agreed by a High Court judge, that the right to rent is discriminatory. Therefore, can the Minister give us any evidence that it has had any effect in actually reducing illegal migration? Has it achieved its purpose in any way? If it has not, in its 10-year life, why on earth are a Labour Government keeping it in this Bill when they have the opportunity, in this legislation, to remove something that is both ineffective and discriminatory?
Baroness Hamwee (LD)
My Lords, as my noble friend Lord Shipley might have said, and with apologies to Robert Frost:
“I have promises to keep,
And miles to go before I sleep”.
My promise was to support Amendment 265. I knew that the noble Baroness, Lady Lister, would be as thorough as ever. When she started to say the word “efficacy”, I thought it was going to turn into “ethics”—but maybe that as well.
I simply want to record my support. However, given today’s White Paper, I do so without much expectation, as has been the case so often in the past on this issue. Nevertheless, my enthusiasm for the amendment is entirely disproportionate to the time I have taken— I promised it would be within a minute, and it is.
Lord Jamieson (Con)
We have heard some compelling arguments from across the House on the very important issues here. I thank the noble Baroness, Lady Lister of Burtersett, for her cogent and careful explanation of the reasons for bringing forward her amendments.
The issue we are addressing today is of great importance, particularly given that the Bill removes the options for tenants to pay rent in advance. Furthermore, the Minister has declined to support our amendment, which would have allowed for an arrangement between two consenting adults to agree on such a payment structure. This is a missed opportunity. Although His Majesty’s Opposition have not tabled an amendment to this group, we share the serious concerns that have been raised and I will try not to repeat the many arguments that have already been made.
Unfortunately, the Government’s proposals, in their current form, appear to pay little more than lip service to fairness. In practice, they fail to provide meaningful protection to those most at risk of exclusion from the rental market. Let us be clear about the deficiency of Amendments 170 and 265: they specifically prevent landlords requiring a guarantor in a wide range of circumstances, yet there remains ambiguity as to whether the amendments would still allow landlords to accept a guarantor if offered. I thank the noble Baroness, Lady Lister of Burtersett, for being very clear that they could still accept it, but that does create some ambiguity.
While we recognise that requiring a guarantor can be a significant barrier for many prospective tenants, particularly those from vulnerable backgrounds, the guarantor system serves a legitimate function where it is used proportionately. It can provide a safety net for tenants with limited financial histories, such as students, individuals supported by local councils or those whose circumstances might not meet the traditional expectations of landlords. However, the Government’s approach to rent in advance is inconsistent with the rest of the Bill. If tenants are not allowed to offer rent in advance as an alternative to a guarantor, we must ask: how will the Government ensure that fair and proportionate mechanisms are put in place to assess risk?
The private rental market is not a one-size-fits-all model; it encompasses a diverse range of tenants, from students and graduates to care leavers and older renters. How do the Government plan to accommodate those who may not have access to a guarantor but are still financially reliable? Crucially, where does the space exist in this framework for discretion, mutual agreement and choice between two consenting adults—tenants and landlords?
Furthermore, the Secretary of State’s proposed power to allow insurance-based alternatives to guarantors raises significant concerns. Can the Minister say how accessible these insurance products are likely to be and what steps are being taken to ensure that they do not create another costly barrier for tenants? As it stands, the insurance model seems unlikely to provide a fair and proportionate solution to the challenges that tenants face. These are not abstract concerns: the provisions, as drafted, place undue strain on tenants and their families without achieving the balance that the Government claim to seek. Unless there are significant revisions, this issue will undoubtedly return with force on Report.
As has been mentioned, the Bill has generated substantial interest across the rental sector, with campaigns led by the National Union of Students being particularly striking. Students across the UK, especially those from marginalised and underrepresented backgrounds are sounding the alarm. Guarantor requirements have emerged as one of the most significant barriers to accessing stable, affordable housing.
As the NUS has clearly outlined, these requirements disproportionately affect working-class students, care-experienced young people, estranged youth and international students—groups already navigating considerable challenges in their pursuit of education. Many of these students face an additional hardship: they do not have a family member in the UK who can meet the often arbitrary financial thresholds demanded by landlords. As a result, they are forced either to pay up to a year’s rent in advance—an impossible ask for many—or to turn to expensive guarantor services. We now find ourselves in the deeply perverse situation where it costs more to rent a home if you are poor.
Guarantor requirements contribute to this divide, by insisting that students find someone, often someone who earns up to 80 times the monthly rent and is based in the UK, to guarantee their tenancy. We are systematically locking out those who cannot meet these criteria. No one should be denied the opportunity to pursue academic excellence simply because of who they know or, more importantly, who they do not know. This is why these amendments fail, why the NUS and student representatives worked so tirelessly to bring this reform forward in the other place, and why it is so vital that we do not let this opportunity slip through our fingers in this House.
I focused much of my speech on the barriers faced by students, but it is essential to remember that this issue also affects many other vulnerable groups, none more so than care leavers. I speak as an ex-leader of a council, where I spent much time trying to enhance the position of care leavers. Having already overcome considerable challenges in their lives, they should not face yet another hurdle in their pursuit of independence. How can we in good conscience expect care leavers to comply with a condition that they simply cannot meet on their own? This also demonstrates the complexity of the situation, as often, their local councils—including Central Bedfordshire while I was there—were often willing and keen to provide guarantors to ensure that care leavers were on an even playing field to those from better financial backgrounds.
As I have outlined, the restrictions on rent in advance and lack of objective criteria for when a guarantor is required will only entrench existing inequalities. Penalising individuals who may be financially reliable but lack family support or financial connections to meet the arbitrary thresholds demanded by landlords is unjust. This is not just an issue of housing, it is an issue of fairness, opportunity and basic dignity.
Housing is not merely a financial transaction, it is the foundation of stability, security and opportunity. When we deny people access to housing because they cannot meet arbitrary demands for a guarantor, we are closing doors not only to homes but to education, career advancement and future independence.
The noble Baroness, Lady Lister of Burtersett, raised a very valid issue regarding the right to rent and the fact that introducing what may seem quite a sensible rule leads to complications and places landlords in an awkward situation if they do not fully understand the legislation in front of them. Earlier today, we heard a number of noble Lords admit that they were not lawyers. It is also unreasonable to expect every landlord to be a lawyer. Where the law is complex, we need to make it simple and easy to comply with. This is one of our major concerns with this legislation.
In conclusion, I ask the Minister to listen to the voices of those most affected by these provisions—the students, care leavers and low-income tenants—and make the necessary changes to ensure that the Bill delivers fairness for all.
Baroness Taylor of Stevenage (Lab)
My Lords, before I respond directly to the amendments, the noble Lord, Lord Jamieson, talked about denying people access to housing, including students, care leavers and people on low incomes. The fact that so little social and affordable housing has been provided over the last 14 years is a very strong reason why we are in the situation that we now are. That those people have not been able to find affordable housing is largely due to the housing policies of the previous Government. I want to put that on the record before giving my answers on my noble friend’s amendments.
I thank my noble friend Lady Lister of Burtersett for her amendments relating to guarantors and the right to rent. I add my thanks to Shelter, which has provided so much advice and support during the passage of this Bill, for which I am very grateful. I also thank my noble friend Lady Kennedy, the noble Baronesses, Lady Grender and Lady Hamwee, and the noble Lords, Lord Tope and Lord Jamieson, for their comments.
Amendment 170 seeks to restrict the circumstances in which a guarantor could be required by a landlord. I appreciate that underlying this amendment—tabled with characteristic clarity, commitment and compassion by my noble friend Lady Lister—is the concern that those who do not have access to a guarantor will find it more difficult to find a home in the private rented sector than those who can obtain a guarantor. I make clear to my noble friend and the Committee that our approach to this issue is underpinned by the need to provide tenants with the rights and protections that they deserve. At the same time, we wish to guard against any unintended consequences that may, for some tenants, make renting more challenging. I recognise that obtaining a guarantor can be difficult for many prospective tenants. The Government are clear that landlords should consider tenants’ individual circumstances when negotiating rental contracts.
The noble Lord, Lord Jamieson, seemed to indicate that there was some sort of compulsion for landlords to find a guarantor. If they wish to come to an agreement without one, they are more than able to do that. What they cannot do under the Bill is require significant sums of rent in advance. That is what was really discriminating against people. Those incredibly high sums of rent required in advance were making it difficult for people to rent.
However, it is important to acknowledge that, in many circumstances, the use of guarantors can provide landlords with the confidence to let their properties to tenants who may otherwise find it difficult to secure a tenancy in the private rented sector. This includes tenants with a history of rent arrears, people with incomes that fluctuate from month to month and those with no previous rental history—for example, students or young people moving out of home for the first time. Prohibiting landlords from accepting large amounts of rent in advance will benefit all tenants by giving them the confidence that the maximum financial outlay needed to secure a tenancy will not exceed the cost of a tenancy deposit and the first month’s rent.
The Government recognise that providing a UK-based guarantor may be difficult for some prospective students, including international students. Under the Renters’ Rights Bill, landlords will continue to be able to offer tenants who cannot provide a UK-based guarantor with the alternative of purchasing rent guarantor insurance. The measures set out in my noble friend’s amendment would inadvertently risk blocking certain types of renter from accessing accommodation in the private rented sector altogether, despite the amendment’s honourable intentions.
Turning to my noble friend Lady Kennedy’s question on guarantors, the Government are clear that landlords should consider each prospective tenant’s circumstances individually, including when it is appropriate to require a guarantor. They should not apply blanket requirements for guarantors to all tenants. In response to her other question, the landlord’s database will act as a record of landlords and properties rather than of individual tenancies. Therefore, it would not be appropriate for landlords to record the risk-mitigation measures that they have put in place for a particular tenant on the database. She also made a point about guidance on guarantors. I will take that back to the department to consider further.
I assure the Committee that we have carefully considered the extent to which different practices act as barriers or enablers to accessing the private rented sector. That is why we are taking this action to limit rent in advance through the Bill. I am always happy to meet my noble friend to discuss this further but, for all these reasons, I hope she will withdraw her amendment.
I turn to Amendment 265, which would abolish the right-to-rent scheme that applies in England. Right to rent was introduced to ensure that only those lawfully in the United Kingdom can access the private rented sector and—this is important—to tackle unscrupulous landlords who exploit vulnerable migrants, sometimes by letting properties that are in very poor condition indeed. Some landlords who rent to those who are here illegally are criminal operators and we all have a shared objective to drive them from the market—I think everybody around the Chamber would agree with that.
We have been absolutely clear that discriminatory treatment on the part of anyone carrying out the right-to-rent checks is unlawful; the dreadful examples given by my noble friend illustrated that. The checks apply equally to everyone seeking accommodation in the private rental sector, including British citizens, and I will just elaborate a little further on that. The right-to-rent scheme is capable of being operated proportionally by landlords and letting agents in all cases. The very purpose of the statutory code of practice on avoiding unlawful discrimination when conducting checks recognises and seeks to address the risk of discrimination.
Baroness Lister of Burtersett (Lab)
My Lords, I am very grateful to everybody who spoke. I will not go into any great detail in response, given the late hour. I do not think that my noble friend the Minister answered the question posed by the noble Lord, Lord Tope, which was on whether the right to rent has had any effect in reducing illegal migration. I do not know if she would care to answer that question now.
Baroness Taylor of Stevenage (Lab)
I do not have any statistics in front of me, but I will come back to noble Lords on that point.
Baroness Lister of Burtersett (Lab)
I thank my noble friend. I am grateful for the support that I received. I was slightly confused, I must admit, by the noble Lord, Lord Jamieson, because I was not sure whether he was supporting my amendments or not. He said that they were ambiguous, but I think his approach was perhaps a bit ambiguous—and I cannot resist pointing out that right to rent was introduced by his Government, and we are now saddled with it.
I am disappointed, but perhaps not surprised, that my noble friend said that there is no plan to be shot of it especially, as the noble Baroness, Lady Hamwee, said, in the light of today’s White Paper. It is not exactly conducive to it, but it is important still to come back to the point.
I was also a bit disappointed that my noble friend did not feel able to give a bit more on the question of guarantors. She said that the proposed amendment would inadvertently block certain groups and could have unintended consequences. Everyone who spoke to this amendment accepted that it may be that it is not quite right, but that it is aiming to do something that in fact supports what the Government are trying to do.
Although she very kindly said that she is willing to discuss it, I did not get the sense that there is a willingness to discuss it in terms of perhaps bringing forward a government amendment that would achieve what we are trying to achieve but without the unintended consequences. Given the late hour, however, I beg leave to withdraw my amendment.
Lord Shipley
Member's explanatory statement
This amendment and others in the name of Lord Shipley aim to ensure that the provisions contained in section 22 apply to joint tenancies as well.
Lord Shipley (LD)
My Lords, there are four amendments in this group relating to Clauses 22 and 23 on notices to quit, so I wish to move Amendment 171 and speak to Amendments 172, 174, and 175.
The background to these amendments has been raised by front-line advisors of Citizens Advice. I thank them for their contribution to our consideration of this Bill, and I hope the Minister will be able to allay the concerns that they have expressed when she responds. These concerns relate to how tenants serve, withdraw or reduce notice in joint tenancies, and the length of notice that tenants must give to leave before the expiration of an eviction notice that they had been served using the new, no-fault grounds 1 and 1A.
It may come as a surprise to some to realise that, in joint tenancies, one tenant can serve a notice to quit to the landlord, ending the tenancy for all tenants without the other joint tenants knowing that this has happened. Tenants remaining in the property might not know that a notice has been served until the landlord expresses an intention to issue a claim for possession on the basis that the tenancy has been ended by a notice to quit. This would put the remaining tenants in a very vulnerable position, at risk of homelessness and liable for court costs. This is the status quo with periodic tenancies, but it could become a more common problem when all tenancies become periodic. It is important for one joint tenant to be able to end a joint tenancy unilaterally—I accept that—but a mechanism is essential to ensure that all joint tenants are notified.
Similarly, while it is welcome that the Bill provides for reduced notice by agreement between landlord and tenant, it should be stipulated that this is only where all joint tenants agree in writing. Otherwise, there is a risk that a departing joint tenant and their landlord will agree to bring a tenancy to an end very quickly, potentially without the remaining joint tenant being aware. In terms of the withdrawal of notice, there is a similar problem. In theory, one joint tenant could issue a notice to quit, and the other joint tenant and the landlord could agree that it will be withdrawn. The solution is to require that the agreement of all joint tenants is needed for the withdrawal of a notice.
There is a further issue when a tenant serves notice, but when the other tenant would have sought to transfer the tenancy solely to them if they had known notice was being served. This happens most often when joint tenants go through a relationship breakdown and the tenant who leaves serves a notice to quit, sometimes with the intention of harming the remaining tenant. Yet the remaining tenant could have gone to court to get an injunction to prevent the departing tenant from serving the notice to quit, allowing time for the tenancy to be transferred to them under family law. The remaining joint tenant would then retain the security of tenure and not be made homeless. It is important to note that many of these cases involve children.
When a tenant receives an eviction notice based on the new no-fault grounds 1 and 1A, they must still give two months’ notice, even if they need to leave the property before the expiration of the eviction notice. Yet in a fast-moving rental market, tenants often have to move quickly to secure an appropriate new home before their eviction notice expires; tenants may therefore face having to start a new tenancy before their current one has ended in order to avoid homelessness. There would be a new deposit, a first month’s rent, and often household bill costs on the new property, while also paying rent and household bills on their current home. This creates a very high-cost burden for tenants and can push those on a lower income into significant debt or put them at risk of homelessness if they cannot cover these costs or find a property with an aligning tenancy start date. This issue will be amplified with the Bill’s increase in tenant notice from one month to two.
This group of amendments would, first, require joint tenants to be notified by both the landlord and any tenant giving notice, that a notice to quit has been submitted and the tenancy will come to an end on a specified date. We should note that this amendment reflects the notification requirements of Section 130 of the Renting Homes (Wales) Act 2016.
Secondly, the amendments would ensure that a tenant’s notice to quit can be reduced or withdrawn, through agreement with a landlord, only if all joint tenants agree to it in writing.
Thirdly, they would allow withdrawal of a tenant notice in circumstances where a transfer or assignment of the tenancy to a remaining tenant is a viable option, which would remove the need to anticipate and pre-empt a notice to quit with an injunction.
Finally, they would reduce the notice a tenant must give to one month when notice has been served to them on grounds 1 and 1A, which would give much-needed flexibility to tenants and help them manage the high cost of moving, which is unaffordable to many low-income renters.
I hope the Minister will give due consideration to those issues, which I think are very important. I have learned a little about joint tenancies that I did not know before Citizens Advice got in touch. I hope that the Minister will be willing to give further consideration and detail to this so that, on Report, we can produce the amendments that are necessary to solve the problems that have been identified.
Baroness Coffey (Con)
My Lords, I was intrigued by the amendments from the noble Lord, Lord Shipley, today and it is interesting to hear that they have come from Citizens Advice. I am conscious that things have evolved over time, and he mentioned relationship breakdown. As somebody who used to rent with other people, I know there was always a certain risk when you took on a tenancy that somebody could walk out and you would be left liable.
I guess I am trying to understand—perhaps I was not listening quite closely enough—whether we will get to a point where, instead of people coming together, this will drive more accommodation into houses of multiple occupation.
I will give your Lordships my personal experience. I was working for a very large company when I moved to another city, which reflected the job situation that I needed. There is no doubt that I deliberately sought out situations that were not exactly HMOs but where individual contracts and tenancies were allowed with the landlord, so that it would not fall on my shoulders to think about these issues.
I suppose I am trying to understand how this amendment would address the situation of making sure that there are enough tenancies and enough accommodation available, without putting more risk on to the landlord. We are already seeing quite a substantial change. I understand why the Government set this out in their manifesto and similar. I appreciate that there may be some differences on some of the impact but, perhaps when the noble Lord, Lord Shipley, follows up—I am happy to discuss this outside—it would be useful to discuss how much of a genuine, as opposed to theoretical, problem this really is.
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Lord, Lord Shipley, for bringing these amendments to the Committee. As we on this side have consistently said throughout, we support the Bill’s overarching aim to create a fairer and more secure private rental sector. However, if it is to deliver on that promise, it must engage with the way that people rent in reality, not in theory. Joint tenancies are a common and practical arrangement, as we have heard, whether between couples, friends or flatmates. However, as currently drafted, the Bill leaves considerable uncertainty as to how these tenancies will be treated, particularly when one party wishes to leave.
Amendments 171 and 175 rightly seek to bring joint tenancies fully and clearly within the scope of the Bill. Without this clarity, both tenants and landlords could be left navigating ambiguity, with little guidance in law and potentially significant consequences in practice.
Similarly, Amendments 172 and 174 focus on the mechanisms for ending a joint tenancy. This is a matter not just of legal process but of fairness and practicality. Tenants must be afforded flexibility, particularly in cases of relationship breakdown or changes in household arrangements, while landlords should not be left in legal or financial limbo.
In that context, it is right to raise the issue of subletting, which is closely tied to how joint tenancies evolve and adapt over time. When a tenant is not using all or even part of their space, subletting enables the more efficient use of underoccupied homes. This is particularly important in areas facing acute housing shortages, where every single room matters. Subletting arrangements can offer a pragmatic solution for tenants trying to manage their finances, respond to personal changes or simply avoid exiting a tenancy altogether. It can help maintain housing stability where one joint tenant moves out, by allowing a new occupier to contribute to rent without formalising a new tenancy agreement from scratch. Moreover, subletting can play a role in addressing the chronic supply issues affecting the rental sector. It offers access to more affordable rents, supports tenants’ incomes and introduces much-needed flexibility into an often rigid system.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Shipley, for his amendments, which relate to tenants ending an assured tenancy and joint tenancies. In doing so, I thank him for raising the very important issues brought to him by Citizens Advice, which has been in touch with the department as well. I thank Citizens Advice and all the other stakeholders for engaging with our officials on these issues. I thank the noble Baronesses, Lady Coffey and Lady Scott, for their comments too.
Where a joint tenant has served a notice to quit, Amendment 171 would require any agreement to a notice period of less than two months to be with not just the landlord, as the Bill requires, but with all other joint tenants as well. Although I genuinely think there is merit to this approach, I am cognisant of the potential impacts on tenants who do not wish to inform their co-tenants that they are leaving. There may be a number of reasons why that might be the case. We would need to give very careful consideration to any change in this direction, to make sure we understand any impacts that it might have. We are currently working through that.
Amendment 172 would allow a tenant to provide only one month’s notice to end an assured tenancy if the landlord had already provided a notice of their intention to seek possession using ground 1 or ground 1A. The Government understand that tenants may find new properties to let within the four-month notice period the landlord has given them, and that market pressures would mean that, ideally, they could go when they need to. However, it is right and fair that tenants provide landlords with the usual two months’ notice so that landlords have sufficient notice, as they may need to change or alter their plans as a result. We think that this strikes a fair balance. Tenants will benefit from slightly longer notice periods, and it is right that landlords can plan for the ending of the tenancy too. Nothing prevents the agreement of a shorter notice period. We expect that, in many cases, landlords will gladly facilitate a quicker end to the tenancy to allow them to sell or move in more quickly.
The noble Baroness, Lady Scott, raised a number of questions around subletting. I will come back to her on those points.
Amendment 174 would require joint tenants to notify each other when serving a notice to quit an assured tenancy, and landlords to inform all joint tenants that such a notice has been served and to provide a copy of the notice. The Bill does not require joint tenants to inform each other when ending an assured tenancy. I understand the point that there is an inherent risk that tenants may not find out until late in the notice period that their tenancy is ending. However, at the moment, the Government are concerned about the potential impact—for example, on domestic abuse victims—of being required to inform the perpetrator that they are ending a tenancy, possibly in order to flee. On the balance of risks, we believe the needs of domestic abuse victims must be allowed to prevail, although I recognise it is a difficult decision and we are giving it further consideration.
Finally, Amendment 175 would require all joint tenants to agree to withdrawing a notice to quit. This amendment is unnecessary, as it has already been established in law that all joint tenants must agree to positively sustain the tenancy. It is very unlikely that a court would determine that a single tenant could unilaterally withdraw a notice to quit, because there is not the positive consent of all tenants. For those reasons, I ask the noble Lord not to press his amendments.
Lord Shipley (LD)
My Lords, these are essentially probing amendments and I am glad that the Minister and her department have had discussions with Citizens Advice. I understand some of the points that she has made. To take up the point mentioned by the noble Baroness, Lady Coffey, I think the aim is to avoid unintended consequences in a new Bill such as this. So it is important that all these issues are thought through and examined so that the best answer can be found. I hope it might be possible, between now and Report, for some of the issues that the Minister has raised to be looked at in detail. I shall look carefully at her response in Hansard to see whether there are ways in which some of the problems that have been identified, and some of the responses with perhaps unintended consequences that the Minister has identified, might find a solution. With that, I beg leave to withdraw the amendment.
Lord Roborough
Member’s explanatory statement
This amendment is intended to probe why the government has sought to remove section 25(1) of the 1988 Act completely.
Lord Roborough (Con)
My Lords, I rise to move Amendment 176 and speak also to Amendment 177, in my name. Before I begin, I refer the Committee to my interests as set out in the register, as a farmer, landowner and residential landlord. In particular, I have a number of houses occupied by employees under assured agricultural occupancies.
These two amendments are probing amendments, intended to allow the Committee to understand better how the Government sees these provisions of the Bill operating and also to probe whether the impact of the Bill in this area may have unintended consequences that need to be resolved. Before moving on to the detail of the discussion, I shall follow my noble friend Lady Scott, who on an earlier group underlined the importance of being able to offer on-site accommodation to agricultural employees.
I have three herdspeople, and one relief herdswoman, who rise daily at around 3.30 in the morning to milk. Being a short walk from the herd and the parlour is critical to their employment conditions. Those herdspeople also take primary responsibility for animal health within the herds, as well as the linked young stock. Again, being on site is vital to allow frequent inspections of the animals to ensure that they are doing well. There is also an important security consideration in having employees on site and able to deal with any malicious trespass, animal escapes and so on.
In short, this may not be a matter of huge general interest, but it is critical to farming in general, and to livestock farming in particular, that accommodation is available on site for these employees. When they leave, it needs to be available for their successors. However, we must also recognise that farm workers may have lived for many years, and even decades, in a community, and that options for them to stay in the area even when employment ends are desirable.
Beginning with Amendment 176, my Explanatory Notes indicate that leaving out this paragraph is intended to probe why the Government have sought to remove Section 25(1) of the 1988 Act completely. Since the 1988 Act, it appears that agricultural occupiers with an assured agricultural occupancy are entitled to remain in that occupation, even if they leave the employment of the landlord, as long as they remain in agricultural employment.
Omitting this subsection could mean that agricultural occupiers retain protection even after their qualifying employment ends. I ask the Minister whether that is the intention. The subsection may be being removed because it refers to fixed-term tenancies, which the Government are seeking to abolish in the Bill. However, in this case, it is linked to fixed-term employment. It appears that the Government may not have considered the importance of this link and the necessity for landlords to be able to recover agricultural accommodation linked to employment. I also ask what impact this will have on assured agricultural occupants in tied agricultural dwellings where, if they are no longer employed in agriculture, it may well be a breach of planning regulations.
Amendment 177 is a similar probing amendment. Ground 16, for recovering possession of an assured agricultural occupancy at the end of employment, was omitted from the Housing Act 1988. This created a headache for agricultural employers, but in practice its implications have been rather limited, as departing employees often leave for other employment with accommodation included, or because the open market rent for quality rural accommodation tends to be unaffordably high for those working in agriculture.
In the Renters’ Rights Bill, the Government have continued to omit the ability to recover accommodation at the end of employment—or at least that is what I thought. On an earlier group, the Minister said that
“we appreciate that the agricultural sector has distinct requirements, and it is often vital for workers to live on-site to carry out their duties, as the noble Baroness, Lady Scott, very ably described to us. That is why we have included ground 5A”.—[Official Report, 24/4/25; col. 859.]
However, it does not appear that ground 5A is applicable to landlords and assured agricultural occupants to ensure that houses can be recovered at the end of employment, as it is omitted as being a ground. I would be most grateful to the Minister if she could explain how she sees it working in practice for agricultural employers to recover vital accommodation at the end of employment.
These assured agricultural occupiers will also gain greater protection, given that grounds 2ZC and 2ZB are not available for use. I ask the Minister why the Government think this is appropriate. Why are agricultural landlords being treated differently from other landlords and are not able to regain possession of the properties after the landlord changes under Section 18 of the Housing Act 1988 or after taking over a tenancy?
In a previous group, the noble Baroness, Lady Grender, argued for making grounds 2ZC and 2ZB discretionary. In our view, this introduction of legal uncertainty would make the complexity even worse. From my limited exposure to this Bill, I am not sure how easily anyone will be able to administer all tenancies captured by it without a law degree. This discretion may elevate that base level of expertise to actually practising at the Bar. Given that it is largely estate agents and land agents who manage tenancies, it is important to make the Bill’s provisions as clear-cut as possible.
I also ask the Minister whether the Government have considered the impact of this Bill on a particular practice that we believe will deliver unintended consequences. Many agricultural employers, when housing employees, have understandably sought to avoid creating assured agricultural occupancies by serving notice before a tenancy begins and classifying that tenancy as an assured shorthold tenancy. This allowed serving a Section 21 notice with certainty that the house could be recovered at the end of employment to ensure it was available for the next employee. As a consequence of this Bill, those employees or tenants will now gain what appears to be greater protection than originally intended. Would the Minister consider adding a provision to allow landlords and employees in this position to change the status of those tenancies, potentially to assured agricultural occupancies, before the Bill takes effect? I beg to move.
Baroness Coffey (Con)
My Lords, I will speak to my Amendment 182. I am a great supporter of the policy of right to buy and right to acquire. I think it is one of the best policies of the past 50 years, making sure that people had investment in their communities and were able to determine exactly how different things in their homes looked. Basically, it made sure that we had a greater proportion of owner-occupiers.
During my time as a Member of Parliament, I had not realised that, in effect, there had been discrimination against people living in the countryside. I discovered this when busily propagating some of the latest policies that my party was putting forward and had it said to me very squarely on a doorstep in a particular housing estate in Rendlesham in Suffolk. I was told that I was doing a load of good, but, frankly, it meant nothing to them because they had already tried to acquire their housing association home and had been told that they could not.
Lord Best (CB)
My Lords, I want to say a few words about Amendment 182 in the name of the noble Baroness, Lady Coffey—not, I am afraid, in support of it. Is it fair that tenants residing in rural properties should have different treatment from those in the rest of the country? I have been responsible for a number of rural housing schemes—indeed, I recently chaired the Devon Housing Commission, looking at the issues facing communities in Devon—and I suggest that there are a number of reasons why it is fair to treat tenants in rural areas rather differently from those in the rest of the country.
First, it is much more difficult if a property is sold and therefore does not come back for reletting. We now know, Right to Buy being a matter of history, that after a period you will not get the relets, the opportunity for more people to enter those properties, in the years ahead. It is more difficult to replace properties in a village than in a town. If we lose the six houses that we have built in that village, they are gone for ever. It often takes years to acquire a site, convince the parish council and deal with the landowners. It takes a very long time to get those six homes built and we do not want to lose them if we can possibly help it, because in the future we will regret that.
My second reason is that the amount of social housing—housing association and council housing—in rural areas is appreciably less than in the rest of the country. It is about 11% for areas classified as rural locations compared with 17% for the rest of the country, including the rural areas, so there are already signs of acute shortage of affordable social housing in many areas, and we cannot really afford to lose what we have.
The third reason is that most of the developments in rural areas, or village areas, are small developments, and there is therefore no requirement to do affordable housing—to have a proportion of the homes that are available at subsidised low rents—so most of the development that is going to happen in rural areas, being less than 10 homes, is not going to have any affordable housing attached to it. We have to hang on, if we possibly can, to the properties that we have and then relet them later on.
My fourth reason is that, as the noble Baroness said, prices are higher but wages are lower. It is much more difficult in rural areas for local people to find any housing other than social housing that they can genuinely afford. There are the retirees moving in—in the case of Devon, from the south-east very often into the south-west. There are more affluent commuters paying more than locals can afford on their salaries. There are second homes—we are going to be talking soon about short-term lets, Airbnb and holiday lets—so locals are priced out, and it becomes a precious commodity to retain those few rural social houses, so I am afraid that I am unable to support Amendment 182.
Baroness Grender (LD)
My Lords, these Benches recognise the vital importance of our rural and agricultural communities, who operate under the more specialised and long-standing tenancy agreements. Such tenancies often span many years, involve successive generations and reflect a connection between the land and those who work it, going well beyond the norms found in other areas of the rental sector. We fully appreciate the challenges that tenants and landlords may face under those arrangements, particularly when legislation risks creating ambiguity or disruption.
When I looked at these amendments, it struck me that discretionary rather than mandatory powers would be a very useful thing to have, so it is hugely ironic that the noble Lord, Lord Roborough, raised my own amendments on this issue. I would have thought that a discretionary approach for any decision in the courts may well be useful in this context. However, while we are sympathetic to the concerns raised, that sympathy does not translate into ready support for Amendments 176, 177 and 182. It is our understanding that the Bill will not apply to residential property let under a farm business tenancy or an Agricultural Holdings Act tenancy but will apply to any residential property on a holding that is subsequently sublet on what we now know as an assured shorthold tenancy, and it will in future have grounds for possession as set out in other parts of the Bill.
We also understand that a process will be in place for landlords to avoid inadvertently creating assured agricultural occupancies, and we fully back the words of the noble Lord, Lord Best, as ever, with regard to rural communities and retention of, in particular, social housing. We believe firmly that local authorities know best and should be given the powers to make decisions over those social homes, with the right level of localism and autonomy. With that said, we look forward with interest to hearing the Minister’s response but remain unconvinced by these three amendments as set out.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Roborough, and the noble Baroness, Lady Coffey, for their amendments, and the noble Lord, Lord Best, and the noble Baroness, Lady Grender, for their comments.
I turn first to Amendments 176 and 177 in the name of the noble Lord, Lord Roborough. Amendment 176 seeks to reverse the Bill’s removal of Section 25(1) from the Housing Act 1988. The noble Lord stated that he is seeking to probe why we are making this change. The answer, I am sure he will be pleased to learn, is simple and straightforward. After this Bill is implemented, Section 25(1) of the 1988 Act will be a spent provision; that is to say, it will have no effect. That is because it deals with what happens when statutory periodic tenancies arise upon the end of a fixed term of an assured agricultural occupancy. Statutory periodic tenancies will no longer exist after the Bill is implemented, nor will fixed terms. Indeed, all assured tenancies, including assured agricultural occupancies, will be periodic tenancies. The provision in Clause 25 is purely a consequential amendment, tidying up this spent provision from the 1988 Act following our reforms.
Amendment 177 seeks to allow the eviction of tenants with assured agricultural occupancies under ground 2ZC. This would reduce the security that these tenants currently enjoy. The noble Lord, Lord Roborough, has highlighted that he is seeking to probe why the Bill is expanding the restrictions on when assured agricultural occupancies can be evicted. With respect, this represents a misunderstanding of what the provision is doing. Clause 25 contains technical and consequential amendments to the assured agricultural occupancy regime that aim to maintain the status quo in light of our reforms. It includes preventing landlords from evicting those tenants under the employment ground—now 5C—as well as ground 5A and the new superior landlord grounds. These grounds cover circumstances where tenants under assured agricultural occupancy tenancies cannot currently be evicted. They are being amended or introduced by the Bill, and, as such, may pose a risk to tenants’ security in the new system. Rather than expanding the restrictions on evictions for such tenants, this provision will broadly maintain the status quo. For those reasons, I ask the noble Lord, Lord Roborough, not to press his amendments.
Amendment 182, in the name of the noble Baroness, Lady Coffey, would prevent any secondary legislation laid under the power in paragraph 65 of Schedule 2 exempting the rural sector from the right to acquire—and, more widely, seeks to ensure that residents in properties in rural areas have the right to acquire. The provisions in paragraph 65 of Schedule 2 allow the Secretary of State to lay regulations specifying types of assured tenancies to which the right to acquire would not apply. This consequential amendment allows the government to consider whether any of the existing right-to-acquire exemptions that apply to assured shorthold tenancies should be transferred across to the new regime. The amendment from noble Baroness, Lady Coffey, would prevent this power being used to exempt the rural sector from the right to acquire. Rural properties are currently exempt in designated rural areas, which are generally settlements with fewer than 3,000 people—the noble Lord, Lord Best, mentioned the Devon Housing Commission, which he has ably chaired, and he has made me aware of the conclusions of that commission.
This is designed to protect affordable housing in areas, both rural and urban, where replacement is often not viable due to its high costs, planning restrictions or land constraints, for example, and it is necessary to ensure the supply of rural affordable housing. The Government have no plans to change this, although it may be helpful if I comment briefly on the right to acquire. To qualify for that, tenants must have spent at least three years as a public sector tenant and occupy an eligible property. That applies whether they are in a rural or an urban area. However, there are important exemptions, such as those for the rural sector and for properties built or acquired by housing associations using their own funds. These restrictions aim to strike a balance between promoting home ownership and protecting social housing in areas or situations where it is most needed. The noble Baroness, Lady Grender, and the noble Lord, Lord Best, reflected some of the reasons that might be the case.
The Government recently consulted on reforms to right to buy, seeking views on eligibility criteria, the minimum and maximum percentage discounts, further protections for new-build properties and replacement of the homes sold. That consultation closed on 15 January and we are considering the responses received. We will provide more information on the next steps in due course. Importantly, the right to acquire was not included in that consultation; the Government will consider whether any changes should be made to the right to acquire in the light of future changes to the right to buy.
Baroness Coffey (Con)
Could the Minister address the situation where housing associations are selling off rural housing on the open market to the highest bidder, rather than to the tenants?
Baroness Taylor of Stevenage (Lab)
We hope to provide more financial sustainability to housing associations through our funding mechanisms, which I hope will prevent them having to do that. The Government have no current plans to change the right to acquire. On that basis, I ask noble Lords not to press their amendments.
Lord Roborough (Con)
My Lords, I am grateful to all noble Lords who have spoken in this short debate, in particular to my noble friend Lady Coffey for her comments on agricultural tie dwellings. I am also grateful to the Minister for providing a very helpful clarification. The question mark remains about what happens to dwellings that have an agricultural restriction on them which are occupied by agricultural employees after they cease to be agricultural employees but may be protected in their tenancy under the Bill. I hope she might write to me on that but, in the meantime, I beg leave to withdraw.
“13A In section 553 (effect of repurchase on certain existing tenancies (England)), in subsection (2)—(a) in paragraph (a), omit the words “or an assured tenancy”;(b) in paragraph (b), omit the words from “or in accordance” to the end of that paragraph (including the “and” at the end of that paragraph);(c) omit paragraph (c).13B In section 554 (grant of tenancy to former owner-occupier), in subsection (3)— (a) omit paragraph (c) (and the “or” at the end of that paragraph);(b) after paragraph (b), insert—“(ca) an assured tenancy, or”.13C In Part 4 of Schedule 2 (grounds for possession: secure tenancies), in paragraph (1)(c), omit the words from “which is neither” to the end of that paragraph.”Member's explanatory statement
This makes further amendments to the Housing Act 1985 which are consequential on the changes made by Chapter 1 of Part 1 of the Bill.
Member's explanatory statement
This brings the wording into line with the definitions used in the Agricultural Holdings Act 1986.
Lord Best
“Regulatory Enforcement and Sanctions Act 2008
57A In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008 (enactments specified for the purposes of Part 1), in the suitable place insert—“Tenant Fees Act 2019 (c.4)””Member's explanatory statement
This amendment integrates the Tenant Fees Act 2019 into Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008. It enables a Primary Authority to support local authorities to give assured advice to lettings agents on achieving compliance under the Tenant Fees Act 2019. Providing this advice will support lettings businesses and reduce pressure on local authorities' enforcement teams.
Lord Best (CB)
My Lords, I repeat my declaration of interest as a vice-president of the Chartered Trading Standards Institute as well as of the Local Government Association.
Trading standards represent an important ingredient in achieving the objectives of the Bill: they are the front line in enforcement of key measures of good practice by property agents carrying out lettings activities. To assist local businesses of all kinds and the trade associations that represent and advise them, arrangements are in place for primary authorities—local authorities able to provide specialist advice on a range of consumer protection legislation. Primary authorities cover different aspects of property matters and support property agents, as well as their trade association Propertymark and the Property Ombudsman. These arrangements enable authoritative assured advice to be given to property agents, who can then rely on that advice in dealing with any query or dispute. It relieves local authorities’ enforcement teams from dealing with queries, complaints and misdemeanours that could be avoided if assured advice was available.
Demand for high-quality advice is likely to grow as a result of the Renters’ Rights Bill. More landlords are likely to make use of letting agents to ensure that all regulatory requirements are being met. The letting agents, in turn, need the best possible advice on the extensive legislative measures that affect their client landlords. A problem here, however, is that current arrangements for assured advice do not extend to aspects of lettings activities in the Tenant Fees Act 2019. This legislation bans agents from charging fees to tenants as well as to landlords. Since the introduction of that legislation, local authorities have been anxious for this area of letting agency work to be included in the assured advice arrangements.
This small amendment would mean that lettings advice covering the Tenant Fees Act, on which property agency businesses can rely, would at last be available, and that local authority enforcement authorities can act with confidence. It is an entirely helpful amendment in tidying up a piece of defective legislation, and it fully supports the objectives of the Renters’ Rights Bill. I am not expecting passionate expressions of support from lots of your Lordships for this somewhat technical amendment, but I hope the Minister will say that it meets with the Government’s approval. I am pleased to move it.
Baroness Thornhill (LD)
I am going to disappoint the noble Lord, Lord Best, as I rise very briefly because I feel that this ties in quite neatly with his later amendments on letting agents becoming more professional and having better qualifications. Any means that will reduce the pressure on local authority enforcement teams are very much to be welcomed. The amendment is techy but simple, and I think it could be effective.
Lord Jamieson (Con)
My Lords, I also thank the noble Lord, Lord Best, for moving this very sensible amendment, which is thoughtful and well-considered.
The integration of the Tenant Fees Act 2019 into the framework of the Regulatory Enforcement and Sanctions Act 2008, through Schedule 2, is not just a technical improvement but a step towards greater coherence and clarity in an already highly complex area of legislation. In a Bill of this scope and detail, ensuring that our legislative frameworks align and complement one another is not only sound law-making but essential for those responsible for implementation on the ground. Was that passionate enough?
The practical implications of this amendment deserve the Committee’s close attention. In essence, it would allow primary authorities to give assured, legally backed advice to letting agents on how to comply with the Tenant Fees Act 2019. Supporting letting agents through legislative transitions in this way will help avoid confusion and ensure compliance from day one—a key goal for any regulatory change.
As the noble Baroness, Lady Thornhill, mentioned, the amendment would also relieve pressure on local enforcement teams, many of which operate with limited resources, in both finance and capacity. By reducing their workload where possible, we enable these teams to concentrate on the most serious breaches—rogue landlords, unsafe housing and the exploitation of vulnerable tenants—where intervention is most urgently needed.
This approach is not without precedent. Organisations such as the Lettings Industry Council have consistently called for greater clarity, guidance and consistency in how regulations are enforced across local authorities. Integrating the Tenant Fees Act into this structure directly supports those calls and shows that the Government are listening to those working on the front line of regulation and compliance.
We are, therefore, sympathetic to the spirit of this amendment. It offers practical benefits to tenants, agents and enforcement authorities alike. We believe that it would contribute to a more effective, fairer and more streamlined regulatory environment.
Baroness Taylor of Stevenage (Lab)
My Lords, I am not sure whether it is because of the late hour, but my Whip, sitting on the Front Bench with me, just sent me a dancing emoji, as if to show me how to show passion when responding to amendments. I will do my best.
I thank the noble Lord, Lord Best, for his amendment, which would allow for the Tenant Fees Act 2019 to be included in the primary authority scheme. This would provide estate and letting agent businesses with the option to receive assured advice on complying with its regulations. The scheme allows the local authority nominated as a primary authority to provide assured advice to businesses that operate across multiple local authority areas, which helps those businesses comply with regulations. The scheme has the potential to streamline the interpretation of regulation for business. It can also be a more efficient approach to regulation for local government.
I welcome Members of the House sharing their views on this matter and we will undertake to consider this amendment further. For now, and for those reasons, I ask the noble Lord to withdraw his amendment.
Lord Best (CB)
I am much encouraged by that response from the Minister, and I am happy to beg leave to withdraw my amendment.
“Charities Act 2011
66A (1) The Charities Act 2011 is amended as follows.(2) In section 117 (restrictions on disposition of land: general), in subsection (2)(b)(ii), after “less” insert “or which are assured tenancies”.(3) In section 120 (requirements for leases which are for 7 years or less)—(a) in the heading, after “less” insert “or which are assured tenancies”;(b) in subsection (1), the words from "a lease" to the end become paragraph (a);(c) after that paragraph insert “, or(b) a lease that is an assured tenancy within the meaning of Chapter 1 of Part 1 of the Housing Act 1988.””Member’ s explanatory statement
This amends the Charities Act 2011 so that the disposition of leases which are assured tenancies will be subject to the requirements in section 120 of that Act.
(i) before the regulations come into force, or(ii) when or after they come into force under a contract entered into before then, or by the acceptance of an offer made before then.”Member’ s explanatory statement
This brings the wording in clause 32(5)(a) into line with the wording used in the new Part 2 of Schedule 6 which would be inserted by the amendment in my name.
“Restrictions on conversion of assured tenancies to short-term lettings(1) Where a property has been let subject to an assured tenancy or assured shorthold tenancy at any time in the preceding three years, it must not be let as a short-term rental property within the meaning of section 228(2) of the Levelling-up and Regeneration Act 2023 unless a change of use has been permitted under the Town and Country Planning (Use Classes) Order 1987 (S.I. 1987/764) as amended by subsection (2).(2) In Schedule 1 of the Town and Country Planning (Use Classes) Order 1987 (S.I. 1987/764), at the end of part C insert—“Class C7. Short term rental property
Use of a dwellinghouse for commercial short-term letting, within the meaning of section 228(2) of the Levelling Up and Regeneration Act 2023.””Member’ s explanatory statement
This clause requires planning consent for assured or assured shorthold tenancies to be converted into short-term lettings.
Lord Best (CB)
My Lords, I apologise for leading two groups of amendments in a row.
Amendment 185, in my name and the names of the noble Lords, Lord Truscott and Lord Young of Cookham and the noble Baroness, Lady Thornhill, seeks to add a new clause to the Bill that would require planning consent before assured or shorthold tenancies can be converted into short-term lettings. The definition of “short-term letting” is defined in the Levelling-up and Regeneration Act 2023. These lettings are often referred to as “Airbnb lets”, although several companies handle them.
I note that the amendment would not affect the letting of spare rooms to supplement the family income or temporary use of an owner-occupier’s home, when, for example, they are away on holiday. Instead, the amendment would cover the switching of privately rented properties from ordinary, longer-term lettings for those living and working locally to short-term lets for visitors. This phenomenon is having a serious impact on housing shortages in a number of tourist hotspots. In some places, the loss of PRS lettings has reached critical proportions, from seaside towns to national parks and historic cities. Appallingly, there are many examples of landlords serving notices to quit—thereby evicting tenants—so that long-established renters can be replaced with higher-paying lettings to tourists.
According to AirDNA, which tracks the lettings by Airbnb and similar companies, York saw an increase of nearly 30% in short-term lets in the city between August 2021 and August 2023. York now has more than 2,000 such lets. In Coniston, in the Lake District, 50% of homes are not lived in full-time. In the picturesque town of Salcombe, Devon, it is understood that around 40% of the accommodation now comprises second homes or short-term lettings; I commend the relevant section in the Devon Housing Commission report on that.
The switching phenomenon also has a particular relevance in London: a survey by the property consultants, Savills, found 117,000 homes listed for short-term letting on the Airbnb and Vrbo websites last year in just 12 London boroughs. The survey found that over half were let for more than the 90 days permitted in London and, in the central London boroughs, 40% of the private rented sector was let on a short-term basis. In many other European and American cities, action is being taken to address this problem. Indeed, Wales and Scotland have legislated to reduce the impact of losing homes for locals to rent.
In England, the Levelling-up and Regeneration Act 2023 has provided the basis for a start to be made. The Act requires the Secretary of State to introduce mandatory registration for short-term lets. This measure would provide local authorities with an evidence base on which to decide whether the level of short-term lettings in their area should be restricted. Regulations under the Levelling-up and Regeneration Act would prohibit the use of short-term lets of non-registered properties. Introducing registration would be a good starting point but, so far, no action has been taken.
In February 2024, Michael Gove, then Secretary of State, announced that the Government would be taking this issue to the next stage, using the planning system to control switchovers to short-term lets where the local planning authority deemed this necessary. To inform the details of this new regime, a government consultation considered the introduction of a new use class for planning purposes, enabling local authorities to refuse permission for a change of use from a long-term to a short-term letting. This consultation exercise produced near-unanimous agreement that such action would be an invaluable mechanism to discourage further expansion of the so-called Airbnb sector in specific places. The Government of the day pledged to take this forward at pace. Sadly, no action followed.
The previous Government reformed the tax regime for furnished holiday lets, and this has now come into force. The change removes a strong incentive for flipping properties from long-term to short-term letting, but the Renters’ Rights Bill may mean that more landlords are now being tempted to flip their properties, making the introduction of a new use class, which would enable councils to intervene, the more urgent. Amendment 185 is intended to provide the opportunity for the Government to progress the action needed to amend planning law by creating a new use class for short-term lettings, empowering each local authority to decide whether it is in the interests of their community to permit changes of use from long-term to short-term lets. The Minister for Housing and Planning in the other place, Matthew Pennycook, has demonstrated an appreciation of this issue and has promised to take further action—but when?
If the Minister is not able to accept this amendment, it would be helpful if she could update the Committee on the timetable for introducing first, the short-term lettings registration scheme and, secondly, the legislation to create a new use class for short-term lets. Action is overdue. I beg to move.
Lord Truscott (Non-Afl)
My Lords, as mentioned previously in Committee, I declare my interest as a landlord and former long-term tenant in the private rented sector. I support the amendment from the noble Lord, Lord Best, on short lets requiring planning consent for properties to be converted into short-term lettings. As your Lordships’ House would expect, the noble Lord, Lord Best, has made the case convincingly.
His Majesty’s Government should include this amendment in the Bill, because there is an undoubted link between the reduced availability of long lets, especially for local residents, and the exponential rise in Airbnb and other short-let platforms. A register, while welcome, will mainly chart the huge and expanding nature of this part of the PRS, which is already having such a deleterious effect on the provision of long-term accommodation for locals and their communities. The Minister may say this amendment is not a matter for the Bill, but it is. The Bill will accelerate the trends of short lets and reduce long lets unless amended. By introducing periodic tenancies with a minimum two-month notice period, it will simply introduce another class of short lets protected by law and destabilise the long-term lets market.
The PRS has not grown in the last nine years, as I mentioned previously in Committee. The Bill, by prohibiting upfront rental payments and fixed-term tenancies, will lead to evermore landlords moving to short lets. This trend is completely ignored by the Bill but will follow as surely as night follows day.
Tenants will be able to give two months’ notice on day one under the proposed legislation. Why should they do that? Because long lets are up to four times cheaper than short lets in, for example, the London Borough of Camden. Once tenants move in, the length of their tenancy will be impossible to police. If tenants move out after only a month rather than the minimum two, how will that be monitored and by whom? It will result in widespread short lets by the back door. A tourist could simply move into what was previously a long let, give two months’ notice and save thousands of pounds. It would just take a little fib on the part of the tenant.
A landlord will have no way of knowing a tenant’s real intentions under periodic tenancies, so will put up the rent, assuming that all long lets can become short lets. The distinction between short and long lets will disappear, with implications for rent levels. Neither the prohibition of mutually agreed fixed-term tenancies nor advanced rental payments were in Labour’s election manifesto, so I am at a loss to understand why these two essential measures to provide stability and certainty to the market have become non-negotiable. The majority of tenants want fixed terms, so I fail to see why HMG think they know better than the tenants themselves. Reducing the supply of long lets as ever more landlords gravitate towards more profitable short lets will mean that rents will assuredly go up, not down, and the losers will be the tenants, especially local residents and their sense of community.
The noble Lord, Lord Best, mentioned London and Devon. I have quoted before how some London housing blocks have become over 90% Airbnb or similar short lets. Local residents are squeezed out. Devon is a county I know well; I am a Devonian. The noble Lord, Lord Best, quoted the example of Salcombe, Devon’s answer to Saint-Tropez. Similar cases can be quoted throughout the West Country and Wales, including Cornwall. However, as the noble Lord said, it is not just coastal resorts and historic cities such as Bath, which I also know well, and York, that are affected. Areas around Birmingham have also become short-let hotspots.
Of course, it is not only the UK. Airbnb and the like have reached saturation point in Spain, in cities such as Barcelona and on Tenerife. It has become so bad, with locals priced out of accommodation, that tourists have been assaulted in restaurants and on beaches. As I mentioned, short lets are far more profitable for landlords than long lets. Airbnb and other short-let platforms are becoming increasingly dominated by professional landlords, as regulation is either non-existent or very light-touch.
By way of comparison, long-let residential property is already governed by 170 laws and regulations. The attractions for landlords to move to short lets is obvious and will be enabled by this Bill. Apart from the further regulatory and legal provisions in the Bill, long-let landlords will be asked by HMRC to make quarterly tax returns by April 2026, and new EPC regulations could cost anything up to £15,000 per property. Estate agents must report long-term rentals to HMRC in this country. Airbnb and the like do not, and I suspect that tax evasion is rampant.
Renting out flats or rooms on Airbnb or other short-let platforms undermines long-term rentals, legitimate B&Bs and smaller hotels, all of whom must pay taxes, abide by a host of regulations, employ local people and support local economies. With more and more remote professional landlords, Airbnb does none of that. The idea that Airbnb and other similar platforms allow a few grannies to innocently rent out their spare rooms is far from the true picture.
The impact of short lets is also pernicious. They undermine any sense of community, create nuisance for full-time residents and can be a security risk for blocks of flats, with Airbnbers having raucous parties and coming and going at all hours of the night and day. As the noble Lord, Lord Best, said, research has found that half of London’s 117,000 short holiday lets are being rented out illegally. In Westminster, where over 50% of residents live in rented property, council leader Adam Hug has said that short lets
“can hollow out long-term residents, making neighbours subject to significant noise disruption, fly-tipped waste linked to short-term let properties”.
In 2015, there were fewer than 30,000 short lets in London. This more than doubled throughout 2016, peaking at over 100,000 in 2019. As Tom Copley, Sir Sadiq Khan’s London Deputy Mayor for Housing, said,
“we need to bring those properties back into use as long-term rented properties or long-term properties for people to buy and live in as owner-occupiers”.
This Bill as drafted will legalise ever more short lets, as tenants will be able to legally move out of a property after just two months.
I had experience of an Airbnb rented flat in a block where short lets were banned under the lease. The owner was fully aware of this fact and kept denying the property was rented out on Airbnb, despite the property being advertised openly on the website. Airbnb takes no action in these situations. In our case, it took over two years for the owner to be forced to abandon Airbnb, despite his flat being the only short let in the block. People were coming and going every few days, and wear and tear on the communal areas and concern for security were considerable.
The only action which reined in the current leaseholder was a threat by the excellent managing agent to go to court to get him to forfeit the lease. HMG have previously said this option will be banned, so I wonder how such situations could be resolved in the future. I would retain the nuclear option of forfeiture but exclude it for death and other relatively minor transgressions.
Lord Young of Cookham (Con)
My Lords, I too have added my name to the amendment from the noble Lord, Lord Best, and want to add a very brief footnote to the two speeches that have already been made.
It is at times like this that we miss the contribution of the late Baroness Gardner of Parkes, who many of us will remember intervening forcefully whenever short-term lettings were mentioned, reminding us of the erosion of rented property in London, but also, as the noble Lord, Lord Truscott, mentioned, some of the problems in large blocks of flats when short-term tenants cannot conform to the normal rules.
What we need here is a balance. There is a role for short-term lettings and Airbnb to play as part of a portfolio of opportunities in a coastal resort or, indeed, in a capital city. But what we have at the moment is a one-way street of erosion of long-term property for rent into short-term lettings. If we are to have a balance and get it right, it should be the local authority which should be in a position to strike that balance. I am sure the Minister, as a distinguished leader of a local authority, would agree that local authorities are best placed to do this.
I think I am right in saying that, until fairly recently, you actually needed planning permission to move from long-term to short-term letting, but, in a move to deregulate and make it easier to move from one use class to another, that requirement to get planning consent to move from one use to another was waived in the 2010 or 2015 Parliament, apart from in London.
It was retained in London, and only in London, where, if you want to short-term rent a property, you can only do so for 90 days—a rule that is ineffective unless it is enforced, and many local authorities find it difficult to enforce . What this amendment seeks to establish is whether the Government are minded to extend from London to other parts of the country that type of restriction to stop what is, at the moment, a one-way street.
I just add a rider to what the noble Lord, Lord Best, has suggested. If you need planning consent to go from long-term to short-term, I do not think you ought to need planning consent to go back the other way. In other words, it should be a hurdle to get over, but if you want to revert to long-term renting, you should not have to go through the process again. If one looks at various parts of the country, in some coastal areas, one in 10 homes are now short-term lets or second homes. Roughly 24 homes a day are being lost through this process, so I hope the Minister will be able to respond sympathetically to the thrust of this Bill, and say that there are plans to give local authorities the powers that I think they need to get the right balance in the tenures in their area.
Baroness Coffey (Con)
My Lords, I live not far from Aldeburgh, not too far from Southwold, so I am very conscious of the issues that have arisen from people acquiring homes and then turning them into short-term rentals. It is a really important part of the coastal economy, but I would suggest in a different way that, in fact, the changes made to the tax situation, where it was possible to offset mortgages and all sorts of expenses, led to a significant increase in the price that people were prepared to pay for houses. I saw this in Southwold, where I got a lot of angry letters—admittedly from people who had done just this thing. What happened was that neighbouring houses that had been priced only a few years earlier at something like £300,000 to £400,000, were now selling for over £1 million. This was done on the basis of the short-term property rental that was possible.
However, what concerns me about this particular amendment is that it does not account for those people who are moving into a place to make it their permanent home. At the moment, this amendment suggests that, if it has been used at all for long-term tenancy, it should be excluded or need further planning permission. I suggest that there are plenty of people who are trying—whether in rural or coastal areas—to make their long-term home, but want to take advantage of the times when they themselves choose to go on holiday to be able to get some rental income. It is a perfectly sensible way, at times when people choose to be away potentially at the height of season, to gain that extra income. While I am sensitive to the issues raised by the noble Lord, Lord Best, and my noble friend Lord Young of Cookham, I think that we need to explore what happens when the property transitions from one owner to another so that they can use their new family home in the best way possible, not only to enjoy that home but potentially to make sure that it gets used all year round.
Baroness Thornhill (LD)
My Lords, I support Amendment 185 in the name of the noble Lord, Lord Best, and signed by the noble Lords, Lord Young and Lord Truscott, and me. It has been explained very fully and in detail, so it needs no further repetition or expansion from me. Indeed, from our many and various discussions or Oral Questions during House business, we are all only too aware of the problem, both here and abroad. The loss of properties from the long-term private rented sector into the much more lucrative and less regulated short-term lettings is causing considerable problems in some parts of the country, as outlined in detail by the noble Lord, Lord Best.
It is a fact that some communities—I am sorry to keep stressing that, but I feel it is important to keep a balanced perspective on this—are being hollowed out as locals cannot find somewhere to rent for the longer term, nor can they find somewhere that they can actually afford to buy. They therefore feel that they cannot remain in their communities. Some areas where short-term lets proliferate can, as we have also heard, be the result of regular antisocial behaviour, which can be of various types, from the very obvious noise nuisance to the degradation of neighbourhoods. Any moves to incentivise landlords back into the long-term private rental market are therefore welcomed by us on these Benches and anything to deter landlords from flipping, as outlined by the noble Lord, Lord Young, will also be supported by us.
We recognise the willingness of both the previous Government and this Government and the difficulties of efforts to balance the needs of tourists, home owners and local residents. It is tricky, because balance is key and individual local plans should be able to reflect each local authority’s needs and circumstances.
To help local authorities, as we have already heard, there was the mandatory registration scheme proposed by the previous Government. That was very positive, as it would improve transparency and ensure compliance with local regulations. However, I note that, in parliamentary debates on the Bill, Housing Minister Matthew Pennycook stated that the previous Administration’s proposals to clamp down on holiday lets
“did not go far enough”.—[Official Report, Commons, Renters' Rights Bill Committee, 5/11/24; col. 238.]
and that his Government are considering what additional weight to give local authorities to enable them to better respond to the pressures that they face, as a result of what have been called “excessive” concentrations of short-term lets and holiday homes in some parts of the country.
To keep this brief and to sum up, it would be welcome to have, before Report, an update on the mandatory registration scheme and any other powers that have been taken forward on this Bill or in other legislation, including actions on companies that take no action, as was well outlined by the noble Lord, Lord Truscott. We could therefore judge whether this amendment is a helpful addition to take forward on Report or is completely unnecessary. I look forward to the noble Baroness’s response.
Lord Jamieson (Con)
My Lords, I thank the noble Lord, Lord Best, for proposing this amendment. It raises a serious solution to one of the most acute crises affecting the private rental sector: the supply of housing. I also thank the noble Lord, Lord Truscott, my noble friends Lord Young and Lady Coffey, and the noble Baroness, Lady Thornhill, for their comments. There is a fair degree of support for this from all sides of the Committee.
Noble Lords will remember that this is one of the themes that these Benches have been most concerned about. My noble friend Lady Scott highlighted the reduction in housing supply on the first day of Committee. Savills reported seeing a 42% reduction in the number of rental properties available on its books in the first quarter of this year. Data compiled for the National Residential Landlords Association found that 41% of landlords say that they plan to cut the number of properties that they rent out in the next 12 months. This is highly concerning, given that the supply of available rental properties is already falling.
TwentyEA found that the supply of properties available to let has dropped by 1% compared to the first quarter of 2024 and has plummeted 22% below the 2019 pre-pandemic levels. Currently, only 284,000 rentable homes are available nationwide—a decline of 18% from last year and 23% from 2019. In the first quarter of 2025, 15.6% of new property listings for sale were previously rental homes. This is a sharp increase from 9.8% in the same period of 2024. Renting is no longer simply a transitional phase or fallback option for many people. It is a deliberate and legitimate long-term housing choice. Renting offers flexibility, mobility and freedom from the financial and practical burdens of home ownership, but tenants cannot benefit if there is simply not enough supply.
The noble Lord, Lord Truscott, raised, as did many others, the risks associated from the Bill accelerating this trend to short-term lets such as Airbnb and other types. This amendment from the noble Lord, Lord Best, would contribute to the solution. Where there is not enough supply of available rental accommodation and many landlords are planning to sell up, working to reduce the amount of short-term lettings could protect the currently available supply and hopefully prevent further reductions.
Planning consent helps local authorities manage the shift and safeguard their rental supply, especially in high-demand areas. This is especially true given the highly regionalised disparities in supply deficits of private rental housing. As the Bill goes forward, we need to ensure that local authorities have sufficient capacity in their planning teams and, in this context, to consider whether licensing may also be an effective tool in this area.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Best, for his amendment, which seeks to restrict the conversion of assured private rental sector tenancies into short-term lets, and the noble Lords, Lord Truscott, Lord Young and Lord Jamieson, and the noble Baronesses, Lady Coffey and Lady Thornhill, for taking part in this debate.
The Government recognise that while short-term lets can benefit the tourist economy, they can also impact on the availability and affordability of housing, including in the private rented sector. I understand noble Lords’ frustration that little has been done to assess the impact of this as its development has accelerated over recent years.
As we have discussed at earlier stages of the Bill, we share concerns that landlords may be leaving the private rented sector to instead provide short-term lets. The noble Lord, Lord Jamieson, gave some figures about reductions in the rental market, but statistics released on 28 April from Rightmove’s rental tracker told a very different story. Its property site found that the number of new properties coming to the market in March was 11% ahead of the same period last year, while the overall number of rental properties is 18% up on 2024, just months before the legislation is set to come into force this summer, so there are differing opinions about the impact.
To address the issues that noble Lords have raised, the Bill includes a provision to ensure landlords will not be able to evict tenants simply to return the property to a holiday let. As many noble Lord will be aware, we have also abolished the furnished holiday lets tax regime. As a result of that measure, landlords will no longer be incentivised by the tax system to make their properties available as short-term holiday lets rather than longer-term homes for people who want to live and work in the area.
The Government will also introduce the short-term lets registration scheme, as legislated for in the Levelling-up and Regeneration Act 2023. The scheme will collect crucial data on the sector and ensure that all providers of short-term lets are aware of their legal responsibilities to ensure that health and safety standards are met in their property.
With regard to the comments made by the noble Lords, Lord Best, Lord Truscott, Lord Young and Lord Jamieson, we are committed to robustly monitoring and evaluating the reform programme and have set out how we are developing our approach in the impact assessment for the Bill. Our approach 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 published evaluation strategy. We are not going to just drop the Bill and leave it; we will continue to monitor the situation.
The noble Lord, Lord Best, and the noble Baroness, Lady Thornhill, asked when the register will be operational. The Government are keen to introduce the registration scheme for short-term lets in England as soon as possible. The initial phase of digital development is now complete and public testing is planned to start in the next 12 months. During this next phase of work, we will test a working interface with a small number of users to make sure that the systems and processes are robust and effective before publicly launching a first version of the service. It is on its way; we have started working on it and will bring it forward as quickly as we can.
The noble Lord, Lord Truscott, asked a question about energy performance standards for the PRS and short-term lets. On 7 February this year, DESNZ launched a consultation on increasing minimum energy efficiency standards in the domestic private rented sector. The consultation includes proposals for rented homes to achieve an EPC C or equivalent by 2030. DESNZ is also seeking views on whether short-term lets should be included in the scope of these changes to help ensure a common standard across all private rented properties.
The proposed amendment seeks only to allow councils to place restrictions on the change of use from a private rental property to a short-term rental property and would not affect the change of use of owner-occupied properties. The amendment seeks to achieve this via a change to the Town and Country Planning (Use Classes) Order 1987. However, it would not have the intended effect, as the use classes order does not permit the change of use in the way proposed.
I assure noble Lords that we are carefully considering what additional powers we might give to local authorities to enable them to respond to the pressures created by short-term lets. However, I also recognise the complexities of introducing such restrictions, so I believe we need to explore the various potential levers that could help achieve that better balance that we all want between housing and the tourism economy before moving forward. I therefore ask the noble Lord, Lord Best, to withdraw his amendment.
Lord Jamieson (Con)
May I seek a point of clarification before the Minister sits down? If I heard correctly, she said that the legislation would come into force this summer. Does that mean that everything will be in place, including things like the database, ensuring that there is court capacity and so forth?
Baroness Taylor of Stevenage (Lab)
The comment related to the finishing of the Bill. There may be subsequent work to be done on it after that.
Lord Best (CB)
I am grateful to noble Lords around the Committee for their support for the amendment. I thank the noble Lord, Lord Truscott, who emphasised the urgency of the situation, and the position in many other places—Paris, Barcelona, Menorca, Santa Monica —where other countries are getting ahead of us in taking action that we should probably learn from. He mentioned, as did the noble Lord, Lord Young, the disruption to other residents that comes from short-term lettings, and the nuisance of parties, fly-tipping and security problems. That is not the main reason for the proposed amendment, but it is an important additional factor, which emphasises its importance.
The noble Lord, Lord Young, said that we must strike a balance between the interests of the tourism industry and the interests of those who are looking for somewhere to live—and the local authority is best placed to do that. The noble Baroness, Lady Coffey, was a bit worried about owner-occupiers being badly affected and not being able to let out their properties, when they were on holiday, for example. I think the amendment takes care of that; it certainly should. It is not the individual owner who lets out their spare room, or even the whole house, for a week or two that we are talking about here; it is the businesses that operate on some scale.
I am grateful to the CPRE, the Countryside Charity, for helping to formulate the amendment, and I give many thanks to the noble Lord, Lord Jamieson, who made important points. We must protect the current supply of accommodation at a time when we are worried about the loss of any homes, which are badly needed. I will withdraw the amendment, but, as I do so, I thank the Minister for telling us about registration. I think that the timescale was that testing would take place for a new registration scheme for short-term lettings over the next 12 months, with a first version then being tried. It is all good stuff, but it sounds slightly slow—the “as soon as possible” bit was the best bit.
The Minister said that other solutions, alongside the possibility of introducing a use class that works—that must be part of it—were being considered. Pulling the right levers is obviously going to be important. Yes, the Government are prepared to do something, but they should take away the message that the speed at which it is done will be important too. We cannot let this fester much longer. With those comments, I beg leave—
Baroness Coffey (Con)
The noble Lord referred to my comments. What I was doing was reading out his amendment where it says:
“Where a property has been let subject to an assured tenancy or assured shorthold tenancy at any time in the preceding three years, it must not be let as a short-term rental property … unless a change of use has been permitted”.
I was trying to understand whether, when there is a change in ownership—not just any old renting out if somebody goes away—that would prevent a new owner-occupier being able to do what is suggested without planning permission. I was just trying to understand his own amendment.
Lord Best (CB)
I am grateful for that point, which sounds entirely valid. We may need to refine still further the amendment that we are all working on. I beg leave to withdraw the amendment.
“(ai) after subsection (1) insert—“(1AZA) But that is subject to subsections (1ZA) to (1ZC).”;(aii) in subsection (1ZA), for “But in” substitute “In”;(aiii) after subsection (1ZB) insert—“(1ZC) Section 11 does not apply to a lease of a dwelling-house in England which—(a) was an assured tenancy immediately before the commencement date (which has the meaning given by section 146(3) of the Renters’ Rights Act 2025), and(b) was granted—(i) for a term of seven years or more, and(ii) by a person other than a private registered provider of social housing.”;”Member’s explanatory statement
This ensures than an existing assured tenancy of a fixed term of 7 years or more - which will become a periodic tenancy by virtue of the Bill - does not come within section 11 of the Landlord and Tenant Act 1985 as a result of that change. Accordingly, repairing obligations will continue to be governed by the tenancy.
Member’s explanatory statement
This is consequential on the new paragraph 3D inserted by clause 33(1) now referring to leases of more than 21 years (instead of 7 years).
“(2) In Schedule 1 to the 1988 Act, paragraph 8 (lettings to students that are not assured tenancies) is amended as follows— (a) after sub-paragraph (1) insert—“(1A) But that is subject to sub-paragraphs (2B), (2C) and (5) to (7).”;(b) after sub-paragraph (2) insert—“(2A) Regulations under sub-paragraph (2) may, in particular, specify as a body of persons—(a) the members, or(b) a class of the members,from time to time of a housing management code of practice which is specified for this purpose by regulations under sub-paragraph (2).(2B) The Secretary of State may by regulations made by statutory instrument—(a) specify a class of building, and(b) provide that a tenancy—(i) does not fall within this paragraph if the dwelling-house is in a building of the specified class, or(ii) falls within this paragraph only if the dwelling-house is in a building of the specified class.(2C) The Secretary of State may by regulations made by statutory instrument—(a) specify a student landlord or a class of student landlord,(b) specify a class of building in relation to the specified student landlord or specified class of student landlord, and(c) provide that, where the landlord is the specified student landlord, or a student landlord of the specified class, the tenancy—(i) does not fall within this paragraph if the dwelling-house is in the specified class of building, or(ii) falls within this paragraph only if the dwelling-house is in the specified class of building.(2D) Regulations under sub-paragraph (2B)(a) or (2C)(b) may, in particular, specify as a class of building—(a) the buildings, or(b) a class of the buildings,from time to time subject to a housing management code of practice which is specified for this purpose by regulations under sub-paragraph (2B)(a) or (2C)(b).(2E) Regulations under sub-paragraph (2C)(a) may, in particular, specify as a class of student landlord—(a) the members, or(b) a class of the members,from time to time of a housing management code of practice which is specified for this purpose by regulations under sub-paragraph (2C)(a).”;(c) in sub-paragraph (3), for “the power conferred by sub-paragraph (2) above” substitute “a power conferred by this section”;(d) after sub-paragraph (3) insert—“(4) Regulations under this paragraph—(a) may make different provision for different purposes;(b) may make supplemental, consequential, incidental, transitional, transitory or saving provision.(5) The question of whether or not a tenancy is within this paragraph is to be determined by reference to the circumstances at the time when the tenancy is granted. (6) A change in the circumstances after that time does not affect whether or not a tenancy is within this paragraph, except in a case where—(a) the tenant is entitled to possession of the dwelling-house at a time after the tenancy was granted, and(b) at the time when the tenant is entitled to possession—(i) condition A is met (see sub-paragraph (8)),(ii) condition B is met (see sub-paragraphs (9) and (10)), or(iii) both of those conditions are met.(7) In such a case, the tenancy ceases to fall within this paragraph (and accordingly this paragraph ceases to prevent the tenancy from being an assured tenancy) at the time when the tenant is entitled to possession.(8) Condition A is met if—(a) the tenancy was granted by a body of persons who were, at the time of the grant, a specified landlord solely by reference to a code of practice, but(b) at the time when the tenant is entitled to possession of the dwelling-house, the landlord (whether that is the body of persons who granted the tenancy or a successor in title) is not a student landlord.(9) Condition B is met if—(a) at the time when the tenancy was granted—(i) regulations under sub-paragraph (2B) or (2C) were in force, but(ii) those regulations did not prevent the tenancy from being within this paragraph, but(b) at the time when the tenant is entitled to possession of the dwelling-house—(i) regulations under sub-paragraph (2B) or (2C) are in force, and(ii) those regulations prevent the tenancy from being within this paragraph.(10) But condition B is not met in any circumstances that are specified, or are of a description specified, for this purpose by regulations made by the Secretary of State.(11) For the purposes of this paragraph—(a) “student landlord” means an institution or body of persons specified, or of a class specified, for the purposes of this paragraph (see sub-paragraph (2));(b) “housing management code of practice” means a code of practice approved by the Secretary of State under section 233 of the Housing Act 2004 (codes relating to the management of HMOs or excepted accommodation);(c) a building is “subject to” a housing management code of practice if it—(i) is a particular building subject to the code, or(ii) is of a class of buildings subject to the code;(d) a reference to—(i) a class of the buildings from time to time subject to a housing management code of practice, or(ii) a class of the members from time to time of a housing management code of practice,includes the buildings or members that are from time to time in a class provided for in the code of practice;(e) a body of persons are “a specified landlord solely by reference to a code of practice” if they—(i) are a member of a housing management code of practice that is specified by regulations under sub-paragraph (2A), and (ii) are not specified by regulations under sub-paragraph (2) as a body of persons otherwise than as a member of that code of practice.””Member’s explanatory statement
Paragraph 8 of Schedule 1 to the Housing Act 1988 provides for certain student lettings not to be assured tenancies. This amendment would enable the exemption to be limited to buildings of a specified class; and for regulations to operate by reference to codes of practice approved under section 233 of the Housing Act 2004.
Lord Black of Brentwood
“Discrimination relating to pets(1) A relevant person must not, in relation to a dwelling that is to be let on an agreement which may give rise to a relevant tenancy—(a) on the basis that a pet would or may live with or visit a person at the dwelling if the dwelling were the person’s home, 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 would have a pet live with or visit them 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 40 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 having a pet live with them at the dwelling or to restrict the circumstances in which such a tenant may have a pet live with them 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.”
Lord Black of Brentwood (Con)
My Lords, I will speak also to my Amendments 192 to 196 and 198, which are also signed by my noble friend Lord Lexden and, with the exception of Amendments 193 and 198, by my noble friend Lady Coffey. I am very grateful to them. Given the hour, and as we are discussing animals, it is right to acknowledge that they are clearly night owls.
The purpose of the amendments is to insert a new clause to extend pre-tenancy discrimination protections to pet owners. In an earlier debate on this Bill in Committee, I set out why this legislation is so important and why pet owners need certainty and clarity about its application. These amendments build on that debate on a further, very specific issue.
Although the current version of the Bill provides protections after tenancy begins for pet owners, requiring landlords to consider pet requests reasonably, I am concerned that these are rendered ineffective if pet owners are excluded before tenancy agreements are even offered. As I have made clear before, I am delighted that the Bill rightly seeks to prevent pre-tenancy discrimination against tenants with children and those who are benefit claimants, but I believe these welcome provisions should also be extended to tenants who already own pets and are seeking a new place to rent. Currently, they are unprotected. Without such a measure, there is a real risk that landlords will automatically disadvantage or reject applicants simply based on the issue of pet ownership.
The truth is that pet ownership is, regrettably, already currently treated as a de facto disqualifier by many landlords. Applicants can be dismissed outright on the sole basis of owning a pet, with no requirement to justify the decision. This renders any post-tenancy pet consent rights in the Bill practically inaccessible for existing pet owners who are moving home, who are barred from progressing past the application stage in the first place.
As the Minister rightly highlighted during our debate last week, the pet provisions in the Bill are fundamentally based on the principle of reasonableness, and that is absolutely right. However, as it stands, a landlord is not technically required to consider in any form a pet-owning applicant and can reject them outright without appropriate safeguards in place. This creates a gap. Although existing tenants may benefit from protection, prospective tenants looking to move may not have the legal support to make a reasonable request to keep a pet at the point of applying for a tenancy. I fear this will continue to result in pet owners facing the heartbreaking decision of having to choose between a home and their pet, as many thousands of homes will remain closed to them.
The proposed clause, with consequential amendments, offers a balanced solution. It does not require landlords to accept pets unconditionally. Instead, it prevents landlords automatically rejecting applications on the grounds of pet ownership while retaining their ability to refuse consent on reasonable grounds after an application has been successful. That seems to me to be the right way to deal with this matter.
Lord Lexden (Con)
My Lords, I am glad, as always, to support my noble friend Lord Black, whose commitment to animal welfare is well known. His proposed new clause and his amendments in this group represent a further stage of his determined efforts on behalf of beloved pets and their owners. The principle underlying his proposed changes is simple: fairness in the rental market must apply at the first stage of the process, which is when an application is made for a tenancy.
As my noble friend pointed out, the Bill rightly prohibits pre-tenancy discrimination against those with children or in receipt of benefits. Similar protections should be extended to those who own pets, who at the moment face rejection of an application for a tenancy on that one ground alone. The new clause does not compel landlords to accept pets unconditionally; it simply introduces fairness by ensuring that applications cannot be dismissed out of hand just because a pet is involved.
As my noble friend has made clear, we need to bear in mind the terrible position in which the absence of fairness places pet owners at the moment. The heartbreak of being forced to choose between a home and a companion animal is one that no tenant should have to make. I hope the Government will give very careful consideration to my noble friend’s constructive proposals.
Baroness Coffey (Con)
My Lords, I put my name to these amendments. I must confess I did not quite understand Amendments 193 and 198, so I did not put my name to them, but I am grateful for the explanation that my noble friend has given. There is no doubt that the availability of private rental in having pets is considerably smaller. I am conscious that when I moved to Suffolk, I think it was back in March 2010, when I was looking for places to rent—not to holiday rent, but to rent properly as a home—had I not had my dog Rizzo at the time, more than 200 properties would have been available, but when it came to any landlord that would even encounter having a dog, the number was reduced to four, and this in an area of 300 square miles.
It gave me a clear insight into the restrictions placed on people who want to move with their family—and pets are considered often part of that family. As has been mentioned elsewhere, there was certainly a premium to pay, as a consequence of what property was available, for the opportunity to have Rizzo come and visit on a regular basis.
I was struck by one issue in the amendments that my noble friends have tabled, to do with mortgaged premises. I have been pretty horrified to learn, in the variety of casework that I have undertaken over the years, about the artificial restrictions placed on mortgages that people have taken up. They have simply told me, “I’m not allowed to do this”. I felt that this was too good an opportunity to miss; that is why I signed my noble friend’s amendment.
As my noble friend Lord Lexden said, this is plain discrimination against people who have not yet been able to secure a home in a particular area. These are sensible additions to the Bill. I am aware that your Lordships have, overall, welcomed the opportunity to try to remove these exclusions on keeping pets in homes that people are renting. I hope the Minister will look kindly on these amendments to make sure that this part of the potential loophole is addressed and filled.
Baroness Hayter of Kentish Town (Lab)
I do hope that the Minister will not agree to this. I have a flat that I live in part-time but sometimes rent, and I am allergic to animals. The idea that I would have to consider and take an application from someone with a pet, when I could not possibly have them living there because of my allergy, seems to me quite unfair. They would come to see the flat and waste their time when there is no chance in the world that I could let it to someone with a pet. I do hope that we will not go the way of forcing somebody like me to waste someone’s time in going to see a property. There is no way that I would be able to have an animal in the flat that I live in at other times.
Baroness Scott of Bybrook (Con)
My Lords, I thank my noble friend Lord Black of Brentwood for his amendments. I also thank my noble friends Lord Lexden and Lady Coffey for their contributions, as well as the noble Baroness, Lady Hayter, who makes it very clear that we need to have a balance.
This group seeks to address the growing concern among renters, but we must also consider the valid and practical concerns of landlords. Although these proposals aim to prevent blanket bans on pets in rental properties, it is essential to recognise that there must be legitimate reasons for any restrictions. Many tenants may view their pets as family members, as we have heard, but we must also acknowledge the potential challenges and consequences of allowing pets in rental properties. These are challenges that can affect property maintenance, insurance costs and, as we have heard, the well-being of other tenants. A balanced approach is needed, one that considers the rights of tenants and the legitimate concerns of landlords and property owners.
Landlords are often responsible for the upkeep of the property and ensuring the safety and comfort of all tenants. Allowing pets may also complicate insurance policies, leading to higher premiums or even exclusions in certain cases. These concerns are not trivial and must not be dismissed lightly, but rather addressed in a way that is both fair and proportionate. The amendment in this group recognises the need for a balanced approach that takes into account the rights of those tenants and the legitimate interests of landlords.
We on these Benches have made our position clear on previous days in Committee. We continue to advocate for a balanced solution that respects the needs of both tenants and property owners. Ultimately, these amendments contribute to a more equitable housing market, where tenants with pets are not excluded from their right to live in a home that suits their needs. They also ensure that the landlord can continue to manage their properties responsibly with the appropriate protections in place.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Black of Brentwood, for his amendments relating to pets and rental discrimination, and the noble Lord, Lord Lexden, the noble Baronesses, Lady Coffey and Lady Scott, and my noble friend Lady Hayter for their comments on these amendments.
Amendments 190, 192, 193, 194, 195, 196 and 198 would extend the core rental discrimination provisions of Chapter 3 to prospective renters with pets, protecting them from any unfavourable treatment in the letting process. We know that pets bring a huge amount of joy to their owners—even Wilberforce, the snake we heard about the other day—and we are committed to supporting responsible pet ownership in the private rented sector.
However, it is our view that extending our rental discrimination provisions in this manner would not be proportionate, nor is it necessary. The Bill already contains measures to ensure that landlords cannot unreasonably withhold consent when a tenant requests to have a pet in their home. Landlords must consider all requests and provide valid justification if consent is refused. This ensures that tenants are not unfairly prevented from keeping pets while still allowing landlords to consider legitimate concerns such as property suitability lease restrictions—the other day we discussed superior leases, which may have clauses about pets—or potential issues with other residents, as my noble friend Lady Hayter mentioned.
Tenants will be able to escalate unfair decisions to the PRS ombudsman, who will have strong powers to put things right, such as compelling a landlord to take a specific action, issue an apology and award financial compensation. Given that, I kindly ask that the noble Lord consider not pressing his amendments.
Lord Black of Brentwood (Con)
I am grateful to all who have taken part in this short debate, particularly my noble friend Lord Lexden, who rightly told us about the heartbreak that can follow when tenants have to choose between a home and a pet, something that happens far too often and which the Bill is determined to diminish. I am also grateful to my noble friend Lady Coffey, who brought to bear her considerable experience and expertise in this area. We should take her comments very seriously.
I say to the noble Baroness, Lady Hayter, that of course I understand the issue that arises from allergies; I am unfortunately allergic to pollen and there is little I can do to avoid it. She is right, and that is why we have to strike a balance. As my noble friend Lady Scott said, this is all about balance between the rights of tenants and those of landlords. I believe that these amendments strike that balance, which is why I tabled them.
I am grateful to the Minister for her comments and her understanding. She has been very constructive throughout our Committee discussions on pets, and I thank her for that. When we last discussed these matters in Committee—last week, I think—she talked about some of the guidelines being drawn up to go alongside this legislation when it comes into force. It occurs to me that this might be one of those areas where there could be some form of guidance to landlords that would ameliorate some of the problems. If she would be happy to do so, perhaps she might look at that and talk to the various animal charities concerned; I know they would be happy to help. In the meantime, I beg leave to withdraw the amendment.
Baroness Scott of Bybrook
Member’s explanatory statement
This is a probing amendment that would allow the landlord to invite any person to offer an amount of rent under the proposed letting value.
Baroness Scott of Bybrook (Con)
My Lords, my amendments in this group are intended to probe the Government’s decisions on rental bidding and to better understand the rationale behind this section of the Bill. I begin by drawing your Lordships’ attention to Amendment 199A tabled in my name. I wish to understand why, if a tenant or prospective tenant offers a lower rent than the proposed letting value, the landlord is prevented from accepting it. If a tenant is able to secure the property at a more affordable rate, this seems a fair and beneficial outcome. If the proposed letting value is set unrealistically high, allowing offers below that figure provides an important market correction, one which benefits tenants. This is particularly relevant in weaker rental markets where negotiating powers often lie disproportionately with the landlords. I simply ask the Minister: did she consider this before putting it forward?
On these Benches, we recognise the difficult balance the Government are attempting to strike between preventing unfair and unaffordable rent increases and ensuring that the proposed letting value reflects proposed market conditions. Market conditions are, of course, determined by the supply of homes and the market rent must still incentivise landlords to remain in the sector to provide the housing capacity that we urgently need. This brings me to our intention to oppose the question that Clause 58 stand part of the Bill. The rent-setting process must be transparent, and must be free to function. We should not pretend that we can fix prices without distorting the market signals that allow for an efficient and well-resourced housing market. We must be careful not to introduce policies that mask the simple fact that we need more homes of all types. We on these Benches are committed to working with the Minister to that end, but I first ask her: has she considered whether these measures may in fact obscure the true demand within the rental sector? Understanding that demand is key to delivering the right supply and the right homes built in the right places.
Further, has the Minister considered the impact on labour mobility? Tenants in rent control units may be discouraged from relocating for jobs or education, thus reducing workforce mobility. With over 800,000 vacancies, we should not be inadvertently curtailing the movement of our workers. Finally, I wish to probe whether the Government have fully considered the potential impact on new renters compared with existing tenants. No one on these Benches doubts the Minister’s intentions; we simply fear that the department has not paused to fully reflect on these key issues.
I turn to Amendment 199B, also in my name. I will cheekily anticipate that the Minister may say, in response to this probing question: “Yes”. The Bill attempts to define the term “relevant person” in Clause 58(6) but, before the Minister reaches that definition, I wish to question its adequacy and its clarity. Is there any formal process to designate someone as a relevant person or is this determined on a case-by-case basis? Further, how is the term “acting indirectly” to be interpreted? Does this include property agents or other advisory parties? Crucially, what is meant by “purporting to act”? I am sure that those with legal expertise in this House will argue that this is a loaded term that depends heavily on interpretation. I would be grateful if the Minister could offer her understanding of it and, importantly, explain how consistency in interpretation will be ensured.
Clause 58 represents a significant shift. With that must come clear answers. I hope the Minister will help your Lordships’ House to understand the Government’s thinking more fully. I beg to move.
Baroness Coffey (Con)
My Lords, I support my noble friend in these amendments. Two different things are going on here, one of which is not allowing the market to work. I am trying to understand what evidence there is to suggest that this is a real issue.
I will give a personal story. When at university, a group of us wanted to rent a house. Under the rules of the university, you could live only at a certain distance, and so on. Not wanting to take a 12-month tenancy, we were particularly attracted by and sought out houses that would require only a nine-month tenancy. The landlady we were involved with used to make considerably more rent in the summer through tourists and short-term lets, but also gave students the opportunity not to take on the liability of the year. That helped keep rents relatively low. I am sure that your Lordships can imagine that such a scenario, while it may seem niche, was still very important to students at that time, and so was the availability of houses reflecting that opportunity. In effect—this is nothing to be embarrassed about—we gazumped by being prepared to sacrifice a living room and turn it into an extra bedroom. It also gave a little more rent to the landlady, which was a factor when, I was led to believe, 46 groups went to see that house wanting to secure the tenancy.
While I completely understand some of the intentions of this clause about not getting into ridiculous bidding wars, I am surprised, given the real scarcity in certain parts of the country of private sector rentals, as to why we would want to unnecessarily put such handcuffs on the landlord to accept only the rent they advertise and not be creative about the situation in which prospective tenants may find themselves.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for tabling her amendments relating to rental bidding. I also thank the noble Baroness, Lady Coffey, for contributing. I will respond to the two probing amendments in a moment. First, however, I will set out to the Committee why I consider her fundamental objection to Clause 58 —which will end the unfair practice of renters being pitted against each other in bidding wars—to be misplaced.
The measures in Clause 58 will require landlords and persons acting for them, for example letting agents, to state a proposed rent in any written advertisement for the property. Landlords and those acting for them will then be prohibited from asking for, encouraging or accepting bids above this price. To respond to the comments of the noble Baroness, Lady Scott, these are not rent controls—the landlord may advertise the property at the rent they wish to achieve, but they cannot then increase that rent as other bidders come along. Currently, too many tenants suffer from a lack of transparency in the lettings process. I cannot imagine the heartbreak of thinking that you have found a property at a rent that you can afford only to discover that the landlord or letting agent has pushed other tenants to offer more. Their experience is not that of a viewing but of a kerbside auction. The impact on renters of the practice is clear and our measures will end it for good.
This is a specific problem that we are trying to target, and the majority of landlords do not engage in rental bidding. However, we are trying to stamp out the egregious practice of a minority of landlords who exploit the fact that, particularly in hot rental markets, there is a lack of supply relative to demand. Tenants can be pitted against each other in ways that ensure the rent of a tenancy escalates to a point beyond what many of them can afford, or which, if they can afford it, puts an incredible financial strain on them.
I visited a housing site in Greenwich this week and I heard that, in some parts of London, a house in the private rented sector will cost a public sector worker 94% of their salary just to pay the rent. These measures will improve the experiences of prospective tenants across England and provide clarity to all those involved in the lettings process.
Amendment 199A would remove the prohibition on landlords inviting or encouraging a tenant to offer to pay an amount of rent that exceeds the stated rent. If this amendment were taken forward, landlords would fall foul of the rental bidding provisions only if they accepted rent at a level above the stated rent, not if they invited or encouraged its payment. While I welcome the scrutiny—and I genuinely do—of our rental bidding measures, I am concerned that this amendment would risk allowing a form of rental bidding to continue to be practised. Under this—
Baroness Scott of Bybrook (Con)
Sorry. While we are talking about this, does the Minister not think that what could happen—and what may happen—is that the level of rents will be above what they would normally be, because the landlord is going to go for the absolute maximum they can? Is that not a danger?
Baroness Taylor of Stevenage (Lab)
I think I answered this question under a previous group on a previous day. This is not intended to be rent cap; it is intended to stop the practice of changing the rent once the rent for that property is published. It will be up to landlords to advertise the property at a rent they think they can achieve for that property and, once they have advertised it at that price, they will not be able to increase that rent when things subsequently come along.
Under this amendment, a landlord could lawfully encourage bids above the advertised price, take the property off the market and then use any bids received to establish a higher price at which to relist it. I think that would start to have an inflationary effect on rents. I am not suggesting that this scenario would be commonplace, but it would be lawful and, if it were to occur, it would clearly be to the detriment of prospective tenants. I therefore consider that our belt-and-braces approach of prohibiting both the accepting and encouraging of bids to be the right one and I ask the noble Baroness to withdraw her amendment.
Finally, Amendment 199B seeks to remove
“by any other relevant person”
from the definition of “stated rent” in Clause 58(4)(b). As I have explained, the rental bidding clauses prevent a landlord, or person acting for them, inviting, encouraging or accepting an offer of rent higher than the “stated rent”. The term “stated rent” is defined as the rent originally proposed in the written advertisement, either by the person who is now doing the inviting, encouraging or accepting of higher offers or, as the case may be, any other relevant person.
A “relevant person” could be either
“the prospective landlord, or a person acting or purporting to act directly or indirectly on behalf of the prospective landlord”.
The latter would usually be a lettings agent, but it could also be a more informal relationship such as a friend of the landlord. It is necessary for us to avoid a loophole whereby, say, the landlord publishes the advertisement containing the stated rent and then asks his friend or letting agent to carry out the rental auction.
As such, the Bill is drafted deliberately to ensure that the prohibition applies in those circumstances, as well as the more straightforward scenario in which it is the landlord who publishes the advert and then proceeds to carry out the rental auction. I therefore ask the noble Baroness to not press this amendment.
Baroness Scott of Bybrook (Con)
I thank the Minister for her reply, and for the insight into this issue from the noble Baroness, Lady Coffey. On these Benches, we recognise the challenging balance the Government are seeking to achieve: protecting tenants from unfair and unaffordable rent increases, while also ensuring that the proposed letting value remains aligned with the functioning market.
These market conditions are of course shaped by the availability of housing, and any rent-setting approach must still offer sufficient incentives for landlords to stay in the market and to continue providing the homes that our communities so urgently require. I thank the Minister for her answers, but I urge her to truly reflect on the points that we have raised, to carry them back to her department and, if necessary, to come back with her continued engagement with the House.
This group of amendments, like many others, is not overtly political; it consists of serious and practical probes into serious and practical issues. In our pursuit of stronger protections for tenants, we must be careful not to deter landlords or make it unfeasible for them to continue to provide the homes our communities so badly need. These are concerns that many landlords share, and we believe that they must be at the forefront of the Government’s thinking. We ask them to go back to reflect on what we have brought forward. I ask the Minister to step back and consider any unintended consequences of this part of the legislation—or, at the very least, to acknowledge the genuine concerns of those who oppose this part of the Bill. Having said that, I beg leave to withdraw my amendment.
Lord Jamieson (Con)
My Lords, I will speak to the amendment in the name of my noble friend Lady Scott of Bybrook, which rightly brings the issue of abandonment to the attention of the House tonight.
I wish to be brief, but I will take the opportunity to pose several questions, so that the Minister can set out the Government’s position. The Government are correct to note, in their Explanatory Notes, that Part 3 of the Housing and Planning Act 2016, which sought to address the recovery of abandoned properties, has never been brought into force. However, in light of the significant changes now proposed to the grounds for possession, I ask the Minister: have the Government sought to revisit this? With the departure of Section 21 and the insistence that landlords must rely on specific grounds for possession, as outlined in Schedule 1, what options are available to a landlord if a tenant abandons their property?
I would welcome clarity on several practical matters. For example, is there a requirement for specific types of evidence of abandonment, in terms of format, scope or detail? How many attempts must a landlord make to contact the tenant? I understand that this may appear later, but, as the Government have refused to implement these changes gradually, these really are burning questions.
Next, with no distinct legal ground for abandonment, how does the Minister propose to ensure that landlords understand how to use grounds 8, 10 or 12, which appear to be the only potential avenues in such cases? Additionally, I would be grateful if the Minister could outline the current average wait time for a court order in such circumstances. What, if anything, is being done to address the underlying causes of tenant abandonment?
I fully recognise that this issue extends beyond housing policy alone. However, ensuring that tenants are able to remain in their homes, and feel secure in doing so, is not only beneficial to them but vital to the health of our wider society and economy. In connection with this, I also ask: from the landlord’s perspective, how is one expected to assess the risk of a tenant returning after a property is believed to have been abandoned?
It appears there is currently no specific legal ground for possession on the basis of abandonment. While the Minister may point out that the incidence of abandonment is low, this is not a justification for leaving the issue unaddressed, particularly now, when the framework for possession is being overhauled. Getting abandoned properties back into the rental market will allow others to benefit from that tenancy and a tenant who has abandoned a property to not accumulate further unpaid rent.
I ask whether the Government gave any consideration to amending Part 3 of the Housing and Planning Act, especially in light of the proposed removal of assured shorthold tenancies, which Part 3 originally referenced.
I hope the Minister will take this opportunity to provide clarity and, where necessary, commit to reviewing this area further. I look forward to her response.
Baroness Williams of Trafford (Con)
My Lords, before the Minister stands up to respond, I just make the point that it has gone midnight. We did not start consideration of Committee until 8.30 pm. That has meant that people have gone home without putting forward their amendments, and there has not been proper scrutiny on the last few groups. The Committee has done amazingly well to get as far as it has, but it has now gone midnight. I do not know if the Whip intends to resume the House.
Lord Wilson of Sedgefield (Lab)
I will resume the House at the appropriate time. This is not the first time where debates have gone beyond midnight: on day 1 of Report, the Great British Energy Bill went to 1 am. I do not intend to take this much further. I want to stop at Amendment 206, which is another two groups, and then that will be it. Hopefully, we will be finished very shortly.
Baroness Williams of Trafford (Con)
The reason we are on the penultimate group is because people have not been in the Chamber to move their amendments in Committee. There have been very short debates in Committee, and some very important groups in Committee have just been glossed over—that is my point.
Lord Wilson of Sedgefield (Lab)
As I said, I want to get to Amendment 206. There is only one amendment that has not been moved. There have been other debates that have gone on until 1 am. If we spent less time discussing this aspect, we could finish quite soon.
Baroness Taylor of Stevenage (Lab)
My Lords, the central aim of the Renters’ Rights Bill is to give tenants more security in their homes. Landlords must not be able to evict tenants without a ground for possession, as defined in Section 8 of the Housing Act 1988, which we are expanding and refining to ensure that landlords can gain possession where proportionate.
The noble Baroness, Lady Scott of Bybrook, supported by the noble Lord, Lord Jamieson, has stated that they do not support Clause 61 standing part of the Bill. This clause will repeal Part 3 of the Housing and Planning Act 2016, which, if brought into force, would have allowed landlords to take possession of premises they believed to be abandoned without a court order. However, Part 3 of the 2016 Act was never brought into force. It also wholly pertained to assured shorthold tenancies. Those tenancies will cease to exist in the private rented sector after the implementation of the Bill. The repeal of Part 3, therefore, is necessary to maintain a coherent statute book.
As I mentioned, Part 3 of the 2016 Act would have enabled landlords to reclaim possession of properties under an assured shorthold tenancy that had been abandoned without a court order, provided they had issued three warning notices without response and the tenant was in rent arrears. While we acknowledge that genuine abandonment can present challenges—I dealt with a case that had gone on for years and years in Stevenage—not only for landlords but also for the wider community, these provisions were not the appropriate solution. At the time, they were criticised as a rogue landlord’s charter, and it is appropriate that they were never implemented.
Where abandonment has occurred, landlords will need to establish a ground for possession. It is likely that, in abandonment scenarios, tenants will also be in rent arrears, making those grounds for possession applicable. Landlords may also rely on breaches of tenancy agreements, such as clauses prohibiting prolonged unoccupancy or on grounds relating to deterioration of the property. In clear-cut situations, implied surrender may also apply—for example, where tenants have returned the keys and the landlord has accepted them even if no formal notice was given.
It is vital that tenants have access to justice when facing the loss of their home. Landlords must not be enabled to take possession without a valid ground. Clause 61 ensures the removal of these redundant provisions from the statute book. I commend this clause to the Committee.
Lord Jamieson (Con)
My Lords, I will not do a full closing speech. The purpose of this was for the Minister to give us some thoughts on how you might deal with abandonment rather than going through a lengthy court case when clearly the property has been abandoned. I would be very grateful if, before Report, the Minister could give this some thought. None of us wants abandoned properties; we want them back in use and available for rent. We do not want people accumulating rental deficits that have to be chased through the court. There clearly is a special case here that needs to be considered. I look forward to the Minister giving us a thoughtful response before Report on how we address the issue of abandoned properties. None one on either side of the Committee wants abandoned properties.
“Student accommodation that is not an HMO(1) Schedule 14 to the Housing Act 2004 (buildings which are not HMOs) is amended in accordance with subsections (2) and (4).(2) After paragraph 3 insert—“Buildings occupied by students: England
3A (1) Any building in England—(a) which is occupied solely or principally by persons who occupy it for the purpose of undertaking a full-time course of further or higher education at a specified educational establishment, or at an educational establishment of a specified description, and where the person managing or having control of it is the educational establishment in question, or(b) which is occupied solely or principally by persons who occupy it for the purpose of undertaking a full-time course of further or higher education at an educational establishment and where the person managing or having control of it is a specified person or a person of a specified description.(2) In—(a) sub-paragraph (1)(a) “specified” means specified for the purposes of that sub-paragraph in regulations made by the Secretary of State;(b) sub-paragraph (1)(b) “specified” means specified for the purposes of that sub-paragraph in regulations made by the Secretary of State;and the regulations may (in particular) provide that an educational establishment is specified, or of a specified description, for the purposes of sub-paragraph (1)(b).(3) Those regulations may, in particular, specify—(a) as a description of educational establishment for the purposes of sub-paragraph (1)(a), or(b) as a description of person for the purposes of sub-paragraph (1)(b),the members from time to time, or a description of the members from time to time, of a housing management code of practice which is specified in the regulations.(4) The Secretary of State may by regulations—(a) specify a class of building, and(b) provide that a building—(i) does not fall within this paragraph if it is of the specified class, or(ii) falls within this paragraph only if it is of the specified class.(5) The Secretary of State may by regulations—(a) specify a building manager or a class of building manager,(b) specify a class of building in relation to the specified building manager or the specified class of building manager, and(c) provide that a building which the specified building manager, or a building manager of the specified class, manages or has control of—(i) does not fall within this paragraph if the building is of the specified class, or(ii) falls within this paragraph only if the building is of the specified class.(6) Regulations under sub-paragraph (4)(a) or (5)(b) may, in particular, specify as a class of building—(a) the buildings, or(b) a class of the buildings,from time to time subject to a housing management code of practice which is specified for this purpose by regulations under sub-paragraph (4)(a) or (5)(b).(7) Regulations under sub-paragraph (5)(a) may, in particular, specify as a class of building manager—(a) the members, or(b) a class of the members,from time to time of a housing management code of practice which is specified for this purpose by regulations under sub-paragraph (5)(a).(8) For the purposes of this paragraph— (a) “building manager” means an educational establishment or other person managing or having control of a building;(b) “housing management code of practice” means a code of practice approved by the Secretary of State under section 233 (codes relating to the management of HMOs or excepted accommodation);(c) a building is “subject to” a housing management code of practice if it—(i) is a particular building subject to the code, or(ii) is of a class of buildings subject to the code;(d) a reference to—(i) a class of the buildings from time to time subject to a housing management code of practice, or(ii) a class of the members from time to time of a housing management code of practice,includes the buildings or members that are from time to time in a class provided for in the code of practice.”(3) Any regulations made by the Secretary of State under paragraph 4 of Schedule 14 to the Housing Act 2004 before the coming into force of this section are to continue to have effect on and after the coming into force of this section as if made under paragraph 3A of that Schedule (inserted by this section).(4) In paragraph 4 (buildings occupied by students)—(a) in the heading, after “students” insert “: Wales”;(b) in sub-paragraph (1), in the words before paragraph (a), after “building” insert “in Wales”.(c) in sub-paragraph (2), for “appropriate national authority” substitute “Welsh Ministers”.(d) in sub-paragraph (3), for “appropriate national authority” substitute “Welsh Ministers”.(e) in sub-paragraph (4)—(i) in the words before paragraph (a), for “appropriate national authority may have regard to the extent to which, in its opinion” substitute “Welsh Ministers may have regard to the extent to which, in their opinion”;(ii) in paragraph (a), for “authority” substitute “Welsh Ministers”.(5) In consequence of the other amendments made by this section—(a) in paragraph 16E(3) of Schedule 2 to the Finance Act 2019 (inserted by Schedule 1 to the Finance Act 2025) (meaning of “institutional building”), in paragraph (i)(i) and (ii) (buildings occupied by students), for “paragraph 4” substitute “paragraph 3A or 4”;(b) in the Capital Allowances Act 2001, in section 270CF (exclusion from qualifying use: residential use), in subsection (1)(b), for “paragraph 4” substitute “paragraph 3A or 4”.(6) Any regulations made by the Treasury under paragraph 16E(3)(i)(ii) of Schedule 2 to the Finance Act 2019 before the coming into force of this section which designate provision as provision corresponding to paragraph 4 of Schedule 14 to the Housing Act 2004 are to continue to have effect on and after the coming into force of this section as if they designated the provision as provision corresponding to paragraph 3A or 4 of that Schedule.”Member's explanatory statement
Paragraph 4 of Schedule 14 to the Housing Act 2004 provides for certain buildings used as student accommodation not to be a house in multiple occupation. This amendment would enable the exemption to be limited to buildings of a specified description; and for regulations to operate by reference to codes of practice approved under section 233 of the Housing Act 2004.
Lord Best
“Training and qualifications of property agents managing assured tenancies(1) The Secretary of State may by regulations require that individuals undertaking the activities of a property agent in respect of management of assured tenancies must have, or be working toward, specific mandatory qualifications, as defined by regulations to demonstrate competency to undertake their property agency roles.(2) Regulations under this section—(a) are to be made by statutory instrument;(b) may make provision generally or only in relation to specific cases;(c) may make different provision for different purposes;(d) may include supplementary, incidental, or transitional provision;(e) must specify classes or types of employees who must be qualified and the appropriate qualification level for each such group;(f) must specify syllabuses and testing methods for qualifications;(g) must specify means of training provision and minimum training hours;(h) must specify requirements for continuous professional development;(i) must approve providers for the provision of training and qualifications.(3) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”
Lord Best (CB)
My Lords, this is a slightly longer amendment, but I will take it at a brisk pace. Amendments 203 and 204 in my name and the names of the noble Lords, Lord Young of Cookham and Lord Truscott, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Thornhill, relate to the implementation of recommendations from the governmental regulation of property agents—ROPA—working group, aimed at protecting consumers from dodgy or inept estate agents, letting agents and managing agents.
Your Lordships have considered and endorsed the case for regulating property agents on a number of occasions since the ROPA report was published by the Government in 2019. Your Lordships’ Industry and Regulators Committee endorsed the recommendations only last year. Indeed, the Housing and Planning Minister, Matthew Pennycook MP, has made clear that the Government accept the case for regulation of the sector, so there is no need for me to rehearse the arguments again. Indeed, the professional bodies and trade associations, including the Royal Institution of Chartered Surveyors, the Property Institute, Propertymark and the Lettings Industry Council have persistently supported the ROPA agenda. Those who would be regulated are as keen on regulation as those consumers who would be protected by it.
However, I fear that the Housing Minister feels that the new measures for ROPA will have to wait until a later date. It is possible that the forthcoming leasehold and commonhold reform Bill will include regulatory measures for the managing agents of leasehold property —a part of the property agency sector where there have been many complaints of abuses and incompetence. However, that Bill only covers leasehold property and is unlikely to incorporate lettings agents, and its timetable is uncertain. The Renters’ Rights Bill presents an important opportunity to take a first step towards creating a proper regulatory framework for the property agency sector. This Bill is concerned with the deal faced by renters and letting agents, who are involved with half the properties in the PRS. This is a chance to raise standards, and a timely one.
The ROPA working group, in recommending the creation of a regulator for property agents, emphasised the need for proper qualifications as well as adherence to a code of practice. At present, anyone can set up a property agency business overnight with no experience of property matters.
Amendment 203 would require the relevant agents to have or be working toward mandatory qualifications. Since the Bill relates only to lettings, its requirement for proper qualifications can affect only lettings agents; and since setting up a fully-fledged regulator just for lettings agents could be seen as disproportionate, this amendment is strictly limited to the requirement for qualifications, which is the most basic of a regulatory regime.
However, without the establishment of a regulator, how can even this somewhat tentative step be taken toward creating a more professional property management sector? Who, in the absence of a regulator, can enforce the new regulatory requirements for qualifications set out in Amendment 203?
Local Authorities’ Trading Standards Officers could check that legal requirements are being met in their area, but, to protect the consumer, a robust national mechanism is needed to operationalise this amendment’s requirements for agents to hold the necessary qualifications before acting for landlords and taking responsibility for rental properties.
Lord Young of Cookham (Con)
My Lords, once again I follow in the slipstream of the noble Lord, Lord Best, and have added my name to one of his amendments. I commend the work that he has done on this particular subject.
The only point I want to make is to draw attention to the growing gap between the qualifications that are needed to manage a block in the social sector as against those needed to manage a block in the private sector. I take the view that, whether you live in a block managed by a social landlord or a private landlord, you are entitled to the same quality of management, professionalism and competence.
Two years ago, we had the then Social Housing (Regulation) Bill. That set out requirements of qualifications for those in the registered social landlord sector, and it required some 25,000 people to go out and get qualifications. Senior housing managers have to have a level 4 housing qualification and senior housing executives need level 5. One could make the case that requirements are even more necessary in the private sector, because it does not have the overall protection that the social housing sector has with either local authorities or registered social landlords.
There is now a growing gap between the relative qualifications you need, depending on whether the block is in the private or public sector. Although some progress has been made in driving up the standards of lettings agents, there is still some way to go. I hope the Minister will be able to express some sympathy for these two amendments. As the noble Lord, Lord Best, indicated, if we do not make any progress with this Bill, we will be back with the leasehold Bill later in the Session.
Baroness Hayter of Kentish Town (Lab)
My Lords, I have also put my name to Amendment 203 and I declare a non-financial interest as chair of the Property Institute, which favours regulation of all property agents, as the noble Lord, Lord Best, has said. Amendment 203 is about safety, security and the good management of people’s homes. I think we all agree that residents deserve to be safe in their homes, but in rented accommodation it is impossible for residents to do everything themselves, because the building and the environment are actually owned and managed by the landlord.
The noble Lord, Lord Young, intimated that, in the case of social housing, it actually took the death of Awaab Ishak to bring forward mandatory qualifications for those who manage social property. As he said, however, there is no equivalent for private property, where unqualified and even rogue agents take responsibility for vital parts of the building’s upkeep, its safety, its access, its insurance and its legality. Unlike other professions handling legal and financial transactions, most of which are regulated, there are no mandatory qualifications or any minimum requirements for property agents, even when they are managing the money of assured tenancies. The absence of regulations clearly can lead to the mismanagement of deposits and rents and legal non-compliance, very often through ignorance rather than wickedness.
Managing shared buildings, particularly tall ones, is extremely complicated and demanding, and growing more so. There are a lot of new energy-efficient rules, quite rightly; there are increasing tenant demands for involvement, quite rightly; there is the rising cost of insurance; and there is more focus on legislation on health and safety, particularly after Grenfell. All these are complicated issues that need to be handled by a professional in the private rented sector, which houses, of course, many vulnerable people.
The private rented sector is often the home of people who can least afford to pay for any additional services, and, if they are paying too much in rent, they cannot even heat the property, and that can be because of mismanagement. It should be obvious without, I hope, having to wait for a death in the private rented sector, that all managing agents looking after homes should be properly competent and qualified. It is a job for professionals, not amateurs.
This amendment is a way forward. We are not talking about an expensive thing to run; it is not asking for very much. It asks simply that those who are paid to manage rented properties know what they are doing and have the qualifications to prove it, so that landlords would employ only agents capable of managing homes legally and honestly. Let us not wait for a tragedy: let us do it now. We owe it to all residents to make sure that the state requires those managing their homes to know what they are doing.
Lord Truscott (Non-Afl)
My Lords, I rise to support Amendments 203 and 204, in the name of the noble Lord, Lord Best, and others. I declare my interest as a leaseholder, as well as a landlord and former PRS tenant. Noble Lords supporting these amendments have already made a cast-iron case for requiring property-management agents to have relevant training and qualifications, and for these requirements to be legally enforced.
I have dealt with a number of property management agents. Some have been excellent and others have been appalling. It seems extraordinary to me that property agents who may deal with millions of pounds of property and revenue are currently not required to have any professional qualifications or training whatever. Some agents I have dealt with in the past have no property qualifications and had little or no understanding of property law or lease enforcement. There is no other sector that I am aware of where individuals dealing with such large amounts of money and such valuable assets can be wholly unqualified and virtually unregulated.
Anyone can set themselves up as a property agent, with little or no knowledge of the sector. Many property agents are, of course, very professional, but the rogues and amateurs undermine the reputation of the whole property sector. This must end, as we have heard. For that reason, I wholeheartedly support these two amendments and urge the Minister to accept them.
Baroness Coffey (Con)
My Lords, I oppose this amendment. It is rare that I am out of step with my noble friend Lord Young of Cookham, but I am concerned that overregulation of aspects of employment is—how can I put it?—a solution waiting for an extensive problem. One of the things that these amendments do is to yet again give considerable powers to others to set all sorts of training expectations. Candidly, and certainly in the private market, there are simply too many sectors in which government and Parliament seek to rip away control instead of the individual having that engagement and relationship.
We already have the property redress scheme in place, of which letting agents and people who manage properties have to be a part. Do not get me wrong: there are plenty of landlords who are not necessarily doing what they should, at the moment, but there are already mechanisms to put this in place. I do not believe that qualifications, training schemes or similar will make a particular difference.
I am also conscious of what happened with social housing, particularly some of the significant failures that we sadly saw in aspects of local government and housing associations. There was a feeling that something must be done. I am conscious, however, that that does not mean that we need to paint every letting agent or property manager with the same brush. For me, this is overreach on behalf of Parliament and, again, I would like to see the evidence for why we need to go to this extent and why yet another profession that has minimal regulation today now needs to be heavily regulated.
It is again a barrier that would put up agencies’ costs. This is the reality of having to deal with this sort of regulation: the person who pays is the renter, not the landlord. We have to bear in mind that, with the cost of living challenge that we are facing—still the number one issue for the electorate in this country—we are here tonight considering an amendment that will continue to put costs on people who are trying to pay their rent. This is the sort of economic situation that we need to consider for every regulation where we are adding extra barriers to entry to make sure that we keep in mind the people who want to just get on with their lives and have good relationships. They can change in the private sector; that is much harder for people in the social rented sector but, even then, we may have gone slightly too far. We must continue to consider the economic impact on people in this country with every regulation that we pass in this House.
Baroness Warwick of Undercliffe (Lab)
My Lords, I will speak briefly in support of the noble Lord, Lord Best. I declare an interest, which I recently gave up, as the chair of the Property Ombudsman board. Perhaps I can provide some of the evidence that the noble Baroness, Lady Coffey, wanted because, in 30 years of dealing with complaints about property agents, the Property Ombudsman has seen many disputes that probably would not have occurred had those agents undertaken formal training and qualifications.
In 2023—the latest statistics we have—the ombudsman resolved over 2,200 letting disputes. Of these, over half concerned the management of tenancies where the main issues were the agents’ performance in organising and communicating repair and maintenance issues. For the majority, dissatisfaction in these disputes concerned simple and consistent communication around timescales and, in general, managing expectations. Training for agents on how to manage tenant and landlord expectations would have stopped many disputes arising in the first instance.
In addition, there were more than 500 disputes that related to complaint handling. Again, agents currently do not take a consistent approach to complaint handling, which often leaves both tenants and landlords frustrated. It became very clear to me in my time at the Property Ombudsman that to provide a professional and consistent level of service to tenants and landlords, many letting agents would benefit from formal training. It would not only help agents to provide a better service but set consistent expectations for consumers, meaning that relationships between agents, tenants and landlords would improve.
In my brief intervention, I reinforce the RoPA report recommendations of the noble Lord, Lord Best, indeed reinforced by the work of my noble friend Lady Hayter, that the elements required to implement a training and qualifications regime are already in place. I hope it would not be too significant a leap for the Government to make training and qualifications a mandatory requirement for all letting agents.
Baroness Grender (LD)
My Lords, talk about save the Best until last—well, until the penultimate. The breadth, depth, knowledge, understanding and experience of the names backing these amendments is fascinating and extraordinary. I thank all noble Lords. I speak on behalf of my noble friend Lady Thornhill who also put her name to both amendments. She signed these amendments and we backed them because it is so astonishing that property agents still, today, have none of these qualifications and that anyone can be set up and become a lettings agency. It is staggering given the amount of expertise that they need in order to advise landlords and tenants on these significant complex legal issues in exchange for the not insignificant amounts of money they get for doing that very job.
Propertymark and others are pressing for this. They know that there are people out there who are not doing a good job, as the noble Lord, Lord Truscott, described, and that they are letting the side down and giving good lettings agents a terrible reputation. It is in everyone’s interest that this aspect of the private rented sector is regulated, precisely because the UK property market is very heavily regulated already, with strict laws governing tenants’ rights and landlords’ obligations across many different Acts. Knowledge, understanding and training around that is absolutely critical.
Qualified property agents should possess the knowledge and expertise to navigate this minefield. Legal compliance and risk management are essential. The list of what they have to do already is long and complex and the Bill will add to it, which is why a transition timeline is essential, with thorough, clear guidance as to what is expected, when and by whom. Landlords are rightly worried about this, and I hope that the Minister can reassure the sector on that particular issue of timeline.
It is worth stressing that without proper qualifications, agents risk costly legal battles, fines and damage to their own professional reputation. We have heard that there are already qualifications out there. The sector is keen to get going and roll them out, but they need that push; that degree of compulsion. Amendments 203 and 204 would provide that. Qualifications demonstrate that the agent is knowledgeable about market trends, property evaluations, but also, importantly, ethical practices and transparency itself. All these things are needed. This would create a virtuous circle, boost tenants’ confidence and make landlords more likely to trust their investments with a qualified agent who would also be able to conduct property inspections, manage maintenance, repairs and rent collection and handle financial management. Surely this has to be done with real professional skill, reducing the risk of disputes and maintaining property value. Those agents who get ahead of the curve and get qualified now will become the best. They will stand out from the crowd in a competitive marketplace.
If the Bill is about raising the standard in the private rented sector, rooting out the bad guys and making a once-in-a-generation shift in private renting, this is such an important part of the equation. The Government must grasp it, grasp it soon and get on with it. At the end of the day, it is not just about bricks and mortar, but people’s homes and livelihoods. I ask the Minister: if not this Bill, where and when?
Lord Jamieson (Con)
My Lords, I thank the noble Lord, Lord Best, for bringing Amendments 203 and 204 before your Lordships’ House today. They propose the insertion of new clauses after Clause 63 and rightly focus on training property agents and the enforcement of agent qualifications. I also thank the noble Lord, Lord Young, who raised the important aspect of parity with the social rented sector, and the noble Baroness, Lady Hayter of Kentish Town, who said that, actually, this is very complex, that people need to understand it and that inadvertent mistakes and omissions are frequently made. The noble Baroness, Lady Warwick of Undercliffe, gave us some statistics—I could not write them down quickly enough, but I am sure I will get hold of them sooner or later. The noble Baroness, Lady Coffey, made a good point, which I will come back to, about proportionality and the risk of overregulation—something that noble Lords may have heard once or twice from this side of the Chamber. I also thank the noble Lord, Lord Truscott, and the noble Baroness, Lady Grender, whose comments I will also come back to.
Your Lordships’ House is correct to consider the value of proper training and qualifications, and the benefits this knowledge can bring to the property market. I shall focus my contribution on the impact that training can have in reducing the risk of regulatory breaches, thereby benefiting tenants. Not only will well-trained agents develop a broader and more cohesive understanding of the law but their ignorance, and the potential for breaches arising from a simple lack of understanding, will be greatly diminished. With this, significant benefits will also be felt by local authorities, as fewer cases of regulatory breaches will be brought to their attention for resolution.
Such a reduction in caseload is particularly important at a time when local authorities are tasked with implementing the Secretary of State’s reorganisation plans as outlined in the devolution White Paper. As your Lordships’ House will be well aware, local authorities are currently operating under immense pressure—facing financial constraints, staffing shortages and increasing responsibilities. It is not just a case of money; I know from my experience with local authorities and their housing teams that it is a lack of enough trained people. We need to seek to minimise the pressure that we put on them.
We must explore proactive measures such as ensuring that property agents are properly trained and qualified from the outset. By doing so, we not only improve standards across the sector but allow local authorities to focus their limited resources on strategic priorities rather than enforcement. However, as the noble Baroness, Lady Coffey, said, there is an issue of proportionality. We must ensure that any powers we pass to the Secretary of State are proportionate and can be implemented. While ministerial oversight is, of course, necessary in certain respects, we must be cautious about top-down regulation of key aspects of training and enforcement.
If we are truly committed to getting this right, we must resist the temptation to defer action or consign this matter to the “deal with it later” category. This argument has been, and will no doubt continue to be, clearly articulated across this House. Not placing provisions in the Bill is not only inadequate but raises more questions than it answers. We must understand the Minister’s intentions fully before we consider granting such significant powers to the Secretary of State. Nevertheless, the intention behind these amendments is well placed. Educating letting agents is vital, as they occupy a central role in the rental housing market and have a direct impact on whether tenants are treated both fairly and lawfully.
Exploring ways to enhance tenant protection without compromising housing supply should be at the front and centre of the Government’s thinking. It is vital that we establish clear, accessible means to ensure that landlords understand their rights and responsibilities, and the regulatory framework in which they operate. Property agents must be at the heart of this ambition.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Best, for his amendments relating to the regulation of property agents. I also thank the noble Lords, Lord Young, Lord Truscott and Lord Jamieson, and the noble Baronesses, Lady Grender and Lady Coffey, who have all spoken in this debate, as well as my noble friends Lady Warwick and Lady Hayter.
Amendment 203 would enable the Secretary of State, through subsequent secondary legislation, to introduce professional qualifications for property agents who manage assured tenancies. I am very grateful to the noble Lord, Lord Best, for his continued engagement on such an important topic—I do regard it as such. He is an ardent campaigner for driving up standards across all property agents, not just letting agents, who are the focus of this amendment.
The Housing Minister and I have had a number of conversations with the noble Lord on how best to raise levels of professionalism. We recognise the challenges that tenants and landlords can face when using letting agents. Many agents provide a good service, but some do not.
The Government are committed to ensuring that landlords and those living in the rented and leasehold sectors are protected from abuse and poor service at the hands of unscrupulous agents. On the point from the noble Lord, Lord Young, about parity with the social housing sector, we want to ensure consistency with our work to drive up management standards in the social housing sector. We are aware that in some blocks, including those managed by social landlords, managing agents will be providing services for both leaseholders and social housing tenants. It is important to ensure that any measures we bring forward on managing agent regulation take full account of other legal requirements, including qualifications proposed for the social housing sector.
Protections are already in place to make sure that both tenants and landlords are treated fairly by letting agents and can hold them to account. This includes the Tenant Fees Act 2019, which bans most letting fees and caps tenancy deposits paid by tenants in the private rented sector in England, and the requirement for all property agents, including letting agents, to be members of a government-approved redress scheme.
The Housing Minister made a Written Ministerial Statement on 21 November 2024 which set out the Government’s intention to revisit the 2019 report from the noble Lord, Lord Best, on regulating the property agent sector. We continue to engage across the sector to improve standards among property agents. We welcome the ongoing work being undertaken by the industry itself, as well as by the noble Lord, Lord Best, and my noble friend Lady Hayter.
We are continuing to consider this issue carefully and have already announced our intention to introduce minimum qualifications for property managing agents of leasehold properties and estate managers of freehold estates, and to consult on this issue this year. We will set out our full position on the regulation of letting, managing and estate agents in due course. I thank my noble friend Lady Warwick for the strong evidence she provided about why that is necessary.
Amendment 204 would have the effect that a property agent who manages assured tenancies may be part of a mandatory redress scheme only if they meet the relevant qualification requirements. In practice, this amendment would place responsibility for ensuring the appropriate property agent has the relevant qualifications on the Property Ombudsman and Property Redress. It would also give these redress schemes the power to award a financial penalty for non-compliance.
The main role of redress schemes is to deal with individual complaints by tenants against their agent. The existing redress schemes have a number of levers at their disposal, including the ability to award compensation to a tenant or a landlord where things have gone wrong. They may also expel members from their scheme. However, redress schemes are not designed to be enforcement bodies, so it would not be appropriate to give them powers to issue a financial penalty. Such measures should be reserved for enforcement authorities, such as local authorities. Furthermore, expulsion from or failure to join a redress scheme will not expressly prevent an agent from trading, although it does mean that the agent is in breach of regulations and liable for enforcement action by the local authority.
The question of who is best placed to enforce qualification measures is important and is certainly something the Government are taking into account as part of their consideration of the regulation of managing, letting and estate agents. As I have mentioned before, we will set out our position on this in due course. I am happy to meet the noble Lord, Lord Best, and any other noble Lord to discuss this issue further. However, with these assurances, I hope that the noble Lord will withdraw his amendment.
Lord Best (CB)
My Lords, I am deeply grateful to all noble Lords who have spoken. The noble Lord, Lord Young, drew attention to the fact that social housing providers are now required to have qualifications, and the same should go for the private sector—perhaps even more so. The noble Baroness, Lady Hayter, reminded us of Awaab’s law, introduced by the previous Government after the death of little Awaab Ishak, and the dangers of housing management not operating smoothly and for the safety of the occupiers. She said that this business was a job for professionals—for properly qualified people—and so it is.
I am grateful to the noble Lord, Lord Truscott, who made the point that managing agents, property agents and letting agents are dealing with millions of pounds-worth of clients’ money. It is actually billions rather than millions. A really serious commitment is required of these agents. The noble Baroness, Lady Coffey, was not so sure that qualifications and training would make any difference. I think this is a bit out of step with the sector itself, the profession, which is asking very urgently for regulation to drive out those who are not worthy of being part of that profession, just as we would expect accountants, doctors and lawyers all to have qualifications before they undertake important tasks.
“Mediated rent pauses (housing conditions)(1) This section applies where—(a) there is a tenancy to which section 9A of the Landlord and Tenant Act 1985 applies;(b) it appears to the tenant that the landlord has breached the covenant implied by that section; and(c) it appears to the tenant that the landlord has failed to carry out works necessary to remedy any such breaches within the timeframes set out in regulations made by the Secretary of State under section 10A(3) of that Act.(2) A tenant is entitled to make arrangements to pay rent to an independent individual, rather than to the relevant landlord.(3) The independent individual must not pass any rent paid under subsection (2) to the landlord until there has been a determination or agreement between the landlord and tenant as to the landlord’s liability for any breach of the covenant implied by section 9A of the Landlord and Tenant Act 1985.(4) Where a determination or agreement under subsection (3) sets a time by which works are to be completed, the independent individual will—(a) release any rent paid under subsection (2) to the landlord if the works are completed by that time;(b) release any rent paid under subsection (2) back to the tenant if the works have not been completed by that time.(5) In this section an “independent individual” means the independent individual responsible for investigating complaints made against members of a landlord redress scheme under section 65.”
Baroness Bennett of Manor Castle (GP)
My Lords, all the bright-eyed and bushy-tailed Members of the House who are still here at 12.47 am will note that I am not the noble Baroness, Lady Jones of Moulsecoomb. My noble friend is the Green lark, and I am the Green owl, so you get me after midnight.
I agree with the comments of the noble Baroness, Lady Williams of Trafford. The hashtag I often use is #Nowaytorunacountry. I take the systematic approach to this and suggest that your Lordships’ House urgently needs to think about a reset of our sitting hours.
I rise to move Amendment 206 in the name of my noble friend. This is a very straightforward, positive, friendly amendment aiming to assist the Government to ensure that this legislation can be enforced and can make a real difference. We know that so many renters are trapped in mouldy homes with leaking roofs and heating and hot water systems that are not working. When renters find themselves in those kinds of situations, this amendment would give them the right to pay the rent to a third-party body. My noble friend Lady Jones has suggested the new ombudsman, but we are very open to other suggestions as well. There are other ways of doing it. The amendment is written in a neutral way.
This is to deal with the situation where a landlord refuses to carry out essential repairs, yet the tenant is in a situation where they still have to keep paying for this utterly inadequate accommodation. The arrangements under this amendment would be that, if a landlord carries out the works and ameliorates the problems, the independent third-party would send them the full amount of rent due. If not, the tenant could get a full or partial refund, which they might well otherwise have to go to court to try to recover.
This is both a fair and an effective provision. It punishes the bad landlords and does not impact on the good ones. From the Government’s point of view, this is a constructive suggestion to help make sure that this legislation delivers on its stated aims. With those brief remarks, I beg to move.
Baroness Coffey (Con)
My Lords, this in effect creates a formal escrow process. One of my proudest achievements was to organise a student rent strike, admittedly some time ago, as noble Lords may recognise. At the time, the university accommodation was due to be dismantled at the end of the year and as a consequence it felt like the university was not taking various matters very seriously.
I happened not to be a paying student at the time; I was a vice-warden in a hall of residence. So I did help them, but I insisted that, if I was to help them, they would have to pay over their rent to avoid being evicted. We did that by handing the money to the student union, to effectively act in escrow. As a consequence, repairs were made and everyone ended up happy—apart from the university, which did not like my role in that at all.
The reason I tell that story is that it matters that tenants should be able to withhold cash going directly to a landlord when the landlord is, frankly, taking the mickey. Awaab’s law has already been mentioned and Clause 63, which we did not specifically address, is already extending that to the private sector, and I welcome that. We need to work out a much easier way for people to effectively deploy this escrow approach. That is why I am supporting the amendment.
It is fair to say that we need to make sure that any such processes are easy to administer. Going a little bit further, there is a regularly read out statistic that something like 15% to 20% of housing benefit—or housing support, whether as direct housing benefit or through universal credit—is thought to go to properties not deemed fit for rent. I went into a reasonable amount of detail on this with officials.
The philosophy explained to me by the Permanent Secretary and other officials was that the state thus far should not determine on behalf of the renter where they are going to live; it is an important right for the renter to make that choice—even though it felt repulsive to me that taxpayers’ money was being spent in, frankly, some pretty ropey places. From my visits to some different housing, I have to say it was quite extraordinary what was going on. Sometimes, I am afraid, the dilapidation was the consequence of the tenant not allowing repairs to be undertaken—but that is a minor aside. The point is that—whether it is private money, your own money or the state’s money going to a private landlord—it matters that we have habitable accommodation. Therefore, I strongly support the amendment from the noble Baroness.
Baroness Scott of Bybrook (Con)
My Lords, these amendments have raised the serious and emotive issue of the reality of tenants living in poor housing conditions and the remedies that are available when landlords fail to act. It is an area where frustration and vulnerability can understandably run high.
Amendment 206, moved by the noble Baroness, Lady Bennett of Manor Castle, on behalf of the noble Baroness, Lady Jones of Moulsecoomb, proposes a system of mediated rent pauses. Under that model, tenants would be entitled to pay rent to an independent individual rather than their landlord when repairs are not carried out within the expected framework. However, we must be clear-eyed about this. How would it operate in practice? Who would this independent individual be in real terms? Would it be the redress scheme ombudsman? If so, is it appropriate or even realistic for them to be holding and distributing rent payments? Would they have the resources, legal authority or financial infrastructure to do so? It is overcomplicated.
There is also the question of safeguards. What mechanisms would ensure that the process was fair to both parties? What happens if a tenant withholds rent on the basis of a dispute that turns out to be unfounded? How long might rent be withheld, and what impact would that have on smaller landlords with limited financial resilience? It is entirely right that landlords should meet their obligations to maintain safe and decent homes, but we should be cautious about creating a system that effectively withholds rent before any formal adjudication. That could introduce significant uncertainty into the private rented sector. Would this approach encourage resolution or would it risk entrenching disputes? Might it push responsible landlords out of the market while rogue landlords simply continue to ignore the rules?
In short, while the amendment is well intentioned, and of course we sympathise with all individuals living in poor conditions and battling with irresponsible and careless landlords, it raises complex questions about implementation and unintended consequences. On balance, we are not persuaded that the provision as drafted would be workable in practice. However, there must be a better, more practical way to ensure that tenants are protected without creating further layers of bureaucracy and pushing good landlords out of the market.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Jones of Moulsecoomb, for tabling Amendment 206, ably supported by the noble Baroness, Lady Bennett, who moved it, and I thank the noble Baronesses, Lady Coffey and Lady Scott, for taking part in the debate.
Amendment 206 would allow a tenant to pay rent to the ombudsman rather than their landlord if the landlord had failed to meet legal requirements on housing quality. I strongly agree with the desire of the noble Baroness, Lady Jones, to ensure that landlords remedy hazards in good time—we all know the outcome when that does not happen—but I feel that the Bill’s existing provisions are the best way to achieve that. The Bill will allow private rented sector tenants to challenge their landlord through the courts if they fail to comply with the Awaab’s law requirements, such as timescales for remedying hazards. Alongside that, it will allow us to apply the decent homes standard to the private rented sector, which is an important move.
The PRS landlord ombudsman will provide a new route of redress for tenants and will be able to investigate complaints about standards and repairs. The Bill will also strengthen rent repayment orders, including by increasing from 12 months to two years the amount of rent that a tribunal will be able to award a tenant. Tenants can seek rent to be repaid where a relevant offence has been committed, including offences related to housing standards, such as failing to comply with an improvement notice.
The amendment has the potential to be administratively complex and risks unintended consequences that might lead inadvertently to worse outcomes for tenants. For example, rent being held by the ombudsman could delay repairs in some cases if it made it more difficult for landlords to fund the required works, a point that I believe the noble Baroness, Lady Scott, referred to. Existing measures in the Bill place legal expectations on landlords about the quality of their properties and give tenants access to compensation if their landlords have not met obligations in relation to standards, as well as providing mechanisms through which landlords can be required to carry out repairs. I therefore ask the noble Baroness to withdraw the amendment.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for her response, and those who have taken part in this short but perfectly formed debate. I thank the noble Baroness, Lady Coffey, in particular for her support for the amendment. It is something we might come back to and look at the working of down the track. I also thank her for the fascinating tale of student days which, I think, took many of us back to our own student days. I think there was an expression of support from the noble Baroness, Lady Scott, for the intention if not the exact drafting of the amendment. I would stress that we are not wedded to the precise drafting, as we are in Committee; we would be delighted to work on the detail of the drafting as we go forward.
In response to the Minister’s response, I am afraid there is a phrase that I am sure is in the Civil Service handbook: “inadvertent consequences”. That seems to be the response that every Minister gives. More substantively, what the Minister said is that tenants can challenge through the courts and appeal to the ombudsman, and orders for action can be done. Those are all things that have differential levels of access depending on people’s capacity, people’s awareness, people’s ability to access those things—their time and energy and costs. The action proposed by this Amendment 206, however, is a really straightforward and simple way to give tenants the power to have control and agency for themselves, not relying on other bodies.
Having said all that, this is of course Committee, and I beg leave to withdraw the amendment while reserving the ability to come back on Report.