King’s Speech

Lord Etherton Excerpts

Thursday 18th July 2024 Lords Chamber

[Lord Etherton (CB)]

My Lords, the Government have declared their intention to introduce legislation to promote social housing and increase the rights of tenants and their protection. These are matters to which I fully subscribe. Although the Minister—the noble Lord, Lord Hunt of Kings Heath—did not elaborate in his opening address on what is intended in relation to tenants’ rights and protections, I assume that housing in this debate includes those matters. I declare my interest in the form of my spouse’s ownership of a very small portfolio of residential rental properties.

I wish to emphasise, as I did at Second Reading of the Renters (Reform) Bill introduced by the last Government, that a careful balance is needed in the private rented sector between increasing the rights and protections for tenants on the one hand, and imposing a regime which drives out of the market a significant number of PRS landlords on the other hand. Some 4.6 million households, or about 11 million people, rent from a private landlord, representing 19% of the entire housing market. This includes some 1.3 million households with children and nearly 400,000 households of people over 65 years of age. The crucial importance of the private rental sector is highlighted by the fact that there is a shortage of about 1 million homes.

In excess of one in five households in England, and one in four in London, rely on the private rental sector for accommodation. According to figures given by the Department for Communities and Local Government in 2010, 89% of landlords in England were private individuals, and 98% of those owned fewer than 10 properties. In 2019, the successor housing department indicated that 45% of private landlords, representing 21% of tenancies, owned a single property, and a further 38% of landlords, representing 31% of tenancies, owned between two and four rental properties. Those facts show, first, that the private rental sector plays a crucial role in the provision of accommodation; secondly, that the overwhelming majority of landlords in the private rental sector are private individuals; and thirdly, that nearly 50% of them own a single property for let, and some 83% own four properties or fewer for rent.

This demonstrates the need for an extremely careful balance between, on the one hand, protecting tenants in the private rented sector from bad landlords and giving them appropriate redress in the case of landlords’ defaults and, on the other hand, not imposing on the many small investor landlords standards and obligations that will drive them from the sector. It will be important to gather information and data that can throw some reliable light on whether the proposed legislative changes will have a significant impact in reducing available accommodation in the private rented sector. As far as I am aware, no reliable evidence was obtained by the last Government for the purposes of the Renters (Reform) Bill. At its Second Reading, I pointed to just a few matters that did not achieve the right balance.

So although there is an urgency to the Government’s proposed policy, care must be taken to avoid unintended consequences. The difficulties in this area of achieving a good balance support the case for a drive to construct new affordable social housing, whether by local authorities, build-to-rent development companies or otherwise. To that end, I greatly support the imposition on local authorities of targets for the construction of affordable housing. For the same reason, I agree with the noble Lord, Lord Shipley, that there is a need to look again at the right of tenants of council homes and housing associations to purchase their homes, so depleting the stock of available affordable social housing for the many people who so greatly need it.