Renters (Reform) Bill

Debate between Lord Cromwell and Baroness Swinburne

2nd reading
Wednesday 15th May 2024 Lords Chamber

[Baroness Swinburne (Con)]

My Lords, it is a pleasure to close this debate and to reflect on the thoughtful contributions that we have heard. I should first perhaps disclose that I have been a very happy tenant for many years, with successive landlords who have welcomed my dog, cat and children—so, for me, the private rental sector plays a valuable role, and the Bill’s intention is to make the system work better for both landlords and tenants.

I am grateful for the diverse, wide-ranging and sometimes contradictory contributions that have been made today, and I will attempt to address the points raised in turn—although they may not be in order, because my papers seem to have got a little jumbled.

I turn first to the abolition of Section 21 and court reform, raised by the noble Baroness, Lady Taylor of Stevenage. She raised the issue of Section 21 being abolished immediately following Royal Assent. Our priority remains ending Section 21 as soon as reasonably possible. As these are the largest changes to the private rental sector in over 30 years, it is critical that we introduce them in a way that both protects tenants’ security and retains landlords’ confidence in the new system. As I stated in my opening remarks, there is a raft of secondary legislation that will be required to achieve that; therefore, it cannot be done at Royal Assent.

The reforms in the Bill will need to be supported by a robust and efficient court system for possession. While the vast majority of tenancies end without any need for court action, an effective and efficient court system must be available for landlords and tenants who need it. We are committed to ensuring that the reforms in the Bill are appropriately supported in the courts. We have already invested £1.2 million in the Courts and Tribunals Service to deliver a new end-to-end online possession process. On top of that, this financial year we are investing a further £11 million to deliver the digital architecture for a new, fully digitised system going forward.

The analogue system is being worked on now to help process the new Section 8 possessions on new contracts as soon as possible. The digitisation of the processes will follow as soon as possible for the existing contracts, provided that the Lord Chancellor’s court assessment suggests that the system can cope. The noble Lord, Lord Carrington, and other noble Lords asked about this; I will attempt to supply a visual chart for setting out indicative timelines for the Section 21 phases and the total abolition as we discuss this over the coming weeks.

With regard to abolishing the fixed terms, noble Lords raised concerns about the shift to periodic tenancies and the removal of bilaterally agreed fixed-term contracts, and we have had two sides of the House completely disagreeing on how this should be carried out. As noble Lords suggested, we have introduced a restriction on the tenant giving notice to leave within the first six months. That will ensure that landlords have a sufficient guarantee of rent and enough notice to find new tenants, and will stop tenants using rented properties as short-term lets. After six months, tenants will be able to serve two months’ notice at any point, which is a significant improvement in flexibility compared with the current system. Of course, we expect many to stay for the long term.

[Lord Cromwell (CB)]

I think the tenant can serve notice after four months but they leave after six months. Can the Minister confirm that that is correct?

[Baroness Swinburne (Con)]

I will check that but my notes tell me that it is six months before they can serve their notice.

I reassure the House that we are exploring potential exemptions to this six-month period in extreme circumstances, such as where there are serious health hazards, the death of a tenant, for victims of domestic abuse, and other such important issues. We will bring these forward as the Bill progresses.

With regard to domestic violence, as many noble Lords raised, we recognise that domestic abuse can be interpreted as anti-social behaviour by neighbours—for example, frequent shouting and intolerable noise. It would be wrong to evict victims, which is why it is important that the judicial discretion is used in ground 14 eviction cases. To consider eviction would be a reasonable step in these circumstances.

Many noble Lords raised the issue of a longer notice period for possession grounds, and powerful arguments for that have been made today. However, we believe that the notice periods for the grounds are set at a length which balances the needs of both tenants and landlords. They give tenants time to find a new home while ensuring that landlords can manage their assets when they need to.

Noble Lords have called specifically for tenants to be protected from the moving and selling ground for a longer period at the start of their tenancy, and we are already protecting tenants’ security by ensuring that landlords will not be able to use these grounds in the first six months of a tenancy. We believe that six months strikes the right balance between improving security and, of course, allowing landlords to continue to feel confident in the market.

The Government are committed to preventing homelessness before it occurs. The Bill will help to do that by abolishing Section 21 evictions, giving tenants greater security of tenure and, we hope, reducing the risk of homelessness. We are also providing total support of £108 billion over 2022-25—an average of £3,800 per UK household—to help households with the high cost of living. This includes increasing the local housing allowance to the 30th percentile of market rents from April, which will mean that 1.6 million low-income households will be around £800 a year better off on average in 2024-25, and over 740,000 have been prevented from becoming homeless or supported into settled accommodation since 2018 through the Homelessness Reduction Act. Between 2022 and 2025, we are investing over £1.2 billion into the homelessness prevention grant, which funds local authorities to work with landlords to prevent evictions and offer alternative sources of accommodation.

With regard to Awaab’s law, I am grateful for this being raised. We agree that no tenant should have to live in dangerous housing conditions. We are taking steps to ensure that hazards in rented homes are dealt with, but how we achieve this needs to take into account the differences between the private and social rented sectors.

Awaab’s law was developed for the social housing sector, in which landlords manage large portfolios of usually between 1,000 and 10,000 properties, and have dedicated repairs and maintenance teams. We believe that it is not the right approach for the private rental sector, in which 82% of landlords have fewer than five properties. Instead, we are strengthening enforcement against hazards in private rented homes. Local councils will be able to issue immediate fines of up to £5,000 if a dangerous hazard is present in a privately rented property and the landlord has failed to take reasonably practical steps to address it. We are also introducing the decent homes standard in the private rental sector for the first time, providing local councils with enforcement powers to require landlords to remedy failures to meet requirements.

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[Baroness Swinburne (Con)]

I will take that into account, but I also extend an invitation to the noble Baroness to meet my team to discuss this in more detail.

[Lord Cromwell (CB)]

Just before the Minister sits down, I have a very simple and short question; it is the one I raised right at the beginning of my contribution. Is it the Government’s view that this Bill will increase the availability of rental accommodation, or not?

[Baroness Swinburne (Con)]

As a quick answer, I cannot give the noble Lord that clarification. The intention here is to improve the quality of private rental sector stock, improve tenants’ rights and make sure that landlords have the ability to get back their property when they require it. With regard to the numbers, I will go back to officials in the department and ask for an assessment of whether they think that it will increase the supply. They tell me they do not think it will decrease the supply; I will now go back and ask whether it might increase it.

[Lord Cromwell (CB)]

I thank the Minister for that very worthy answer; these are very worthy objectives. I think the answer she is giving me is: “No, it’s not going to increase”, but I appreciate that she is not quite vocalising that. I think all the indications are that it will decrease it, but we shall see.