Renters’ Rights Bill
Lord Carrington Excerpts(1 week, 6 days ago)
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Lord Carrington (CB)
My Lords, I support Amendment 22 from the noble Earl, Lord Leicester. I declare my direct interests in the private rented sector, with lettings of cottages in Buckinghamshire and Lincolnshire, and in direct farming and agricultural lettings in those counties. I said in Committee that a number of Bills, reviews and reports are in motion that cover the whole issue of farm and other diversification in rural areas, which the Government are keen to encourage in the light of falling profitability in farming, as subsidies are withdrawn or concentrated on environmental activities and concerns.
Farmers are therefore looking carefully at their assets to see whether they can be put to a more profitable use. Obviously, this can involve farmstead cottages and buildings, rather than just stand-alone farm buildings. The Planning and Infrastructure Bill is relevant in this context, together with the rural England prosperity fund, which specifically targets facilities and building conversions that help rural businesses to diversify.
This amendment would assist in enabling diversification if the necessary planning permission has been granted or there is a permitted development right. I am thoroughly aware that the Minister is keen to protect all assured tenants from eviction for whatever reason, and keen not to reduce the housing stock. However, in granting that planning permission, the authorities will already have given due consideration to the potential conversion and any loss of residential buildings through change of use. They will have agreed that the merits of the planned development outweigh the retention of the residents. I therefore hope the Minister will include this new ground 8A amendment as a sensible ground for possession, which would assist in the development of the rural economy.
Baroness Thornhill (LD)
I will mainly speak to Amendments 4 and 21. It is fairly obvious that we will support Amendment 21 from the noble Lord, Lord de Clifford.
We have a problem with Amendment 4—or we did to start with, but then I took legal advice. The noble Lord, Lord Jamieson, asserted that we needed clarity and consistency across the Bill. I suspect we have more lawyers than any other profession in this House, and guess what: I got slightly different answers. However, the message was quite consistent: we absolutely do not need to have the same definition of family, in this case, across a whole Bill because we are dealing with very specific, different things.
My understanding is—and I am certain that the Minister will correct me if I have this slightly wrong—that the amendment to ground 1 deals with the diversity of the modern family and the kind of things that can happen, but it is about the repossession ground, so it has been drawn fairly tightly for obvious reasons. However, the definition in Clause 20 is clearly broader because it relates to the removal of the guarantor liability for rent after a family member in a joint tenancy dies. It is a sympathetic amendment and a sympathetic broadening, casting the net a little bit more widely, as it seeks to protect bereaved families, whereas we necessarily want to keep the definition in ground 1 fairly tight to avoid abuse. We have resolved our position on that, so we will not support Amendment 4.
I want to hear what the Minister has to say on Amendments 22 and 23, because I believe there are grounds to do what they would do already in the Bill. I am genuinely interested to hear the Minister’s response to those amendments.
Lord Carrington
Member’s explanatory statement
This amendment and others in the name of Lord Carrington would enable the landlord to gain possession of the dwelling-house to house their agricultural worker, who will be working at least 35 hours per week for the landlord, regardless of the worker’s employment status (i.e. employee, worker or self-employed person).
Lord Carrington (CB)
My Lords, I shall speak also on Amendments 9, 11, 13, 14, 15, 16 and 17. I apologise that there are so many; I actually tabled only one but the Table Office divided it.
The amendments cover grounds for possession as they relate to self-employed agricultural workers. It is clearly understood that the key aim of government is to provide more security for tenants in the private rented sector—hence the abolition of Section 21 no-fault evictions. I thoroughly support this policy, but reforms must be implemented carefully when it comes to the rural economy to take into account the particular circumstances of the agricultural sector in order to avoid negative impacts, such as the necessary housing of farm workers who are crucial to the nation’s food security, as well as to a thriving rural economy.
Accordingly, special protections specific to agriculture are required. That is already partly recognised in the Bill in ground 5A, but limited to direct employees. Agriculture is unique in terms of tenanted housing, as often agricultural workers are provided with accommodation to enable them to be close to their place of work. A worker can often be required to work long hours during certain seasons, such as lambing or harvest, or unsocial hours, such as early mornings and late evenings, in the case of dairy farming. There are also animal welfare considerations that require workers to be close at hand at all times.
Following Committee in the Lords, I withdrew the original amendments to address the Minister’s concerns. She said then that there were other arrangements that a landlord could use to help their contractors with accommodation when they are working away from their home, such as paying expenses, using licences to occupy or paying for them to be housed in an Airbnb. She is absolutely correct, as contractors can be somewhat different from employed or self-employed farm workers. I have therefore removed contractors from this amendment.
The Minister’s suggestion that the same could be achieved by allowing self-employed workers to occupy a property under licence would not be appropriate for longer-term workers, which this amendment seeks to address. I also point out that licence agreements are generally unsuitable for long-term occupation, and in some instances can actually be considered as a tenancy, especially when the occupant of a dwelling has exclusive occupation of all or part of the dwelling.
I know the Minister was worried that these amendments could open up an exemption for a wider group of workers, and I hope I have reassured her that this specifically covers only genuine full-time agricultural workers. The revised amendments, which add only self-employed agricultural workers to this category, also deem that the nature of the self-employment should be genuine and meaningfully full-time. Hence, reference is made to working a minimum 35-hour week. Furthermore, the revised amendments confirm that there is no intention to alter the security of tenure afforded to assured agricultural occupants. That is because the Bill states that grounds 5A and 5C do not apply to this type of worker.
We believe that the ground for possession should be available where there is a need to house self-employed agricultural workers—for example, a self-employed party to a share-farming arrangement on a farm or a self-employed shepherd. It is increasingly common in the agricultural industry for workers to be self-employed but, given the nature of their work, especially if it is with livestock, they need to live on site. Some examples of workers who might fall into this category are dairymen, sheep shearers, relief milkers or tractor drivers. Currently, ground 5A provides a means of getting possession where the dwelling is required to house someone who will be employed as an agricultural worker. However, it does not cover the situation where that worker is self-employed.
On the same theme of self-employed workers, ground 5C does not adequately provide for possession where a self-employed worker has been provided with a dwelling but the work contract has ended; it applies only where the tenant has been employed by the landlord. In summary, we would like to see extensions to both ground 5A and ground 5C to reflect modern farming employment practices and cover situations where the worker is self-employed as well as employed. I very much hope that the Minister will be able to accept this amendment, which purely reflects current employment practices in farming, is non-political and is not designed to cover non-agricultural workers.
My two other amendments in this group, Amendments 10 and 12, cover the status of service and key workers. Much of the debate, within this Chamber and beyond, is rightly focused on the Bill’s impact on the private rented sector in urban rather than rural areas. These amendments seek to address two critical concerns: first, how we ensure that rural businesses can continue to function effectively and house employees; and, secondly, how to support the housing needs of key workers, in both urban and rural areas.
In many rural communities, landlords have typically also been a major employer in the area, and the convention is that they house employees of their businesses. Traditionally, the most common form of employment was in agriculture, and this is reflected in the specific legislation for agricultural worker tenancies. But, as successive Governments have encouraged rural diversification, we have seen a growing number of businesses beyond farming employing and housing workers. This has become more frequent as affordability challenges have meant that accommodation often needs to be offered as part of an employment package to attract and retain staff. Alongside this, more properties have been let to non-employees under assured shorthold tenancies, which have maintained flexibility. This system has allowed landowners to regain possession at the end of a fixed term, enabling them to house new employees as business needs evolve. Without a clear right to repossess in such cases, we risk seeing vital rental properties in rural areas either being sold or left empty. This is not hypothetical: we have already seen the consequences in Scotland following the ending of its equivalent of Section 21.
These amendments aim to ensure that rural businesses can continue to house the workers they need, while also supporting the broader functioning of rural and urban communities. In Committee, the Minister raised two objections to a similar amendment: first, that ground 5A already covers this issue; and, secondly, that we must protect tenants in critical local jobs. However, ground 5A, while welcome, does not go far enough. As the Minister acknowledged, the agricultural sector has unique needs, hence the inclusion of ground 5A, but 85% of rural businesses do not relate to farming or forestry. Many of these businesses still require staff to live on or near the site to perform their duties effectively. If the logic behind ground 5A works for agriculture, it should also work for these other rural enterprises. These amendments would extend repossession rights to cover incoming service occupancy workers—those who are required to live in a property for the better performance of their duties.
A good example is a rural business that diversified into hosting weddings to remain viable under changing agricultural policies and profitability. It now needs to hire a full-time wedding planner, someone who must be on site at short notice, work irregular hours and take on responsibilities for security and caretaking. However, the business cannot recruit because there is no housing available nearby. One of this rural business’s cottages is currently let to a non-employee. If the business were to seek repossession of this property to house this wedding planner, ground 5A would not apply and it would be unable to obtain possession. Amendments 10 and 12 would allow repossession of this property to protect the viability of the business.
I appreciate that the ambition of the Bill is to protect the security of tenure of more households. However, if we do not strike the right balance and make it more difficult for businesses to employ and house staff, they will simply hold properties vacant for potential future employees or sell them. This will further restrict the availability of private rented housing in rural areas.
I turn to the second point, which is the protection of tenants in vital local roles. The amendment is needed to address the efficient functioning of the rural economy, which includes housing those in vital local roles. The principle has been accepted for housing incoming agricultural workers; this is simply an extension of that. The Government are concerned about housing vital key workers in rural areas, so I have strengthened the amendment to include a provision allowing repossession where the property will be used to house an incoming key worker. Such workers are broadly defined as certain NHS employees; carers, who we have already talked about; teachers; and police and security staff, et cetera. In many rural areas, key workers face long commutes due to a lack of suitable housing. This undermines recruitment and retention and ultimately harms local services. These amendments would allow rural landlords to offer housing to key workers, ensuring the viability of rural areas.
While my focus is primarily rural, the benefits extend to urban landlords, such as NHS trusts or housing providers, and to key workers such as firefighters, on-call carers and others whose proximity to work is essential. In short, these amendments would make the private rented sector more responsive to the needs of both rural businesses and urban communities. They strike a balance between tenant protection and operational necessity and I urge the Minister to support them. I beg to move.
Baroness Grender (LD)
My Lords, I thank the noble Lord, Lord Carrington, for bringing what is a quite small technical issue, even if there are many amendments related to it, particularly regarding farmers and their tenants. We understand that, technically, Amendments 8, 9, 11 and 13 to 17 relate to one very small, specific, technical issue, which is that if a dairy farmer, say, is on a contract, or is a freelancer but needs to be moved in to the site, then that repossession should be able to happen. So it is about viable businesses and about ensuring that somebody who is highly relevant can live next door to where they are working.
We understand, or we thought we understood, that licence to occupy would cover this. We also worry about the hours relating to this, although we note that one of the amendments specifies a 35-hour week. Therefore, I want to know from the noble Lord, Lord Carrington— I am happy to sit down and make way for him to answer—whether it would be possible to apply a loophole so that someone could work for just one hour and then get through a loophole that has been applied by these amendments.
Lord Carrington (CB)
The answer is “No”. The whole reason for putting 35 hours a week in there is to make sure there is no loophole, and it is drafted as such.
Baroness Grender (LD)
I thank the noble Lord.
On Amendments 10 and 12, we on these Benches are concerned that they technically widen the scope beyond where we are comfortable. However, regarding Amendments 8, 9, 11, 13, 14, 15 and 16, we hope that the Minister has heard the technical detail that is required for a very specific profession and will look favourably on taking this away and having another look.
Lord Carrington (CB)
I thank the Minister very much. I appreciate her response, but I am afraid that I am somewhat disappointed by it. It demonstrates a lack of understanding of the farming industry and the rural economy.
I greatly appreciate the words of the noble Baronesses, Lady Grender and Lady Scott, as well as of the noble Lord, Lord Cameron of Dillington, who brings very practical experience as a dairy farmer, whereas I am only a sheep and arable farmer.
To pick up on what the Minister said about this being a loophole, the whole point of my amendment saying that the person has to be a genuine worker, working 35 hours a week, is surely sufficient to deny that claim. Reluctantly, I would like to test the opinion of the House.
Lord Carrington
Member's explanatory statement
This amendment and others in the name of Lord Carrington would enable the landlord to gain possession of the dwelling-house to house their agricultural worker, who will be working at least 35 hours per week for the landlord, regardless of the worker’s employment status (i.e. employee, worker or self-employed person).
Lord Carrington
Member's explanatory statement
This amendment and others in the name of Lord Carrington would enable the landlord to gain possession of the dwelling-house to house their agricultural worker, who will be working at least 35 hours per week for the landlord, regardless of the worker’s employment status (i.e. employee, worker or self-employed person).
Lord Carrington
Member's explanatory statement
This amendment and others in the name of Lord Carrington would enable the landlord to gain possession of the dwelling-house when the tenant stops working for the landlord, regardless of the tenant’s employment status (i.e. employee, worker or self-employed person).
Renters’ Rights Bill
Lord Carrington Excerpts(1 week, 6 days ago)
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Lord Carrington (CB)
My Lords, I shall speak to Amendment 34 and the associated Amendments 35, 36 and 40 in my name and kindly supported by the noble Lord, Lord Hacking. First, I thank the Minister, the noble Baroness, Lady Taylor, for her ongoing engagement with me and other noble Lords and Baronesses throughout the steps that this important Bill has taken thus far. My amendments concern a vital part of the Bill: the right of renters to challenge annual rent increases.
There remains strong consensus across this House and in the other place that stands with the Government in ensuring that unreasonable and exploitative rent increases are avoided. Such increases should not be used in this way across the private rented sector as a means of eviction through the back door. However, despite the Government’s own recent amendments, which I will turn to in due course, I remain strongly of the opinion that the Government’s current drafting of Clause 7 will not work, even with the new failsafe mechanism that has been added in the name of the noble Baroness, Lady Taylor.
It remains the case that under the current wording of the Bill, renters will have a universal right to challenge any and every rent increase they receive, in all circumstances and without qualification. Moreover, increases that the First-tier Tribunal agrees will come into effect only once the tribunal has given its ruling. This wording continues to have the very real and dangerous potential to undermine the supply of new rental homes in England and, at the same time, overwhelm the courts.
The Government believe that renters will apply to the tribunal only if they believe that a rent increase is above market rents. Like others, I am afraid that will not be the result of this legislation. The legal text of the Bill still sets out that a rent increase could not come into force until after the tribunal rules. The result of this drafting is to create an artificial incentive for all renters—all 4.5 million of them—to submit a challenge to a proposed increase in rent from their landlord, however legitimate. This would prevent the increase coming into force until the tribunal decides. There is no risk to the renter in this, as it provides a guaranteed delay. Once this is widely understood, as was pointed out by the noble Baroness, Lady Wolf, renters will exercise their right as a matter of course. Indeed, I expect a celebrity such as Martin Lewis would immediately note the opportunity to delay rent increases as a money-saving tactic for renters.
This incentive also risks the efficacy of the First-tier Tribunal by burdening an already struggling court with thousands of cases. This would result in those in real need waiting potentially months longer for access to justice from exploitative landlords. The Government rightly want renters in genuine need of redress to have access to the court, but the queue for justice will be too long for this to prove realistic.
My amendments seek to ensure that if a rent increase is challenged, but the increase is upheld by the tribunal, the rent increase becomes effective from the original date of the Section 13 notice. This important detail removes the incentive for spurious challenges that are being used only as a delaying tactic by renters who are challenging their rent increase because they simply want to delay payment of it. By removing this incentive, only those renters with real cause and who are being exploited, and are therefore likely to get the support of the tribunal’s decision, will challenge rent increases. These are the very people who should be at the front of the queue when it comes to these sorts of challenges.
I turn to the amounts of money we are looking at when it comes to rent increases. I want to explain how my amendments, while deterring spurious challenges, also support renters who challenge their rent but with whom the tribunal is not in agreement. The Office for National Statistics notes that the average rent per month in the United Kingdom, in the 12 months to April 2025, was £1,339. The average rent increase across the UK in the same 12-month period was 7%. Therefore, if we were to take 7% as a marker for the rent increase in the next 12 months, we would be looking at the average rent across the UK increasing by around £93 per month.
Now, £93 can be a good deal of money to many across the country, particularly as the cost of living crisis continues. This pressure on household finances has not been overlooked in my amendments, which cover the concerns of the Minister and others that renters may be put under undue financial pressure if they are unsuccessful in their rent challenges and are required to pay back large lump sums of backdated rent at once.
Under the Bill, every renter from the time it is implemented would have the ability to challenge and delay the £93 per month annual increase without needing to provide a reason, be it financial or otherwise, as to why they are challenging that increase. However, if the tribunal, when it eventually gets to each and every challenge, judges in the landlord’s favour, my amendments would ensure that instead of that renter needing to pay their landlord a backdated amount of rent immediately, a 12-month payment plan would be put in place. This means that if it took six months for the challenge to be reviewed by the courts and a decision made, the renter would not need to find the extra rent immediately but would need only to find the extra £46.50 each month over the next 12 months to pay their landlord in backdated rent. This seems entirely reasonable, and I hope the inclusion of this amendment has been carefully considered by the Minister.
I now turn to the Government’s assessment that renters will apply to the tribunal only if they believe a rent increase is above market rents. The Government are placing a great faith in this opinion and have commissioned a new burdens assessment and justice impact test, which is referred to many times throughout the Bill’s impact assessment, from November last year. However, we have not been able to review or scrutinise these two important documents, as they have not been published. Were we able to see and scrutinise them in this place, many of us may be reassured by the Government’s current opinion on levels of renters who will challenge their rent, but while the Government restrict access to these documents, we must rely on what the Bill says and our understanding of renters and the PRS as it stands in a time when household finances are tight and there is every incentive to delay a rent increase.
The Government have tabled a fail-safe amendment to Clause 7, but again there is a lack of detail here too. In Amendment 37 in the name of the Minister, the noble Baroness, Lady Taylor, we are not given clarity around when such a power would be used and what the trigger for this would be. What level of caseload would the tribunal need to face before the Government were to step in and introduce backdating? Therefore, while I applaud the Government for considering Clause 7 and tabling this amendment, I fear it will do nothing to reassure the sector. It is also interesting to note that in the event of the introduction of the fail-safe mechanism, rents will be charged from the date of the Section 13 notice—quite a reversal of policy from the tribunal decision date. If we had the detail around when such a statutory instrument would be enacted, we might be able to agree with the Government on the amendment, but as it stands, sadly I cannot.
To sum up, taken together, I believe that Amendments 34, 35, 36 and 40 in my name would deliver a fair result. They are technical changes that keep the vital rights of renters to challenge from being exploited, while reducing the artificial, jeopardy-free incentive to take any and all landlords to court for reasonable increases in line with the market. The amendment giving protection to renters who lose their challenge with the 12-month payment plan should also be strongly considered by Government.
Lord Carrington
Lord Carrington (CB)
My Lords, I very much thank the Minister for her answers to my various questions. However, I also point out that her agreement to work on the amendment from the noble Baroness, Lady Wolf, is an extremely positive step and I look forward to the results of that.
However, with considerable sadness, I am very disappointed by the lack of clarity on Amendment 37. The drafting of that amendment is so vague, with the judgments being called only when absolutely necessary and when significant, et cetera, and there being no data to back this whole thing up, that I want to pursue my amendment, because my Amendment 34, together with associated Amendments 35, 36 and 40, all provide great clarity to this particular issue. They are, in a sense, technical amendments: they are not in any other way political.
In Amendment 36, I propose this 12-month delayed payment for any rent increases that the tribunal comes up with, so I recognise these financial pressures, and we have done something to try and ameliorate them. On that basis, I would like to test the opinion of the House.
Lord Hacking (Lab)
My Lords, I very much support Amendments 43 and 45, tabled by the noble Baroness, Lady Scott, and supported by the noble Lord, Lord Jamieson. I can give a practical example of this. A very nice couple from Chile wanted to rent one of our flats. They had no credit record at all here in England so there was no way to check that. There was no efficient way to check the previous landlord, which is the other step that a landlord normally takes to ascertain whether these are suitable tenants to go into the property. They had the money. Both of them were coming to work in London for a year for an academic purpose. Enabling them to pay some money in advance—I have forgotten whether it was six months or more—was therefore a sensible compromise. They turned out to be delightful tenants and highly reliable, and we were delighted to have them in our house.
I also want to speak to Amendment 46. It is to protect landlords when a tenant has signed up to take the property on a certain date but has failed to pay either the first month’s rent in advance or the deposit. I suggest that it would be entirely wrong, because the tenancy agreement had been signed and so forth, if the landlord were then obliged to take that tenant into the property. Remember that a landlord cannot chase unpaid rent for three months, and then there is the delay in getting a hearing in the county court, so that would be onerous for the landlord to deal with. Moreover, if the tenant has not paid either the first month’s rent or the deposit in advance, he probably does not have the money available, and the high probability is that the landlord will have to suffer that tenant in his property for three or four months without any payment at all.
I therefore thought it would be sensible to make it quite plain—my amendment starts:
“For the avoidance of doubt”—
that the landlord does not have to give the tenant keys to the property or allow them to get into it when the tenant has not paid. I added a further bit to the amendment to enable the landlord, if the tenant fails to pay the first month’s rent or the deposit for a further 28 days, to take the next step of having the lease annulled. That is to make it plain in the Bill what the position of the landlord is after having entered into an agreement with a tenant who then does not pay either the first month’s rent or the deposit.
Lord Carrington (CB)
I support the indefatigable and noble Lord, Lord Hacking, in his Amendment 46. I find it plainly obvious that rent needs to be paid before occupation. I can find preciously few examples of anyone paying for goods and services after they are contracted or consumed. An obvious example is a railway ticket or an air ticket. No one goes to the cinema and pays after the performance or takes a litre of milk at Tesco and then pays after drinking it: it is just not acceptable.
Participating in the private rented sector, as either landlord or tenant, is a serious business. The landlord has made a major investment and may have a mortgage to service, among other costs. A tenant is looking for a safe and secure tenancy which incorporates decent home standards: he is well aware of the financial obligation. Without this amendment, the landlord would be laid open to the possibility of four months with no rent and a longer eviction process under Section 8, possibly taking seven months or so. The position of a landlord is a commercial business, not a public service. I urge the Minister to accept this rather obvious amendment.
Baroness Thornhill (LD)
My Lords, in view of the time, I will speak briefly to Amendment 43. I could simply say the first sentence: “We are strongly opposed to rent in advance because it is discriminatory”.
This amendment is being framed as a cosy option where tenants and landlords can reach a mutual agreement as to whether or not they will do this. No, I do not believe that. If allowed, it will become, as now, a requirement. In effect, it will become a bidding war by any other name, and landlords have their pick of tenants: Zoopla has just reported that there are between 20 and 25 punters for each property and at least 20 requests to view each property. Landlords can pick, it is a beauty parade, so they can choose the tenants who have the money to give them six months’ rent up front against those who just do not have those advantages. But those same people can still afford to pay the rent and would still make good tenants.
We are opposed to anything that prices out poor renters in hot rental market areas. We refute the argument being discussed by landlord groups that this is an option for niche circumstances that allows people to access housing; for example, as was said, where people might struggle with credit checks. If you are struggling with credit checks, it is highly unlikely that you will be able to pay six months’ rent in advance. In a very modest property in Watford, six months in advance is between £6,000 and £8,000. That is a lot of money.
We know that landlords and letting agents often use it as a barrier to reject tenants relying on universal credit or housing benefit, preventing them accepting a tenancy, which means that only those with savings or family support to draw on will comply, which those on low incomes are less likely to have. Shelter tells us that six in 10 renters have been asked for it and over 800,000 people in one of its surveys say they were not able to secure a property because of the demand for rent in advance. The Bill aims to prevent discrimination against renters on benefits. This amendment would allow it by the back door.
Renters’ Rights Bill
Lord Carrington Excerpts(2 months, 1 week ago)
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Baroness Jones of Moulsecoomb (GP)
My Lords, I shall speak very briefly, because the noble Lord, Lord Black, covered his two amendments very thoroughly. I do not have pets myself, but I declare that I have a daughter who has recently taken the tenancy of a house, and she has children, a dog and two cats. It was quite difficult for her to make sure that they could all live together, so I understand that a lot of people would have to lose their pets, and I think that is an incredible shame.
I thank the Dogs Trust, Mars Petcare and Battersea Dogs & Cats Home for their briefings and work on this, which were very thorough. Amendment 118 would provide security for pet owners in rented accommodation —knowing that, once granted, consent cannot be withdrawn. If this was tabled in the other place by the current Minister, I assume that he is going to accept this amendment, and that the noble Baroness the Minister will tell us that today.
Amendment 125, which I have also signed, would go a long way towards ensuring that blanket no-pet policies cannot continue. Battersea Dogs & Cats Home has described the second most common reason that pets are given up to it as because of rental restrictions. That seems extremely hard. Although I do not have any pets, I understand the value of pets to people in all sorts of ways, and I hope that we can have some success with these amendments.
Lord Carrington (CB)
I shall speak to Amendment 126A and to support the noble Earls, Lord Caithness and Lord Leicester. I had not intended to speak on this, but it is a point that there is a big difference between pets in rural properties and pets in urban properties. Speaking as someone who lets rural properties, I have never had any problem with stopping tenants bringing their pets, but I would mention that cats are a particular problem in certain areas. I think that the very carefully drafted amendment of the noble Earl, Lord Leicester, makes a great deal of sense in this respect.
Lord Inglewood (CB)
My Lords, I declare my interest as entered in the register and apologise to the House for not having spoken before in Committee. I spoke at Second Reading, but the combination of the west coast main line and prior commitments has made it impossible in Committee until now.
Briefly, I make just three points, in no particular order. First, in respect of Amendment 118, the nicest, cutest little puppy can turn into a horrible adult dog, and if it is impossible for the landlord, having given consent, to change that if the cute little puppy turns into a dog from hell, that would be a very great mistake. It is a matter of balance, reasonableness and judgment. Secondly, I support the amendment in the name of the noble Earl, Lord Kinnoull, because that seems to be elementary sensibleness—nothing more. Thirdly and finally, having heard the very persuasive speech of the noble Lord, Lord Black, I suddenly wondered: were they asking the Government to make it compulsory for tenants to have pets? I ask the Minister what her view about that would be.
Renters’ Rights Bill
Lord Carrington Excerpts(2 months, 2 weeks ago)
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Lord Carrington (CB)
My Lords, I declare my interests in the private rented sector, with residential lettings in Buckinghamshire and Lincolnshire.
I have tabled Amendments 96, 98, 99, 103 and 104 to Clause 8, in which the Government seek to create a new right for renters to challenge their annual rent increases. I am most grateful for the support of the noble Lords, Lord Young of Cookham and Lord Howard of Rising, in this group.
I believe there is a strong consensus across your Lordships’ Committee that stands alongside the Government in wishing to prevent unreasonable rent increases being used as a means of eviction through the backdoor. However, I also believe there is a strong consensus that the Government’s drafting of Clause 8 will not work. Indeed, I am deeply concerned that providing a universal right for all renters to challenge all rent increases, in all circumstances and without qualification, will undermine the supply of rental homes and overwhelm our courts.
The Bill seeks to provide renters with mechanisms to ensure redress where their landlord behaves inappropriately, irresponsibly or exploitatively—yet I fear that the current drafting will undermine that intention in practice. At Second Reading we heard examples of poor behaviour by a small minority of landlords, but the response delivered by the Government will impact the whole private rental market, including the great majority of responsible landlords.
The effect of Clause 8 will be to create a right for all 4.5 million of England’s private rental households to challenge their rent increases annually, via the Section 13 process, at no cost and at zero risk. Every single renter will have a right to take their landlord to the First-tier Tribunal if they perceive their rent increase to be “disproportionate” or unreasonably above market rates.
The Government believe that tenants should apply to the tribunal only if they believe a rent increase is above market rents, but I am afraid that will not be the result of this legislation. The legal text of the Bill sets out that a rent increase could not come into force until after the tribunal rules, and explicitly prohibits the court from determining real market rent to be higher than the landlord’s proposal, even if that is a judge’s evidenced assessment.
The result of this drafting is to create an artificial incentive for all 4.5 million renters to submit a challenge to their rent rise, however legitimate, because this would prevent the increase coming into force until the tribunal decides. There is no risk to the tenant in this and it provides a guaranteed delay in when the increase comes into force. Once this is widely understood, renters will exercise their right as a matter of course.
This incentive risks overwhelming our First-tier Tribunal, burdening an already struggling court with hundreds of thousands of cases. This has already been referred to by the noble Baroness, Lady Wolf, who has come up with a sensible solution. The Government want renters in genuine need of redress to have access to the courts, but the queue for justice will be too long for this to prove possible.
Moreover, the risk of this backlog in cases is causing serious concern among professional and responsible landlords in the sector. The prospect of extended delays to increasing rent would make it more difficult for investment institutions and build-to-rent developers to invest in new, high-quality rental homes, undermining the rental housing supply that we want to see. The reality of this backlog would be upward pressure on rents—the opposite of what the Government want to achieve.
The Government themselves have acknowledged their desire to ensure that responsible landlords can increase their rents in line with the market annually, and the Government have rightly ruled out rent controls. However, the system proposed under this Bill will in practice undermine landlords’ ability to secure market rents annually.
The Guardian newspaper recently revealed that a King’s Counsel has assessed the Bill to determine the likelihood of a legal challenge in the European Court of Human Rights. Subsequently, the newspaper City AM published an article outlining this legal opinion, which determined that the Government stand a greater than 50% chance of losing in the ECHR on this aspect of the Bill. I implore the Government to look into this further as a matter of urgency.
My amendments would mitigate the very serious legal risk with the current proposals on rent challenges. It is all very well for the Minister to repeat, as she has in the past, that the Bill is compatible with the ECHR, but that judgment was made before our amendments were tabled and discussions ensued. As a matter of grave responsibility, the Government should consult again with their lawyers now that these issues have been raised.
The amendments to Clause 8 in my name offer a common-sense solution that should reassure all parties. In my amendments, I propose that if a renter’s challenge is unsuccessful, rents should take effect from the date of the Section 13 notice rather than the tribunal’s determination date. I further propose that the court should be able to follow the evidence, empowering the tribunal to raise rents to what it deems to be market rates, even if this is potentially higher than what a landlord originally proposed.
I believe that, taken together, the amendments would deliver a fair result—technical changes that would keep the right to challenge while reducing the artificial jeopardy-free incentive to take landlords to court. These reasonable amendments would also give institutional investors and build-to-rent landlords the confidence to invest in the high-quality new rental homes that our country needs. To address concerns raised by a number of noble Lords at Second Reading about unsuccessful challenges leaving renters with a large bill, my amendment is drafted to mandate landlords to spread any backdating over a 12-month period.
The number of amendments proposed to Clause 8 speak to the widespread concern in this House about the risks of the Government’s current drafting. Whether colleagues support my amendments or those of my colleagues, I believe the Government’s position is unsustainable. A credible plan is needed to address the artificial incentive for every renter to challenge their rent. Otherwise, I fear for serious investment in new rental homes and the functioning of our courts system.
Lord Cromwell (CB)
My Lords, I have some sympathy with Amendment 99, concerning the rent rise challenges under Section 13 of the Bill. It is essential that tenants can properly challenge excessive rent increases—but, once again, a fair balance is what we seek.
I slightly take the noble Baroness, Lady Scott, to task for her reference to “consenting adults”. The reason for the Bill arises precisely because of the power differential between landlords and tenants. Some adults are more consenting than others, if I may use that phrase. I am not quite sure that works, but noble Lords will know what I mean.
I support the proposal in Amendment 99 in the name of the noble Lord, Lord Carrington, that the rental increase—only, of course, if agreed by the tribunal—should take effect from the date of a Section 13 notice rather than the date of the tribunal decision. I also agree that, where this creates a rent backlog, you would need a payment plan to set it off over time. I note, however, that there would still be a risk to the landlord in those circumstances: if a tenant uses the tribunal as a speculative delaying tactic, and then if the rent increase is finally approved by the tribunal but the tenant does a flit with the rent arrears unpaid, this will leave the landlord with the unenviable prospect of trying to recover the money due to them from the departed tenant.
In short, the Bill enables—perhaps even invites—speculative challenges to any rent increase requests. I think the noble Lord, Lord Carrington, slightly overeggs it when he says that everyone in the entire country will do that, but perhaps he is doing that to illustrate his point. Either way, as my grandfather used to say, “Don’t complain if people fall for a temptation that you have created”. For the tenant it would make rational, self-interested economic sense to automatically challenge any rent increase, and this abuse of the tribunal process would add to its existing overload of cases and therefore discourage supply. I therefore support the amendment containing provisions in this regard.
There has also been a suggestion, I think in Amendment 98, that the tribunal might set a rent above what was requested by the landlord. I do not support that, for two reasons. First, if a landlord proposes a rent increase, it must be assumed that they consider it to be a satisfactory increase. Secondly, the danger of having the rent set higher than the landlord has requested is often mentioned by tenant groups that I have spoken to as a significant cause for tenants to feel intimidated, thereby preventing challenges to rent increases. The Bill does a lot to rebalance the power in the landlord/tenant relationship, but the issue needs to be re-examined. Making a revised rent payable from the notice date, if necessary with a payment plan for arrears, while at the same time not allowing rent to be increased beyond the landlord’s requested level, would achieve a better balance of rights between landlord and tenant and would prevent abuse of the tribunal system. I therefore hope the Minister will pay heed to this proposal and I look forward to hearing what she has to say.
Renters’ Rights Bill
Lord Carrington Excerpts(2 months, 2 weeks ago)
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Lord Carrington (CB)
My Lords, I declare my direct interest in the private rented sector, with cottage lettings in Buckinghamshire and Lincolnshire, together with farming and agricultural lettings. I am also a member of the National Farmers’ Union and the Country Land and Business Association, which have a direct interest in Amendment 63, on which I shall speak and for which I am grateful for the support of the noble Earl, Lord Leicester, and the noble Lord, Lord Roborough, who sadly is not able to be here today.
Before I turn to Amendment 63, I am also very pleased to be able to support Amendment 60 in the names of my noble friend Lord Carter of Haslemere and the noble Lord, Lord Hacking. I certainly will not repeat everything that has been said, but I shall make just one further point: it is relevant to note that Paragon, a bank that specialises in the private rented sector, commissioned a survey of landlords on the proposals in the Bill and the result was that 71% of landlords put the extended time, from two months to three months, as their top concern.
On Amendment 63, the Bill does not contain provisions to allow the repossession of a residential property if there is to be a change of usage. For example, if a landlord wanted to use the land for office space or commercial or retail usage, the amendment would allow them to seek possession of a dwelling house where it was intended that the use of that property, or the land on which it was situated, would be changed to non-residential and there was permission from the relevant authorities to do so. There are a number of Bills, reviews and reports in motion which cover farm diversification, which the Government are keen to encourage in the light of falling profitability in farming as subsidies are withdrawn or concentrated on environmental activities and concerns. Farmers are therefore looking carefully at their assets to see whether they can be put to more profitable usage. Obviously, this can involve the farmstead house and buildings rather than just stand-alone farm buildings. The Planning and Infrastructure Bill is relevant in this context, together with the Rural England Prosperity Fund, which specifically targets facilities and building conversions that help rural businesses to diversify.
In addition, we have the land use framework and a farming road map to look forward to, and it has also been announced that the noble Baroness, Lady Batters, will chair a report on profitability in farming and this will include diversification. This amendment assists in enabling this diversification, if the necessary planning permission has been granted. I am thoroughly aware that the Minister is keen not to reduce the housing stock. However, although it is possible that the proposed diversification will affect only agricultural buildings, there may be a more comprehensive development involving a farmhouse or other residential building, particularly if they are closely located to the diversification site. I therefore hope that the Minister will include this amendment as a sensible ground for possession, one which would assist in the development of the rural economy.
Lord Pannick (CB)
My Lords, I support my noble friend Lord Cromwell’s Amendment 142. I declare an interest in that my wife owns rental properties. I agree with what the noble Lord says about the mischief of Clause 15. It is very easy to imagine circumstances in which the owner of a property decides, in good faith, to sell it and the tenant therefore has to leave. The landlord then places the property for sale on the market but finds that, for whatever reason, after four or six months they cannot sell it. Clause 15 would prevent the landlord for 12 months from again leasing out the property. It would do so however well-intentioned the conduct of the owner of the property and however reasonable the new tenancy agreement, and even if the new lease is to the same tenant as the old one, on the same terms, including as to rent.
I entirely understand the Government’s wish to prevent landlords from abusing their rights, but the breadth of this restriction is, to my mind, plainly disproportionate to the feared mischief. This is not only unfair on the landlord; it will inevitably have an adverse effect on the housing stock available for rental purposes.
I appreciate that Ministers have stated that this Bill is compatible with the European Convention on Human Rights, but it seems to me very doubtful indeed that this clause complies with Article 1 of the first protocol to the convention, on the right to property. The European Court of Human Rights and our domestic courts have explained that the right to property requires a fair balance between the interests of property owners and those of the community in general. I cannot see how a blanket provision which penalises a landlord by preventing them from renting out their property, for a period of 12 months, however bona fide their conduct or however fair the terms of the lease, could possibly be said to respect a fair balance.
The mischief which the Government seek to prevent requires a more tailored response. I hope the Minister will be able to say, in response to the concerns that have been expressed by my noble friend Lord Cromwell and myself, that she will be prepared to meet with us to discuss ways of making this clause more proportionate by recognising an exception for landlords who have acted in good faith and responsibly.
Lord Carrington
Member's explanatory statement
This amendment, along with other amendments related to new Ground 2ZZA in the name of Lord Carrington, seeks to ensure that where the intermediate landlord is given less than 3 months’ notice to quit, the duration of any notice they are required to give to their tenant is limited to 2 months.
Lord Carrington (CB)
My Lords, I have already declared my interests earlier in the debate today. In speaking to this group of amendments, I thank the Minister for discussing them with me yesterday in great detail. I also forgot to thank her for the discussion that we had on the previous amendment.
The amendments that I have tabled are designed to ensure that an intermediate landlord who is, under the terms of his tenancy, obliged under a notice to quit to release his tenancy in less than three months, can give notice to his own subtenant limited to two months rather than the Bill’s four months, so that he is not in contravention of the head tenancy. It is proposed that ground 2ZA is amended to reduce the notice period to two months to avoid situations where an Agricultural Holdings Act tenant is forced into breaching the terms of their agreement through no fault of their own.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Carrington, for the amendments and for the meeting we had yesterday, and I thank the noble Lord, Lord Jamieson, for his comments on this set of amendments. Amendment 28 works together with Amendments 29, 37 and 38 to insert a new ground for possession, numbered 2ZZA. This proposed ground for possession is well intentioned but, in the Government’s view, unnecessary. It seeks to replicate ground 2ZA with a notice period of two months rather than four in the limited circumstances where agricultural landlords have been given short notice to vacate of three months or less by their superior landlord. Ground 2ZA already covers these circumstances and allows superior landlords and courts to treat a notice given under ground 2ZA as valid even after the intermediate landlord is no longer legally involved once their lease has ended, thus providing the affected tenant with the same protection.
Amendment 28 specifically seeks to ensure that the proposed ground has two months’ notice. This goes against the general principle of the Bill that tenants should generally be given four months’ notice to uproot their lives in circumstances where they have not committed any wrongdoing. We do not believe that a tenant’s security of tenure should be undermined due to the actions of a superior landlord and encourage communication between all parties, where a superior landlord’s notice to the intermediate landlord is shorter. By creating ground 2ZZA with a shorter notice period for circumstances where the intermediate agricultural landlord has themself been given short notice by their superior landlord, the noble Lord, Lord Carrington, is seeking to ensure that the superior landlord is not left managing the subtenancy.
Amendment 29 adds ground 2ZZA to the list, in subsection 4(3)(f) of the Bill, in which a notice given by an intermediate landlord can be treated as a notice given by a superior landlord once the intermediate tenancy has ended. As superior landlords will already be able to evict tenants under a notice given by an intermediate landlord, we do not think the noble Lord’s proposed ground 2ZZA is required.
Amendment 37 is an amendment specifically to ground 2ZA, disapplying it in the circumstances in which the noble Lord wishes ground 2ZZA to apply. Further to what I have already said, this highlights the redundancy of the proposed ground 2ZZA. Clearly, ground 2ZA would apply already, to the point that it needs to be disapplied to make proposed ground 2ZZA work. I am sorry—I hope everyone is following this.
Amendment 38 inserts the proposed ground into Schedule 1 to the Bill. For all the reasons I have already highlighted, in our view the amendment is not required. As such, I ask the noble Lord to withdraw the amendment.
Lord Carrington (CB)
I thank the Minister for her extremely clear description of this amendment and why it might not work. I also thank the noble Lord, Lord Jamieson, very much for his own contribution. Everyone is probably now completely befuddled by the whole thing. I will not take up any more of your Lordships’ time, and I certainly will withdraw the amendment. However, we will be looking further at the legal implications of this.
Lord Carrington
Member’s explanatory statement
This amendment, along with other amendments related to new grounds for possession for occupation in the name of Lord Carrington, seeks to enable the landlord to gain possession of the dwelling-house to house their agricultural worker regardless of the worker’s employment status (i.e. employee, worker, self-employed person or contractor).
Lord Carrington (CB)
My Lords, I already declared my interests earlier in the debate.
I will speak to Amendments 48, 49, 51, 52, 54, 55, 56, 57 and 58. Some of these amendments have been kindly supported by the noble Earl, Lord Leicester, and the noble Lords, Lord Colgrain and Lord Roborough. The objective of Amendment 48 is to broaden the definition of “agricultural worker”, regardless of the worker’s employment status to cover not only a direct employee but a self-employed person or contractor, as this reflects modern farming employment practices.
In my meeting with the Minister, to whom I am most grateful for her attention, I learned that she was worried that this could open up an exemption for a wider group of workers, but I hope that I have reassured her that this specifically covers only agricultural workers. Her suggestion that the same could be achieved by allowing self-employed workers to occupy a property under licence would not be appropriate for longer-term workers, which this amendment seeks to address.
We believe that a ground for possession should be available where there is a need to house a non-employed agricultural worker; for example, a self-employed party to a share-farming arrangement on the farm or a self-employed shepherd or cowman. It is quite common in the agriculture industry for workers to be self-employed, but, given the nature of their work, especially if it is with livestock, they need to live on the site.
Currently, ground 5A provides a means of getting possession where the dwelling is required to house someone who will be employed by them as an agricultural worker. However, it does not cover the situation where the worker is self-employed. Similarly, ground 5C does not adequately provide for possession where a self-employed worker has been provided with a dwelling, but the work contract has ended. It applies only when the tenant has been employed directly by the landlord. We would like to see extensions to grounds 5A and 5C to cover situations where the worker/tenant is self-employed as well as employed. I hope that the Minister will be able to accept this amendment, which purely reflects current employment practices in the farming industry and is certainly not designed to cover non-agricultural workers.
I turn now to Amendments 50 and 53 in this group. By way of background, in the rural private rented sector the average length of a tenancy is around seven years, so there is little churn in view of the long-term nature of accommodation in rural areas. Combined with the shortage of rural affordable housing, which I hope will be addressed in the Planning and Infra- structure Bill, the availability of housing to support rural growth, particularly that driven by the increasing need for farm diversification due to lack of profitability in farming, is a clear and continuing problem. This diversification is being encouraged by the Government through schemes such as the Rural England Prosperity Fund. However, this diversification will be held back if it involves the necessity to house an employee on site and there is no availability of housing.
Rural landlords in the private rented sector have traditionally been the employer of their tenants. Historically, they have primarily housed agricultural workers, but with mechanisation, fewer mixed farms and employment costs, these cottages have been rented to others. At the same time, legislation governing the private rented sector has evolved to give extra statutory protection to agricultural workers. However, as farms have modernised and have been encouraged to diversify, many farmers and landlords have businesses which employ staff to operate in non-farming sectors but still need to be housed by the landlord for the better performance of their duties. The system of assured shorthold tenancies has allowed farmers and landowners to recover cottages at the end of the fixed term and thereby house the employee for the new enterprise.
In a situation of assured tenancies, this option will not exist, so the prudent owner may well take the view that he cannot risk an assured tenancy and therefore keep the house unoccupied. This could affect supply in an already-stretched private rented sector. While it remains very important that rural landlords are able to house incoming agricultural workers—new ground 5A —it is increasingly important that they are able to gain possession from a non-employee PRS tenant in order to house an employee of their diversified business.
This amendment would allow possession where the property is required for housing a person who, for the better performance of their duties, is required to be, or is by custom, housed by their employer. In order to conform with an assured tenancy, this circumstance could be made a prior notice ground in an assured tenancy if a fixed-term tenancy is not allowed. The possibility of registering such properties would allow an incoming tenant to be aware that such properties can be let only on fixed terms. Examples of such employees include security personnel, housekeepers, catering staff, wardens and groundsmen.
I urge the Minister to favourably consider this amendment, in light of the real needs of the rural economy, where housing is in very short supply and the need for rural diversification from farming is paramount. The Bill is currently geared toward the urban PRS and does not take sufficient account of the different challenges in the rural sector. I beg to move.
The Earl of Leicester (Con)
My Lords, I support the noble Lord, Lord Carrington, on Amendments 48, 49 and 51 and, subsequently, 50 and 53. On the first ones, the noble Lord is absolutely right that, in the 21st century, the terms of employment in agriculture have moved on: they are not based on the old direct employee relationship. There are increasing numbers of self-employed people—the noble Lord mentioned stockmen and stockwomen, and many stockmen will be self-employed and work for two or three farmers, with two or three herds. Obviously, it puts you at an advantage if you can provide them with a house.
Baroness Taylor of Stevenage (Lab)
Presumably there would be a time lag anyway because of the notice period that is required. Whatever arrangements are made in those circumstances would need to be used in the circumstances that the noble Baroness describes.
Lord Carrington (CB)
I just add that there may not be a notice period if there has been an accident.
I thank all the noble Lords who have contributed to the debate, particularly the noble Earl, Lord Leicester, and the noble Baronesses, Lady Scott and Lady Grender. I look forward to hearing what the noble Lord, Lord Berkeley, has to say before Report.
There are two themes to these amendments. The first is the change in farming employment practices, and these amendments are designed to cater for that. The second theme is farm diversification, which this Government are keen, quite rightly, to encourage. As we all know, diversification ought to lead to growth and growth ought to lead to more housing, as there will be more wealth. I think the Government should, if possible, broaden the way that they look at these two amendments.
The Minister mentioned that the proposals that have been put forward are open to abuse. I say only that the abuse would be by a very small number of people, whom one could probably deal with in a different way. Airbnb and licensing are solutions for certain types of contractors or employees who are brought in for a limited period, but are certainly not suitable for the longer term. It is not in any landowner’s interests to get rid of a tenant who is paying a decent rent in order to put in an employee who is not paying a rent, unless he really has to, so I do not think that abuse is really an issue.
However, I see that we need to look at the definitions very carefully and I am happy to sit down again to try to come up with some definitions of who should qualify for this. That said, I beg leave to withdraw the amendment.
Lord Carrington
“New ground for possession for property which is needed to house a protected tenant
24A After Ground 8 insert—“Ground 8A
The landlord seeking possession requires the dwelling-house for the purpose of housing a person who either—(a) was employed by the landlord, or in the case of joint landlords seeking possession, by at least one of those landlords, and whom the landlord has an ongoing statutory duty to house after the job has ended as provided by the Rent (Agriculture) Act 1976 or this Act, or(b) is the former employee’s successor under the Rent (Agriculture) Act 1976 or this Act.””Member’s explanatory statement
This new ground for possession allows possession of a property where it is needed for the landlord/s to provide Suitable Alternative Accommodation under the Rent (Agriculture) Act 1976 or this Act to a protected former employee (or their successor) whom the landlord has a lifetime duty to house.
Lord Carrington (CB)
My Lords, I repeat that I declared my interests earlier in the debate, so I will not bore your Lordships with them again. I am now talking about Amendment 65, on which I am pleased to have the support of the noble Earl, Lord Leicester, and the noble Lord, Lord Roborough. Once again, it is a fairly technical matter, so I will try not to send everyone to sleep.
I thank the Minister for her engagement on this issue. I have taken on board her concerns, which relate principally, as we have heard throughout these debates, to making sure that the rights of assured tenants are not affected.
Many former or current agricultural employees have protected tenancies under the Rent (Agriculture) Act 1976 or they have lifetime security of tenure as assured agricultural occupants under the Housing Act 1988. While landlords have the statutory duty to house these protected tenants for their lifetime, and for at least one succession to a spouse or other family member, they have the right under the above statutes to offer such tenants suitable alternative accommodation—SAA.
Often, the tenants of these houses occupy housing required for a new agricultural worker or a property that is no longer suitable for them due to age or infirmity. In its current form, the Renters’ Rights Bill does not address the fact that a property may be occupied by a protected tenant. To offer that property to a new agricultural employee or rehouse an aged retiree to ensure that their housing needs are appropriately met, another property is required to offer as suitable alternative accommodation to that protected tenant. There is currently no ground in the Bill to allow possession of a PRS property in order to rehouse a tenant whom the landlord has a statutory lifetime duty to house. This amendment will enable landlords of rural properties to manage their properties when rehousing protected tenants.
The amendment is vital because of the longer-term nature of accommodation in rural areas. The average tenancy, as I said in a previous debate, last for 7.5 years and it is often not possible to rely on a natural churn of tenancies in order to offer the suitable alternative accommodation when it is needed. A nearby vacant rental property is often unavailable. Accordingly, our amendment deals only with the issue of suitable alternative accommodation under the terms of the Rent (Agriculture) Act 1976 rather than the Rent Act 1977, covering non-agricultural workers. It aims to ensure that the existing right can be honoured: in other words, that properties will be provided for protected tenants when required.
The amendment enables landlords to provide such accommodation when it is needed. This is particularly important when it comes to former agricultural workers who have lifetime security of tenure under the Rent (Agriculture) Act 1976. It should be noted that it is very common that such workers are moved on retirement to an alternative property owned by the employer, as the particular property they have occupied as part of their job is key to the nature of their work: for example, the dairyman’s house and things like that.
This amendment is in some ways similar to Amendment 62, from the right reverend Prelate the Bishop of Manchester and the noble Earl, Lord Leicester, which seeks to facilitate the housing of retired clergy. In both cases, the properties required are usually used for employees, but they will be let on the open market for times when they are not required by employees or former employees. Employers need to know that they will be able to regain possession as and when needed, or else they will not let them out. However, the big difference between this amendment and Amendment 62 is that, in the case of Amendment 65, the landlord has a statutory duty to house the employee under existing legislation.
The Bill already acknowledges in new ground 5A the fact that it is critical to certain jobs that an employer can house an incoming agricultural worker. The point of this amendment is to ensure that, when an incoming agricultural worker comes into a property, that property can be made available to the outgoing retired agricultural worker whom the landlord has a statutory duty to House, even after the job has ended.
This amendment is a key part of the mechanism for making way for an incoming agricultural worker, so that a different property can be freed up for the retired outgoing worker. In short, it is like the incoming agricultural worker ground but it is, in effect, an incoming retired agricultural worker whom the landlord has the duty to House. This circumstance could be made a prior notice in an assured tenancy if a fixed tenancy is not allowed. That would mean that PRS tenants would be on notice from the outset that this is the type of house that a landlord usually uses to house employees—incoming or retired—and they may give notice in the future on this ground.
Finally, as I am sure the Minister will point out, there is the possibility, under Section 27 of the Rent (Agriculture) Act 1976, of applying to the local authority to have retired agricultural workers housed. This is only in very limited circumstances where the following conditions are fulfilled: the house is occupied by a qualifying worker, protected by the Housing Act 1988 or the Rent (Agriculture) Act 1976; it is required for an incoming agricultural worker; the employer cannot by any reasonable means provide alternative accommodation; and the authority ought to provide it in the interests of agricultural efficiency.
Baroness Taylor of Stevenage (Lab)
My Lords, once again I thank the noble Lord, Lord Carrington, for his amendment which would create a new ground for possession, and thank the noble Earl, Lord Leicester, and the noble Lords, Lord Berkeley of Knighton and Lord Jamieson, for their contributions to this debate. This ground would enable a landlord to seek possession of a tenanted property in order to re-let the property to a person to whom they have a lifetime duty under the Rent (Agriculture) Act 1976 or the Housing Act 1988.
I thank the noble Lord, Lord Carrington, for his collaborative engagement on this matter and for helping me through his reasoning for the amendment, both in our meeting and his clear explanation in this Chamber. However, our position towards this amendment remains the same. It would go against the general principle of increasing security of tenure for assured tenants that is consistent throughout the Bill.
We do not agree that there is a compelling reason that this particular group of agricultural tenants need to be housed in specific dwellings at the expense of existing assured tenants. Where a landlord has a statutory duty to house an agricultural tenant or their successor, in many cases landlords will be able to move tenants as and when suitable properties become available. Landlords can also use the existing discretionary suitable alternative accommodation ground 9, which the noble Lord, Lord Carrington, mentioned, to move an assured tenant to another property if needed.
The noble Earl, Lord Leicester, referred to the issue of underoccupation, which all landlords face. I certainly faced it as a social landlord when I was a council leader; it is not unique to farming. The idea that mandatory eviction is the answer to this, rather than incentivising people to move on from underoccupied properties, would be a completely new area of legislation to be considered and would be out of scope of this Bill.
The new ground would mean that an existing assured tenant could be evicted through no fault of their own, simply moving the problem around and creating insecurity for tenants. As the noble Lord, Lord Carrington, said, this is similar to the issue we discussed on Tuesday in relation to retired clergy. I understand the distinction that the noble Lord made in relation to the statutory duty, but it is not for a specific property. The issue of just moving the problem around is the same. As such, I ask the noble Lord to withdraw his amendment.
Lord Carrington (CB)
I thank everyone who has contributed, particularly the noble Earl, Lord Leicester, my noble friend Lord Berkeley of Knighton and the noble Lord, Lord Jamieson.
I think we must agree to disagree on this. The Minister, quite rightly, is trying to uphold the essence of the Bill, which is security of tenure for assured tenants, and does not appear to be able to consider the fact that some properties should have a sticker on them saying “prior notice could be given for the occupation of this property”. I think that would be a sensible solution because there are two big things that this Bill does not take account of—no doubt among others.
First, the rural economy is very different from the urban economy. We do not have the housing that is available in the urban economy, and we are going through a revolution in terms of farming. Secondly, and I keep emphasising this, the farmer or landowner has a statutory duty. That was put firmly in an Act passed, I believe, under a Labour Government: the Rent (Agriculture) Act 1976. I urge the Government to consider this again, but in the meantime, I withdraw the amendment.
Renters’ Rights Bill
Lord Carrington Excerpts(2 months, 3 weeks ago)
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Lord Carrington (CB)
My Lords, I will speak to Amendment 173 in this group. I declare my interest in the private rented sector, with cottage lettings in Buckinghamshire and Lincolnshire. I thank the noble Lord, Lord Truscott, for tabling Amendment 173, and I am very keen to support it.
The reasoning behind my support is twofold and comes from the desire, which is shared by most, that this Bill be an opportunity to make sizeable reforms to the PRS—not only in tenant security but in improving housing and its management. This is predicated on the need, first, to encourage private long-term institutional investors into the PRS and, secondly, to differentiate between the private rental sector and short-term holiday lets, typified by Airbnb.
The Bill’s proposal that tenants should be able to give notice after only two months of occupation, rather than the four proposed in the amendment, severely limits these objectives as the addition of a two-month notice period means that a tenant might be in residence for only four months, rather than six months, which is the key to bank finance and institutional investment. It is also a question of the balance of fairness between landlord and tenant, as the costs of establishing a tenancy, renovation and redecoration need a longer timeframe for payback than that which the current suggestion would provide.
This is also an important financial point: lenders to the PRS are concerned that mortgage payments will be missed if the revenue stream ends in under six months and will therefore be wary of lending to the sector. The downside to this, over the longer term, is the risk of tenants being trapped. To deal with this issue, a tenancy agreement should include exceptions for mis-selling, poor or unsafe living conditions, breach of PRS ombudsman regulations, death, domestic abuse, et cetera, during the first four months.
It is very important to use this opportunity to increase the supply of housing in the PRS and, at the same time, to increase the standard of the product to conform with the decent homes standard and to raise the standard of management. The key to this is encouraging institutional investment and build-to-rent investors.
BTR—build to rent—is distinct from the broader PRS because BTR homes are new builds which have been constructed specifically for the rented sector, reflecting the priorities of modern renters and funded by institutional investors. BTR results in rental-focused developments that are owned and managed by a single, professional, accountable landlord. This mitigates against many of the issues plaguing the PRS, such as poor-quality homes, unscrupulous landlords and poor value for money. Bringing in private sector institutional investors will increase the rental housing stock and provide high-quality, energy-efficient homes available for long-term rent at affordable cost. However, long-term institutional investors such as pension funds are looking for predictable returns over the long term and are therefore anxious to avoid the risk of short-term tenants, which the Bill may encourage.
The second major issue that arises from serving a two-month notice on the landlord from day one of the tenancy agreement, rather than after a four-month period, as suggested, is that it risks opening a back door to misusing rental homes for short-term two-month lets. If a renter can sign their tenancy and submit their notice on the same day, tenants will be able to use a property meant for long-term rent for short-term purposes. This loophole risks undermining the work done to reduce short-term lets and their social consequences. Legally, a landlord would have no ability to prevent abuse or to prefer a long-term renter and their family. The result would be the loss of rental homes, with fewer local homes available for local residents.
The risk of this misuse is particularly high in the institutional and build-to-rent sector, because of the turnkey attractiveness of these homes. They are built so that they are easy to move into and out of, with good furnishings, free wifi and high-quality facilities.
With this loophole, a landlord could not be sure if their tenant proposed to stay for two months or a significant period. The short-term letting problem represents a barrier to investment in the delivery of new rental homes, as lenders, institutional investors and developers would have no certainty about the occupancy levels and revenue base underpinning the scheme. To address this, in 2023, the Levelling Up, Housing and Communities Committee recommended this same amendment that we are suggesting now.
Failure to address this issue will result in a significant loss of investment in new rental homes, as well as an inadvertent upward pressure on rents, particularly in cities, making it harder for people to find homes that they can afford. For the sake of an expanding and healthy PRS, which satisfies a clear market demand for the rental sector, I urge the Minister to consider and accept this amendment.
Lord Jamieson (Con)
My Lords, in moving Amendment 9, in the name of my noble friend Lady Scott, I will speak also to Amendment 13, in my name and that of my noble friend. These amendments are grounded in a very simple but important principle: when landlords and tenants reach mutual agreement they should be trusted to make arrangements that reflect their individual needs and circumstances. This debate is not about fixed-term tenancies for their own sake; it is about preserving the ability of landlords and tenants to enter into legitimate, mutually agreed contracts that reflect flexibility and choice. If both parties are in agreement, there should be a legal mechanism to support such tenancies.
Amendments 9 and 13 introduce a degree of flexibility into the framework of the Bill, without in any way undermining its core objectives to enhance tenant security and stability in the rental market. Without these amendments the Bill risks reducing the security of tenants. Amendment 9, tabled by my noble friend and supported by noble Lords across the House, would allow fixed-term tenancies to continue, but only where both the landlord and tenant have freely and mutually agreed to such an arrangement.
The Renters’ Rights Bill seeks to strengthen the position of tenants in the rental market. I support these aims but, in our efforts to provide stronger protections, we must also ensure that we do not inadvertently remove tools and options that serve tenants well, particularly where those arrangements are entered into voluntarily and in good faith. Under this proposal the landlord would agree to suspend certain grounds for possession and refrain from rent increases during the fixed term. It strikes a careful and fair balance, giving tenants greater security and predictability while allowing landlords to plan ahead with confidence.
Amendment 13 in my name would ensure that landlords and tenants retain the ability to vary terms of the tenancy by agreement. This is a modest but important provision ensuring that necessary flexibility is not lost under what would otherwise become a rigid and inflexible structure. We cannot predict the future and need to allow scope to enable a tenant and a landlord to mutually agree changes to their agreement to reflect this; for instance, where they both wish to see modifications to the property or to enable a temporary subletting where a tenant is going to be away for a time.
Beyond the immediate relationship between landlord and tenant, this also speaks to something bigger. A modern, dynamic workforce depends on geographic mobility. Working-age adults must be able to move for the opportunity, whether it is a job, an academic course or to support a family. Scrapping the option of a mutually agreed fixed-term tenancy risks restricting that movement and, in turn, limits potential.
We believe that flexibility drives productivity. The economy cannot flourish if people are locked out of areas of opportunity simply because the housing arrangements no longer accommodate short-term needs. This is not just about following a job, it is about making it possible to succeed, wherever life takes you. When we support mobility through flexible, fair rental agreements, we open the door to a future where success is not defined by the postcode of your birth but by your ambition, determination and ability to seize opportunity.
These amendments do not seek to weaken tenant protections—quite the opposite. They create opportunities for tenants to request greater security and encourage landlords to provide it willingly and transparently. In a rental market as diverse and complex as ours, this kind of voluntary flexibility is not just welcome, it is essential. If the Bill is to be a true Renters’ Rights Bill, it must include the right to choose through mutual agreement the housing arrangements that best work for each individual and their family. That is what these amendments seek to enable, and I hope the Minister will give them careful and serious consideration. I beg to move.
Lord Carrington (CB)
My Lords, I declare my direct interest in the private rented sector with lettings in Buckinghamshire and Lincolnshire. I am pleased to support the amendment from the noble Baroness, Lady Scott, and the noble Lords, Lord Truscott and Lord Jackson, and I congratulate the noble Baroness, Lady Scott, on her damascene conversion following the previous Renters (Reform) Bill. I hope we will achieve the same with the current Minister. I will not repeat their well-argued points in favour of the amendment but will make the following additional points and reiterations.
I approach the PRS from a rural background, where the average length of a tenancy is around seven years. There is little churn, in view of the long-term nature of the accommodation in rural areas. As a result, assured shorthold and fixed-term tenancies are popular. This is somewhat different from the urban PRS to which this Bill is largely directed. I cannot understand why the Government would object to the continuation of the freedom to contract for a fixed term if both parties agree, particularly as it provides flexibility and certainty to both. The landlord gets his guaranteed rent and the tenant can negotiate additional conditions such no rent reviews for a certain period, improvements and security for the term.
In Germany there are two types of tenancy: indefinite and fixed-term. Fixed-term tenancies have move-in and move-out clauses and neither party is obliged to renew. Minimum rental periods in Germany, whether indefinite or fixed, can be up to two years. The German system shows that the assured and fixed-term tenancies can work well together. The ability to contract for a fixed term also has the effect of reducing rental pressure in the overall market as longer-term tenancies act as a natural brake on rising rental costs as there are fewer opportunities to increase the rent.
Another major advantage of retaining fixed-term tenancies is that it gives confidence to buy-to-let lenders and to institutional investors, because mortgage payments are more secure, as is the financial return to the institutional investor. These are the types of landlord we should now be encouraging if the PRS is to grow and the problems of bad individual landlords are to be minimised, because they tend to employ professional management and to produce a better product. I urge the Government to look again at this matter.
Lord Truscott (Non-Afl)
My Lords, it is a pleasure to follow the erudite speech of the noble Lord, Lord Carrington. I remind the Committee of my interest as a long-standing landlord and former tenant in the private rented sector.
Why do the Government insist that they know best when a majority of both tenants and landlords want fixed tenancies? That is a fact. The Minister quoted surveys earlier, but opinions have been sought and that is the case for both tenants and landlords. The Minister has never really explained why the Government think they know more and better than the people primarily affected. Is it a case of groupthink? I support Amendments 9 and 13, proposed by the noble Baroness, Lady Scott of Bybrook. The Government should not, in my view, interfere in an agreement between two or more consenting adults.