Renters’ Rights Bill

Lord Willetts Excerpts
Tuesday 1st July 2025

(3 weeks, 2 days ago)

Lords Chamber
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I pointed out in Committee that it took my daughter about 10 seconds to work out that we are going to have a side market here, a secondary market, developed between potential students who are looking for a house and landlords: an unregulated secondary market in contracts, options and fees to secure tenancies—pre-tenancies, if you will, or agreements to rent rather than the rent itself. This complexity is the natural consequence of the Bill in so far as tenants who want to bag the best homes are concerned. We are going to end up with connivances between cohorts of incoming and outgoing tenants. The people who need our help and support the most are going to be disadvantaged. Everyone is going to pay more, it is going to destroy a stable market that works well for everybody, and, inter alia, it is going to make it harder for our country to get the brightest and best people we need to grow our economy in the future. These amendments should be supported.
Lord Willetts Portrait Lord Willetts (Con)
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My Lords, I support the excellent amendments proposed by the noble Baroness, Lady Scott, in particular Amendment 5, which strongly resembles an amendment which had cross-party support at an earlier stage of our deliberations on the Bill and I hope will continue to have that support. It seems to me that the proposals that we have before us will lead to a two-tier system, in which advantaged students who can afford the higher rents will go into the purpose-built accommodation, but the lower-cost, more flexible accommodation—often smaller, private lettings—will be much reduced, and that will be very bad news for access to university.

I do not by and large believe conspiracy theories, but on this occasion I think that the interests of the Ministry of Housing, Communities and Local Government are very different from the interests of the Department for Education. If students are no longer travelling to university so much, if some students are deterred from this accommodation, and if other types of tenants move in instead, that is not a problem for the department sponsoring this Bill; in fact, it might almost be a help. It will then be able to say that other people have been able to find private rented accommodation and the adjustment has been borne by a particular group of students. Meanwhile, the Department for Education, with its commitment to social mobility and opportunity, will be facing the consequences of fewer students going to university since they cannot afford the high-rent environment which is now being promoted. So, I am concerned that the department steering this Bill is not taking proper account of the legitimate interests from a different perspective of education and social mobility.

I very much regret that the Minister, despite her courtesy in meeting up with myself and others, which we have appreciated, has not been able to make any concessions, even moving from three rooms to two rooms or one room. I hope at least, however, she will be able to flesh out a statement she made a few minutes ago in the debate on the previous amendments, when she said that the Government would “continue to monitor the market”. Will she assure the House that this monitoring of the market will include monitoring student access to the private rented sector as part of their participation in higher education?

Baroness Wolf of Dulwich Portrait Baroness Wolf of Dulwich (CB)
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My Lords, I too offer strong support to Amendment 5. In that context, I declare an interest as an employee of King’s College London.

The profound change, in varying ways, to the rental market that the Bill will introduce is not very well understood outside this Chamber, but some of the people who have become very aware of it, in my experience, are people who currently let to students. I first became aware of this when told by a number of people that they do not see themselves letting to students in future, thank you very much. These are people who have small rental properties. I know that that the noble Lord, Lord Willetts, whose amendment I was happy to support in Committee, is also aware of this. He has highlighted the fact that we now have a bifurcated system.

The Government have rightly acknowledged that student housing is a major issue and have introduced some clear provisions that cover purpose-built student accommodation, and indeed student halls, but fail to cover anything that does not have at least three bedrooms and is being let to students. The problem is that a large proportion of the cheaper student housing outside major cities is of exactly that type. What somewhat astonishes me is that we have a situation in which there is not likely to be any harmful impact on the provision of student housing at the expensive top end of the market but a very major impact on smaller, cheaper rental properties at the lower end, which are of course the ones taken by students from lower-income families and people who are not in the major cities but are in other places. I am somewhat puzzled that the Government have been so determined not to extend ground 4A to, at least, properties with two bedrooms. I really do not understand it and I therefore strongly support the amendment.

I would like to lay something for the future about Amendment 7. I notice that it is a probing amendment and, of course, apprentices are not students—they are employees, many of them rather adult employees—but in future, if and when we revisit the issue of making accommodation easily available to people who are, in effect, students, and that will include apprentices, we should pay this considerable attention.

If we look back 200 or 300 years, especially in London, we see that it was full of apprentices who had come from elsewhere in the country. They served their apprenticeships in London and then went back out, and they could do so because part of being an apprentice was that you lived with your master. We do not have that any more, and the result is, again, enormously reduced opportunities for people who live in less economically advantaged places. If you are a low-income school leaver, you will have far fewer apprenticeship opportunities open to you in your hometown, and we are not doing anything to make accommodation easily available to apprentices who might want to be employed in economically more favoured regions.

Apprentices are not students so it is too late for this Bill to do anything about them, and it probably was not possible anyway, but I flag this conundrum as something that—if we ever come back, review the consequences of the Bill and make some changes—I hope the Government might put something on the table about at the same time.

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Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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Students who take up accommodation should have the same rights as anybody else who is taking up accommodation. That is why we do not want to exempt from the benefits of the Renters’ Rights Bill students who want to rent in the private rented sector.

To come on to the point from the noble Lord, Lord Willetts, about monitoring, we will monitor this element of the Bill, along with all aspects of it, and I will give noble Lords more detail about that—it comes up under a future set of amendments, but as he has asked the question, it is important to respond to it. We will evaluate the process, impact and value for money of the reforms in line with the department’s published Housing Monitoring and Evaluation Strategy. The evaluation will involve extensive data collection through interviews, surveys and focus groups with a range of stakeholders, as well as trusted data sources. We will talk to tenants, landlords, letting agents, third sector organisations, delivery partners, the court service and government officials. I will say more about the court service later on, because, to some extent, that needs a much more immediate and dynamic monitoring process.

The primary data will be supplemented by monitoring data from existing surveys and new data produced by the reforms. Reports will be produced for publication approximately two and five years after implementation, in line with commitments made in the Bill’s impact assessment to publish findings. Therefore, they will be available for parliamentary scrutiny. It is important to say at this point that we want to make sure there is a process by which we can review the provisions in the Bill.

Lord Willetts Portrait Lord Willetts (Con)
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I am grateful to the Minister for that very full explanation of the monitoring. In her long list of organisations that would be consulted, I do not think she had universities. Will she assure the House that they will be included as well?

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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My apologies to the noble Lord; that was probably my speedy reading rather than an omission on the part of the information I have—so, yes, I agree with him that this is part of the monitoring process.

Amendment 5 seeks to expand ground 4A, which allows students living in HMOs to be evicted in line with the academic year. It seeks to address the concerns of some noble Lords that the scope of the ground needs to be expanded to all student properties. It would remove the HMO restriction and allow students living in self-contained accommodation—one and two-bedroom properties for example—to be evicted each year. We have thought carefully about the design of ground 4A, and I am grateful to the noble Lord, Lord Shipley, for also giving it great thought. We want to ensure the cyclical nature of the typical student market is maintained. We therefore believe limiting it to HMOs achieves this by capturing the bulk of typical students—that is, groups living in a house share. Meanwhile, students who need more security of tenure, such as single parents living with their children, or post-graduate couples living together who have put down roots in the area, will be protected.

The core principle of the Bill is that tenants should have more security in their homes, and it is right that these groups should not be exposed to potential eviction using ground 4A. Self-contained one-bedroom and two-bedroom homes are also easier to let to non-students than student HMOs. I do not agree with the conspiracy theory that the noble Lord, Lord Fuller, spoke about, but if a landlord cannot gain possession in line with the academic year, they are more likely to be able to let the property out to non-student tenants. That gives another way through for landlords.

On Amendment 6, noble Lords may remember that, in the Committee evidence session in the other place, it was highlighted that students are often pressured into signing contracts for the next academic year very early in the term, before they have had a chance to form stable friendships or assess a property’s proper condition and location. To discourage this practice, we amended the Bill to prevent landlords using ground 4A if they had agreed a tenancy more than six months in advance of tenants gaining the right to possession. This amendment seeks to extend this six-month limitation to allow landlords to sign tenancies up to nine months in advance. I am not convinced that this would be the right approach.

As I have highlighted, in many cases students are expected to commit to properties within just months of arriving at university, before having the opportunity to form lasting friendship groups or evaluate whether a property meets their needs in terms of condition or location. The purpose of this measure is to act as a strong disincentive to this practice, while striking the right balance. It avoids pushing students into signing tenancies before Christmas—when students are still settling in—but continues to allow flexibility for students who prefer to secure accommodation in advance of the summer period and does not interfere with typical exam periods. Extending this limit to nine months would undermine that balance and risk reinforcing the practice that this measure is intended to discourage; for example, tenants in a competitive market may be forced to search for tenancies starting in September during their January exam period.

Amendment 7 seeks to expand the student ground for possession, so that it can be used to evict a tenant undertaking an apprenticeship. While I understand the support for apprenticeships and share the noble Baroness’s wish to support people undertaking them, I do not believe that this would be the right approach. Ground 4A was created in recognition of the unique, cyclical nature of accommodation for those in traditional higher education. Those in other types of education, such as apprenticeships, are less likely to live in cyclical accommodation and need the security of tenure that the Bill gives tenants. Those on apprenticeship schemes, for example, earn a wage and tend to hope to stay at their company once the apprenticeship is completed; they live lifestyles much more akin to the working population than to university students. They will therefore benefit from all the increased security of tenure that the Bill will give them. For the reasons I have set out, I ask the noble Baroness, Lady Scott, to withdraw her amendment.

Renters’ Rights Bill

Lord Willetts Excerpts
Tuesday 22nd April 2025

(3 months ago)

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At the heart of these amendments is the future and interests of our children and grandchildren. Like all of us once did, students are stepping into adulthood, navigating new freedoms, new responsibilities and new challenges. Their need for secure, affordable and predictable housing is a foundation for their success. Let us give them the stability to study and the security to maximise their potential. I beg to move.
Lord Willetts Portrait Lord Willetts (Con)
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My Lords, I shall speak to Amendment 40 in my name. This is the moment when students and higher education enter the housing and rental market debate. I am never totally sure whether the department responsible for housing welcomes this interruption from the higher education sector, but I hope the Minister will accept it in the spirit in which it is meant. I declare an interest as a visiting professor at King’s College London, and a member of the council of the University of Southampton.

I understand the arguments that the Minister makes about the need for tenants to have security and be able to put down roots in the long term, but so many of her arguments for this legislation do not apply to students who are seeking reliable accommodation for an academic year. The model that she proposes is clearly not in their interests.

If I may say so to the Minister, the link between housing policies and higher education is very important. The previous Labour Prime Minister, Tony Blair, set a target of 50% of people going to university. There are different views about the target; I do not personally believe in targets, but nevertheless that 50% target was achieved and it was achieved only because of the use of the private rented sector. It is impossible to have imagined that that target would have been secured without the way in which the private rented sector has developed for student accommodation. This is not just a historic achievement; if the Government have opportunity as one of their core objectives, it is surely important that students who could benefit from higher education have that opportunity, and that includes being able to access accommodation that meets their needs.

The Government have clearly accepted that there is a need for some special arrangements for student lets. The exact form they take is open for discussion. My noble friend Lady Scott made very powerful points in support of her proposed amendments, which try to secure that. The Government have made some concessions to recognise the student market. There is already one exemption from the legislation, which is for purpose-built student accommodation. That tends to be high-cost and involves students making a very early commitment. It is possible almost at the beginning of the previous academic year for the student to enter into a special academic year contract in this high-cost, purpose-built accommodation. To put it crudely, the Government are looking after the elite: the students who plan a year ahead, can afford the high rents and go into the —by and large—very high-quality purpose-built accommodation, which often has business investors behind it.

There is now a second category that has been added, and that is ground 4A, which is essentially for HMOs with three bedrooms or more in the private rented sector. They are also now going to be exempt from the burden of the legislation, with a different start date for making a commitment—about January before the academic year starts. That is the next group— I feel it is a bit like that famous “three classes” sketch, since we have got a second group that will now be looked after.

But that leaves a third group for whom the Government are not currently providing any exemption. These are students in smaller accommodation, maybe one or two-bedroom properties, for whom none of the special exemptions are going to apply. It is therefore very odd that, in the Government’s model to tackle this problem, you could have three university students who are friends and are in three totally different rental regimes because of the structure of the exemptions which the Government are trying to offer.

What I am attempting in the amendment in my name—I welcome the support of other noble Lords—is to say that these smaller rented accommodations of one or two bedrooms should also be exempt from the general provisions of the Bill and instead be recognised as academic accommodation, with its special needs. What do we know about these students in one- or two-bedroom properties? The evidence is limited. There seem to be quite a few of them. There are different estimates as to how many students in the rented sector are in these smaller accommodations. One estimate is 24%; another is a third. Several hundred thousand students are currently in this sector. So, if landlords pull out from it because there is no way they can be confident of being able to offer a tenancy for an academic year and the accommodation enters the mainstream market, several hundred thousand students currently renting in this sector will lose out.

One view is that they may be students who go for particularly low rents. I do not know. An alternative account of these students is that this smaller accommodation is basically for students who wish to live more quietly. It is less social. One suggestion is that it tends to be final-year students who move out from the bigger, more crowded accommodation so that they can properly study and revise for their final year. The Government’s education policy appears to be, “It is okay to have a special arrangement if you are going to be in a large, sociable environment, but if you want to move into a studious, quieter environment, we are ceasing to recognise that you are a special student and your kind of accommodation is going to go”.

I very much hope that the Minister will recognise, as the Government have already made concessions, that we need a wholehearted attempt to preserve an academic year student rental market. My attempt to extend the exemption on ground 4A to one- and two-bedroom accommodation is an attempt to do that. The interesting proposals from my noble friend Lady Scott are an ingenious attempt to do that.

Finally, and briefly, I will refer to another amendment that attempts to do that: Amendment 189, in the name of my noble friend Lord Young of Cookham, who is in the Chamber but currently appears unable to participate in this consideration of his excellent amendment. It is another attempt to resolve this issue with an ingenious proposal that there should be a special code of conduct for private sector residential landlords letting to students. If landlords sign up to that code of conduct, they would then be exempt.

To be honest with the Minister, I do not have particularly strong views about exactly which mechanism should be used but I hope that at the end of the consideration of these amendments, she will accept that there needs to be a wholehearted recognition that the student academic market is different and, instead of slicing it into these particular sectors—some parts of it to be recognised and others not to be—there needs to be a complete solution for students renting for academic terms because, otherwise, the Government’s commitment to opportunity will be in jeopardy.

Baroness Wolf of Dulwich Portrait Baroness Wolf of Dulwich (CB)
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I have added my name to Amendment 40 in the name of the noble Lord, Lord Willetts, and declare an interest as an academic employee of King’s College London. As such, I am acutely aware of the accommodation and living costs that students face if they study away from home. London is particularly expensive, as I am sure noble Lords have noticed, and the level of maintenance loans available and the total absence in England of maintenance grants mean that many UK students conclude that a London degree is simply out of reach.

At King’s, we manage to offer first-year undergraduates a place in hall and we have an affordable accommodation scheme that helps a subset of students obtain accommodation at below market rates, and other universities are similar. However, over time we have seen our student body change. On the one hand, we have far more international students, many of whom are able to afford the rents charged in high-end, purpose-built student accommodation or to pay market rents in the private sector; on the other hand—this is far less well known—we have seen a strong growth in the proportion of our UK students whose families live in or close to London who live at home, and a corresponding decline in the number of UK students who are in student accommodation in London.

If your family lives in the London area, you can live at home and be a commuter student and still have access to a huge range of institutions and degrees, but that is not true for people in a very large part of the country. You do not need to believe that young undergraduates should all go away to do their studies to be aware that for many people, it is absolutely central to social mobility and to their future. If it is only wealthy students who can move geographically, our best faculties and specialist degrees will not be able to recruit the best students.

Renters’ Rights Bill

Lord Willetts Excerpts
Tuesday 4th February 2025

(5 months, 2 weeks ago)

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Lord Willetts Portrait Lord Willetts (Con)
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My Lords, I congratulate the noble Lord, Lord Wilson of Sedgefield, on his excellent maiden speech, its eloquence and his extraordinary personal story. This afternoon, behind the Bench of Bishops, we may have seen another constitutional function emerge in this House: the Bench of Blairites. I welcome the noble Lord and appreciate what he said about his predecessor as Member of Parliament. He also spoke eloquently about opportunity, and that is a test against which the measures in the Bill should be assessed.

I thank the Minister for her willingness to engage in discussions with all of us across the House. In her opening speech, she referred to genuine problems with the private rented sector, the difficulties for people in employment if they lose their accommodation and the incredible difficulties for parents with a child at school if they face the uncertainty of losing the place where they live. She ended by saying that she hoped this legislation would help tenants put down deeper roots in the community.

That was all very eloquent, but it revealed a way of thinking that simply does not reflect the reality of student accommodation, for which these concerns do not apply. There are over 1 million students in the private rented sector and a long-standing problem, preceding this Government, is that, although access to private rented accommodation has been crucial to the growth of higher education in this country, the housing department has never really understood higher education and the education department has never understood the importance of private housing. I fear that this legislation is an example of that phenomenon.

For example, students receive maintenance loans in three separate payments during the year. Many rents historically have been structured around the payment of maintenance loans. There is now an assumption of a monthly rental payment model and no scope for landlords to offer tenancies structured around maintenance loans. Have there been any conversations with the education department about changing arrangements for the payment of maintenance loans so that they match the envisaged new payments of rents? Those are the kinds of practical issues that matter and are acute if there is no understanding of the problems facing students.

Students have genuine grievances. At the All-Party Group for Students last week, all of us from both Houses were left in no doubt about their unhappiness, which was sometimes about the quality of student accommodation and sometimes about the role of guarantors, for example. But few believe that the Government’s proposals, as they stand, will make these problems significantly better. Indeed, there is a danger of landlords exiting the system.

The Government have already made some welcome concessions. First, there is the exemption for purpose-built student accommodation. This is estimated to cover about half a million students out of the 1.2 million in private rented accommodation. It is the most expensive and is heavily regulated—quite rightly. There are significant constraints on its supply and on its further provision.

We have recently had the famous ground 4A exemption, which means that landlords can repossess a rented property in advance of the new academic year. This applies to landlords of HMOs with three or more bedrooms. As the noble Baroness, Lady Warwick, said, this does not cover the many smaller landlords of smaller student accommodation with one or two bedrooms.

It is estimated that, of the 1.2 million students in the private rented sector, half a million or so are in purpose-built accommodation. There may be another 300,000 or 400,000 in the larger HMOs, and there could well be 200,000 to 300,000 in the smaller private landlord arrangements for which there is currently no special recognition. Will the Minister consider, for example, extending this exemption beyond large HMOs to all private landlords?

More radically, will the Minister consider the case for continuing to allow 12-month academic year tenancies —a system which has worked well overall? Does she recognise that there are other risks with some of the provisions in the Bill? For example, upfront payments may now be much harder to require. However, there will be the increased use of guarantors. Requiring a guarantor for a student from a low-income background is very tough, as is requiring a UK guarantor for an overseas student.

Perhaps the housing department is fed up with special pleading on behalf of students, but I think the crucial criterion is one of opportunity, as we heard in that excellent maiden speech. In the purpose-built accommodation—PBA—the rents for students average about £190 a week, in contrast with about £130 a week charged by small private landlords. We could end up with a system where the more expensive accommodation sector grows and is exempt. By and large, this is more expensive and occupied by the affluent students. In future, low-income students might find it harder to access the diminishing amount of lower-rent accommodation. Maybe they are supposed to stay at home and become commuter students. Some people want to see that. A very good social rule of thumb is that the more affluent someone’s family and the higher their social class, the greater the distance they go away to university. The low-income students will be staying at home and commuting, while the students from affluent backgrounds will pay high rents in high-quality, purpose-built accommodation a long way from home. If we end up with this, it will not be meeting the opportunity challenge. I very much hope the Minister will accept that her proposals need to be assessed as to whether or not they promote educational opportunity in our country.