Renters’ Rights Bill
Baroness Thornhill Excerpts(4 days, 16 hours ago)
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Baroness Thornhill
“(d) entries in respect of all landlord notices served under section 8 of the Housing Act 1988, to be registered within 7 days of service.”Member’s explanatory statement
This amendment seeks to require entries to the database to include notices served under section 8 of the Housing Act 1988 within 7 days of registration.
Baroness Thornhill (LD)
My Lords, I reassure noble Lords, with regard to time, that the amendments in this group, in my name and those of other noble Lords —and there are a quite a lot of them—all work together and function as a pack. Therefore, my description of these amendments working together will actually be quite brief. The amendments look to strengthen the link between compliance with the private rented sector database and the lawful use of eviction powers. I appreciate that I am pushing the envelope a little bit and I will be genuinely interested in the Minister’s response.
These amendments are rooted in a very simple principle. If we expect landlords to meet minimum legal obligations—and we do, and we hope for more compliance: that is what the whole Bill is about—such as registering on the new database, which, following our previous discussions, is going to be the whizziest, wonderful game-changer, there really must be meaningful consequences when they do not. Currently, the Bill does not explicitly tie database compliance to a landlord’s ability to issue a Section 8 notice. These amendments aim to correct that, or at least to open up a discussion about it.
Amendment 223 would require landlords to register any Section 8 eviction notice on the database within seven days of issuing it. This would support greater transparency, help local landlords and tenants track patterns of use and ensure that there is a reliable record of how and when eviction powers are being exercised. Can the Minister say how we gather that data accurately, if not through this? It is important data and without it we lose very valuable oversight.
Amendments 235, 238, 239 and 240 would prevent a Section 8 eviction notice being considered valid if the landlord has failed to comply with Clause 83(3) of the Bill—namely, the obligation to register themselves and their dwelling on the database. These are not minor or excessive requirements; they are fundamental baseline requirements for responsible landlords. It is entirely reasonable to say that, if these duties are not met, a landlord should not be able to proceed with eviction.
Amendment 236 provides necessary clarification, ensuring that this requirement applies to the entirety of subsection (3) and not just selected parts. Taken together, this group helps to make the database a functioning gatekeeper for landlord compliance. It reinforces the idea that legal powers, especially those as significant as eviction, should be available only to those who follow the rules. That in turn builds confidence in the system and protects tenants from being displaced by landlords who are themselves acting unlawfully. I hope the Minister will look carefully at these proposals. They are proportionate and targeted and go to the heart of what this reform is meant to achieve: a fairer and more accountable rental sector. I beg to move.
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Baroness, Lady Thornhill, for opening this group. The issues of database fees and possession restrictions are of real significance, and this group is therefore of considerable importance. Before turning to the wider contributions made today, I will speak to the amendments in this group that I have tabled. Amendment 228C seeks to probe the circumstances under which a landlord may be charged a fee under the regulations made under Clause 80. I would be grateful if the Minister could provide some clarity on this point. Under what conditions do the Government foresee such charges being applied?
Amendment 228E, also in my name, would prevent the costs of enforcement action against non-compliant landlords being charged to those who have complied with the requirements of this chapter. This part of the Bill seems entirely unfair on law-abiding landlords. We want to understand why landlords who are compliant must bear the costs of enforcement taken against those landlords who fail to comply with the law. Could the Minister explain why compliant landlords must bear the costs of enforcement targeted at those who fail to meet their legal obligations?
Amendment 228F seeks to remove subsection (4)(d), which includes the costs of enforcement action imposed by the Bill in relation to the private rented sector. Our original understanding was that these fees were intended to relate to the database, but this paragraph seems to be a classic case of Ministers seeking additional and wider-ranging powers as a belt-and-braces approach. This is not an acceptable way forward. We understand completely that the database must be funded and we accept that a fee is reasonable, but we need to make sure that the fees charged under this clause remain reasonable. We know that this will increase the costs of business for landlords, so we need to ensure that the costs are both reasonable and proportionate. We are concerned that this wide definition of “relevant costs” may result in unreasonably high costs.
Perhaps I can press the Minister to give the Committee some sense of what the fees will be like, and how increases will be managed. Ultimately, we must bear in mind that it is usually the tenants who bear these costs through their rents in the future. Overall, what are the predicted costs of setting up and running the database, and what are the costs likely to be to the landlord?
Many landlords are small-scale and independent; they are not corporate landlords, with legal teams and financial reserves. They are ordinary individuals, often renting out one or two properties as a way to supplement their pension or to provide long-term family support. For the database to function as intended, it must be financially accessible.
On Amendment 228G, clear communication of the changes of fees is essential. It builds trust and helps people plan their finances, but it also avoids any confusion or frustration.
Lord Hacking (Lab)
Before the Minister sits down— I am probably breaking the rules, but I do so for very good reason—I want to state to the Committee that that she was quite right on Amendment 237, and I was quite wrong.
Baroness Thornhill (LD)
My Lords, I thank the Minister for her response. I absolutely accept that my amendments were pushing at the boundaries. However, at their heart is protecting tenants from being evicted by a landlord who is acting unlawfully, almost as a matter of principle.
However, I accept that the Minister is confident that the Bill as it stands should drive compliance and that, therefore, my amendments will be unnecessary. My answer to that is that only time will tell. That leads us to group 13, where we will talk about reviews and why we need them. I thank the noble Baroness, Lady Scott, who articulated some concerns and felt that maybe we could open a dialogue on this issue. For now, I beg leave to withdraw my amendment.
Baroness Thornhill
“(e) create provisions for financial penalties for non-compliance with the requirements for a database entry, including, but not limited to, provision for a rent repayment order where a person has failed to ensure that a required entry is up-to-date and active.”Member’s explanatory statement
This amendment would include rent repayments orders for non-registration of the database created under this Act.
Baroness Thornhill (LD)
My Lords, I am working overtime tonight. In moving my Amendment 226 I will speak to my Amendment 257 and support a number of important amendments in this group, including those from the Minister and the noble Baroness, Lady Kennedy, whose contributions I look forward to.
As colleagues will know, rent repayment orders remain one of the few enforcement mechanisms that are available directly to tenants. That is the key. They are not just about recompense; they are about ensuring that landlords meet their legal obligations and that tenants are protected when they do not, and recompense is made. Amendment 226 seeks to ensure that rent repayment orders can be applied where a landlord has failed to register on the private sector database established by the Bill. If we are serious about transparency and raising standards, non-compliance with the system we are creating must carry real consequences. I am starting to feel like a broken record, but noble Lords will get the message. Otherwise, the credibility of the database and the wider enforcement regime is seriously undermined.
Amendment 257 seeks to extend rent repayment orders further to cover cases where landlords have failed to join a redress scheme or maintain active entries on the new database. This amendment relates strongly to amendments in the previous group and on the enforceability of the database. If we want a rental system that is responsive, accountable and fair, we must ensure that tenants have clear recourse when landlords do not engage with these fundamental duties.
I am grateful to the noble Baroness, Lady Kennedy, for Amendment 244A, which adjusts the standard proof in some cases to the balance of probabilities rather than beyond reasonable doubt. This change is both proportionate and pragmatic. We know that gathering evidence can be an enormous burden for tenants. This amendment helps to address that imbalance while preserving important legal safeguards in more serious cases.
I also welcome the suite of government amendments in this group, which bring clarity to how rent repayment amounts are calculated and to which offences fall within scope. These amendments, particularly those aligning the repayment period with a two-year window, provide much-needed consistency and support effective enforcement. The inclusion of new categories of offence and consequential changes to the Housing and Planning Act 2016 are helpful and align with the overall intent of the Bill. However, I gently emphasise that, while the government amendments are welcome, they will be significantly strengthened by the additions proposed in my amendments. There is little point in creating systems to register landlords and offer redress if we do not give tribunals the power to act when landlords ignore them. Rent repayment orders are not a silver bullet, but they are an important tool to renters. We should not pass up the opportunity to make them more robust, more comprehensive and more effective in practice. I beg to move.
Baroness Kennedy of Cradley (Lab)
My Lords, it is a privilege to speak after the noble Baroness, Lady Thornhill, because I agreed with every word she said in her excellent opening speech. I will speak to Amendment 244A in my name. This amendment would apply the civil standard of proof for rent repayment orders pursued only on the basis of a Protection from Eviction Act offence. By changing the evidential standard for these rent repayment orders from “beyond reasonable doubt” to “balance of probabilities”, Amendment 244A will provide parity with the normal work of the tribunal and provide encouragement to tenants and those who assist them to claim redress, which was Parliament’s intention by including Protection from Eviction Act offences among the things that rent repayment orders could be claimed for. In short, the current requirement of a criminal standard of proof thwarts that intention.
Rent repayment orders are brought in the first-tier property tribunal, and the first-tier property tribunal is not a criminal court. A rent repayment order is not a criminal prosecution. The first-tier property tribunal does not follow criminal procedural rules or result in a criminal sentence or criminal record if a defendant is convicted. However, the tribunals require a criminal standard of proof. In addition, rent repayment orders are often brought by self-represented applicants seeking to reclaim rent they have paid to their landlord as compensation, and legal aid is not available for rent repayment order claims. For these reasons alone, it is therefore inappropriate that rent repayment orders for Protection from Eviction Act offences should apply the criminal standard of proof.
Moreover, a civil claim in a civil court for a legal eviction or harassment applies the civil standard. This is despite the fact that civil claims typically attract much higher penalties in the form of civil damages, rather than just the chance to apply for repayment of rent paid. It is therefore logical and consistent to apply the civil standard of proof to Protection from Eviction Act rent repayment orders in line with the rest of the civil law, and this is what Amendment 244A does.
Why does getting rid of this illogical anomaly matter? First, the nature of Protection from Eviction Act offences means they are often impossible to prove to the criminal standard. Often, landlords change the locks on tenants and dispose of their possessions when renters are not at home. Illegal evictions and harassment occur in the privacy of a renter’s home, often without witnesses. The criminal burden places an extra, often insurmountable, burden on lay applicants to prove their case at tribunal. It also has a chilling effect of preventing claims being brought in the first place, as the evidence available for these offences is unlikely to meet the standard. Under the standard, therefore, renters cannot apply for rent repayment orders as they cannot prove their case beyond reasonable doubt, even where it is clear that an offence has occurred that only the landlord would be motivated to commit. This weakens enforcement and access to justice, and undermines the whole purpose of the rent repayment order legislation.
Secondly, the incredibly low number of rent repayment orders for Protection from Eviction Act offences demonstrates that the system is not working. Safer Renting and the University of York have done research which estimates that over the two-year period from 2021 to 2022, there were at least 16,000 illegal evictions—a figure which is almost certainly an undercount.
Meanwhile, data gathered by the organisation Marks Out Of Tenancy shows that, over the same time period, there were just 31 rent repayment orders on the Protection from Eviction Act ground that were successful. Despite the large number of illegal evictions recorded by individuals and organisations assisting them, people are not applying for rent repayment orders as a source of redress. The higher criminal standard results in tenants and those assisting them considering an application not worth pursuing.
Thirdly and finally, with the forthcoming abolition of Section 21, criminal and unscrupulous landlords, who are the minority of landlords, might take a calculated risk that they can save money by unlawfully evicting or harassing their tenants, as they know how hard it is for tenants to enforce against them in the First-tier Tribunal. Rent repayment orders are realistically the only option for renters to enforce their rights without legal representation. It therefore has never been more important to strengthen the rent repayment order regime for Protection from Eviction Act offences so that renters can enforce their rights and gain access to justice for these life-changing offences.
These offences are some of the most egregious a landlord can commit—illegal eviction, attempted illegal eviction and harassment. The physical, mental and financial impact of these offences on renters and their families cannot be overstated. I look forward to my noble friend Lady Taylor of Stevenage’s reply. I am sure she will want to reflect on the wider debate today. I hope she will agree to meet with me and Safer Renting—experts in this field—to discuss the aim of Amendment 244 before Report to see what can be done.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Thornhill, and my noble friend Lady Kennedy of Cradley for their amendments relating to rent repayment orders. I also thank the noble Lord, Lord Jamieson, for his contribution.
I will begin by responding to the amendments in the name of the noble Baroness, Lady Thornhill. Amendment 226 seeks to extend penalties for non-compliance with private rented sector database requirements. The Bill already includes a clear, proportionate and escalating approach to penalties against those who flout the rules. For initial or less serious non-compliance, local authorities can impose a civil penalty of up to £7,000— I think the noble Baroness, Lady Thornhill, said she was beginning to sound like a stuck record; now I feel like that as well. In the case of the database, that applies, for example, to a first failure by a landlord to register.
For serious or repeat non-compliance, local authorities can prosecute or, alternatively, issue a civil penalty of up to £40,000. In the case of the database, that applies, for example, where a landlord knowingly or recklessly provides information to the database operator that is false or misleading in a material respect. We will, through the Bill, significantly strengthen rent repayment orders because we believe they are a powerful mechanism for tenant-led enforcement.
In relation to the database, rent repayment orders are available where a landlord knowingly or recklessly provides false or misleading information to the database operator. They are also available where a landlord continues to fail to register or provide the required information to the database following a first penalty. These, though, are criminal offences, and it would not be appropriate to extend rent repayment orders to non-criminal breaches of the database requirements. Rent repayment orders are intended to act as a punitive sanction against landlords who commit criminal offences. Extending them to conduct that does not amount to an offence would undermine this.
Similarly, Amendment 257 would make rent repayment orders available for initial failure to be a member of the PRS landlord ombudsman and initial failure to be registered with the PRS database. My view is, as before, that it may be inappropriate to extend rent repayment orders to these non-criminal breaches. The new ombudsman and database are fundamental parts of our reforms, and of a better private rented sector with greater accountability. It is vital that they are robustly enforced.
We think the routes of enforcement currently in the Bill represent an effective and proportionate approach. We will monitor the use and effectiveness of rent repayment orders under the new, strengthened regime and consider whether further changes are necessary. Therefore I ask that the noble Baroness, Lady Thornhill, withdraws her amendment.
Amendment 244A, tabled by my noble friend Lady Kennedy of Cradley, seeks to lower the standard of proof to which the First-tier Tribunal must be satisfied before making a rent repayment order against a landlord for an offence of illegal eviction or harassment under the Protection from Eviction Act 1977. She set out very clearly and concisely why she was putting that forward with a very convincing argument.
I am clear that illegal eviction and harassment are serious criminal offences and that offenders need to be robustly punished. I accept that this happens too rarely at the moment. We are seeking to address this through the Bill by extending civil penalties, as an alternative to prosecution, to illegal eviction and harassment offences under the Protection from Eviction Act 1977.
My noble friend pointed out that the First-tier Tribunal is not a criminal court and asked why the criminal standard of proof should apply. The rent repayment order regime is predicated on an offence having been committed, and it is an established principle in law that offences are taken to have been committed when proved beyond reasonable doubt. Creating a lower standard of proof for the same offences for a finding of guilt in the tribunal compared with the criminal courts would be confusing, inconsistent and could be subject to a successful challenge.
We are also placing a duty on local housing authorities to enforce against specified landlord legislation, which includes illegal eviction and harassment under the Protection from Eviction Act 1977, and we are looking hard at how best we can support them do so effectively. This Government are determined to bear down harder on illegal eviction and harassment. We are concerned, though, about what impact this amendment could have on the integrity of the rent repayment order regime as a whole.
Rent repayment orders are predicated on an offence being committed. As I said, they apply exclusively to criminal offences, and the penalty can be a very significant one. The changes that we are making through the Bill both double the maximum penalty to two years’ rent and extend the circumstances in which the tribunal must award that amount. I recognise that illegal eviction may be hard to prove beyond reasonable doubt, but that is not a principled reason for a civil standard of proof to apply to obtaining a rent repayment order in respect of a serious criminal offence.
The severity of the penalties that, quite properly, apply in the rent repayment order regime mean that there would be serious questions about procedural fairness should the criminal standard of proof not be required. The criminal standard of proof will of course be required when a local authority issues a civil penalty for illegal eviction or harassment under new Section 1A of the Protection from Eviction Act 1977. All the other rent repayment offences would remain to be proved beyond reasonable doubt. Making rent repayment orders for illegal eviction and harassment subject to the civil standard of proof would create an anomaly and be a departure from a well-established position, which we consider would be hard to justify. Of course, I would be very happy to meet the noble Baroness, Lady Kennedy, and Safer Renting but, for now, I ask the noble Baroness, Lady Thornhill, to withdraw her amendment.
I will end with a brief—I promise—explanation of the Government’s amendments in this area. This Government view rent repayment orders as a critical part of ensuring higher standards and better compliance in the private rented sector; that is why we have significantly expanded them through the Bill. Government Amendments 244 to 248 aim to ensure that they work as intended in their application to the offence of breaching the restricted period after relying on the moving and selling grounds of possession, and the amended licensing offences are described correctly.
Baroness Thornhill (LD)
First, I thank the noble Baronesses, Lady Kennedy and Lady Bennett, and the noble Lord, Lord Jamieson, for their excellent, thoughtful and thought-provoking contributions.
We all agree, I think, that it is really disappointing that rent repayment orders—such a valuable tool—are so rarely used. Let us hope that the changes outlined by the Minister work and that the whole renting culture changes, with tenants’ empowerment. As we have gone through this process, we are beginning to see all the impacts of the Bill and how they should all work together to produce that change; perhaps an increase in the number of RROs will be an indication that things are improving.
I follow the logic of the Minister’s arguments, as on my previous amendments, but I hope that we have given her food for thought. I withdraw my amendment.
Lord Best (CB)
I shall confine myself to two sentences, because the exposition from my noble friend covered the ground so admirably. I can only imagine the nightmarish, Kafkaesque scene whereby a family is being turned out of their home and call the police, who, if an officer turns out at all, take the side of the landlord, who is committing a criminal offence. What seems badly needed is the clear statutory guidance proposed by this amendment, coupled with the instruction that prevention of cruel and illegal evictions by landlords has to be grounds for both co-ordination and intervention by the relevant police force and the local housing authority working together. I support this amendment.
Baroness Thornhill (LD)
I want to scratch lots of bits out, since the noble Lord, Lord Best, was so succinct.
Amendment 258 is in the name of Lord Cromwell and has notable signatories, and the noble Lord sold this amendment well. In short, this is an amendment that should not be needed, if the police and local authorities did their jobs correctly, as per the law, as outlined in the Protection from Eviction Act. This amendment is rightly seeking to reinforce what should be happening but we know is not. The already mentioned organisation, Safer Renting, monitored data from its clients over a given period, which revealed that, when the clients were going through an illegal eviction, and while it was in progress they called the police for assistance, worryingly in only 9% of cases did the police actually go to the property and assist the tenants. Therefore, as the noble Lord said, in 91% of cases they either failed to turn up, or turned up and sided with the landlord.
Interestingly, so concerned was Safer Renting about these statistics that it decided to do something about it. To its credit, in partnership with the Metropolitan Police and the GLA, it developed a training course for officers. Approximately 8,000 officers took the training but, sadly, this did not mean it recorded any significant improvement when talking to its clients, which begs a lot more questions that are probably not answerable here.
As has already been said by several noble Lords, it is imperative that the police understand the harassment before and during an illegal eviction—or, indeed, what constitutes criminal offences—and, most importantly, that they co-operate with the local authorities charged with the role of prosecuting these rogues and criminal landlords. Shockingly, that is not always happening. Safer Rentings’ illegal eviction count for England and Wales in 2022-23 showed 8,748 illegal evictions—that is one every 67 minutes.
It is not necessary for the police to prosecute these offences unless they witness criminal actions taking place alongside the eviction, but it is crucial for them to understand the law both to refer them to the local authority and to co-operate with the authority’s investigations. We support this amendment, but we hope the Minister will reassure us that it is not needed.
Baroness Scott of Bybrook (Con)
My Lords, Amendment 258, tabled by the noble Lord, Lord Cromwell, aims to provide greater clarity for local housing authorities and police forces in responding to cases of illegal eviction. Illegal eviction is a serious offence; it is not simply a housing matter but often a brazen abuse of power that leaves some of our most vulnerable renters without recourse. That said, we have reservations about the practicalities of this proposal, but I have listened to the noble Lord, Lord Cromwell, having asked the noble Lord, Lord Hogan-Howe, his views on it.
In essence, the amendment would place a statutory duty on police and councils to notify each other when a complaint of illegal eviction is received, to co-operate in investigating the offence and to take reasonable steps to assist the tenant. The intent here is understandable —tenants report illegal evictions and are, as we know, bounced between bodies, with the police saying it is a civil matter and councils struggling with limited capacity. Although the intent behind the amendment is undeniably well-meaning, we just have to pause and ask whether it might inadvertently entrench confusion within the statutory framework rather than resolving it.
Without clear definitions, the proposal to impose duties on local housing authorities and police forces to co-operate and assist opens the door to operational ambiguity. What exactly constitutes “reasonable steps to assist”, and what measurable outcomes are expected from this co-operation? Without these clarifications, there is a real risk of creating more confusion for the very tenants we want to protect.
We also want to be very careful about the practical burdens. As the noble Lord, Lord Cromwell, said, both councils and police forces are grappling the whole time with existing resource shortages. This amendment adds new responsibilities without addressing the underlying issue of capacity. Should we not first evaluate whether these agencies are equipped to handle their current workload before we impose further duties? What assessments have been made of the additional resource implications of this?
There is great merit in the principle behind the amendment—namely, the need for clearer co-operation and more decisive enforcement—but there are significant questions about whether, as drafted, it achieves that aim in a proportional, workable manner.
I agree with the noble Baroness, Lady Thornhill, and I ask the Minister: is the guidance clear enough, particularly to police forces, that it is an illegal act and it is against the law? Is there enough guidance? Are they being told exactly what they have to do? Do local authorities have clear guidance about looking after the tenant, which is their responsibility if they have been evicted and they are homeless at the time? Can this not be done in a different way by insisting that the Home Office work with MHCLG to try to embed the guidance that is already there and insist that both organisations deliver what they should be delivering at the moment?
Baroness Thornhill
“Review on impacts of the Act on private rented sector(1) The Secretary of State must conduct a review of the impact of this Act on the private rented sector.(2) The review must, in particular, assess the impact of the Act on—(a) the supply of housing in the private rented sector,(b) rent levels and affordability,(c) the security of tenure for tenants,(d) the regulatory and financial burden on landlords, and(e) any other factors the Secretary of State considers relevant. (3) In conducting the review, the Secretary of State must consult—(a) representatives of tenants and landlords,(b) local housing authorities, and(c) any other persons or bodies the Secretary of State considers appropriate.(4) The Secretary of State must lay a report on the findings of the review before Parliament no later than two years after the day on which this Act is passed.(5) The report must include—(a) the findings of the review, and(b) any recommendations for legislative or policy changes the Secretary of State considers necessary.”Member’s explanatory statement
This amendment requires the Secretary of State to review and report on the impact of the Act on the private rented sector, including housing supply, rent levels, tenant security, and regulatory burdens, within two years of its enactment.
Baroness Thornhill (LD)
My Lords, Amendment 263 is in my name, and was kindly signed by the noble Baroness, Lady Freeman of Steventon. My noble friends Lady Janke and Lady Grender will speak to their own amendments in this group, and we will all aim to be brief due to the lateness of the hour.
All through every day of this Committee, there has been a series of common threads, regardless of the groupings. One such thread is the uncertainty of the impact on the supply of homes to the private rented sector. We have had claims and counterclaims, but the reality is that no one knows exactly what will happen yet, because this is a genuinely radical Bill. A sub-theme, if I may call it that, has been the plea throughout the Bill’s passage for various aspects of it to be reviewed. My amendment tries to pull these concerns together and seeks to provide an honest, full and all-embracing review to be presented to Parliament no later than two years after the passing of the Act.
Two years seemed like a long enough time to gather data and see trends, but not too long to make changes, if it were apparent that changes needed to be made. The proposals in the Bill are so far-reaching, the legalities complex and the regulations as yet largely unknown and awaiting guidance or agreement through secondary legislation. But the impact of them could, we hope, be extremely positive and change the rental market for the better—or it could be a total disaster. We have certainly had plenty of hyperbole and tub-thumping rhetoric to that effect. Maybe it will simply be somewhere in between: the curate’s egg.
This amendment tries to cover all the important key indicators. As the explanatory statement says, it
“requires the Secretary of State to review and report on the impact of the Act on the private rented sector, including housing supply, rent levels, tenant security, and regulatory burdens, within two years”
of the Bill’s enactment. It also helpfully suggests who might be consulted upon, but—also helpfully—it includes the option for whomsoever is deemed appropriate by the Secretary of State.
I do not think it would be helpful at this time of night to expand on why each of these things is extremely important, but we know that they are, and that is why they are listed in the amendment. For that reason, we would like to see this, or something very similar, on the face of the Bill. I beg to move.
Baroness Taylor of Stevenage (Lab)
I will write to noble Lords confirming the policy on publication of research. I think it is a matter of publication and then for Members to call it forward if they wish to scrutinise it further.
Baroness Thornhill (LD)
I thank the Minister for that. I am glaring at the noble Baroness, Lady Scott, because she filched one of the things I was going to say, but she is absolutely right—great minds think alike. Although we are coming at the Bill from completely different positions, we are agreed on this issue. Her summary of my Amendment 263 actually said it all as to why we feel we need something in the Bill.
If the Government are confident about the way they will monitor and evaluate, why not put something in the Bill? As for an arbitrary date, surely, after two years—bearing in mind that you can come back whenever you like within that period—you will have some indication of the trend. That is what is bothering us: the uncertainty and radical nature of the Bill, which we hope will be successful.
We reserve our right to come back to this issue, but for now I beg leave to withdraw my amendment.
Renters’ Rights Bill
Baroness Thornhill Excerpts(4 days, 16 hours ago)
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Lord Hacking (Lab)
My Lords, we now move on to Clause 65. I have tabled a number of amendments in this group: Amendments 207, 210, 214, 215 and 216. All of them are directed at tidying up the terms of the Bill, but they are also rather complicated, so I must ask for the patience of the Committee as I go through them one by one, so that I get the argument right relating to each of them.
Amendment 207 takes us straight to Chapter 2 on page 99 of the Bill and landlord redress schemes. Clause 65(1) says that the Secretary of State
“may make regulations requiring a residential landlord to be a member of a landlord redress scheme”.
The difference of opinion that I have in moving this amendment is that that should not be in terms of “may” but “must”, because it is an essential feature of landlord redress schemes that all residential landlords join in.
Amendment 210 goes further into this section of the Bill. The requirement that I seek here is that there should be only one landlord redress scheme. I think that my noble friend the Minister is sympathetic to that. I would like it to be rather stronger and make it an obligation to have only one redress scheme.
We then move to Amendments 214, 215 and 216. Amendment 214 gives sympathy to those who are digitally inept, which certainly includes me. In that amendment, I seek a requirement to enable those who are unfamiliar with computers and other electronic devices to be able to enter the redress scheme and not be digitally excluded.
Amendment 215 is the most complicated of all my amendments. It would make it a condition of approval of a designated redress scheme that the Secretary of State should apply the test of what is considered appropriate and proportionate in support of tenants experiencing house-related problems. It is a matter of drafting, perhaps, but a matter of some importance.
Amendment 216 is very sensible and I hope that my noble friend the Minister will be able to help me here. I suggest that we should be quite sure that the duty of the Secretary of State is to designate one landlord redress scheme in the private sector, and no more than one.
I hope that I have covered all the amendments sufficiently and accurately. I beg to move.
Baroness Thornhill (LD)
My Lords, I wrote in my notes that this was “hopefully” the last day in Committee on the Bill, but I have now inserted “possibly”. Regrettably, it is my last day, because of an important appointment tomorrow that I cannot cancel.
It is appropriate for me to thank profusely all those who have helped me personally, and probably helped all of us, with their excellent briefings, as well as giving help with amendments—and, in my case, frantic email exchanges when I have not quite understood things. I refer to all those in the Renters’ Reform Coalition, the Local Government Association, the National Residential Landlords Association and Suzanne, the Independent Landlord, to name but a few.
This is a very important part of the Bill, and we largely support the first two amendments from the noble Lord, Lord Hacking, regarding having just the one scheme and changing “may” to “must”. However, I will speak to my Amendment 218, which is a simple probing amendment for what is a very complex issue. The Bill makes continuing or repeat breaches of the landlord redress scheme an offence, but not joining the scheme in the first place is merely a breach. That means that landlords can still be fined by the local authority for not joining but tenants cannot claim a rent repayment order as it is not an offence.
There is clearly an imbalance here; my amendment simply seeks to probe the Government’s reasoning for not making failure to join the scheme an offence in the first place, rather than waiting for landlords continually not to adhere to the new requirement. We want this failure to become an offence from the get-go because we believe that non-compliance with the redress scheme will have serious regulatory consequences, significantly impacting tenants’ ability to hold their landlord to account. That is the key matter on issues such as disrepair and the standard of the home. The rent repayment order gives tenants compensation for substandard accommodation and can incentivise them to report things in the first place. Interestingly, Generation Rent’s polling found that nearly one in three renters has had maintenance issues in their home, which they have reported, but their landlord has not dealt with—a simple but very telling snapshot.
In the Republic of Ireland, failure of a landlord to register a tenancy with the Residential Tenancies Board—the Irish equivalent to what we are proposing—is a criminal offence, punishable by imprisonment of up to six months and a fine of €40,000, with €250 payable each day of non-registration. Perhaps they take a rather different approach.
We are concerned that, as councils are already overstretched and currently have very little resource for proactive enforcement, an undetermined number of landlords could avoid joining the redress scheme initially as they will think being discovered by the council is low risk. The risk of being reported by their tenants—who would not be eligible for a rent repayment order, so there is no incentive for them—is also very low. Both aspects are not what we want. Therefore, we feel that this imbalance does not treat seriously enough the impact that non-compliance in these matters will have in undermining and frustrating one of the fundamental tenets of the new regulatory regime. I hope that the noble Baroness will allay our concerns.
Lord Jamieson (Con)
My Lords, I thank the noble Lord, Lord Hacking, for introducing this group of amendments, and the noble Baroness, Lady Thornhill.
The landlord redress scheme is a vital function of the Bill, and the onus is on all of us to ensure that the legislation is as effective and robust as it needs to be. I hope that the Minister will take the time to reflect on the constructive suggestions made by noble Lords and take them back to the department for further consideration. The fact that the Minister has tabled amendments is, I suggest, a recognition that the Bill is not perfect, even in the eyes of those charged with defending it.
Before I turn to the amendments tabled by the Minister, the noble Baroness, Lady Thornhill, and the noble Lord, Lord Hacking, I shall speak to those amendments in the name of my noble friend Lady Scott of Bybrook. Amendment 208 would require a residential landlord to be a member of the landlord redress scheme only if their tenant does not already have access to redress via a letting agent who is a member of another approved independent scheme. This would avoid duplication, unnecessary regulatory burden and the potential confusion between effectively being a member of two different schemes. This is vital, because clarity and efficiency in regulation are essential for compliance and enforcement.
Amendment 210A probes the Government’s proposed duration of the membership period for the redress scheme. This period is to be set by regulations, but as things stand there is no indication, or even a hint, of what that timeframe might be. Could the Minister provide some clarity on this point? Stakeholders need certainty to plan and prepare appropriately.
Amendment 210B seeks to require the Secretary of State to publish draft regulations establishing the landlord redress scheme within six months of the passage of the Bill. A clear, time-bound commitment is essential if the Government are serious about delivering this long-promised reform. Without a defined timeline, there is a risk that implementation will drift or be indefinitely delayed, to the detriment of all stakeholders—especially tenants. Could the Minister say what, in her view, constitutes meaningful progress and what timescale the department is working to?
Baroness Kennedy of Cradley (Lab)
My Lords, I support Amendment 220, tabled by the noble Lord, Lord Best, to which I have added my name.
Amendment 220 neatly ensures that the Bill is clear about who the PRS database is for. I understand the Government’s need to consider privacy, but in doing so the Government need to remember why the PRS database is needed. It is about increased transparency, empowering renters so that they can make informed decisions about where they live and properly exercise their rights. Yes, support for landlords and, yes, a tool for local authorities to raise standards—these are the intentions of the database and always have been since we started to lobby for this Bill many years ago. Amendment 220 is a simple way for this to be made clear in the Bill.
I hope that my noble friend the Minister will accept this amendment. I also ask her to confirm that the Government’s priorities for the private rented sector database remain renter empowerment, support for landlords so that they are aware of their obligations, and providing an effective toolkit for local authorities to drive up standards.
Baroness Thornhill (LD)
My Lords, I will speak to Amendments 220 and 225, tabled by the noble Lord, Lord Best, and my Amendments 243 and 243A, all of which seek to strengthen and clarify the role of the new private rented sector database.
I also support Amendment 219, moved by the noble Lord, Lord Hacking. In so much of this Bill we lack a timeframe. Between us, we have tabled several amendments asking for clarification on timeframes. It is not just us seeking these timings but everyone who is impacted by the Bill.
This is an area of great potential. I confess to getting quite excited about it when I first realised that it was a real tool in the Bill. A well-designed database could be genuinely transformative, supporting better enforcement, empowering tenants and giving responsible landlords the tools that they need to navigate the system more effectively. The noble Lord and I have very similar thoughts on that. However, to achieve that, it must be more than just a repository of basic information, which is where I fear we are going. It must be useful, accessible and enforceable.
Amendment 220 seeks to make it clear that the database is a tool not just for local authorities but for public good. It should serve the interests of tenants, responsible landlords and good letting agents alike. In its current form, the Bill seems to emphasise enforcement utility but underplays the wider potential of the database as a source of transparency and information for all parties in the rental market. If we want this database to help drive up standards and support informed decision-making, we must set out that intention clearly.
Amendment 225 introduces two further practical improvements. First, it allows letting agents to upload information on behalf of landlords, a sensible provision given the role that many agents already play in managing compliance. Secondly, it proposes that the database should offer a portal to help landlords determine whether their properties require licensing under the local authority schemes and to apply for those licences where necessary. Too often, licensing rules can vary from one area to another and be hard to navigate, particularly for smaller landlords. A centralised, user-friendly tool would significantly improve compliance.
My Amendment 243 probes a critical issue: enforcement. The Bill states that landlords must be registered on the database along with each of their dwellings, but it is currently unclear what consequences there are for non-compliance. This amendment proposes that failure to register should be an offence, and we seek clarity from the Government on how these provisions will be enforced in practice. Without credible enforcement mechanisms, even the best-designed database risks being ignored by the very landlords it is intended to regulate.
Finally, Amendment 243A would give the Secretary of State the power to include links to useful resources on the database, such as the “My Housing Issue” gateway. Such signposts may seem minor, but they can make a real difference, especially for tenants who need guidance on their rights or for landlords seeking to meet their obligations. The database should not exist in a vacuum; it should connect users to help, advice and relevant legal frameworks.
These amendments may differ in focus, but they are united by a common aim: to ensure that the private rented sector database lives up to its promise and potential. It must be more than a tick-box exercise; it must be practical, enforceable and truly useful to the people it is meant to serve. I hope the Minister will give these proposals careful consideration, and I look forward to hearing the Minister’s response.
The Earl of Lytton (CB)
I will make just a couple of comments on the two amendments tabled by my noble colleague, the noble Lord, Lord Best. I start with Amendment 220 and the point made in support of it by the noble Baroness, Lady Thornhill, because what is proposed here is clearly, in effect, a public register. I was not absolutely sure that I understood whether that was delimited in certain ways by the reference to “other interested stakeholders”, whoever or whatever they might be in any given circumstance, but a public register is what we are dealing with.
If I may, I link this across to the next group of amendments, because it is appropriate to mention here that the noble Baroness, Lady Thornhill, has Amendment 222, which has an extensive list of requirements. I simply say that some of what she sets out there might need a rethink as to whether it is appropriate for that degree of detailed information to be on a public register, bearing in mind who else may have access to it and for what purposes.
I have a question on Amendment 225. I absolutely agree with the functionality point, and I add to that by saying that there must absolutely be an email communications option in any database of this sort. Given the state of the normal, regular postal service, having an email option and being able to flag up an alert system of some sort would be absolutely essential for any landlord, their agent or, for that matter, any renter using the database.
My question is to do with the way the database is applicable to local authority schemes. The noble Baroness, Lady Thornhill, confirmed what I believed to be the case: namely, that local authority schemes might vary considerably. If we have a national database, I simply ask how that deals with strictly local things on a per local authority basis. The rules of the game must obviously apply nationally, but the property concerned, the landlord and the renter in particular may be local. I simply flag up how that will function or whether there will be a subsidiary local authority subset on a per local authority basis.
If we have approach, and given the amount of data that the noble Baroness’s later amendment suggests, then, in terms of the amendments previously spoken to by the noble Lord, Lord Hacking, I suggest that we are looking at quite a considerable lead-in period in practical terms to get this database in place. If it is to be of use, it needs to start off as some sort of cut-down version in order to enable the essential information to be there, even if it is then expanded. I therefore see this being achievable by some sort of rollout over time. Trying to put it in place from day one would be a recipe for something approaching chaos.
Baroness Thornhill (LD)
My Lords, first, I apologise to the Minister. I was remiss not to thank her before the previous group for the time she gave up to meet my noble friend Lady Grender and me to discuss the database. I know that she is always very willing to meet noble Lords and that she gives up a lot of her time. I hope she will accept my thanks now.
The amendments in this group continue to relate to strengthening the content, utility and functionality of the new private rented sector database. As has already been highlighted, the database could be a powerful driver of higher standards, tenant protection and, importantly, support for responsible landlords. But to fulfil that role, it must be built on comprehensive, reliable and adaptable foundations—something these amendments aim to deliver.
Amendment 222 is in my name, supported by the noble Baroness, Lady Freeman, whom I thank. I also thank the noble Lord, Lord Best, for his positive comments. The noble Baroness and the noble Lord both made some pertinent comments that I hope will add to the debate. Yes, the amendment sets out a broader and more ambitious vision for what information could be captured in the database from the onset. If this system is to be genuinely useful, it needs to go beyond the basics and include key documentation that reflects the safety, security and condition of the property. Renters deserve to know that the home they are moving into is safe, compliant and fairly let.
I say to the noble Baroness, Lady Kennedy, that I do not intend to go into great detail on this today, because time is of the essence. To sum it up, the point is to expose infringing, dodgy landlords. A good landlord has nothing to fear, but if things such as banning orders are on the site, this might incentivise landlords to not get themselves into that position in the first place. In Watford we have had issues with a landlord who is a prolific property owner. It would be very useful, and quite powerful, if people could see the number of offences under the name of a landlord. I accept the concerns expressed by the noble Earl, Lord Lytton. If there was any hope of any elements of my catch-all list being taken up, I would happily argue each one with him on a case-by-case basis.
Amendments 221 and 227, tabled by the noble Lord, Lord Best, would ensure that the database includes records of gas and electrical safety checks, and that, crucially, it can become a digital home for all these certificates. We already require these documents to be produced, so incorporating them into the national system should be a logical next step. Amendment 227 would even allow accredited safety certificate providers to upload directly, removing administrative burdens from landlords and improving data accuracy. This would modernise and streamline an essential part of the compliance process.
Amendment 228 in the name of my noble friend Lady Grender focuses on tenancy disputes—specifically rent levels and resolution outcomes. In the absence of reliable rent data, we lack the evidence base needed to track affordability—something that has come up before in the Bill—or understand the impact of policy changes. Including dispute outcomes would help tenants navigate the system more confidently and enable more informed decision-making by both renters and landlords. It also provides an accountability mechanism to ensure that the system is working as it should.
Amendment 224, also from the noble Lord, Lord Best, and which I support, is linked to these proposals and would reinforce the requirement for the database to include the right types of detail to make it genuinely functional for enforcement and policy use. I am sure we would all be willing to contribute to a general discussion on what that might be.
Amendment 229 introduces a small but important clarification to ensure that the database links records not only to landlords but to specific dwellings. This might seem technical, but it speaks to a broader point. The system must allow us to track the full history of a property and not just its owner, although the owner is clearly vital, especially the owner we have mentioned many times: the invisible, absent, non-contactable landlord. This is vital in cases where properties change hands but the issues persist. With reference to the local case that I referred to earlier, often it was just a family member’s name that had changed, so I think the more we can track down these infringing and rogue landlords, the better.
This brings me to Amendment 230, which would require the use of the UPRNs: unique property reference numbers. That is a new acronym for me. These identifiers already exist and are widely used in local government and in the property sector. Using them in the database would help standardise records, reduce duplication and enable effective data sharing across agencies—something that they, and all of us, think needs to be improved. It is a ready-made tool that would help knit together fragmented information across the sector and, as we have heard, it has proved effective.
These amendments work together to build a more useful, transparent and future-proof database that supports not only enforcement but renter safety, data integrity and informed policy-making for the future. Each of these proposals is practical, proportionate and grounded in existing obligations. What they offer is not duplication but integration. I hope the Government will recognise the value of taking a more ambitious approach to what the database can deliver and I am heartened by the comments that the noble Baroness has already made today.
Lord Cromwell (CB)
My Lords, I am entirely supportive of pretty well every amendment that has been put down on this—this blizzard of amendments about a database across four groups. I agree that there should be penalties for not participating in it. It has to be something that is not a nice-to-have add-on: it has to be core to everything. However, I will just give two notes of caution, the first of which goes back to the point made by the noble Earl, Lord Lytton. If you are going to start recording disputes on the system, there could be many, many reasons why a dispute runs for a long time. It would not necessarily be the fault of evil landlords. It could be illness on the part of the tenant; it could be a multitude of things. You have to be very careful there.
The second point is to be careful what you wish for. No one has suggested this so far, but is this database going to be searchable by tenant? Because a landlord looking at a tenant might search the database and find that every previous tenancy has ended in a dispute. Is that going to be a fair use of this database? Because it is a logical suggestion, looking at this from a landlord’s point of view, to look out for rogue tenants as well as rogue landlords.
Renters’ Rights Bill
Baroness Thornhill Excerpts(6 days, 16 hours ago)
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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.
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 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.
Renters’ Rights Bill
Baroness Thornhill Excerpts(1 week, 5 days ago)
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The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I will start with government Amendments 136, 138 and 139. These amendments make provision for the requirement to provide a written statement of terms for tenancies that become assured after they have begun. A tenancy may become assured during its lifetime for a range of reasons; for example, because it becomes the tenant’s principal home, or rent becomes payable on the property.
Where this happens, landlords should be able to comply with the requirement to provide a written statement of terms. These amendments will therefore require landlords to provide a written statement of terms within 28 days of the tenancy becoming assured. Without this, landlords would be left in limbo, unable to comply with the duties in new Section 16D of the Housing Act 1988 to provide a written statement of terms at the outset of a tenancy, leaving them liable to penalties. It would also leave a tenant without the written statement of terms, a key benefit of the new system, despite their tenancy having become assured. I beg to move.
Baroness Thornhill (LD)
In view of the time that we have lost—and I must say publicly that I regret the pressure that we are putting ourselves under—I will just say that it is essential that written statements are mandated to help people resolve conflicts and provide evidence if disputes go to court. What these must contain, which is the essence of Amendment 140 from the noble Baroness, Lady Scott, is clearly important and needs to be widely known.
There is quite a lot in the Bill that we feel needs to be widely known, and we have all had concerns about the level of knowledge. All I will say, with my tongue in my cheek for things down the road, is that that is all the more reason to regulate those who act for landlords—such as letting agents—to make sure that they act professionally and inform their tenants correctly.
Baroness Scott of Bybrook (Con)
My Lords, Clause 14 aims to strengthen the transparency of rental agreements by requiring landlords to provide written terms at the outset of a tenancy. This is a welcome step towards ensuring that tenants are fully informed about their rights and obligations, and that landlords are held to account for the terms they offer.
Amendment 140, in my name, recognises that legislation alone is not enough. We must ensure that tenants, landlords and, indeed, any third-party contractors involved are informed and empowered. By requiring the Secretary of State to issue clear, accessible guidance, we help to make these rights and duties real and usable in practice. Without such guidance, even the most well-intentioned legislation risks becoming an abstract concept rather than a meaningful tool for change. This is why it is crucial that the Government take proactive steps to ensure that everyone involved in the rental process understands their roles and their responsibilities.
Amendments 136, 138 and 139, tabled by the Minister, seek to refine the process through which written statements of terms are provided. The intention, as I understand it, is to ensure that landlords are held to account for providing these terms in a timely manner, which is certainly a step in the right direction. However, we must be careful to consider whether the amendments fully take into account the diverse needs and circumstances of both tenants and landlords.
The Government have a clear opportunity here to provide a system that is not only fair and transparent but also practical and achievable for all those involved. We must ensure that these provisions do not overburden landlords with an administration task but, at the same time, protect the rights of tenants by providing them with the necessary information to make informed decisions about their tenancies. While the intention is to create more transparency, it is equally important, we feel, that we do not add unnecessary complexity or red tape that could inadvertently discourage smaller landlords or make the rental process more cumbersome.
In light of these considerations, I would like to ask the Minister one or two questions. First, is the Minister confident that the 28-day requirement for landlords to provide written statements will not lead to confusion or delays? This timeline, while designed to allow time for landlords to issue the statements, may in practice create gaps in communication, potentially leaving tenants in a state of uncertainty about their rights and obligations. How do the Government intend to mitigate these potential delays?
Furthermore, how do the Government plan to ensure that smaller landlords, who may not have the dedicated administration teams, will be able to comply with these provisions without facing excessive burdens? Small landlords, who often play a crucial role in our rental market, could face challenges in keeping up with increased administration requirements without support or resources. We must be mindful not inadvertently to create barriers that make it harder for these landlords to continue offering tenancies.
In conclusion, while we acknowledge the Government’s intention to improve transparency in tenancy agreements and better protect tenants, we must consider the real-world impact of these changes. We must ensure that reforms are workable for both tenants and landlords, without increasing the complexities of the rental process or creating unnecessary barriers to housing. The amendments, while positive in some respects, do not fully address the practical challenges landlords and tenants face. Is the Minister confident that these provisions will not place undue burdens on landlords, especially those at the smaller end of the market, and that they will effectively protect tenants’ rights without creating new avenues for confusion and non-compliance? The legislation must strike a balance that promotes fairness and transparency while also being workable for all parties involved.
Baroness Thornhill (LD)
My Lords, I have spent some time looking at this and I have listened very carefully to the amendments in this clause from the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, as well as listening to the words of the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull.
I am neither a lawyer nor a solicitor, but we are troubled by Amendment 144 in particular, as it would in effect delete all of the new Section 16I of the Housing Act 1988, inserted by Clause 18. In doing so, it would remove the ability of local housing authorities to issue civil penalties for a range of offences, pushing them into the courts. Having listened to the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull, I think that there probably is a debate about what should be pushed back to the courts, but in general I see a legitimate role for local authorities to issue penalty notices. I also feel that in much of the Bill we have talked about the courts’ capacity to deal with things, so I would be a little reluctant to increase the burden on the courts, which we are already arguing are stretched.
I would also be interested in hearing from the noble Baroness, Lady Scott, why Clause 15 of the previous Government’s Renters (Reform) Bill gave similar powers to the local housing authorities as in Clause 17 of this Bill, albeit with a much lower maximum fine. To us, the proposal undermines the regime in the Bill that empowers local housing authorities to issue civil penalty notices. It is part of the tools in the box to give local authorities more powers to enforce across the many and various sections of the Bill. If the one objective of the Bill is to raise standards and root out rogue landlords, the Bill is right to give greater powers to local authorities to do so and raise the level of fines that can be imposed to be an effective deterrent.
At this point, when the noble Lord, Lord Jamieson, very nicely pointed out the one person who has inherited and the this and the that—I do not think that those landlords need to be worried at all about this measure, as they are not the people whom the Bill is aimed at. In fact, there is a tiny degree of scaremongering in this. As I understand the aim, and I am sure that the Minister will correct me if I am wrong, we are looking at the bottom end of the market. The answer to the landlords mentioned in the list cited by the noble Lord, Lord Jamieson, is, “If it is so ruinous to you, don’t do it—don’t do the thing that will result in that fine being imposed”. I am absolutely certain that the majority of good landlords would go nowhere near it—but actually, as the noble Earl said, some of our worst landlords do terrible things. It is very often a shock to talk to the people who deal with bailiffs, evictions and all that, to actually see the conditions that some landlords will subject human beings to. But it is a legitimate argument to talk about what should go to the courts or not as a result of what we have been talking about.
Amendments in this group seeking to reduce the amount that a local authority can charge in civil penalties will be generally resisted by ourselves, precisely because this Bill enables these fines to be used as revenue to provide resources for a strong and effective enforcement service. The capacity and capability of local authorities to carry out positive enforcement is a serious matter—and, of course, we will cover that in the next group. Councils keep the fines that they impose, whereas fines from the courts go to the Treasury, although it must be said that the LGA is still concerned that there will be a funding gap, the amount of which is going to be fairly speculative at this stage, which makes the reasons for wide-ranging reviews, which we will discuss in later groups, to be imperative. Perhaps the Minister could give us some reassurances on funding.
Amendment 144 removes the power of local housing authorities to enforce several provisions in the Bill that we strongly agree with, such as purporting to end a tenancy by serving a notice to quit orally or serving a purported notice of possession—in other words, not using the Section 8 process. In other words, it is conning a tenant that they have to leave. Councils must have the right to enforce this, as it goes to the heart of the Bill.
Amendment 144 therefore reduces the powers of local housing authorities to enforce, and Amendments 146 and 154 go on to reduce the penalties that can be imposed, which we opposed. Amendments 147 and 155, as well as all the amendments from the noble and learned Lords, Lord Etherton and Lord Keen, and the noble Earl, Lord Kinnoull, are an interesting variation on that theme, using rental payment as a measure of the penalty. I can see some logic in that, given that rents vary enormously depending on the property. But two months’ rent in a small house in Lancashire might well be several hundred pounds, whereas a similar property in Hertfordshire might be several thousand. There is a fairness of argument there, which is probably why there is a range of fines the authority can use, and I am sure the noble Baroness will enlighten us.
Finally, we can agree on Amendment 157. The burden on local authorities cannot be understated, and therefore it should be contingent on the Government to specifically look at this aspect and not just rely on the LGA and others to point it out. We are not convinced that it needs to be in the Bill, but it should be a genuine commitment.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, for moving those amendments. I send my get-well wishes to the noble and learned Lord, Lord Etherton, as well, and thank the noble Lord, Lord Hunt of Wirral, for moving the noble and learned Lord’s amendments. I thank the noble Earl, Lord Kinnoull, and the noble Baroness, Lady Thornhill, for taking part in the debate.
It might help if I start with a brief bit of context. We are taking a clear escalatory approach to civil penalties here. Across the Bill, less serious, one-off breaches will be subject only to the maximum penalty of £7,000. Only if landlords persist in not signing up to the database or the ombudsman will they become liable for a civil penalty of up to £40,000—and that is the maximum. Where landlords continue to fail to remedy unacceptable conditions in a property, they may be faced with a civil penalty of up to £40,000 or indeed criminal prosecution. Where there is evidence that landlords and letting agents continue to discriminate in the letting process, they can face multiple fines. But as the noble Baroness, Lady Thornhill, said, good landlords—there are many of them—will not be subject to any of these fines because they do not commit the offences that would lead to those fines. The answer is to follow the outlines in the Bill and then there will not be any need for landlords to be fined.
Amendment 144 would remove the ability of local authorities to impose financial penalties for non-compliance with the tenancy requirements where this is not a criminal offence. Effective enforcement against landlords who flout the rules is a key part of ensuring that our reforms deliver their full benefits. Across the provisions in the Bill, as I said, we have taken a consistent, proportionate and escalating approach to penalties. The civil penalties of up to £7,000 for less serious or first-time non-compliance is an important part of that approach. Removing the ability of local authorities to impose civil penalties for non-criminal breaches of the tenancy requirement would create a gap. How would landlords who, for example, failed to issue tenants with a written tenancy agreement or ended a tenancy illegally be held to account? Transferring responsibility for determining fines for these breaches to the courts would be a poor alternative and, as mentioned by the noble Baroness, Lady Thornhill, it would unnecessarily increase pressures on the courts. We have had many debates about that in this House in response to other areas in the Bill. In response to the question from the noble Lord, Lord Jamieson, about the capacity of local authorities to deal with this, local authorities have significant experience of imposing civil penalties. I do not see a good reason for excluding breaches of the tenancy requirements from this well-established practice.
Amendments 137, 141, 149 to 151, 156, 158 to 164, 293 and 294 are consequential on Amendment 144 and remove references to new Section 16I of the Housing Act 1988, which Amendment 144 would delete. Amendment 146 would reduce the maximum penalty for a breach of the tenancy requirements from £7,000 to £5,000. Amendment 147 would, in the alternative, set the maximum penalty for a breach of the tenancy requirements at two months’ rent. Amendment 154 would reduce the maximum financial penalty for tenancy offences from £40,000 to £30,000. Amendment 155 would set the maximum penalty for tenancy offences at 12 months’ rent. Amendments 153, 201, 217 and 241 would reduce the maximum civil penalties for offences in relation to tenancy reform, illegal eviction, the database and the ombudsman from £40,000 to £7,000.
Civil penalties need to be set at a level that provides an appropriate punishment and acts as an effective deterrent to future non-compliance. To respond to the question from the noble Lord, Lord Jamieson, about the level of the fines, we have set the maximum civil penalty for offences across the Bill at £40,000. This mirrors existing maximum civil penalties for offences under the Housing Act 2004, which are currently £30,000, but this takes account of inflation since those came into force. We intend also to increase the Housing Act 2004 maximum penalties to £40,000, via regulations, to reflect those changes in the value of money. The £7,000 maximum penalty for breaches represents a similar percentage uprating to reflect inflation, compared with a maximum fine level of £5,000 for less serious non-compliance in other housing legislation; for example, the Tenant Fees Act 2019.
Increasing maximum fine levels to reflect inflation ensures that the deterrent effect of the penalties is maintained. However, I emphasise that these are maximum levels: they will not be the normal penalty level. Local authorities will need to look at the particular circumstances of each instance of non-compliance. They will need to take account of aggravating or mitigating factors and arrive at the final penalty in line with their policy. When considering whether to issue a civil penalty, local authorities are required to issue a notice of intent, allowing time for landlords to make representations. The local authority will need to be satisfied beyond reasonable doubt that the landlord has committed an offence. If the landlord disagrees with the imposition or amount of the penalty, they will of course be able to appeal to the First-tier Tribunal.
Lord Jamieson (Con)
I thank noble Lords for their contributions to this group. I owe a particular debt of gratitude to the noble and learned Lord, Lord Etherton, for bringing amendments to this House. I also wish him all the best for his recovery. These amendments, while similar in spirit to ours, would go even further in addressing the limits placed on local housing authorities. The noble and learned Lord is right to highlight both the challenges faced by local authorities and the significant scale of the proposed fines.
As there appeared to be a little bit of confusion, let us be absolutely clear: we need powers to hold to account rogue landlords who deliberately and maliciously break the rules to the detriment of tenants. That is something we can all agree on. However, we need a system that is fair and proportionate and does not ensnare essentially innocent landlords who inadvertently —or not maliciously—fall foul of the rules. They need to be encouraged to stay in the rental game.
As my noble friend Lord Hunt said, we need more rental homes, we need people to stay in the rental market and we need more people to come into it. We need to be very wary of coming up with systems where they fear very significant fines that they may perceive as arbitrary. Hence, I was very keen to get clear guidance from the Minister about how these fines would be placed and at what levels. I look forward to hearing further from her on this. I also appreciated what the noble Earl, Lord Kinnoull, said around the 2016 Act and the importance of guidance on that.
I thank the Minister for her reply and the commitment to share some reasoning for the figures that the Government have arrived at and some guidance— it appeared she would, anyway. Without insight into the rationale for the figures selected and the thresholds imposed, we are left to critique in the dark. For scrutiny to be effective and informed, the Government must provide not just partial explanations but a full and transparent account of how these conclusions were reached. Only then can Parliament properly fulfil its role in holding the Executive to account. I hope that the Minister will enable us to do this by sharing some of the Government’s reasoning and further guidance on how those fines will be brought forward.
Getting penalties right is not a technical detail; it is fundamental to the fairness and effectiveness of a system designed to remedy an offence. Significant fines and penalties for rogue landlords are appropriate and proportionate. However, as I said earlier, significant fines for someone who unintentionally falls foul of the law would be inappropriate. We need to be careful and calibrated to ensure that they deter offences but do not distort the functionality of the housing market. Although we want to address rogue landlords, we also want a thriving rental market and to avoid deterring good landlords who might perceive a significant risk of large, arbitrary fines.
I will finish with this message: a well-designed penalty framework should uphold the law, encourage compliance and support the functioning of housing authorities. The success of this legislation depends not just on good intentions but on practical deliverability, balanced implementation and trust from those who must operate within it.
Baroness Thornhill (LD)
Before the noble Lord sits down, can I just ask him: did he really feel, in his time as chair of the Local Government Association and leader of a reputable authority, that local authorities were dishing out fines willy-nilly or were disproportionate in their measures when they were considering things? I found the opposite—there were times when I wished we would be a bit tougher and stronger and go a bit further. I do not recognise this picture that the noble Lord is painting: that landlords might perceive that it is terrible and feel bad about it. I genuinely believe that most good landlords have nowt to fear—it is not those that the Bill is gunning for. We have a duty to convey that message and not to make good landlords feel threatened by the fact that there is an escalation in fees.
Lord Jamieson (Con)
I thank the noble Baroness very much. She is absolutely right: most councils in this country are very good and proportionate and do not levy fines—or whatever—willy-nilly. I absolutely agree with that. However, it is very much in the eye of the beholder, and we need to do everything we can to encourage a successful and thriving rental market with good landlords. Within that, one needs to think what that single-, two- or three-home landlord will look at. They will see the potential risk of £40,000, and it is perception. I absolutely concur that councils act appropriately in many instances, but if a landlord feels that there is a risk, and particularly when that risk can be two, three, or, in some cases in the north of England, four years’ rent, they may just say, “I do not want to take that risk, I will sell my property”. That is one less house for somebody to rent and one more person on a council’s housing waiting list.
Renters’ Rights Bill
Baroness Thornhill Excerpts(1 week, 5 days ago)
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Lord Cromwell (CB)
My Lords, I also support these amendments. I have one small niggle, which I will get to, but I live at the end of a very ropey copper wire system, so I yearn for the day when broadband reaches up into the Midlands—or, as it is known down here, the north.
My understanding is that Openreach, in the areas where it is installing, currently includes a building free of charge in its rollout programme. That could change, and it is not clear whether alternative network providers may charge for installing. The situation is not clear at the moment and is, of course, subject to change. Therefore, would the Minister consider it right to oblige landlords to take on the cost if one is imposed?
Baroness Thornhill (LD)
My Lords, I rise to give my support for Amendments 134 and 135 in the names of my noble friend Lady Janke and the noble Lords, Lord Black of Brentwood and Lord Best, who, in his usual style, has added some quality dimensions to this discussion. The noble Lord, Lord Cromwell, has given his usual nudge about something we might have forgotten.
In short, these amendments offer a simple, cost-neutral solution to a growing problem. Too many renters are still denied access to fast, reliable broadband, and there is a real risk of growing the digital divide as a result. The ability to work remotely and to access education and vital public services are basic needs in the modern world. Reliable broadband is not a luxury; it is a necessity as fundamental as water or electricity in our lives today, yet over 900,000 households are being left behind. This is often simply because, as has been said clearly, landlords are hard to reach for requests for fibre installation or are just not bothered. These amendments would introduce a clear, fair process, ensuring that tenants could request full-fibre broadband and receive a timely response. This is not about forcing landlords to pay but removing a passive barrier that is harming renters’ access to full-fibre broadband.
It is good to know that these measures are backed by many organisations, such as Generation Rent and the Good Things Foundation, and offer a cost-neutral way for the Government to improve digital inclusion, particularly for low-income renters. Importantly, yes, landlords benefit too, with fibre infrastructure clearly adding a long-term rental value to their properties.
This is a fair and practical step to connect more people and strengthen our digital infrastructure, so we strongly support these amendments—no surprise there—and urge colleagues to do the same. We look forward to the Minister’s response.
The Earl of Erroll (CB)
My Lords, I will say a few words, particularly in response to the comments of my noble friend Lord Cromwell about loading costs on to the landlords. The problem is that, if you are in the countryside, they want to charge a huge amount to get it to you. We have one or two cottages and, to get a fibre cable out to us, we were being quoted £15,000 at one point. We would be connecting about five properties at the end of it—rented properties and another house. The other complication is that, if one of them is a business, for example, there are different rules on what they are allowed to charge. A lot of this is in the original regulations telling BT and the other networks what they had to do, particularly when BT was trying to block other people having access to the houses. There are a lot of unfairnesses in the legislation, which Ofcom never dealt with properly. I am not sure where it has got to now, but there are lots of little wars going on.
It can be very expensive: it is not just a matter of connecting something to a roadside, as it is in the city. If you are going to be running it half a mile or so, you will find that you can be loaded with enormous costs, and that they want five-year leases and so on. Sometimes, you can tell that the price will be slashed soon, because they suddenly make a big sales pitch, trying to get you to take on a five-year commitment to five grand a year; that is the best sign that they are about to roll it out in a couple of years’ time. So things are not quite as simple as they seem.
Homelessness: Young Adults
Baroness Thornhill Excerpts(2 weeks, 4 days ago)
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Baroness Taylor of Stevenage (Lab)
As I said in my initial Answer, we continue to strive to make sure that we offer the best support possible for care leavers. The noble Lord is right to say that they deserve to have that support right through to the age of 25. Earlier this year, we introduced a measure into the DfE’s Children’s Wellbeing and Schools Bill to make sure that no care leaver in scope of corporate parenting duties can be found intentionally homeless. We also made the decision to further strengthen legislation as the Government are all too aware of the long-term impact that pre-care and post-care experiences can have on young people. It is essential, as part of local authorities’ role as corporate parents, that this vulnerability is recognised and that care leavers are provided with the care, stability and support they need to build a secure and successful future.
Baroness Thornhill (LD)
My Lords, providers of support and housing for this vulnerable group need two things: funding from Homes England and accreditation from Ofsted. In a recent meeting with the YMCA, for Hertfordshire this time, I was told that all its development plans were on hold because of the lack of any announcement about any new funding streams from Homes England, leaving the sector completely in limbo. Can the Minister tell us why this is? In addition, it has been waiting since October 1923 to get Ofsted accreditation for a unit for 40 such vulnerable children.
Baroness Thornhill (LD)
Okay—a long time. Will the Minister please agree to look into this logjam and see whether she can be Dyno-Rod?
Baroness Taylor of Stevenage (Lab)
I am always happy to be Dyno-Rod, even when it goes back to 1923. I am not sure which programme the YMCA applied to, but at the Spring Statement we announced an immediate injection of £2 billion to support the delivery of the big boost in social and affordable housebuilding that is necessary. As the noble Lord, Lord Austin, asked me to have a meeting with the YMCA, I think it would be very helpful to meet it and find out what it has experienced with this blockage to its funding. I hope we can do the Dyno-Rod job and get that freed up as quickly as possible.
Renters’ Rights Bill
Baroness Thornhill Excerpts(2 weeks, 6 days ago)
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Lord Northbrook (Con)
I am sorry to disagree with the noble Baroness but, sadly, from practical experience, I think what she is saying is not necessarily the case.
Baroness Thornhill (LD)
My Lords, I will wind up on this group and give a little more detail on my Amendment 264. It is a straightforward amendment; I like to be straightforward. Based on the facts given by noble Lords in this debate, there is evidently a genuine concern about the capacity of the courts to deliver. All contributions have been well evidenced and—I will be quite frank—are worrying.
From our perspective, as was evidenced by the contribution from my noble friend Lady Grender, we support this legislation, we want ir to work and, for it to work, we know that the courts have to be efficient. If they are not, it could undermine the core purpose of the Bill, as was passionately said by the noble Baroness, Lady Scott. We know of, and understand, the issues regarding the courts. These have been well articulated in every contribution across the Committee, so I will not repeat them. However, many legitimate questions have been posed to which we need answers.
On Amendment 264, it is vital that court capacity is reviewed, and that this is enshrined in the Bill to make sure that it happens formally and can be scrutinised within two years. We feel that two years is probably enough, certainly to sort out the IT—as referenced by the noble Earl—and to feel whether we are moving on to an even keel after an initial transition period. I am sure that, as we go through the rest of the days in Committee, we will look at that transition period.
The amendment looks at all the key components for the effective working of the courts. It asks to look at access to justice. We must ensure that the system is accessible, affordable and understandable for all, regardless of a tenant’s background and circumstances. It is legitimate to ask the Government for their commitment to resourcing the courts and to have hard evidence about case volume, how many cases, and how long they are taking—the last aspect being very important for both landlords and tenants.
As has been mentioned, the current evidence is of the months ticking by, which is unfair to landlords. Their concerns in this instance are valid. Under the new grounds, if eviction is legitimate, it needs to happen quickly. Delaying things by months could put some landlords in financial jeopardy and tenants in real limbo and uncertainty. I am sure that any Secretary of State would want answers to these pertinent questions within a reasonable timeframe to ensure that all is working as intended, or, if not, in time to make some remediation, as the assessment will be based on real data. I am certain that the Government, too, are concerned about this and are doing everything they can to make sure that the courts are ready; I look forward to the Minister’s reply.
However, we do not support in any way Amendment 283 in the name of the noble Baroness, Lady Scott, to delay the abolition of Section 21. The sooner the long-promised abolition of Section 21 happens, the better. Indeed, Amendments 279, 280 and 283, as well as, to a lesser extent, Amendment 69, would certainly result in delays in the Act coming into force. For this critical reason, we cannot support them.
However, this does not mean that we do not take this issue seriously; I am not wearing rose-coloured spectacles. I expect full answers on the readiness of our courts to deal with these radical changes. The criticism and concerns regarding the courts have been known now for some considerable time. Work must have been done, so we would expect the Government now to have some hard answers.
Lord Carter of Haslemere (CB)
My Lords, I support the comments of the noble Baroness, Lady Thornhill, and all noble Lords who have spoken about concerns about court capacity to deal with the huge increase in loads that will come their way. This is not just a serious policy issue; it is an important legal one. Article 6 of the ECHR guarantees rights of access to justice within a reasonable time, and if those rights are delayed then that will impact also on landlords’ rights under Article 1 of Protocol 1 of the ECHR, which is about rights to property. I am afraid there is nothing in the ECHR memorandum, which I have with me, addressing the Article 6 and Article 1 of Protocol 1 points relating to delays to justice in the courts. That is an important issue that has to be addressed, and I cannot see how this sensible Amendment 264 can be denied. Incidentally, the amendment overlaps with Amendment 106, which we will consider later; for some reason, they have been put in different groups.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I thank the noble Baronesses, Lady Scott and Lady Thornhill, the noble Lord, Lord Young of Cookham, and the noble and learned Lord, Lord Etherton, for their amendments, and I thank the noble Lords Cromwell, Lord Empey, Lord Wolfson and Lord Northbrook, the noble Baroness, Lady Grender, and the noble Earl, Lord Kinnoull, for their comments and for bringing the noble and learned Lord’s amendments before us.
I understand the concerns that Members have on this issue, which is why we engaged early on with noble Lords in advance of the Bill coming before this House. We have listened to noble Lords’ views and experience in this area. I appreciate that we may need to have further discussions.
I say to the noble Baroness, Lady Scott, that I started working with noble Lords on the Bill some months ago to understand the concerns that they had. Where probing amendments have been tabled, I have attempted to answer in detail. On matters requiring factual answers, such as data that I did not have at my fingertips, I have responded either in writing and/or offered further meetings to noble Lords.
However, it was too late in the day when the party opposite recognised the dreadful housing crisis that it had led us into, which meant it was too late for it to finish legislation to deal with it. Today, we are faced with amendments seeking to remove core principles of the Bill that is trying to deal with it. If those come before us, I will have no option but to disagree with them. Some of those core principles were in the Bill of the party opposite when that sat before this House. This Government will take up the challenge of dealing with the issues with a degree of balance between landlords and renters and, I believe, will do a better job of it.
The amendments before the Committee today would all require the Government to make an assessment of the justice system as a result of these reforms and, in some cases, delay commencement of the reforms until certain conditions were fulfilled. Amendment 69, in the name of the noble Baroness, Lady Scott, would require the Lord Chancellor to prepare an assessment of the operation of the process by which a county court is able to make possession orders for rented properties, and how such orders are enforced. That assessment will be published at such a such a time and in such a manner as the Lord Chancellor sees fit. The noble Baroness, Lady Scott, has also tabled Amendment 283, which, if made, would delay the commencement of these important reforms until the Lord Chancellor had carried out and published the proposed assessment and was satisfied that the court service had sufficient capacity.
The Government’s view is that the implementation of our tenancy reforms should not, as the noble Baroness, Lady Thornhill said, be held back by an assessment of current working, especially one that is so broad and undefined. We have no intention of delaying these urgent reforms while we wait for an unnecessary assessment of the existing possession process. The proposed assessment will provide no new insight or benefit to interested parties. Compelling the courts and tribunals to undertake such an assessment would detract from their vital work to make sure that the courts are ready for our reforms.
Quarterly data on the operation of the court possession process for rented properties is already, and will continue to be, published by the Ministry of Justice. This is regularly reported and scrutinised. The published statistics include both the volumes and timeliness of possession orders and the enforcement of those orders. Court rules specify that possession claims requiring a hearing should be listed within four to eight weeks of the claim being issued. Landlord possession claims are taking an average of eight weeks—not seven months, as quoted by the noble Lord, Lord Northbrook—to progress from the issue of a claim to a possession order in the most recent quarter from October to December 2024.
Instead of publishing this unnecessary assessment, we will carry out our tenancy reforms as quickly as possible. I want to reassure the Committee that we are fully focused on making sure that the justice system is prepared for the changes to court caseload and procedures which will be required for our reforms. We are working with the Ministry of Justice and HM Courts & Tribunals Service to that effect. This includes investing in additional court and tribunal capacity to handle any extra hearings generated. I hope that answers the point from the noble Lord, Lord Wolfson. I therefore ask that those amendments are not pressed.
Amendment 205 in the name of the noble Lord, Lord Young of Cookham, would require the Secretary of State to lay a Statement before Parliament setting out how the Government will ensure that the county courts are prepared for the impact of the Renters’ Rights Bill on possession cases. The Statement would need to be made within six months of the Bill being passed and assess the effect of the Bill on the volume of cases, the efficiency and timeliness of judicial proceedings, and the resource requirements of the courts in future.
As I have said, I fully recognise noble Lords’ concerns that this Bill will impose an additional burden on the justice system and understand the concern of my honourable friend at the other end of the building about the court system. As already noted, I reassure the Committee that we are fully focused on making sure that the justice system is prepared for changes to court caseload and procedures which will be required for our reforms and we are working with the MoJ and HMCTS to that effect.
To pick up the point from the noble Lord, Lord Young, about resources, we are working together to agree how these reforms are implemented. This will include ensuring that the county court will have the capacity and resources it needs to adjust to any changes in possession caseloads—which will, of course, involve the assessment that the noble Lord, Lord Northbrook, referred to—and commitments to address the resources needed. Work is also progressing on updating rules and procedures in readiness for the implementation of the new legislation.
In the longer term, we expect our reforms to reduce the volume of court possession claims, as only those cases where there is a clear, well-evidenced ground for possession will be able to proceed. This will help offset any increased pressure on the courts resulting from our reforms in due course.
His Majesty’s Courts & Tribunals Service is building an end-to-end digital service for resolving all possession claims in the county courts in England and Wales, to make processes more efficient and easier to understand for landlords and tenants—a much-needed reform. Funding has been agreed and provided to enable the design and build of this new service, which is well under way and builds on the existing digitisation of the justice system.
The noble Lord, Lord Cromwell, said it had left him with the impression that this was five years away. That is not what the court service said and not my understanding of where we are with it. As I have explained, this is not a new system that is being built from scratch; it is a further module of an existing system.
The noble Earl, Lord Kinnoull, commented on the outlining of the size of the problem that our colleagues from HMCTS set out. That was the hold system that they are developing, with the approach to design and build being at prototype stage. I understand what he is saying, but the digitisation process is not the whole picture of what we are doing with our colleagues in the courts service. This service will offer an online route for making and responding to possession claims, filing documents and receiving updates and outcomes, offering improved user experience through guided journeys.
As we have heard, some noble Lords heard first-hand about the progress being made. The noble Earl, Lord Kinnoull, said that the question was put, “How long will this take?” and colleagues replied, as I understand it, “Two years from March”. I thank him for those comments, but that is not the totality of the work we are doing with the courts service, so, while progress on that is really important to driving this forward for the future, we will be working with our friends in the courts service and supporting them in the interim. I therefore ask him not to press his amendment.
I reiterate my thanks to the noble Baroness, Lady Thornhill, for Amendment 264, which would require the Secretary of State to publish a review of the impacts on the judicial system arising from the Renters’ Rights Bill within two years of the legislation being passed. The review would need to consider the effect of the Bill on the volume of cases, the efficiency and timeliness of judicial proceedings and the resource and administrative burdens on the courts.
As I already outlined, I want to reassure the Committee that we are fully focused on making sure that the justice system is prepared for changes to court caseloads and procedures. We are taking that issue very seriously. We will monitor the effects of these reforms on the justice system by closely engaging with the sector and analysing the comprehensive data that is already collected. It is not that we do not think it is necessary to analyse the data; it is more that we think committing to a formal review on the face of the Bill is unnecessary.
The points the noble Baroness made about justice delayed being justice denied are quite right. That is why we do not want to delay all this, including abolishing the Section 21 evictions that have caused so many problems. We want to do that as quickly as possible, but I want her to be assured that we believe that analysis of the impact of the Bill on the system is critical and important, and we will be doing that using the information that is already available.
Baroness Thornhill (LD)
I thank the Minister for giving way. Does that mean, as I take from her words, that such monitoring and review will be an ongoing and rolling process from day one?
Baroness Taylor of Stevenage (Lab)
That is completely correct. We need to make sure we are taking account of the impact on the system from the start. We believe that over time it will reduce the volume of cases going to the court service. As the noble Baroness, Lady Grender, pointed out, not many cases end up in the courts system, but there are some that go down that route. We will be monitoring them from the outset.
Baroness Thornhill (LD)
I do not doubt the genuine compassion and sincerity of the noble Baroness, Lady Coffey, but I feel there is a real incongruity about the current position of His Majesty’s Official Opposition to favour landlords and make evictions quicker and easier. The message to tenants via this amendment is, “Your unwanted evictions will take place only in the school holidays, so on 21 December rather than earlier in December”. I genuinely feel that it would be unworkable and that circumstances differ. I could actually argue the opposite: I would rather my children were safe in school while I negotiated trying to find where we were to live. I just do not think we can say that one size fits all on this.
Baroness Scott of Bybrook (Con)
My Lords, I thank my noble friend Lady Coffey for bringing Amendment 70 before the Committee today. It is a thoughtful and considered probing amendment that rightly recognises the significant impact that housing stability can have on a child’s education. During the pandemic, our children and grandchildren suffered greatly. Schools were closed, youth clubs shut down and extracurricular activities ground to a halt. The disruption left many young people adrift at a crucial stage of their development, and only now are we beginning to understand the effects. It is therefore incumbent on us all to support and uplift the next generation. However, the Government must ensure that the burden does not fall disproportionately on individual landlords. It is not, and should not be, their moral obligation to serve as the final safety net for vulnerable families. That responsibility lies with us—with the state, with local authorities and with society.
Owning a property does not automatically confer great wealth. It does not equip an individual to shoulder the complex needs of a struggling family. The Government must tread carefully to ensure that their actions do not drive up costs in this sector, which fall most heavily and disproportionately on low-income families and the most vulnerable members of our society. A sustainable housing market depends on both tenant security and landlords’ confidence. This is a very tough balance to strike, but I believe that the onus is on us all to strike it.
Lord Marlesford (Con)
My Lords, I find these amendments very curious. The whole principle of the private rented sector is that it is a capitalist operation; it is an operation which has costs and revenue. The revenue comes from rent. Obviously, rents must be very carefully determined. As to whether it is one month or two, that seems to me of little account. Basically, what tenants need to know is that rents are likely to increase by some measure which is generally agreed. In the private rented sector, this is normally the retail prices index—the RPI, as opposed to the CPI. If there is not a return on the investment, the investment will not continue to exist. Nobody can afford to let properties if there is no return on the property. The question, of course, is: what should the return be?
There are two very important factors to think of. The first is the gross return, the gross rent, as a percentage of the market value of the property, and the question of what percentage it should be. I have produced a table which shows the different levels of rent for different values of property, but, of course, that is not the only factor, because one has to remember that the rent charged is gross before the cost of maintenance, and maintenance is hugely important. The solution to having a good private rented sector is proper maintenance and, indeed, improvement through modernisation maintenance. It may be that you put in a more economic burner to heat the house—they vary a lot, and later ones are much more efficient, but that is an expenditure. You have to get a balance there.
I suggest that very often, about a third of the rent, on average, will go on the maintenance—keeping up to date—and administration of properties. If we said, for example, that a 3% return on capital was a reasonable level for the rent to be set at, that might end up at a net 2%, which is probably about what equities yield at the moment. We must see that.
Then comes a very important point, which we shall no doubt be discussing later: the affordability of rents for tenants. The Government’s guidance has for a long time been that rents should not be more than 30% of household income. Therefore, that calculation should be made. If somebody is renting a property, they should bear in mind that that is the Government’s advice as to the amount that they can afford to pay, other things being equal. Equally, the landlord letting the property will also have to take into account whether or not the prospective tenant can afford their property. Again, it is essential that if you set a rent, you know the household income, to see whether it reaches the affordability stakes.
These are important and complicated matters, but they are crucial to the private rented sector. My worry about the Bill is that half the time the Government do not seem to understand the private rented sector. It is a business enterprise like many other business enterprises. It is not particularly virtuous or unvirtuous, but I wish I could feel that the Government, in fiddling around with it all, were trying to make it work in a practical manner for investors and those receiving the benefit of the investment; that is, the product. There is no real difference between a house that you rent and a product that you buy in a shop. It is part of how the system operates, how civilisation operates. The Government are very muddled in their thinking on this. I would have liked to have got rid of the Gove Bill, which also was ill considered and ill conceived, lacking in understanding of the real world.
Baroness Thornhill (LD)
My Lords, we have several groups of amendments that talk about rent, money and finances, so before commenting specifically on this amendment, I want to have a little rant regarding landlord finances. The narrative is that the majority of landlords are in a terrible financial position. What evidence do we actually have for that? It is certainly not borne out by my anecdotal evidence and could be conceived as scaremongering, because my understanding is that being a landlord is, and will remain, profitable.
The idea that, to remain sustainable, landlords must be able to pass the entirety of any increased business cost and risk on to the tenant through a rent increase is, frankly, ridiculous. There is no other business model that operates in this way, and it does not add up when we look at the sum of the data that we have. The English Private Landlord Survey said that the median income of landlords, including rental properties, is around £52,000. According to the Shelter/YouGov survey of private landlords, rental income is largely additional for landlords: 50% of landlords say that they do not rely on rental income to cover living expenses.
I note that in any investments that I have made, there is a very cleverly worded phrase at the bottom: “Investments can go down as well as up”—except if you are a landlord, it would seem; even more so as you are left with a capital asset that, in this country, largely increases in value. That is my rant. If the noble Baroness, Lady Jones of Moulsecoomb, were in her place, she would probably be quite proud of me for it.
I turn to the amendments in this group tabled by the noble Baroness, Lady Scott, regarding notice periods for rent increases. When the Bill was introduced in the Commons it proposed a standard one-month period. The Government’s decision to extend this to two months represents a welcome improvement that better balances the interests of landlords and tenants. This evolution demonstrates a willingness to listen and to respond to concerns about tenant security, for which I sincerely thank the Minister and her team.
Amendment 73 seeks to revert the notice period to just one month and Amendment 81 questions the differential treatment between standard and low-cost tenancies. These amendments, particularly Amendment 81, raise fair questions, which I too would like an answer to, as I have not been able to find a reason for that differentiation. A two-month notice period for rent increases represents a reasonable middle ground that acknowledges landlords’ legitimate need to adjust rents while giving tenants adequate time to prepare financially.
For many working families, a rent increase actually requires careful budgeting. I have not got the figures to hand but we know that a significant number—into the many thousands—of moves and evictions last year were due to the inability of the tenant to pay the new rent rise. One month is simply inefficient to work a decision to relocate and make those adjustments.
I commend the Government for finding a balanced approach. This middle ground solution may not be perfect from any single perspective, but it demonstrates what good legislation can achieve when all voices are genuinely heard during the parliamentary process. With these factors in mind, I look forward to the Minister’s response.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for her amendments relating to notice periods for rent increases, and the noble Lord, Lord Jamieson, for moving Amendment 72.
I thank the noble Lord, Lord Marlesford, for his comments about the balance between landlord and tenant. We are aiming to get that balance in this Bill. He is right to point to the ratio of rent to income, but that is why tenants need longer to consider the impact on their family budget. Increasingly, the proportion of income that is taken up by rent is going up and up, particularly in certain parts of the country, making it very difficult for tenants to manage increases at short notice and without adequate notice to plan their family budgets.
The noble Lord, Lord Jamieson, talked about consultation with landlords on the impact of rent increases. Because of a question during the debate on a previous day, I undertook to give a written response on the consultation that has been carried out before and during the course of this Bill. I will provide that response in writing to noble Lords; it is being prepared at the moment, and I will get back to them with a summary of that.
I thank the noble Baroness, Lady Thornhill, for her comments. She is quite right to refer to issues of rental income and capital assets. As I have said many times, we must make this fair for everybody, and make sure that everybody gets what they want. Landlords want a tenant who will look after the property and pay their rent, and tenants want a landlord who will make sure the property is available, looked after and in good condition—that is what we are all after.
Amendment 72 would reduce the amount of notice of a rent increase that a landlord will have to give a tenant from two months to a period equal to a rental period. For example, where the rent is paid monthly, this would reduce the notice period from two months to one month. I appreciate, as the noble Lord, Lord Jamieson, said, that these are probing amendments.
Together with Amendment 72, Amendment 74 would remove the requirement for landlords to serve a rent increase notice two months before the rent increase comes into effect. We do not agree with this position. The Renters’ Rights Bill will deliver our manifesto commitment to empower private rented sector tenants to challenge unreasonable rent increases. This includes by requiring landlords to give two months’ notice of a change, rather than one. This was, as the noble Baroness, Lady Thornhill, pointed out, the result of debates in the other place and of lobbying from a number of groups that have been speaking to us. This will ensure that tenants who may struggle to pay a rent increase will have time to consider their options, seek advice and, where necessary, take steps to challenge the rent increase at a tribunal.
Receiving a rent increase can be distressing for many tenants. We want to give tenants time to reassess their budgets and consider their options. It is unfortunate that the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, do not agree that tenants should have this protection.
Amendment 73 seeks to decrease in the Bill the notice period for a landlord to serve a rent increase from two months to one month. Similarly to Amendment 72, we do not agree with this position. A two-month notice period will give tenants time to review their budgets before the rent increase takes effect and to take advice, if necessary or appropriate, from advice agencies such as Citizens Advice.
It is regrettable that the Opposition have tabled this amendment, because they supported this position on the matter. Their original White Paper, in 2022, promised to
“increase the minimum notice landlords must provide of any change in rent to two months”.
It is disappointing that they have changed their minds on this, and now wish for tenants to have less time to consider their options when receiving a rent increase.
Amendment 81 seeks to increase from one month to two months the amount of notice of a rent increase that landlords of relevant low-cost tenancies need to provide. Social landlords that fall under a new definition of a relevant low-cost tenancy in the Bill will be exempted from most of the changes the Bill makes to rent increases. This means that landlords of relevant low-cost tenancies will be permitted to increase the rent via the Section 13 process at any point in the first 52 weeks of a tenancy, and then once every 52 weeks thereafter, and must give at least one month’s notice. The new amount may take effect after this notice period if it is not challenged by the tenant in the tribunal. These landlords will still be able to use review clauses within a tenancy to increase the rent, as they can at present.
Baroness Thornhill (LD)
My Lords, there are a lot of issues in this group, but the bottom line, again and again, is the imbalance of supply and demand, and the imbalance of power between tenant and landlord. Demand significantly outstrips supply. The landlord/tenant balance is surely like a see-saw, with one fairly heavy person on one end and a nice sylph-like person on the other end. I believe this legislation just wants to even it up a little bit.
There are those of us who feel that, in this kind of market, landlords can and do charge what they want. Rents have been going up significantly, driving more people out of the private rented sector and—I think this is a point on which we have so far not joined the dots—into the arms of their local authorities under the homelessness and temporary accommodation route. We need only look at the rising figures to know that this is happening and happening at scale. We have debated it regularly in your Lordships’ House over several years.
I was not surprised to read on the front page of the Guardian this morning that one of its surveys found that private rented sector landlords are fleecing taxpayers as a direct result of the temporary accommodation crisis. The Guardian found:
“Local authorities in England are paying 60% more for rooms in … bed and breakfasts and hostels than it would cost to rent similar-sized accommodation”
in the private rented sector. There are far more details in the front-page article, but it is irrefutable that some private landlords and hotels are cashing in on England’s hidden homelessness crisis. The lack of supply creates a vicious cycle that is costing the country an enormous amount of money. Thus, we support all the measures the Government are taking in the Bill to try to curb unreasonable rent increases and prevent economic evictions. We will discuss this more in the next group.
We are also concerned about market rents being the deciding factor for the tribunal, given a market that is significantly undersupplied, especially in areas of the country with high housing prices. If market rents are used, they should be based on existing equivalent rental properties in the area and not just new builds, which are usually more expensive and can be overpriced. I look forward to debating the amendments in the next group, which are trying to bring some resolution to this.
I will dispatch positively and succinctly all the amendments tabled by the noble Baroness, Lady Warwick. Her commitment to the social housing sector and her work with registered providers is well known. It is no surprise that she was supported by the noble Lord, Lord Best, to whom the same accolades could apply. Such providers are in a dilemma over rents and at the mercy of the Government as to when and by how much they can increase rents, as the noble Baroness outlined very well. We are concerned that there is increasing evidence that a significant number are cutting back on their future development plans to build social and affordable homes at a time when we all want the opposite.
On the First-tier Tribunal, there seems to be a real fear around the Committee that renters will all rush to challenge their annual rent rise, as has been said by many. I am pragmatic about this. I think it is probably wise to expect an increase, which is why we wholeheartedly support Amendment 87, from the noble Baroness, Lady Wolf. I was a little too late to put my name to it—the nominations had closed, so to speak—but I would have. If there can be a simple mechanism to weed out claims that have absolutely no chance of success, as has happened in Scotland, it must be worth considering.
We can clearly see from recent tribunal hearings that cases are often contradictory and inconsistent, and seem to rely on different sources to make a judgment, which means they are often based on an incomplete picture. This is why I have submitted Amendment 106, supported by the noble Lords, Lord Carter and Lord Howard, for which I thank them. We are simply seeking assurances that the tribunal is fit for purpose and ready to go, and that adequate consultations have been carried out.
What is worrying is a recent survey by Generation Rent, which I too thank for its work all year round and in particular with this Bill. The survey found that less than one-third of renters had actually heard of the tribunal, with fewer than 10% claiming to know a lot about it. There is clearly a lot more work to do before we even get a trickle of people, let alone a tsunami of people or everyone, making an appeal against their rent. Thus, we could not support any amendments that involve tenants paying landlords’ costs, or allowing the tribunal to award higher rents, as these are new barriers to renters exercising their rights.
However, I have a degree of sympathy with Amendment 99, tabled by the noble Lord, Lord Carrington, and very ably supported by the noble Lord, Lord Cromwell. The rent should be backdated to when it would have been legally allowed to be raised, otherwise there really is an incentive to appeal: “What have we got to lose?”. To me, it does not seem fair.
Finally, it feels wrong, as has been said by several noble Lords, that a landlord should add value to their capital asset and then use that immediately to hike the rent—a financial win-win for the landlord. Likewise, Amendment 70 in the name of the noble Baroness, Lady Jones, has some merit.
Lord Carter of Haslemere (CB)
My Lords, I support Amendment 106 from the noble Baroness, Lady Thornhill. I declare an interest as a former landlord.
Clause 8 of the Bill amends Section 14 of the 1988 Act to allow any tenant to challenge a rent rise in the First-tier Tribunal. It will be free of charge. No tribunal ruling will be able to increase the rent proposed by the landlord. By challenging the rent rise, as we have heard, the tenant will automatically delay any rent rise by several months, however modest and justified it may be.
This will obviously create an incentive for tenants to challenge single rent rises, regardless of the merits, and without any risk to them doing so. As we have heard, if their appeal is unsuccessful, they will then be liable to pay the increase in rent only from the date of the tribunal’s determination. That is incredibly unfair on landlords, for the reasons the noble Lord, Lord Young, and my noble friends Lord Carrington and Lord Cromwell have given. What have tenants got to lose? My focus is to express strong support for seeking to ensure that the tribunal has adequate resources to cope with the likely increase in the number of rent rise challenges it will face. Okay, not 100% of tenants are going to challenge rent rises, but there will be a significant increase unless changes are made to the Bill to remove the incentive to do so, because they have nothing to lose.
Given that the tenant will hold all the aces in the pack, the tribunal floodgates are likely to be, or are at risk of being, opened. Without more tribunal resources, this will greatly increase delays and create even more incentives to challenge rent rises. The Government need to get this right or the system will grind to a halt, landlords will leave the sector in droves and tenants will be at risk of homelessness. As I said at Second Reading, there needs to be balance in the very welcome improvements that the Bill makes as a whole. The relationship between landlord and tenant has to be a two-way street to maximise the effectiveness of the Bill.
As this amendment proposes, there needs to be a proper consultation, including with the senior judiciary, before these provisions are commenced, to ensure that the tribunal system is adequately resourced to cope with the increased demand—what on earth could there be against that? This is such a sensible and unobjectionable amendment, and I am looking forward to seeing it accepted by the Minister and appearing in the next proof of the Bill.
Lord Howard of Rising (Con)
My Lords, I support the amendments in this group in the name of the noble Baroness, Lady Scott, to which I have added my name. I endorse what she said just now when she spoke to the amendments.
When I spoke to the fourth group, I pointed out that, as presently drafted, the Bill will, at a conservative estimate, give rise to 1 million applications per annum to the rent tribunals. Other noble Lords have commented on the problems which will occur. The rent tribunals will be overwhelmed. With the delay for any rent increase, this will amount to a de facto rent control, with a corresponding and inevitable loss of rental accommodation when landlords disappear from the market as they cease to be able to cope with the ever-rising costs, not least the cost of increasing regulation.
I spoke at Second Reading to the problems in Berlin, where rent controls had to be abandoned owing to the lack of rental accommodation. These amendments would help introduce some realism into the system, so that applications to the rent tribunals are for genuine reasons and not merely because it would be silly not to go to the rent tribunal when there is no risk and a possible gain.
Baroness Thornhill (LD)
I had thought that there would be a few more speakers than that, but hey.
I wish I could be half as certain about what is going to happen in the future as some noble Lords here—they must have a crystal ball hidden somewhere. I feel this Bill is almost an act of faith. It is quite obvious that we believe that it is going to do good things and that Armageddon will not happen. However, the noble Baroness, Lady Scott, argued her case very well and sincerely, and likewise she believes that. At the moment, neither side really knows what is going to happen. To use the cliché: only time will tell.
The problem with so many amendments being regrouped is that we are into groundhog day, so I will be brief. As previously stated, we do not support amendments that would disincentivise tenants challenging rent rises and feel that most of these amendments fall into that category. The Bill is about a power balance between the tenant and the landlord, and is a genuine attempt to redress that balance. A lot of the amendments and statements made by some noble Lords want to maintain the status quo; for us on these Benches, that is an imbalance. We are just going to have to disagree about that.
The noble Baroness referred to the realities of the housing market. Our interpretation is that landlords can charge whatever they want—whatever the market will sustain—and we do not believe that that is right. In doing so, I genuinely believe we are creating an underclass of people who will never be able to fit into the private rented sector. That is perhaps an argument for another day.
The Minister has perhaps already answered Amendment 105, but I am quite happy to hear it again, given that I agree with the noble Baroness that such a review is important and necessary.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for her amendments on rent regulation. I thank the noble Lord, Lord Howard, and the noble Baroness, Lady Thornhill, for their comments.
As I set out earlier, the Bill will empower private rented sector tenants to challenge unreasonable rent amounts. This is a central aim of the Government’s reform agenda and reflects our manifesto commitment. The tribunal will not be able to increase rent beyond what the landlord initially proposed. This will prevent unscrupulous landlords—let us face it, most of them are good, but there are some unscrupulous ones—using rent increases as a back door means of eviction, while ensuring rents can be increased to reflect market rates.
We are clear that tenants should submit an application to the tribunal only where they believe a rent increase is above market rates. In the first instance, we strongly encourage landlords and tenants to communicate early about what adjustments to rent are sustainable for both parties. We need to think about possible triage arrangements if there is no agreement between them.
We anticipate that our reforms will lead to some increases in cases, but, as I have already stated, we are working closely with the judiciary to ensure the tribunal has the capacity to deal with cases. In the First-tier Tribunal (Property Chamber), work is progressing to increase capacity, as well as on reviewing resourcing and working practices in readiness for any increase in demand. I am not sure if it will be 1 million applications, as the noble Lord, Lord Howard, said, but we anticipate that there will be some increase initially, until the way that this works drives down demand in the future—which I think it will. This is part of our wider work to make sure the justice system is prepared for the changes to case loads and procedures which will be required for our reforms.
As now, tenants will be able to challenge the rent payable in the first six months of a tenancy if it is above market rate at the First-tier Tribunal. The tribunal can determine the open market rent only to be lower than or the same as the tenancy rent itself. The tribunal will not be able to increase the rent above the amount originally proposed by the landlord. We see this as a rebalancing mechanism, as the noble Baroness, Lady Thornhill, said.
Amendment 92 seeks to allow the tribunal to determine the open market rent to be higher than that originally proposed by the landlord. We believe that limiting the tribunal to determine a rent to be either the same as the landlord themselves proposes or an amount lower than this is fair to both parties. If landlords have agreed a rent that they consider to be acceptable at the beginning of the tenancy, they should have no fear of a challenge at tribunal.
I turn to Amendment 93. This Bill enables a tenant during the first six months of a tenancy to challenge the rent payable. It is an important provision that should stop a minority of unscrupulous landlords exploiting tenants desperate to find a new home. It strengthens our ban on rental bidding, ensuring that any landlords who seek to charge over the odds can be challenged. When a tenant challenges their rent, the Bill states that the start date of the new rent determined by the tribunal
“must not be earlier than the date of the application”.
This reflects Section 22 of the Housing Act 1988, where a similar provision already exists to allow backdating of a determination where a tenant has challenged an excessive rent.
Amendment 93 would prevent a tribunal backdating the determination of the new rent payable to the date of the tenant’s application. It would mean that the new rent could take effect only from the date of the tribunal’s determination. I understand that the purpose of this is to ensure that the landlord will not have to repay the difference in rents back to the tenant. The Government encourage landlords and tenants to communicate early about what rents are sustainable for both parties. The Bill levels the playing field to enable a more equitable discussion about levels of rent before anything comes to the tribunal. To be clear, the aim of this is to prevent as many cases as possible ending up in court action.
In our view, the noble Baroness’s amendment would limit the ability of tenants in the first six months of an above-market tenancy to get justice for the period that the case is in the courts. It would also increase the risk that landlords would seek to exploit desperate tenants by extracting above-market rents. I am really concerned about that, because one of the key principles of the Bill is to stop that happening.
Baroness Thornhill (LD)
My Lords, most of the amendments in this group are disagreeing with the Government’s ban on being able to ask for rent in advance, and all basically say the same thing. While I am very supportive of the Government’s aims, there are legitimate questions to be answered in this area. By preventing tenants paying rent up front, will the Government potentially reduce the housing options available to financially vulnerable people? So says the letting and landlords’ association. Is it a way to crack down on discrimination against low-income renters by unscrupulous landlords? So say the Government and the lobby groups for renters.
Amendments 108 and 111, which would allow up to six months’ rent in advance or even 12 months, are troubling. Rogue landlords could pressure vulnerable tenants to mutually agree to these excessive payments, circumventing the very protections that the Bill seeks to establish. Furthermore, Amendment 112’s provision for tenants to specifically request such arrangements in writing could easily be manipulated. Landlords might simply make such requests a condition of securing the property, forcing tenants to choose between signing or losing their housing opportunity.
However, what we do know is that people on fixed incomes, such as pensioners, those with lower incomes, the self-employed, the overseas students, those with a bad credit history, those who fail referencing checks and those with no family member to act as a guarantor will all have challenges passing referencing and affordability checks. They are the risky renters. The Government’s amendments are clearly designed to protect these financially vulnerable people from exploitation, but the big question is: how will agents and landlords manage tenancy risk in the future? Tenancy risk is a reality. With over 20 tenants chasing each vacancy, landlords will, legitimately and legally, be able to pick the person who represents the lowest risk. The bottom line for them is economic reality. Your Lordships have all heard my views, but even I would say, “Who can blame them?”
There are many thousands in these various groups. How do the Government think that they will get housing in the future? How will landlords mitigate the risk of tenants who fail references and have no renting history in the UK or who have CCJs against their name? Millions of people fall into these categories. My deepest worry is that the rent in advance system will go underground and people will be asked to stuff cash into brown envelopes, while rental payments will be edited to make it seem that all is well. Desperate renters will do desperate things to put a roof over their heads. I hope that I am wrong and not being unduly harsh on landlords or tenants. It seems to me that such people are left with the sole option of a professional rent guarantor service. What else is there? I am quite sceptical of local authorities stepping into that role, although they do much already to make tenancies survive and to help tenants.
What are the Government doing to ensure that those services can operate legally and responsibly, and to help this group of people? Are they part of the solution? I look forward to the noble Baroness’s answers.
Finally, to reiterate the point, a market that is significantly undersupplied and where the market rules of supply and demand result in continually rising rents, impacting most on precisely this large group of risky renters, has already resulted in a whole cohort of renters who are forced into homelessness and overpriced temporary accommodation. These are the very people who would in the past have been in social housing, of which there is, as we know, a huge shortage. The free market, under the rules as they are now, has led us to this place—a broken system—and there is no one denying that. Continuing as we have thus far can lead only to more of the same.
The Bill is a brave attempt to recognise the current imbalance between tenant and landlord, but if we do what we always do, we will get what we always get, and that is not acceptable.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, and the noble Lords, Lord Jamieson, Lord Truscott and Lord Hacking, for their amendments in relation to rent in advance, and the noble Lord, Lord de Clifford, and the noble Baroness, Lady Thornhill, for commenting on these amendments.
Taken together, Amendments 108 to 110 and 112 tabled by the noble Baroness, Lady Scott, would allow landlords or agents to charge rent in advance when this has been mutually agreed with the tenants in a tenancy agreement. This Government are clear that the practice of landlords or agents charging rent in advance is unfair. Many of us will have heard the stories, many of them of requests for large amounts of rent in advance that have pushed families into financial hardship or locked some out of the sector completely. In other cases, unscrupulous landlords use rent in advance to pit prospective tenants against each other and create these dreadful bidding wars to help people secure a property. That is why the Bill will prohibit a landlord or letting agent requiring or accepting any payment of rent before a tenancy has been entered into. In addition, a landlord will be able to require only up to one month’s rent in advance in the window between a tenancy being entered into and that tenancy beginning.
I want to be crystal clear on this point: once a tenancy has begun, tenants will remain free to pay their rent prior to the agreed due date should they wish to do so, although landlords will not be able to require this and any attempt to require it will be challengeable by the tenant.
Amendment 108 would allow landlords to include terms in a tenancy agreement that require rent in advance to be paid up to six months before it is due. It is the view of the Government that this amendment would fail to protect tenants from exploitative rent in advance practices. Landlords, being able to require up to six months’ rent in advance when this is agreed in a tenancy agreement, could, in a market where properties are hotly contested, push tenants into agreements that stretch their finances to breaking point to secure a tenancy.
Amendment 109 would limit rent in advance to four months when agreed in a tenancy agreement. This has the same effect, with the potential for tenants in hotly contested markets to feel compelled to agree to terms that require significant financial outlay. Even the limit of two months, as the noble Baroness, Lady Scott, proposes in Amendment 110, in our view does not go far enough to protect tenants. In a scenario where a landlord can request two months’ rent in advance, this is still a significant financial expectation of a tenant. Given that the tenant will also likely be required to pay a five-week tenancy deposit, they could face being asked to stump up more than three months’ rent to access a property.
Renters’ Rights Bill
Baroness Thornhill Excerpts(3 weeks, 3 days ago)
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Lord Northbrook (Con)
My Lords, I firstly declare an interest as a private landlord of residential properties in Hampshire.
I support Amendment 60, to keep the rent arrears landlord legal action limit to two months rather than four. As the noble Lord, Lord Carter of Haslemere, said, landlords are not charities, and the noble Lord, Lord Hacking, agreed with this. I also support Amendment 63 in the name of the noble Lord, Lord Carrington, which also seems very sensible.
Local authorities are already reluctant to sanction a change of use from residential to commercial, so they exercise careful control over this. As the noble Earl, Lord Leicester, said, money from permission to convert residential properties to commercial can be used to pay for and improve properties, and something that has not been mentioned much so far is the EPC problem that a lot of these cottages have, and the extra money that needs to be found to pay for this.
Baroness Thornhill (LD)
My Lords, I would like to thank all the parties in the renters’ coalition for their work on many aspects of the Bill, particularly this one. They have very patiently answered my every query as I have attempted to familiarise myself with all the grounds for possessions and the implications of that.
Before I move to the detail of my Amendments 26 and 27, I would like to offer support for Amendments 24 and 30 from the noble Baroness, Lady Warwick. If one recalls—because she was right at the beginning of the debate—this was about ground 6B, when the house is required back for works to be done to it. Given that the landlord is not obliged to provide alternative accommodation while the works are done, we believe it might justify consideration of compensation, mainly because—this is interesting—6B is already being described on property websites as a “loophole”. Ground 6B currently lacks clear definitions and proper oversight, so it runs the risk of being misused, disputed or even ignored. Any moves to reduce court use, given our concerns in this regard, are also to be clearly welcomed.
Amendments 26 and 27 pertain to the two no-fault grounds for eviction: namely, ground 1, moving in a family member, and ground 1A, selling the property. First, the increase in notice periods from two to four months for eviction on these grounds is most welcome, giving tenants more time to find a new home. Amendment 71 from the noble Baroness, Lady Jones, strengthens this further by the discussion of compensation, as she outlined, and we feel that this complements our amendments.
Baroness Scott of Bybrook (Con)
My Lords, the amendments in this group represent yet another instance where the rights of renters intersect with those of landlords. This group of amendments is indicative of the broader Bill and, rather than increasing the availability of homes, we believe it risks reducing the supply of rental properties. This could drive up costs for renters at a time when the cost of renting has already risen significantly. It is, of course, important to make sure that the legal framework which governs this relationship protects those who are renting, but we cannot forget the landlords. They should also have their rights upheld. Landlords should have their rights over their properties respected and retain the ability to recover possession of their homes when they need to.
I start by speaking to Amendments 24 and 30, tabled by the noble Baroness, Lady Warwick of Undercliffe. They assume that the landlord is in some way liable to pay compensation for exercising rights, which surely are theirs by virtue of the fact that they actually own the property. Determining when in specific cases compensation is required is surely the responsibility of a court. To assume that compensation is always required tips the balance against the landlords and would likely discourage many responsible, principled landlords from entering the market and meeting the high demand for rented properties that we see across the country.
In the same vein, Amendments 26 and 27, tabled by the noble Baroness, Lady Thornhill, would place an administrative burden on landlords, which would have a dampening effect on the housing market. Houses are important personal assets. Piling on layers of regulation will further suffocate the market and limit the agency of landlords to use the assets that they own.
Conversely, we believe that Amendments 60 and 61, tabled by the noble Lord, Lord Carter of Haslemere, strike an appropriate balance, recognising that landlords need to be protected from bad actors, who could have a devastating financial effect on them. Landlords should not be punished for supplying rental properties to the market. Maintaining the existing possession grounds for rent arrears would mean that they can operate in the market with confidence that they will not be left out of pocket.
Amendments 63 and 64, tabled by the noble Lords, Lord Carrington and Lord de Clifford, further speak to the fact that landlords should retain the right to make use of their own property as they see fit. It is neither the role nor the place of government to dictate to home owners how their personal property should be used.
Amendment 71, tabled by the noble Baroness, Lady Jones of Moulsecoomb, seeks to conflate the rights of the landlords with their responsibilities. The landlord, by owning the property, has the right to make decisions about how that property is used. The tenant, in renting from that landlord, is expected to respect the rights of the landlord as the property owner. This relationship does not in any way suggest that the landlord should be liable to forgo income while still providing the service. This measure would clearly disadvantage landlords in their legal relationship with their tenant and would depress the market, which is already undersaturated.
Finally, I welcome that Amendments 142, 165 and 166, tabled by the noble Lords, Lord Cromwell and Lord Hacking, strike the appropriate balance between the rights of the renters and the rights of the landlord. We need to remember that we are talking about a market, which requires flexibility and adaptability so that it works for consumers and providers. Allowing landlords to make these decisions without being hamstrung by long-term obligations means that they can act in the mutual interest. A flourishing market benefits renters as much as landlords. This balance is imperative to achieve a flourishing market. I urge the Government further to consider, between now and Report, this crucial balance between landlords and tenants, most importantly to protect the tenants in this sector.
Renters’ Rights Bill
Baroness Thornhill Excerpts(3 weeks, 3 days ago)
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Lord Carter of Haslemere (CB)
My Lords, I support what the noble Lords have said there. The principle against retrospection is long-lasting and fundamental to our constitution and our legal system, and it is enshrined, as has been said, in the European Convention on Human Rights.
There is an ECHR memorandum on the Bill in which the assessment is made that it strikes a proportionate balance between rights of property on one hand and the rights of tenants on the other. I would like to know from the Minister whether that proportionality assessment has properly taken into account the significance and the implications of the retrospection that has been drawn attention to here. What actually are the implications of that retrospection? What does it affect? If those words are kept in the Bill, what rights do they actually affect which are imposed in a new way by the Bill?
Baroness Thornhill (LD)
Not wishing to lower the tone of erudition in the Committee, I would say, “latine non studi”. In plain English, what I would like to say is that the kernel of the noble Lord’s concerns is about certainty and clarity over arrangements. We have all had letters from different people saying, “I don’t know whether this means I now have to change”. So I genuinely think that there is an issue around clarity and understanding and, to that end, I really look forward to the Minister’s response, because what we all need is a clear and flexible framework for tenancies that everyone understands. She spoke in some of her answers about making it simpler, but it seems that, historically, we have inherited quite an amazing array of differences, and it is perhaps no wonder that some people are struggling. So I think that the transition, and transitional arrangements, is something we should look at.
Lord Cromwell (CB)
My Lords, I will speak very briefly because, as always, the noble Lord, Lord Young of Cookham, has set out his case so coherently and in such detail that I need raise just a couple of points. Before I do, I declare an interest: I do not let out any residential property, but I have a couple of family members who let out one each.
I support all four of the amendments in this group, because there is considerable uncertainty about how the Bill will affect shared owners who become the so-called accidental landlords that have been referred to. They often sublet as a survival strategy, to deal with exceptionally difficult financial circumstances, which the noble Lord set out. Where co-owners try but, as is common, fail to sell, the proposed 12-month letting period ban—the lack of a letting period—risks punishing the very people who simply do not have the financial resilience to cope with a 12-month void in their ability to sublet. This applies acutely to the poorer and more vulnerable end of the market, so I trust that it will be of particular interest to this Government.
Baroness Thornhill (LD)
My Lords, I too support the amendments in the name of the noble Lord, Lord Young of Cookham.
If many of the amendments to this Bill are designed to make us look at unintended consequences for certain groups of people, these amendments concern one group of people who wholeheartedly deserve and need us to look at how the Bill will impact their situation as shared owners who cannot sell their flats and are subletting due to a variety of legitimate reasons. The specific conditions of their model of part ownership were so cogently outlined by the noble Lord, Lord Young, that, noble Lords will be pleased to know, I will not even attempt to repeat them. That has led to their campaign to plead with us—“plead” is almost not a strong enough word—to look at ways to ameliorate the devastating situation in which they find themselves.
The key element of concern is the stranglehold that the registered providers have on the property—no doubt deemed to be a good thing in normal times, but this situation is far from normal. Due to that stranglehold and the restrictive rules that shared owners must abide by, for the majority of shared owners subletting is a loss-making operation by design. I am not given to hyperbole, but I cannot think of anything worse than being in the situation that they are trapped in.
The term “accidental landlord” was a new one to me, but when I heard first hand from the shared ownership owners, I felt their pain—it is a really messy issue. Let us not forget that, if you have gone into shared ownership in the first place, it is highly likely that your finances are going to be stretched anyway—no high salary, no inheritance, and no bank of mum and dad—or you would have bought outright. As has already been said, the 2025 survey of the Shared Owners’ Network found that 90% of subletters were created because of the building safety crisis.
Another shocking statistic was that, in November 2024, the National Audit Office stated that the Government will not reach their 2023 target for the remediation of high-rise buildings with dangerous cladding. This building safety crisis is set to continue for over a decade or more, so it is not a big stretch to say that the problem of accidental landlords will increase. That is why I too was disappointed that this was not picked up by the impact assessment—perhaps the Minister can explain why.
The issue is certainly complex, and I am absolutely certain that the Minister is fully knowledgeable about it and sympathetic to it. The amendments tabled by the noble Lord, Lord Young, are trying to find out whether there is a way forward through this Bill to help this group of people. Alternatively, perhaps the Minister will take it upon herself to follow this up by other means.
I will end with a few words from one of the many emails from the aforementioned Stephanie, but I will pick up on a slightly different point. She says that
“we are not bad people … we’re trying to cope with an impossible situation … we don’t need to be punished for failing to sell the unsellable flats that are already ruining us”.
Between the noble Lord, Lord Young, and Stephanie, they say it all—and they have our full support.
Lord Jamieson (Con)
My Lords, I support the amendments proposed by my noble friend Lord Young of Cookham, who made a powerful case and highlighted the unique circumstances of shared ownership owners. These amendments address the specific and pressing concerns faced by shared ownership leaseholders under this Bill, and we believe that they would help ensure that this group is treated with fairness and clarity.
Shared ownership has proved to be a valuable tenure, enabling many individuals and families to take their first step on the housing ladder. However, as has been highlighted, there are circumstances where shared ownership owners find themselves trapped, and we do not want them to be disadvantaged by this Bill and face unforeseen consequences. They are subletting not out of a desire but out of necessity
To avoid repetition, I will speak to the amendments together in a way that highlights their collective aim of protecting shared ownership leaseholders, who often have limited means. Clearly, they speak to the potential unintended consequences of the Bill and the repercussions of fire safety.
Amendments 19 and 20 focus on the impact that Clauses 1 and 2 will have on shared ownership leaseholders, particularly those who rent out their properties under licences. The amendments seek to provide clarity on how these leaseholders will be affected by the proposed regulations, ensuring that their unique circumstances are properly considered. In particular, Amendment 20, which defines “shared ownership lease” by reference to Section 13 of the Landlord and Tenant Act 1985, would be an important step towards eliminating any ambiguity in the application of the legislation to this group.
Amendment 107 addresses a significant practical issue: many shared ownership leaseholders face restrictions in their lease agreements that prevent them profiting from subletting. In some cases, they are not even permitted to increase rent during a subletting arrangement, regardless of market conditions. This amendment seeks to ensure that leaseholders in these circumstances are not unfairly burdened by rules that were never designed with their situation in mind.
Renters’ Rights Bill
Baroness Thornhill Excerpts(3 weeks, 5 days ago)
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Lord Shipley (LD)
My Lords, I remind the Committee that I am a vice-president of the Local Government Association.
I listened carefully to the noble Baroness, Lady Scott of Bybrook. I can see the merit in a clause defining the Bill’s purpose, and Ministers will advise us on that—except that the whole Bill defines its purpose.
I noticed that the noble Baroness, Lady Scott, used the word “secure” several times in her speech, confirming that:
“The purpose of this Act is to improve the ability of renters in the rented sector to obtain secure, fairly priced and decent quality housing”,
as in subsection (1) of the proposed new clause in Amendment 1. I do not understand how the noble Baroness can propose an amendment that talks about the security of decent-quality housing at the same time as Amendment 8 proposes that small landlords—that is, those having fewer than five properties—could continue to be able to issue Section 21 no-fault notices.
I have to assume that it is now the Conservative Opposition’s intention to withdraw Amendment 8, for otherwise I do not see how, in all honesty, a statement can be made in Amendment 1 that the objective is for secure, decent-quality housing in the private rented sector when for many properties no-fault evictions would be allowed to continue under the Conservatives’ Amendment 8.
Baroness Thornhill (LD)
My noble friend Lord Shipley has eloquently kicked things off for our Benches. I will make a few general comments about how we will conduct ourselves during the course of the Bill.
We do not agree with the assertions made by the noble Baroness, Lady Scott of Bybrook. We think that the intentions in the Bill are perfectly clear. Whether it will live up to those intentions only time will tell, which is why we too would be looking at reviews. In fact, the noble Baroness’s Amendment 261 is very similar to my own Amendment 263, so I will reserve comments on reviews until we discuss that group.
I say to the Minister that we really want the Bill to go through, and for that to be done professionally and swiftly, in a well-scrutinised way, so we will not be making Second Reading-style speeches or commenting on every single item and amendment. I would therefore like the Minister to take it that silence means we agree with the Government’s position. However, we will probe, challenge and seek evidence and reassurances, and I think the Minister would expect no less from us.
We all know that the main problem is the shortage of homes, particularly social homes. The Bill is not intended to solve that problem. It has to be seen as part of a suite of policies that the Government are trying to bring in—and, to use the same phrase again, only time will tell. However, landlords have cried wolf before—over the Tenant Fees Act, I believe—and Armageddon did not happen. That is not to say we should not take their concerns seriously, nor that the Government should not monitor and review, but the most important thing in the Bill is the abolition of Section 21. That was promised by the noble Baroness, Lady May, when Prime Minister, back in the mists of time, so it is long overdue. It is time that we cracked on with this, and we will do our bit to ensure thorough scrutiny but swift passage.
Baroness Eaton (Con)
My Lords, I declare an interest as vice-president of the Local Government Association and as part owner of rented properties in Bingley, West Yorkshire. I support Amendment 261, tabled by my noble friend Lady Scott of Bybrook, with its proposed new clause:
“Review of the impact of the Act on the housing market”.
Specifically, I welcome the proposed addition of a review of the impact the Bill will have on requests for social housing. The vast majority of landlords in this country are good, honest people who do a real service in maintaining Britain’s housing supply and providing decent homes to people before they start the journey of getting on to the property ladder, but the reality is that, with the ever-increasing regulation placed on landlords, not least the abolition of Section 21 no-fault evictions, which has already been mentioned, the signing of tenancy agreements will become more of a risk.
In reality, landlords will no doubt be more reluctant, under the new burdens placed on them, to take on more vulnerable tenants—for example, those who enter the market for the first time, without references, and those in receipt of housing benefit. Amendment 261, on reviewing the impact the Act will have on social housing, is necessary because local authorities and housing associations are going to come under pressure as never before to provide social housing, either because supply in the private rented sector will become more challenging to access or because rents are likely to spiral out of control under these proposals. I therefore support fully the amendment tabled by my noble friend.
Baroness Thornhill (LD)
I have to confess to the noble Lord that I had written down exactly what he said—that these are not two nice amendments to bring in fixed tenancies by the back door—but then I thought, “He’s actually just creating a new ground for repossession”. What I am concerned about from the previous debate and this one—and I urge the Minister to clarify this—is that there seems to be an idea that rolling tenancies are unstable. I have several friends who are landladies, and we have had discussions about this over one or two glasses of wine and—believe it or not—they are not fazed by this. They have not reacted hysterically, because their attitude is, “My tenants like to stay long term; I’m a good landlady”; they do not see that that is a problem. But clearly there is a problem because we have had the reaction. I say to the Minister that the messaging has somehow got lost that this is not a less secure tenancy and that, in fact, the expectation is that the tenancy will roll on, and I believe the Government have tried to make the paperwork and things easier for that to happen.
If that messaging was correct, I do not see why a tenant would need incentivising to stay if everything was going okay. So forgive me if I sound perplexed: I thought I had a clear view about this, but the noble Lord has kind of knocked me there. I think it is because of the messaging that we have had about the instability of rolling tenancies, whereas I believe that that is not the case. I would be very interested in what the Minister has to say on that. I appreciate that the noble Lord’s speech was not long; it was engaging oratory and got the little grey cells going.
Lord Cromwell (CB)
Perhaps the noble Baroness and I should discuss this over a few glasses of wine also, although I do not drink—but she can have the wine. I do not think the amendment creates a new ground for repossession; it gives the tenant greater security of tenure by removing half the causes for which a landlord could serve notice—I think that is what we will have to discuss over the glass of wine. It applies in special circumstances, where a landlord does not anticipate the need to sell or the wish to move in a family member but wishes to incentivise their tenant, who could leave at any moment on two months’ notice, to stay longer. So they say, “I’m prepared to give you greater security of tenure as an incentive to remain and continue paying the rent”. It is not more complicated than that, but I am glad that I managed to lift the bafflement and look forward to a chat afterwards perhaps.
Baroness Thornhill (LD)
Before I comment on the noble Baroness’s Amendment 8, I would like to apologise for my cough, which laid me low for most of the recess. I am conscious that, especially when my noble friend Lord Shipley was speaking, I was struggling. I offer my apologies for that.
Would it be impolite to call this a wrecking amendment? Yes, it would be impolite, but, from our Benches, it certainly feels like one. As was mentioned previously in an earlier group, if this amendment were accepted, it would affect around 85% of rented homes. In effect, it would completely gut the legislation of one of its key objectives. We on these Benches cannot agree with that. We entirely support the abolition of Section 21.
That said, I have listened to the many reasoned and reasonable responses, and the noble Baroness, Lady Scott, clearly believes, as do many others, that the provisions of this Bill will involve more landlords and tenants going to court. The readiness of the courts for this legislation was one of the reasons why the previous Government rowed back on that. It is reasonable to ask the Minister for the Government’s assessment of the readiness of the courts and for the impact assessment that has been made. We are concerned that failings in the courts will undermine the main principles of the Bill.