Renters’ Rights Bill
Lord Jackson of Peterborough Excerpts(3 weeks ago)
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Lord Jackson of Peterborough (Con)
My Lords, I shall contribute very briefly to the debate on this important amendment. I say at the beginning that I defer to no one in my admiration for the noble Lord, Lord Bird, and his heroic battle over many years to raise the issue of homelessness and those less fortunate people who do not have access to good housing. Sometimes, you come upon an amendment and you have to make a decision between your heart and your head. Your heart is very much taken with the sincerity of the noble Lord’s argument about the need to be fair—principally to tenants, but also to landlords—in the way you put legislation together.
I absolutely and fully take that view, but the noble Lord will understand that one of the reasons I do not support his amendment is that the Government, rightly or wrongly, have brought the Bill to this stage. I believe that Section 21 will have unintended consequences. It will reduce the amount of rental stock, and mean that people who own capital will sell it to other people who own capital—landlords—and they will not put that property back on the market for those in the most desperate need, mainly young working families, but also others in the market. The noble Lord will know—it is a wider issue, I accept—that rent controls very rarely work, whether it is in Barcelona, New York, Scotland or other places in the world. So that is the head part. On the heart part, I absolutely agree with what he is saying.
My point is that the Government have reached this juncture, and we are about to go into Report, the Bill is going to happen and there is a consensus, whether I like it or not. Given that we have some enduring concerns about court capacity and the ability of the court system to deal with any concomitant legislation which might arise from the Bill—which will become an Act in the not-too-distant future—I feel that his amendment, while extremely well-meaning and very sincere, will not help deliver what we want, which is fairness and equity for tenants and landlords. It is only on that basis that I respectfully say that I do not support the amendment, and I suspect that the Government will take a similar view. I applaud the noble Lord for everything that he has done in raising these very important issues over many years.
Lord Hacking (Lab)
My Amendment 281 has not been formally called, but if it is the wish of the House, I will address it. The other amendments, Amendments 279 and 280, have already been debated.
I was rather surprised to be asked again to declare my interests, because I have done so on several occasions already during the passage of the Bill. Oh, I am now being released. Anyway, my interests are disclosed in the register.
I therefore move on to a very responsible role that the noble Lord, Lord Bird, and I have, and that is of moving the last group of amendments in this Committee. It has been a long journey to get to this point, involving a lot of hard work by many Members of the House, but none more so than my noble friend the Minister, who has worked extremely hard throughout all the Committee sittings.
As usual, the noble Lord, Lord Bird, gave a very spirited speech. He spoke with great passion. It is always delightful to hear him, and I welcome him back. He was not here last night but he has given the spirited speech today. I am afraid that I do not agree with his rather simplistic description of the Conservative Party as running their policies based on baddie tenants, or that my party is running policies on baddie landlords. I know from debates in the House and discussions with the Minister that there has been a great effort by my party to produce a Bill which is fair and balanced. I am looking at the noble Baroness, Lady Scott, but she is not quite coming with me on this proposition. However, I believe that my noble friend the Minister largely has achieved that.
We have heard the noble Lord’s reasons for different commencement dates under the Bill. All my amendments go to Clause 145, on commencement. I have tabled Amendments 281, 287, 288 and 289. They all seek to give more time for the commencement of certain parts of the Bill. I draw attention to Amendment 288, which seeks to give more time, and different times for new tenancies, suggesting increasing the times to six months and, for existing tenancies, 12 months.
This is a problem that has been presented to me by estate agents. We all should understand how impactful this Bill is. Clause 1 of the Bill states that it applies to all tenancies—existing tenancies and new tenancies. In so far as it applies to existing tenancies, it applies to a great number of tenancies that are fixed term, many of which are shorthold. My wife and I use a 12-month fixed-term tenancy.
Estate agents have now got a very different role. Concerning new tenancies, that is okay. A new tenancy will be set up as a periodic tenancy with, ab initio, a new tenant. However, the existing tenancies produce different work for the estate agent. Under the present system of shorthold tenancies, the agent contacts the tenant and the landlord about three months before the expiration of the tenancy and checks whether the tenant wants to go for another period of tenancy and whether the landlord is agreeable to that. He also checks the position on the amount of rent. I do not know, and neither do many estate agents, what the new requirements will be. Is it proper for the estate agent to contact the tenant and ask, “How much longer do you want?” It is a periodic tenancy; there is no end date. Would it be proper for the estate agent to then engage the tenancy on the amount of rent? These are difficult decisions that have to be made.
In this modern age, these things have to be set up with software and the like, which is why I am asking my noble friend the Minister to give more time. All that has been asked of me, which I am now asking of noble Lords and, more directly, the Minister, is this: can we have more time, so that all the right procedures are set up and it does not end up being a scrambled egg?
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Bird, and my noble friend Lord Hacking for their amendments relating to the commencement of measures in the Bill. I thank the noble Lords, Lord Deben and Lord Cromwell, and the noble Baronesses, Lady Grender and Lady Scott, for participating in this group.
I turn to Amendments 278, 282, 286, and 291 in the name of the noble Lord, Lord Bird. I add my tribute for all the work he does to tackle homelessness. He is a great hero of mine, and it is a great privilege to work with him. The noble Lord rightly notes the importance of ending Section 21, which is a major contributor to homelessness levels in England and a major cost to councils, which now spend more than £2 billion a year on temporary accommodation. That was the last full year’s figure. I heard that £4 million a day is currently spent on homelessness in London. Much of that is driven by Section 21 evictions. As well as the misery created for individuals and families, these evictions put pressure on the public purse and costs that would be much better spent on other public services.
These amendments seek to bring most of the measures in the Renters’ Rights Bill forward to Royal Assent. The Government agree with the noble Lord that the measures in this Bill are urgently needed, which is why we moved swiftly to introduce it early in our first legislative programme for government. To end the scourge of Section 21 evictions as quickly as possible, we will introduce the new tenancy for the private rented sector in one stage. On that date, the new tenancy system will apply to all private tenancies. Existing tenancies will convert to the new system, and any new tenancies signed on or after that date will be governed by the new rules. There will be no dither or delay, and the abolition of Section 21, fixed-term contracts, and other vital measures in the Bill will happen as quickly as possible.
However, we must do this in a responsible manner, as noble Lords have mentioned. We are therefore also committed to making sure that implementation takes place smoothly. As such, it is essential that wider work around the Bill is allowed to conclude before implementation takes place. That includes the production of guidance, updating court forms and making secondary legislation. For example, the information that landlords are required to give tenants in the written statement of terms will be set out in secondary legislation. Work is already under way on these matters. We need to get it right. We will appoint the date of implementation via secondary legislation, which is typical when commencing complex primary legislation. This will allow us to give the sector certainty about when the system will come into force. Relying on Royal Assent would create significant uncertainty around the specific date, and it is important that we do not do that.
I say to the noble Lord, Lord Bird, that I was lucky enough to benefit from the post-war Labour Government’s drive to build social housing so, although I could have done, I did not grow up in the kind of housing that he described. Our social housing was built in new towns, and that was the last time that social housing was built at any scale in this country. We have promised that again, and have committed £2 billion to social and affordable housing. So the noble Lord has my personal commitment that we will move this forward as quickly as possible.
The noble Lord, Lord Deben, talked about the speed of legislation. I have been a Minister for only a few months but I am already learning the frustration of time lags. I thought that councils move a bit too slowly at times, but we certainly need to move things forward more quickly. Of course, this is not just about legislation; we are trying to move on housing at some speed. We have already provided funding to improve construction skills, funding for planning officers, a new National Planning Policy Framework, over £500 million for homelessness and the social housing funding that I have already mentioned. We understand that this needs to be moved forward quickly. We will work as quickly as we can on that. As such, I ask the noble Lord not to press his amendments.
Lord Jackson of Peterborough (Con)
I concur with the comments across the Chamber about what a professional job the Minister has done in piloting the Bill and engaging with Members. At Second Reading, she made specific reference to working closely with the Ministry of Justice on court digitalisation and extra funding for court costs. Is she in a position to update the Committee on what progress has been made on that? There are still people across the Committee who are concerned about the likely ramifications of the abolition of Section 21, whenever it happens.
Baroness Taylor of Stevenage (Lab)
I understand the noble Lord’s concern. There is ongoing dialogue with the Ministry of Justice, and I hope to be able to update Members before Report on where that has got to as soon as we are able to. I do not think it would be helpful to have a running commentary on it but my honourable friend the Minister for Housing is in dialogue at the moment with the MoJ. I will update noble Lords as soon as we get to the end of those discussions.
I turn to the amendments tabled by my noble friend Lord Hacking. Amendment 281 seeks to delay a number of provisions coming into force. The Bill currently provides that these provisions commence two months after Royal Assent. Two months is a well-established precedent, and I see no reason why commencement of these provisions should be delayed. For example, the provisions include important protections for tenants and provide local authorities with better powers to enforce housing standards.
Amendment 287 would set a time limit of 12 months between Royal Assent and the implementation of the Bill’s tenancy reforms in the private rented sector. Amendment 288 would change the approach to tenancy reform implementation in the Bill. It would require that the measures were applied to new tenancies no earlier than six months after Royal Assent and to existing tenancies no earlier than 12 months after Royal Assent. Amendment 289 would require that the conversion of existing tenancies to assured tenancies under the new tenancy reform system took place no earlier than 12 months after Royal Assent. As I have set out previously, we will end the scourge of Section 21 evictions as quickly as possible, and we will introduce the new tenancy for the private rented sector in one stage.
I assure my noble friend that this Government will ensure that the sector has adequate notice of the system taking effect but, in order to support tenants, landlords and agents to adjust, we will allow time for a smooth transition to the new system while making sure that tenants can benefit from the new system that they have waited so long for as soon as is realistically possible. We are planning a wide-ranging campaign to raise awareness of our reforms, supported by clear, straightforward and easy-to-read guidance to help landlords to prepare for change and to help tenants to be ready for it. On that basis, I ask my noble friend not to press his amendments.
Renters’ Rights Bill
Lord Jackson of Peterborough Excerpts(3 weeks, 1 day ago)
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Lord Marlesford (Con)
My Lords, I rise to support my noble friend very strongly. I declare my interest, as I have done before, as a Suffolk farmer who has converted redundant agricultural buildings into dwellings. It is all still part of the farming operation.
I have already warned the Government that they are in danger of relying on statutory instruments, Henry VIII clauses and subsidiary legislation for what will be primary legislation. The purpose of the Parliament is to legislate, in the first instance, primary legislation. The House of Lords, with its careful scrutiny of statutory instruments, has a particular role and record in doing this. So, this particular Bill is going, in any case, to have a lot of unanswered questions. We are going to try to ask most of those questions and get the Government to face up and give us the answers because it is a very bad principle of legislation for a Government to say, “Oh, we’ll leave that to the courts”, or something like that. That is not what legislating is about. It is important that we do not unnecessarily add into potential secondary legislation what should be primary legislation.
The Government have got to take this very seriously because this is a long and difficult Bill which has many dangers in it and ahead of it, not least—and I shall probably say this again—because the private rented sector plays an important part in the provision of housing. The provision of housing was one of the objectives of the previous Government and of this Government. It is also part of generating economic growth, which the Chancellor and the Prime Minister have repeatedly told us is their priority. I beg the Government to be more rigid and dissective in their thinking before rushing ahead with this legislation.
Lord Jackson of Peterborough (Con)
My Lords, I support my noble friend Lady Scott on the Front Bench and reiterate her very strong arguments and those from my noble friend Lord Marlesford just now.
We have seen a quite significant trend since the general election of the Government seeking to award themselves very wide-ranging, permissive powers in primary legislation with very little detail. That is a significant concern. Certainly, if the boot was on the other foot and a Conservative Government had brought forward a clause such as Clause 64, where we are being invited to take on trust the expeditious post-dated production of a statutory instrument and regulations, the party now in government would, quite rightly, have complained about that.
If we look at the detail, this is an extremely wide-ranging amendment. Clause 64(4)(b) talks about “relevant tenancy” and the adding or removal of any particular kind of relevant tenancy. On “dwelling”, paragraph (c) states,
“in addition to a building or part of a building, it includes any other structure, vehicle or vessel”,
and
“includes a building or part of a building, and anything for the time being included in the meaning of ‘dwelling’”.
That is a very wide definition to be in a Bill when we have an open-ended commitment to produce regulations without any date.
I think, and have said before, that the idea of retrospective legislation is poor. In a different context at the beginning of Committee in your Lordships’ House I mentioned this issue. It is very worrying that there is no opportunity for a period of amelioration and getting used to the regulations.
Finally, given all that, the chance of significant instances of litigation arising from this clause are pretty high, I would think. For those reasons, is the Minister able to write to noble Lords before Report at least to give an indication of when those regulations are likely to be published to reassure your Lordships’ House that this a one-off in terms of how wide and permissive these powers are? Frankly, it is not good enough. It does not allow us to analyse properly the efficacy of the policy and the likely impact it will have on any litigation for both landlords and tenants. I hope the Minister is able to take those issues on board.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for her amendment regarding the definition of a landlord and thank the noble Lords, Lord Marlesford and Lord Jackson, for participating. Amendment 206C seeks to remove subsection (4) of Clause 64. This would mean that amendments to the definitions of “relevant tenancy”, “residential landlord” and “dwelling” set out in the Bill could not be made by regulations. This would affect Part 2, which includes the redress and database provisions.
I fully agree that any changes to the definition of those who bear responsibilities and benefit from rights under this legislation should be made with proper consideration. The definition of “residential landlord” under Clause 64 of this Bill has been drafted with care to capture the majority of typical private tenancies in England. However, the private rented sector has proven itself to be dynamic. I am sorry to say that the unscrupulous use of complicated arrangements, such as certain types of rent-to-rent schemes, has demonstrated the need for flexibility in how we define who is, or is not, in scope of private landlord redress or the database. We are also aware that other forms of occupation, such as occupation under licence, may benefit from the Part 2 protections in the future. A strong case may be made for expanding who is protected if certain arrangements proliferate following the implementation of the Bill.
Our focus at this time, however, must be on getting our reforms right for the millions living in typical private tenancies, rather than extending the redress and database provisions to other kinds of residential occupier whose needs and circumstances may be quite different from the majority. We have included a power to change the scope of Part 2 by regulations in the future if it is considered appropriate. The reason is that the introduction of mandatory landlord redress for the first time is a significant undertaking. The definition of “residential landlord” has been drafted, as I said, to capture the majority of tenancies. We have retained the flexibility to change the scope of rental agreements covered by the database and ombudsman in the future, should that be deemed necessary.
Renters’ Rights Bill
Lord Jackson of Peterborough Excerpts(1 month, 1 week ago)
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Member’s explanatory statement
This amendment seeks to probe the government’s rationale for introducing retroactive legislation.
Lord Jackson of Peterborough (Con)
My Lords, I am grateful for that clarification from the Government Whip. On that basis I declare again that, as in the register of Members’ financial interests, I receive a rental income from my one property, which was my matrimonial home.
I will speak to Amendments 16, 17 and 18. My intention is to highlight an important principle that this legislation seems to violate. The amendments in this group are underpinned by the Bill’s retroactivity. I seek to probe the Government’s use of retroactive provisions, and I urge them to reaffirm from the Dispatch Box their commitment to prospective lawmaking.
Retrospective legislation is generally defined as legislation which
“takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty or attaches a new disability in respect to transactions or considerations already passed”.
The Oxford Dictionary of Law defines retroactive legislation as:
“Legislation that operates on matters taking place before its enactment, e.g. by penalizing conduct that was lawful when it occurred. There is a presumption that statutes are not intended to have retroactive effect unless they merely change legal procedure”.
Stroud’s Judicial Dictionary of Words and Phrases—a tome that I am sure we are all familiar with—defines it in Latin as:
“Nova constitutio futuris formam imponere debet, non praeteritis”.
That is, unless there be clear words to the contrary, statutes do not apply to a past but to a future state or circumstance.
The general approach to retrospective legislation was summarised by the noble Lord, Lord Kerr, in the Supreme Court case of Walker v Innospec Ltd and others in 2017, where he said:
“The general rule, applicable in most modern legal systems, is that legislative changes apply prospectively. Under English law, for example, unless a contrary intention appears, an enactment is presumed not to be intended to have retrospective effect. The logic behind this principle is explained in Bennion on Statutory Interpretation, 6th ed (2013), Comment on Code section 97: ‘If we do something today, we feel that the law applying to it should be the law in force today, not tomorrow’s backward adjustment of it’”.
Retrospective legislation may also be challenged under Article 6 of the European Convention on Human Rights, because such legislation will only be compliant with convention rights where there are
“compelling grounds of the general interest”—
that comment was made in the case of Zielinski, Gonzalez and others v France 1998—or where such legislation seeks to remedy existing defective legislation.
The principle of non-retroactivity is a fundamental concept within the civil law system that ensures the stability and predictability of legal relations. It refers to the restriction placed on the application of new legislation to actions or events that have occurred prior to the law’s enactment. Essentially, this principle serves as a safeguard for individuals, protecting their existing rights and expectations from being unexpectedly altered by future legislative changes. Non-retroactivity is rooted in several key rationales. It reflects the belief that individuals should be able to rely on the legal framework in place at the time they act. If laws were to apply retrospectively, it could lead to confusion and insecurity, undermining the rule of law and fairness.
That is the basis on which I move my Amendment 16 and speak to my Amendments 17 and 18. In many jurisdictions, this principle is codified within civil codes or specific statutes. For instance, the French civil code explicitly states that a law cannot have retroactive effects unless otherwise specified. Similarly, the German Basic Law incorporates this principle, which serves as a safeguard against potential abuses of legal reforms by ensuring that new laws do not adversely affect established rights and obligations. Internationally, treaties and conventions also reflect the doctrine of non-retroactivity. The European Convention on Human Rights articulates the necessity of legal certainty and protection of rights, endorsing the notion that individuals must be aware of the legal consequences of their actions at a given point in time. The UN’s International Covenant on Civil and Political Rights further emphasises that no one shall be subjected to retroactive penal laws, further demonstrating the widespread acceptance of this principle.
I accept that there are some notable exceptions to the English legal system setting its face against retroactivity. One such case, perhaps the most notable, is of course the War Crimes Act 1991. If legislation is aimed at, for instance, protecting public safety or welfare, such as in scenarios where a retroactive law serves to enhance public health standards or address urgent safety concerns, the legal system may justify its application to prior situation. Courts often assess the implications of such laws on individual rights, weighing the benefits to society as a whole against potential infringements on personal freedoms. Another example in this context is the landmark case of the European Court of Human Rights ruling in Hirst v the United Kingdom about prisoner voting rights, where the court emphasised that legislative changes should not detrimentally affect individuals who were previously adjudicated under earlier laws. In this instance, the court reinforced the significance of respecting established legal positions, thereby underscoring the essence of non-retroactivity.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I thank the noble Lord, Lord Jackson, for his amendments relating to transitional provisions and retroactive legislation, and for his lesson in Latin. In the year I took my second language, I was hoping to do Latin, but they changed it to Russian, so I never got to do it. I am very grateful for the lesson this morning. I will return to his points in a moment.
I will cover a couple of other points before I explain the government amendments. First, in relation to the comments made by the noble Baroness, Lady Scott, if landlords are not aware of the legislation, it has certainly not prevented them from coming forward with their representations—we have had hundreds of them. We have also had frequent contact with representative bodies such as the National Residential Landlords Association, but that does not mean that the Government do not understand the need for effective communication of the legislation. We will continue to work on a programme for that.
In relation to the comments made by the noble Lord, Lord Empey, one thing that frustrated and annoyed me when I was a council leader was when the standard equalities clause was put at the end of a committee report, as if it was just a tick-box exercise and everybody assumed it covered all the bases. I used to insist that the statement of equalities was relevant to the paper to which it was appended. I feel the same about signing off the rights clauses in this Bill, so I take it seriously. However, he makes a very good point, and we must always be clear that what we are signing off does its intended job.
I thank all noble Lords who have contributed to the debate: the noble Lords, Lord Marlesford, Lord Carter and Lord Cromwell, the noble Baroness, Lady Thornhill, as well as the other noble Lords whom I have mentioned.
On the government amendment removing Clause 3, I think this is the first time I have had to remove a government clause from a government Bill, but that shows that we are listening and thinking about making this a better Bill as we go along. Our amendments remove Clause 3, which makes transitional provision for terms in existing superior leases, and replace it with government Amendment 296. Government Amendment 296 inserts Part 2 of Schedule 6 to make transitional arrangements which ensure that pre-existing legal instruments will continue to operate and that parties to such instruments will not be found in breach of their terms following the implementation of our tenancy reforms. The risk arises because such instruments may make express reference to certain tenancies—such as assured shorthold tenancies, to which the noble Lord, Lord Jackson, referred—which will become obsolete as a result of the Bill. Mortgages, for example, sometimes require letting only on assured shorthold tenancies, which would be impossible for a landlord to comply with after commencement. In the case of mortgages, insurance contracts and Section 106 planning obligations, landlords will be able to continue to let their properties without being found in breach of their terms where they were able to do so before the reforms. Provision is made so that parties will not be prevented from making changes or modifications to their agreements of their own volition.
In relation to existing leases, the amendment will ensure that intermediate landlords will not be found in breach of their head lease terms should they return a property to the superior landlord which is subject to a post-reform assured periodic tenancy—I realise this has a level of complexity that can be baffling. That could be the case, for example, if a subtenancy is converted from a fixed-term to a periodic tenancy on commencement of the Bill and the head lease is for a fixed term that expires shortly thereafter.
Government Amendments 184, 276, 277, 290 and 297 to 301 make technical, consequential amendments associated with government Amendment 296. Notably, government Amendments 297 and 299 enable changes to be made to Part 2 of Schedule 6. These will ensure that transitional or saving provision can be made to address all possible issues which may arise from pre-existing instruments and that are yet to be identified. Again, this ensures a seamless transition to the new legal framework in what is, admittedly, a very complex legal context.
I will make a few general comments on the amendments tabled by the noble Lord, Lord Jackson. Subsuming Clause 3 into new Part 2 of Schedule 6 is intended to ensure that leaseholders who are permitted or required to sublet on a fixed-term assured tenancy, or an assured shorthold tenancy, under the terms of a superior lease are not put in breach of a superior lease following the changes to the assured tenancy regime made by the Bill. It necessarily has a retrospective effect on parties to such superior leases which were entered into before the Bill’s provision came into force.
The explanatory statement appended to the noble Lord’s amendment explains that the intention is to probe why this clause operates retrospectively. It is not entirely clear from the drafting what the amendment wants to achieve; the intention appears to be to enable an assured tenancy to be granted pursuant to the term in a superior lease in the same circumstances and on the same terms as would have been possible before the changes made by the Bill. It is possible that the intention is even to go as far as allowing a fixed-term tenancy or an AST to be granted. If so, the amendment would very likely not achieve that.
The policy intent behind Clause 3 is important: to protect landlords with superior leases from being unable to sublet in future, or even being placed in breach of their superior leases, as a result of the reforms. It is important enough to merit interfering in existing contracts. The Government recognise that any legislation with retrospective effect needs to be carefully considered. In the case of this Bill, we will apply the new tenancy system to all private tenancies at the same time, including those entered into before commencement. This will prevent a lengthy system of two-tier tenancy, ensuring that tenants can enjoy better rights at the same time and that Section 21 is not available in relation to private tenancies. Landlords will continue to have access to strengthened grounds for possession to end tenancies when they need to.
I turn specifically to Amendments 16, 17 and 18. As I have just set out, Clause 3 has been subsumed into new Part 2 of Schedule 6. However, the intended outcome behind Clause 3 will still be delivered, so I will address the substance behind the amendments tabled by the noble Lord, Lord Jackson, as this will still be relevant even if the clause structure and numbering are somewhat altered.
The purpose of Clause 3 is to enable landlords with superior leases to continue to sublet after the reforms have come into force. Existing superior leases may require landlords who sublet to do so on an assured shorthold or a tenancy with a fixed term. These are types of tenancy that this Bill will abolish, so landlords will not be able to comply with such requirements in future.
Clause 3 therefore ensures that the intermediate landlord will not be in breach of the terms of their superior lease and can continue to sublet under the new system by issuing new-style assured tenancies. This is critical to ensuring that landlords with existing superior leases are not unduly impacted by the reforms and left in breach, and must therefore apply retrospectively to existing leases in order to operate as intended. Indeed, this preserves the effect of existing agreements and ensures that the reforms do not interfere in previously agreed arrangements—the opposite of what the noble Lord, Lord Jackson, was suggesting. Without these provisions, some landlords would be left in breach of their own superior lease, and the future supply of private rented properties could be severely affected.
I do not think that these amendments will improve how Clause 3 will operate in the proposed new structure, and therefore I respectfully ask the noble Lord, Lord Jackson, to withdraw the amendment.
Lord Jackson of Peterborough (Con)
I thank the Minister for those comments. I, too, remember when we sparred on regional television many years ago. We did it in English—not Latin, unfortunately, or even in Russian.
On a serious point, I hear from the Minister that she is cognisant of the need for a balance between the rights and obligations, and duties and responsibilities, of tenants and landlords. I was struck by the comments of my noble friend Lord Marlesford about litigation and the capacity of the courts to deal with some of these issues which may arise from aspects of retroactivity in this legislation. The noble Lord, Lord Cromwell, also made a very good point, which the Minister will hopefully take on board, that we need a proper schedule ahead of time where the Government outline where these changes will be made, in order for representative organisations, such as the NRLA and others, to communicate that. I also hope the Government take the opportunity to consult properly with small landlords and other representative bodies.
Naturally, because of the wide-ranging nature of these changes, we will no doubt have to return to this issue from the Front Bench and across the House on Report, but with the spirit of co-operation and the helpful response from the Minister, I am happy to withdraw my amendment.
Renters’ Rights Bill
Lord Jackson of Peterborough Excerpts(1 month, 2 weeks ago)
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Baroness Scott of Bybrook (Con)
My Lords, I rise to speak to Amendment 8, standing in my name. At its core, the private rented sector exists only because individuals are willing to invest in property and rent it out to others. The rental market depends on landlords, many of them small-scale, independent operators who choose to let their homes to others. These are not large corporate entities with huge legal teams and financial buffers; they are ordinary people with one or two properties, often let out to supplement their pension or as a long-term investment for their families.
Let us be clear: the most recent English private landlord survey shows that 45% of landlords own a single rental property and a further 38% own between two and four. That means that over four-fifths of landlords operate on a very small scale, far from the image of large institutional landlords. These landlords form the backbone of the rental sector. Yet, under the proposals in the Bill, particularly the removal of Section 21 without sufficient alternative safeguards—this is to answer the question by the noble Lord, Lord Shipley—we risk driving them out of this market altogether.
That is why I rise to speak to Amendment 8, standing in my name. This amendment proposes a targeted and reasonable exception that landlords who let fewer than five properties—those very small-scale landlords we have spoken of—should retain the ability to use Section 21. This is not about denying renters their rights or undermining the central aims of the Bill; rather, it is about recognising the limitations that smaller landlords face. Unlike larger letting organisations, smaller landlords do not have the resources or the legal support to navigate complex procession proceedings. For them, the loss of Section 21 without workable and efficient alternatives could be and will be the final straw. These individuals are not villains of the piece; in many cases, if not most, they are providing much-needed homes in areas of acute shortage. They do not have the resources to engage in lengthy legal proceedings every time they need to regain possession of their property, whether due to personal financial need or a change in family circumstances or to exit the sector entirely. If the Bill removes Section 21 without offering small landlords a workable alternative, the risk is clear: many will simply choose to leave the market. They are already, altogether.
We know this is already happening: the National Residential Landlords Association found last year that one in four landlords were planning to sell at least one property, many citing rising regulation and uncertainty about future reforms. As these landlords exit, we are left with fewer homes to rent, and the tenants feel the consequences most sharply.
The experience in Scotland offers a sobering lesson. There similar reforms were introduced with the intention of improving tenant security. Yet, as we have seen, they had the opposite effect: a sharp increase in landlords exiting the market and the highest rent increases in the United Kingdom as demand rapidly outpaced supply. Research from the Nationwide Foundation has found that 70% of landlords and letting agents lack confidence in the future of the market. The evidence from Scotland demonstrates that the type of over-regulation proposed here will drive landlords out of the market, reducing housing supply and ultimately leaving renters worse off.
Amendment 8 offers a simple, balanced solution. It allows the Bill to move forward with its tenant protections intact, while acknowledging the distinct position of small landlords and giving them the breathing room that they need to continue letting their homes. If we are serious about building a rental system that is fair, functional and fit for the future, we must ensure that it works for tenants and landlords alike. Amendment 8 does not undermine the principles of the Bill; it strengthens it. It recognises the diversity within the landlord community and offers a sensible, proportionate safeguard for those who make up its majority by allowing small landlords to continue using Section 21 when and where no viable alternative yet exists. We protect not only their role in the market but the long-term interests of renters themselves. I urge the Government to take this amendment seriously and consider whether the future of the private rented sector truly lies in squeezing out the very people who keep it afloat.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to speak in this very important debate in Committee and to support my noble friend Lady Scott of Bybrook on this amendment. The amendment is about fairness between tenants and landlords, and practicality. It is about the alternative that the Government are offering smaller landlords who are in the situation where they feel it prudent to give notice and seek possession of their own property under Section 21 and Section 8 of the Housing Act 1988. In particular, it is about the bureaucratic and onerous burden and court costs that will fall upon smaller landlords.
Let us look at the figures. Almost half of landlords—45%—own only one property. For the avoidance of doubt and for full transparency, I declare myself to be a landlord; I own one property, which was my matrimonial home, as listed in the Register of Lords’ Interests. Some 83% of landlords are small landlords, and so would be covered by this amendment, in that they own fewer than five properties.
We understand the proper commitment by the Government, as outlined in the manifesto, to abolish Section 21 no-fault evictions, for laudable reasons. We are all committed to the same thing—that good-quality private sector housing should be available in a fair way, to as many people as possible— and we accept that the Government have a mandate to make tenancy reforms. Notwithstanding that, unfortunately, as the previous Administration found, much of the efficacy of that policy will fall upon the reliability or otherwise of the court system and its ability to expedite possession claims in a timely and efficient way.
His Majesty’s Government’s own figures, as at quarter 4 of 2024, show that seven months is the average time taken to process and enforce a Section 8 possession case—especially around the thorny issue of rent arrears and anti-social behaviour. The LGA and the Law Society have raised this issue. The Law Society in particular notes the potential
“increase in contested hearings in the short term, as landlords that would previously have used”
Section 21, because it was less costly and less onerous, will now
“have to show good reason for eviction”.
On page 65 of the impact assessment, the Government, rather elliptically, reference “non-legislative changes” to improve the court system, but they do not give any detail. That is an important issue, as we are being asked to support the Government’s proposals. How do the Government intend to manage the increased demand? The Housing Minister in the other place used the word “ready”, saying that the Government would not take any precipitous action until the court system was ready. What does “ready” mean? This is a problem the previous Government faced and, as the Minister knows, they resiled from going ahead too fast with this policy because the court system was not fit for purpose. What specific measures will be used to deal with the existing backlog in Section 8 claims arising from landlords seeking to take possession? Let us make no mistake, the failings of the court system have the potential to undermine what would be laudable reforms and could have the perverse effect of encouraging landlords, especially smaller landlords, to exit the private rented sector.
Tenants themselves do not have much faith in the court system. Figures provided in 2023 by Citizens Advice show that only
“23% of tenants feel confident applying to court. 99% of tenants whose landlord has taken an unreasonably long time to complete repairs did not bring a claim for disrepair to court … 54% … said they did not … because of the complexity of the process … 45% … said they were put off by the length of time involved”.
It is also the case that the abolition of Section 21, particularly in respect of smaller landlords, will have an impact on the hitherto good relationship between many tenants and landlords, turning it into a much more litigious and disputatious situation. Many of those landlords will not be prepared to give tenants the benefit of the doubt if they fall on difficult financial times or have less benign economic circumstances. Those are the real-world consequences of this policy and one of the issues that this amendment seeks to address and ameliorate.
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.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendment tabled in the name of my noble friend Lady Scott of Bybrook, to which I have added my name. I will make some general observations. This amendment is helpful because it encourages a mutually agreed arrangement, where appropriate, between landlord and tenant, in order to avoid disruption, delay or litigation where they might otherwise arise, to the mutual benefit of both parties.
The noble Lord, Lord Truscott, is right to say that the wider philosophical argument is that the abolition of fixed terms will provide greater security for tenants and retain flexibility, but it is a surprising one, because a number of key issues undermine it. The abolition of a contract of a particular type in this way is an obvious infringement on the freedom of parties to agree such terms as they wish. On principle, it should be implemented only on the most cogent and urgent grounds, and no such grounds exist across the whole private rented sector.
There are also some situations in which tenants as well as landlords clearly benefit from fixed-term tenancies. Examples are student lets, lets related to fixed-term job postings or projects, and moving to be within a particular school’s catchment area. It obviously does not help tenants in these situations to be prohibited from obtaining the security of a fixed-term let. And landlords who are inflexible in their approach to the term of a tenancy and who are prepared to offer only a fixed term will do so at their own cost, as they will find that there is a smaller pool of potential tenants than for landlords who are flexible in their approach. This market-driven discouragement to fixed-term tenancies already exists and will continue to do so.
The stated aim in this legislation of enabling tenants to leave poor-quality properties is poorly thought through. The first point to make in this regard is that it will usually be apparent to a tenant before moving in whether a property is of poor quality. If a tenant moves in full knowledge of that want of quality, the fairness of allowing them to move out mid-term is not obvious. It may be true that, sadly, tenants often do not have a choice, but if it is, leaving mid-term is unlikely to be an option, for the same reason. It is better to find ways to coerce landlords into making living conditions better. However, such cases can be legislated for by the simple expedient of implying into a lease a warranty that a property is fit for habitation—a test already enshrined in statute in the Defective Premises Act 1972. If a tenant can show that that warranty has been breached, he or she may terminate immediately and leave, free of future liabilities.
In any case, parties can and already often do agree break clauses in fixed-term tenancies. There is no reason why they should not continue to do this, particularly if changes in circumstances, such as a job not working out, can be anticipated. This is also fairer to the landlord, since it alerts the landlord to a possible change in circumstances in advance.
Secondly, although circumstances sometimes change unexpectedly, that is true for both sides and giving tenants free rein in this regard while landlords have none is inherently unfair. In practice, if circumstances change unexpectedly—for example, a tenant loses their job or an income-earning partner ceases to be able to work or passes away unexpectedly—few landlords would be likely to insist on a tenant seeing out their term. It is not in their interest to have a tenant who cannot pay the rent. Most will be prepared to negotiate an early exit in such circumstances and instal a tenant who can. The rare residue of cases where a tenant has suffered a change of circumstances and wishes to leave but a landlord is unwilling to allow them to do so can be met by legislation stopping far short of an outright ban on fixed-term tenancies where hitherto there has been mutual agreement between the parties.
Finally, there is a point to be made about the concept of seeking to protect the rights of tenants in residential tenancies without regard to the wider context of how the legislation impacts on the pool of properties available for tenants. The abolition of fixed-term tenancies means that many landlords in the PRS will prefer not to let at all rather than be limited to letting on a periodic tenancy. Preparing a tenancy for a let involves a considerable amount of time and effort. If tenants can simply come and go on a whim, that time and effort will go unrewarded and fewer people will undertake it. That will reduce the size of the sector and so drive down tenant choice—to the detriment, rather than the benefit, of tenants. Tenant protections are worth obtaining only if the sector remains attractive to both landlords and tenants, as the noble Lord, Lord Empey, said earlier. The proposed abolition of fixed-term tenancies fails to achieve that balance, particularly if there was agreement previously.
Provisional Local Government Finance Settlement
Lord Jackson of Peterborough Excerpts(5 months, 2 weeks ago)
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Baroness Taylor of Stevenage (Lab)
The noble Baroness makes a very good point. I pay tribute to my colleagues in local government, who do an amazing job of continuing to deliver some non-statutory services in spite of the incredible financial pressures they have been under. For example, we still managed to keep a theatre open in my area. That happens all across the country, so all credit to local government for the work it does on this. The noble Baroness mentioned constant rounds of bidding for pots of funding. We think that is wasteful and unnecessary. It just sets authorities up against one another in competing for pots of funding. We will do our very best to get rid of that approach. As we develop the spending review proposals, we will build what local authorities need for the future into core funding.
Lord Jackson of Peterborough (Con)
My Lords, because the Minister is a very experienced and knowledgeable former local authority leader, she will know, in all fairness, that Covid, inflation, energy costs and demographic change were also issues that the previous Government had to face. Her Government will have to face some of them as well. On the specific pots of money to be bid for, I ask her to alight on the issue of planners. Is there any possibility that the Government might look to provide bespoke funding to enable local authorities to recruit and retain planners so that they can build the houses that are necessary, particularly for young working people, and that they can take forward very important regeneration projects in their local areas?
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for his kind comments. I do understand that a few issues arose in recent years, but an awful lot of money seemed to be wasted during Covid that might have been better spent delivering local services. On funding for planning, we announced alongside the NPPF announcement that additional funding is available to support local authorities’ capacity for planners. We recognise that, with an absolutely key mission on growth, the planning capacity in local authorities needs to be strengthened. Our colleagues in the Department for Education are working on skills and repurposing the apprenticeship levy into a skills and growth levy, and there is some direct funding support for local authorities. We hope that will attract around 300 new planners. I know you cannot go and pick them off trees, but that will help to support the planning that will need to be done to support the growth we need in our country.