Renters’ Rights Bill

Earl of Kinnoull Excerpts

Tuesday 4th February 2025 Lords Chamber

[The Earl of Kinnoull (CB)]

What a genuine pleasure it is to follow the noble Baroness, Lady Fookes. Oddly, in my decade here, I think it is the first time that I have followed her. I say those words warmly and very much hope that I will not disappoint her with what I am about to say, but I am directionally with her.

I congratulate the noble Lord, Lord Wilson of Sedgefield, on a very compelling, moving—I am going to borrow that word again—and thoroughly eloquent maiden speech. I am very grateful to him for sharing all those memories with us; it was a wonderful thing. I look forward to the speech of the noble Baroness, Lady Brown, which is coming up next—she should not worry, as there are about five minutes between me and her.

I remind the House of my entries in the register of interests, in particular as a trustee of various Scottish entities which are engaged in letting rural properties. I have, in a much smaller way, three rural properties that I let. Noble Lords should remember that, in Scotland, Section 21 has already been abolished, so I have some experience of life beyond this Bill, which may be helpful to the House later.

I will cover two brief subjects now. The first is the great importance of smooth judicial and administrative processes, both to the landlord and the tenant. Secondly, I will cover the topic of pets and pet insurance.

On the first area, I am very grateful to the noble and learned Lord, Lord Etherton, who has done all the heavy lifting for me. I do not want to repeat things that he has said, but he underlined the challenges and the crucial importance of having clarity, efficiency and speed within the administrative and court processes. I note that almost everything contained in the Bill is a new process in some way.

When the Minister kindly came to the Cross-Bench meeting, I think she had more questions from us than almost any other Minister recently. She would have felt the interest in this particular area within that meeting. I am grateful in advance for her help in getting going a meeting with interested Cross-Benchers to discuss the detail of the court processes and the IT system that will support these, which I believe is in progress of booking at the moment.

The construction of the new processes for courts and the ombudsman, which will, I hope, provide clarity, efficiency and speed, is something that I do not feel will be particularly easy or can be done particularly quickly if, that is, we are to start in the new era smoothly. This inevitably means that the commencement provisions of the Bill will need to take account of this if Parliament is to be confident that it has done its part in making sure the new system is fully operational as it becomes live.

I turn to my second and final area: the provisions about pets and pet insurance. Here I am grateful again to the Minister for arranging a discussion with interested officials on the Bill team. I have also had the benefit of discussions with former colleagues and others within the insurance industry. The rural letting market in Scotland is one where you would expect a pet. The Scottish market, at least in my experience, copes with the problem of pet damage in a very simple way. Pets are discussed with the landlord, who therefore understands what pets are involved. Assuming that all are agreeable— I do not remember any instance where things were not agreeable—market standards are for deposits of up to two months’ rent. On leaving the property, the deposit is then used to deal with any pet damage. No insurance is involved, and the system has the benefit of being very simple. I think there may be lessons there, which I will come back to.

Insurance, generally, is against things that are unlikely; it is never against things which are inevitable. The puppy has not been born that does not chew, and it is inevitable that dogs will cause some damage to a home. Other pets will cause damage to homes—for instance, to fitted carpets. It is not surprising, therefore, that, to date, no comprehensive pet damage insurance policy exists in the UK market. I was responsible for many years for underwriting operations in continental European countries and I never came across any similar insurance there either.

Various UK insurance brokers, no doubt in response to the provisions of this Bill and spotting a potential opportunity, are attempting to interest insurers in providing some element of cover. The insurance risk carriers to date—that is, not the insurance broker intermediaries—have shown no interest. I spoke to the head of personal lines of a UK FTSE 250 insurance group, and they indicated to me that they would have no appetite to develop such a product. I was not surprised, having had a similar role in the past.

The one insurance product that is currently on the market is not available to tenants and covers only accidental damage. It gives an example of a covered event: a dog might tear down the curtains in a house, and that action might damage the wall in some way, and it is the wall which is then repaired. This is, as a percentage of the actual loss cost likely from pet damage, very small. The language of the Bill suggests that insurance will be available both to tenants and to property owners, and that the coverage of the products will extend to all risks of physical loss or damage to the property. However, this is not wholly clear, nor are the insurance limits that might be needed clear, in any of the Bill documentation.

Within the Bill, the landlord has the right to require the tenant to go and find such insurance before the tenant would be allowed to have the pet on their premises. Currently, neither the landlord nor the tenant would know exactly what to set out to buy, and there is no product available. I am all for the presumption that pets can be inside a rented home, for all the reasons contained in the Explanatory Memorandum and which were given again in the Minister’s excellent opening speech.

As things stand, I regret, the insurance provisions of the Bill do not work. I hope to continue working with the Bill team to explore the insurance options, remembering that risk transfer into the insurance markets is complex and expensive. I strongly think that we should take a look at the Scottish solution. Where people have asked for a pet, the landlord should have the ability to ask for the comfort of perhaps two additional weeks of rent deposit. I hope the Minister might agree to meet to talk through this potential option in the future.