Renters (Reform) Bill

Debate between Robert Neill and Alex Sobel

Report stage
Wednesday 24th April 2024 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

The Renters (Reform) Bill had the potential to bring much-needed security and safety to renters, yet amendments to water it down, brought forward in Committee and even on Report, are a backward step that will significantly undermine the Bill’s intent. As an MP with one of the largest student populations in the country, I am all too aware that students are experiencing a housing crisis on top of a cost of living crisis. We have seen landlords asking students renters for guarantors, as well as for deposits of up to 100% of their annual rent, the criterion for which is that the guarantor must own a UK property.

That requirement has an impact on the accessibility to working-class students of private rented sector accommodation at their university. It also has an impact on the ability of care leavers and those estranged from their families to access higher education altogether, as well as that of international students who do not have family members with property in the UK. To mitigate that, I have tabled new clause 41, which seeks to end one of the most illogical parts of the rental process: guarantor schemes. The expectation that, despite entering into a legal contract that outlines the responsibility of the landlord and the tenant, a nominated individual takes responsibility for fulfilling the contract seems to undermine the purpose of the contract itself. My new clause seeks to tackle financial pressure on students, supporting the amendment tabled by my hon. Friend the Member for Sheffield Central (Paul Blomfield) to stop landlords from signing up tenants months before an academic year, which creates an arms race for student lets.

We must also consider those who have come through the care system or have become estranged from their parents, for whom living at home has never been an option. If students do not know a guarantor who owns a house in the UK, they may be stuck paying extra to a private company, paying six months’ rent or more up front, or being unable to rent at all. Guarantors are not expected for most people of the same age who are not students, so why is there this discrepancy for students?

An international postgraduate student at Leeds University told me:

“My only viable option was using the Guarantor service ‘Housing Hand’ which costs me an additional 50 pounds a month on top of rent and bills. I am a PhD student receiving the UKRI minimum stipend which is paid monthly.

The cost of living for food and rent alone is already difficult on this stipend and during final week before the stipend is paid each month I often struggle to maintain a healthy and balanced diet due to financial strain.

This is not only demoralising but effects my academic progress on a physical level as I am often hungry and unable to afford fresh fruit and vegetables which are a staple of my diet. It may not sound like much, but not having to pay for this guarantor service could make a considerable difference to my overall wellbeing on a monthly basis as this money could instead be used on fresh food.”

Research conducted by students from the Centre for Homelessness Impact found that just 36% of universities provide help on rent guarantors, that even fewer provide a rent guarantor service for students, and that, as universities themselves face financial issues, such a service will become more unlikely. Renting as a student is already an uphill struggle. We know, for example, that student accommodation prices have increased by 61% since 2012, and information from the National Union of Students UK shows us that two in five students have considered dropping out because of the cost of rent and bills. When we are trying to encourage people to attend our world-leading institutions, which strengthen the skills potential of our country’s workforce, why do we put up so many barriers?

Our universities are the UK’s strongest soft power. International students in particular are left with nothing but bad choices—they must either find a UK guarantor or pay six months’ rent or more up front to their landlord. As one student recently relayed to the all-party parliamentary group on students:

“International students often face more challenges than home students. We have heard stories of students paying months of rent upfront, only to find out they have been scammed and the place they thought they'd secured doesn’t even exist. We had one case where international students paid a whole year’s rent in advance, only to find out their landlord went bankrupt. While they eventually got their money back, the stress and uncertainty they went through was unbearable.”

The Bill was a welcome opportunity to rectify so many of the scandals in the private rented sector, yet there has clearly been a continued and concerted campaign to force the Government to create an unprecedented two-tier rental market in which students would be at the mercy of section 21 evictions that other tenants would be protected from.

[Sir Robert Neill]

I refer the House to my entry in the Register of Members’ Financial Interests, as I am the owner of a single residential flat that is let out. I simply want to say that, in housing policy, we must always try to strike a balance between the legitimate interests and rights of tenants, and those of landlords, not all of whom are large corporations by any manner of means, and not of all whom make any great profit from those premises—they often operate at quite small margins—but who are a necessary part of the whole eco-structure. Equally, having served in local government for many years, I am conscious of the pressure that unwarranted evictions can place upon families and then upon local authorities, which have to pick up their housing duty towards those families. I believe that the Government are doing their level best in the Bill to get the right balance as far as that overall picture is concerned.

I want to speak in particular to Government new clause 30. We have already heard some rehearsal of the logic behind the new clause and the concerns about whether it will cause a delay to the abolition of section 21 evictions, as well as concern about the pressures on the county court. It is in that context, and wearing my hat as Chair of the Justice Committee, that I want to flag up to the House the inquiry that the Justice Committee is currently undertaking, and receiving evidence on, in relation to the work of the county court. I particularly welcomed the Minister’s commitment of £11 million to be transferred to the Ministry of Justice to carry out the assessment, because, of course, like local government and housing, the Ministry of Justice is an unprotected Department. It is also a downstream Department: either through the courts service or other parts of its work, it picks up many things that have gone wrong, whether elsewhere in our public services or in society as a whole. The courts system, including the civil courts and the county court in particular, is very much part of that: a great deal of social problems go through the county courts, and we know from all the evidence we are receiving that those county courts are under very great pressure.

As such, I support the new clause—but not because I want to delay the introduction of the reforms to the housing procedure that are envisaged, or the abolition of section 21 evictions as they currently exist, although as my hon. Friend the Member for Totnes (Anthony Mangnall) said, there may be other ways of striking the right balance that we could look at. I do not want to delay that reform, but we have to be frank and open about the pressure it will potentially put on what is already a strained county court system. If we are going to make those reforms—this applies to both parties—we need to will the means to make sure the county courts work as efficiently as they should do for all parties, whether landlords or tenants. That is the topic that I wanted to refer to some of the evidence on.

The overall picture, based on some 43 submissions that have been published on the Justice Committee’s website, is that of a very troubled situation as far as delays in the county court are concerned. There are delays in two areas that are germane to this debate: the first is the time it takes to see a possession action through the courts, and the second is enforcement, and particularly delays in getting bailiff appointments where necessary and then getting the enforcement carried out. There are real difficulties with both; it is fair to say that those difficulties vary across the country, but especially in many urban areas, there is considerable pressure. That is particularly acute in London and the south-east, where my constituency is.

Although the majority of those submissions came from landlords, they are based on data that I think is accepted and verified, whichever way one looks at this issue. The Large Agents Representation Group represents the largest letting and estate agents in London and the south-east. It has collected a deal of data, and it says in its submission that

“on average, the county court is taking approximately 276 working days to process a repossession claim from initial enquiry to a decision being given.”

Some of the other data that we get does not cover the whole of that process, which is why it is important to have the overall picture. That comes to an average of about 55 weeks, which does not include the enforcement time afterwards. That is unacceptable on both sides of the equation, so we need the resources to put that right.

Midland Heart, a housing association based in Birmingham—a well-established register of social landlords—says that

“typically, possession claims may take a minimum of 8 months, and sometimes up to 18 months, to conclude”.

The Hyde Group, another major social housing provider, said that

“the current level of delays is extreme and unacceptable”.

A number of those submissions also highlighted the serious delays in bailiffs executing warrants of possession when they are obtained under the current process. Of course, that is not unique to possession hearings: as has been observed, in some cases possession hearings proceed with more speed than other parts of the county court process, but they are still painfully slow in many areas. For example, we have had pretty clear evidence that there has been an increase in possession actions of roughly 16% from the equivalent quarter in 2019, before the pandemic. There was obviously a drop-off during the pandemic itself for a number of reasons, and as has been observed, the county court has done well to pick up the backlog that was created during the pandemic.

We ought to pay tribute to everybody in the county court: not just the judges, but the office staff who have worked phenomenally hard to try to turn that situation around. I hope all Members of this House will try to find the time to visit their local county court and see the work that is done by people on the admin side, who are often not the best-paid people in the public sector by any means. Indeed, recruitment and retention of staff in the county courts is itself a real challenge, which means that we must have continuing investment in those courts. I hope the assessment that the Lord Chancellor carries out under the terms of new clause 30 will help us to trigger greater investment and make the case for funding the county courts much better than it has been for many years under Governments, dare I say, of all political complexions.