Renters’ Rights Bill Debate
Full Debate: Read Full DebateBaroness Scott of Bybrook
Main Page: Baroness Scott of Bybrook (Conservative - Life peer)Department Debates - View all Baroness Scott of Bybrook's debates with the Ministry of Housing, Communities and Local Government
(1 day, 14 hours ago)
Lords ChamberMy Lords, I declare my interest as set out in the register as vice-president of the Local Government Association. I very much look forward to the maiden speeches of the noble Baroness, Lady Brown of Silvertown, and the noble Lord, Lord Wilson of Sedgefield, and welcome them to the House.
The Renters’ Rights Bill is counterproductive. While the Government may have good intentions, they will drive landlords from the market—reducing choice and putting up rent for the tenants they seek to protect. While we discuss this Bill, it is important to remind ourselves who landlords are: around 45% own one rental property, with another 40% owning two to four. In many, if not most, cases these are not professional landlords; they may have gained an extra property when a family member has died or through marriage later in life, or perhaps they invested in a property or two to use as a pension. To expect them to be able to cope with all the costs and burdens placed on them by this Bill is at best naive. Many decent landlords and safe, quality homes will leave the rental market as a result.
We must absolutely deal with bad landlords, but in most circumstances there is no reason a good landlord would want to lose a good tenant. It is in their interest to keep a steady income from a reliable tenant who respects their property. Having an empty property is expensive, and there are significant fees and paperwork involved with finding a new tenant. While trying to protect and improve living conditions for renters, the Government should be very careful not to do the opposite and make it worse for them.
The last Conservative Government introduced our own version of this Bill, the Renters (Reform) Bill. It was first introduced to the House of Commons in May 2023 and eventually had its Second Reading in your Lordships’ House in May 2024, but was not taken any further before the general election. The Bill did not make quick progress because we wanted to take our time to get this right. We listened to representations from the sector and carefully considered the impact of our policies. We made changes during the Bill’s passage through the House of Commons, most notably on the readiness of the courts, and further changes were planned for the House of Lords, most notably to carve out student lets.
We recognise that some reform to our rental market was necessary to protect tenants from the abuse at the hands of rogue landlords, but it was always important to us that we balance the rights of tenants to live safely and peacefully in the homes they were renting with the rights of landlords, particularly with respect to their property rights.
The Government were trying to balance the see-saw, and I know we did not get everything right. Many felt that the measures introduced by the Bill went too far in favour of tenants and too far against the landlords in a way that would work to the detriment of the rental market, and I have sympathy with that. However, we listened to the concerns that were raised and we were making changes to the Bill as it progressed.
If the Renters (Reform) Bill did not quite balance the see-saw, the Renters Rights’ Bill tips it over. This is not the same Bill that the last Conservative Government introduced, and the Government are rushing it through without any care for the repercussions that will reverberate throughout the sector. Labour has abandoned our commitment to improvements in His Majesty’s Courts & Tribunals Service before abolishing Section 21 for existing tenancies, as well as our six-month implementation period before abolishing Section 21 for new tenancies. This means that our courts will not be resourced as they need to be. Labour has also abandoned our requirement for the Lord Chancellor to assess the courts’ possession processes before abolishing Section 21 for existing tenancies, which would have ensured that they were ready for the changes first.
Labour has abandoned our plans that would have stopped tenants being able to give notice during the first six months, to give landlords some predictability and protect them against tenants seeking to exploit these new arrangements for rolling tenancies such as holiday lets. Labour has abandoned our plans to make it easier to remove anti-social tenants, which we were changing from “likely” to cause a nuisance or annoyance to “capable” of doing so, making it much harder to evict those who deserve to be evicted. Labour has also abandoned our commitment to sufficiently carve out student accommodation, where it is essential that both landlords and tenants have the certainty of fixed-term contracts to plan for subsequent years.
Not only have the Government removed many of the safeguards and improvements for landlords that we put in the Bill but they have added many concerning measures of their own. They are increasing the mandatory eviction threshold for rent arrears from two months to three months, significantly increasing the loss incurred by landlords when a tenant is not paying for the property they are occupying. They are shortening the time limit for landlords to consider a pet, which we know to be a significant issue. They are rushing, in our opinion, the implementation for the private sector of Awaab’s law—a law that was designed for the social housing sector and that could have significant implications for smaller landlords if not implemented very carefully.
If that was not enough, Labour took the Bill even further, through the amendments it made in the House of Commons. It introduced amendments to include restricting the payment of rent in advance, which will hit most severely self-employed renters and those with bad credit ratings, where a landlord is now even less likely to want to take the risk on them. It introduced amendments requiring landlords to pay compensation to tenants when they possess their properties, burdening landlords with even more unfair costs, even if they have no choice but to take their property back and may have already spent a lot of money to do so.
Much has changed since the original Bill was introduced, and we must acknowledge the broader context that the Bill and the sector find themselves in. Landlords are leaving the rental sector at a higher rate than ever, with many citing rental reforms as their reason for leaving. Rightmove has estimated that 18% of homes up for sale were previously rented, compared with 8% in 2010. In London, where we know the problem in the rental market can be most acute, the situation is even worse: 29% of homes for sale in our capital city were previously rented out.
On top of this inflated package of rental reforms, landlords now have the minimum energy-efficiency standards to contend with. Ed Miliband, the Secretary of State for Energy Security and Net Zero, is requiring all private and social rented homes to meet EPC C by 2030. The industry estimates that this could cost the sector £25 billion—an average of £5,400 per home. This is a cost that many landlords, particularly those with only one or two properties, just cannot take.
Of course, this is set against a backdrop of ever-increasing taxation from a Government who do not understand how our economy works. All these issues compound to make our country an unattractive, burdensome and expensive place to be a landlord, however fair and decent one might be to their tenants.
There is always a balance to be found with legislation, and in this case respect for property rights is essential for investment and stability. I would expect the risk of legal challenge on this Bill to be very high. There will certainly be a few interested parties queuing up to challenge the Government over the rights to their own property. If the Government are not careful, and continue with such an aggressive pursuit of landlords, there is a good chance that their Bill will get stuck in the courts and not be able to benefit anyone.
In Scotland, similar legislation has resulted in the highest rent increases in the United Kingdom because of demand far outstripping supply. The Nationwide Foundation found that 70% of landlords and letting agents lack confidence in the future of the sector. This has led to a significant reduction in rental stock, which has made it much more difficult and expensive for tenants, especially those on low incomes, to find a home. We must learn from Scotland’s mistakes.
There will always be people who want, or need, to rent rather than buy their home. We must ensure that there is a stable rental market for them, and we will do all we can to convince the Government to think carefully about how they proceed. We intend to table amendments to address some of the most pressing concerns, including: the capacity and operation of the courts; student landlords, who need certainty of length of tenure and other mutually agreeable fixed-term contracts; some exemptions for smaller landlords, who are less able to weather these changes; the availability of insurance for damage caused by pets; consideration of the property rights of landlords; and the impact on the housing market. We will pursue these amendments for the benefit of landlords and tenants alike, because we know what will happen if we do not.
The Government’s own impact assessment acknowledges that tenants will see increased costs as a result of their policies, saying
“it is likely that landlords will pass through some costs of new policies to tenants in the form of higher rents—to offset those costs and maintain a degree of profit”.
Surely the Government cannot want this, and I hope that they will listen to the concerns being raised by the sector and by many noble Lords across this House before it is too late.