Renters’ Rights Bill

Debate between Baroness Coffey and Baroness Scott of Bybrook

Monday 12th May 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, I was intrigued by the amendments from the noble Lord, Lord Shipley, today and it is interesting to hear that they have come from Citizens Advice. I am conscious that things have evolved over time, and he mentioned relationship breakdown. As somebody who used to rent with other people, I know there was always a certain risk when you took on a tenancy that somebody could walk out and you would be left liable.

I guess I am trying to understand—perhaps I was not listening quite closely enough—whether we will get to a point where, instead of people coming together, this will drive more accommodation into houses of multiple occupation.

I will give your Lordships my personal experience. I was working for a very large company when I moved to another city, which reflected the job situation that I needed. There is no doubt that I deliberately sought out situations that were not exactly HMOs but where individual contracts and tenancies were allowed with the landlord, so that it would not fall on my shoulders to think about these issues.

I suppose I am trying to understand how this amendment would address the situation of making sure that there are enough tenancies and enough accommodation available, without putting more risk on to the landlord. We are already seeing quite a substantial change. I understand why the Government set this out in their manifesto and similar. I appreciate that there may be some differences on some of the impact but, perhaps when the noble Lord, Lord Shipley, follows up—I am happy to discuss this outside—it would be useful to discuss how much of a genuine, as opposed to theoretical, problem this really is.

[Baroness Scott of Bybrook (Con)]

My Lords, I thank the noble Lord, Lord Shipley, for bringing these amendments to the Committee. As we on this side have consistently said throughout, we support the Bill’s overarching aim to create a fairer and more secure private rental sector. However, if it is to deliver on that promise, it must engage with the way that people rent in reality, not in theory. Joint tenancies are a common and practical arrangement, as we have heard, whether between couples, friends or flatmates. However, as currently drafted, the Bill leaves considerable uncertainty as to how these tenancies will be treated, particularly when one party wishes to leave.

Amendments 171 and 175 rightly seek to bring joint tenancies fully and clearly within the scope of the Bill. Without this clarity, both tenants and landlords could be left navigating ambiguity, with little guidance in law and potentially significant consequences in practice.

Similarly, Amendments 172 and 174 focus on the mechanisms for ending a joint tenancy. This is a matter not just of legal process but of fairness and practicality. Tenants must be afforded flexibility, particularly in cases of relationship breakdown or changes in household arrangements, while landlords should not be left in legal or financial limbo.

In that context, it is right to raise the issue of subletting, which is closely tied to how joint tenancies evolve and adapt over time. When a tenant is not using all or even part of their space, subletting enables the more efficient use of underoccupied homes. This is particularly important in areas facing acute housing shortages, where every single room matters. Subletting arrangements can offer a pragmatic solution for tenants trying to manage their finances, respond to personal changes or simply avoid exiting a tenancy altogether. It can help maintain housing stability where one joint tenant moves out, by allowing a new occupier to contribute to rent without formalising a new tenancy agreement from scratch. Moreover, subletting can play a role in addressing the chronic supply issues affecting the rental sector. It offers access to more affordable rents, supports tenants’ incomes and introduces much-needed flexibility into an often rigid system.

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[Baroness Scott of Bybrook (Con)]

My Lords, my amendments in this group are intended to probe the Government’s decisions on rental bidding and to better understand the rationale behind this section of the Bill. I begin by drawing your Lordships’ attention to Amendment 199A tabled in my name. I wish to understand why, if a tenant or prospective tenant offers a lower rent than the proposed letting value, the landlord is prevented from accepting it. If a tenant is able to secure the property at a more affordable rate, this seems a fair and beneficial outcome. If the proposed letting value is set unrealistically high, allowing offers below that figure provides an important market correction, one which benefits tenants. This is particularly relevant in weaker rental markets where negotiating powers often lie disproportionately with the landlords. I simply ask the Minister: did she consider this before putting it forward?

On these Benches, we recognise the difficult balance the Government are attempting to strike between preventing unfair and unaffordable rent increases and ensuring that the proposed letting value reflects proposed market conditions. Market conditions are, of course, determined by the supply of homes and the market rent must still incentivise landlords to remain in the sector to provide the housing capacity that we urgently need. This brings me to our intention to oppose the question that Clause 58 stand part of the Bill. The rent-setting process must be transparent, and must be free to function. We should not pretend that we can fix prices without distorting the market signals that allow for an efficient and well-resourced housing market. We must be careful not to introduce policies that mask the simple fact that we need more homes of all types. We on these Benches are committed to working with the Minister to that end, but I first ask her: has she considered whether these measures may in fact obscure the true demand within the rental sector? Understanding that demand is key to delivering the right supply and the right homes built in the right places.

Further, has the Minister considered the impact on labour mobility? Tenants in rent control units may be discouraged from relocating for jobs or education, thus reducing workforce mobility. With over 800,000 vacancies, we should not be inadvertently curtailing the movement of our workers. Finally, I wish to probe whether the Government have fully considered the potential impact on new renters compared with existing tenants. No one on these Benches doubts the Minister’s intentions; we simply fear that the department has not paused to fully reflect on these key issues.

I turn to Amendment 199B, also in my name. I will cheekily anticipate that the Minister may say, in response to this probing question: “Yes”. The Bill attempts to define the term “relevant person” in Clause 58(6) but, before the Minister reaches that definition, I wish to question its adequacy and its clarity. Is there any formal process to designate someone as a relevant person or is this determined on a case-by-case basis? Further, how is the term “acting indirectly” to be interpreted? Does this include property agents or other advisory parties? Crucially, what is meant by “purporting to act”? I am sure that those with legal expertise in this House will argue that this is a loaded term that depends heavily on interpretation. I would be grateful if the Minister could offer her understanding of it and, importantly, explain how consistency in interpretation will be ensured.

Clause 58 represents a significant shift. With that must come clear answers. I hope the Minister will help your Lordships’ House to understand the Government’s thinking more fully. I beg to move.

[Baroness Coffey (Con)]

My Lords, I support my noble friend in these amendments. Two different things are going on here, one of which is not allowing the market to work. I am trying to understand what evidence there is to suggest that this is a real issue.

I will give a personal story. When at university, a group of us wanted to rent a house. Under the rules of the university, you could live only at a certain distance, and so on. Not wanting to take a 12-month tenancy, we were particularly attracted by and sought out houses that would require only a nine-month tenancy. The landlady we were involved with used to make considerably more rent in the summer through tourists and short-term lets, but also gave students the opportunity not to take on the liability of the year. That helped keep rents relatively low. I am sure that your Lordships can imagine that such a scenario, while it may seem niche, was still very important to students at that time, and so was the availability of houses reflecting that opportunity. In effect—this is nothing to be embarrassed about—we gazumped by being prepared to sacrifice a living room and turn it into an extra bedroom. It also gave a little more rent to the landlady, which was a factor when, I was led to believe, 46 groups went to see that house wanting to secure the tenancy.

While I completely understand some of the intentions of this clause about not getting into ridiculous bidding wars, I am surprised, given the real scarcity in certain parts of the country of private sector rentals, as to why we would want to unnecessarily put such handcuffs on the landlord to accept only the rent they advertise and not be creative about the situation in which prospective tenants may find themselves.

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[Baroness Coffey (Con)]

My Lords, this in effect creates a formal escrow process. One of my proudest achievements was to organise a student rent strike, admittedly some time ago, as noble Lords may recognise. At the time, the university accommodation was due to be dismantled at the end of the year and as a consequence it felt like the university was not taking various matters very seriously.

I happened not to be a paying student at the time; I was a vice-warden in a hall of residence. So I did help them, but I insisted that, if I was to help them, they would have to pay over their rent to avoid being evicted. We did that by handing the money to the student union, to effectively act in escrow. As a consequence, repairs were made and everyone ended up happy—apart from the university, which did not like my role in that at all.

The reason I tell that story is that it matters that tenants should be able to withhold cash going directly to a landlord when the landlord is, frankly, taking the mickey. Awaab’s law has already been mentioned and Clause 63, which we did not specifically address, is already extending that to the private sector, and I welcome that. We need to work out a much easier way for people to effectively deploy this escrow approach. That is why I am supporting the amendment.

It is fair to say that we need to make sure that any such processes are easy to administer. Going a little bit further, there is a regularly read out statistic that something like 15% to 20% of housing benefit—or housing support, whether as direct housing benefit or through universal credit—is thought to go to properties not deemed fit for rent. I went into a reasonable amount of detail on this with officials.

The philosophy explained to me by the Permanent Secretary and other officials was that the state thus far should not determine on behalf of the renter where they are going to live; it is an important right for the renter to make that choice—even though it felt repulsive to me that taxpayers’ money was being spent in, frankly, some pretty ropey places. From my visits to some different housing, I have to say it was quite extraordinary what was going on. Sometimes, I am afraid, the dilapidation was the consequence of the tenant not allowing repairs to be undertaken—but that is a minor aside. The point is that—whether it is private money, your own money or the state’s money going to a private landlord—it matters that we have habitable accommodation. Therefore, I strongly support the amendment from the noble Baroness.

[Baroness Scott of Bybrook (Con)]

My Lords, these amendments have raised the serious and emotive issue of the reality of tenants living in poor housing conditions and the remedies that are available when landlords fail to act. It is an area where frustration and vulnerability can understandably run high.

Amendment 206, moved by the noble Baroness, Lady Bennett of Manor Castle, on behalf of the noble Baroness, Lady Jones of Moulsecoomb, proposes a system of mediated rent pauses. Under that model, tenants would be entitled to pay rent to an independent individual rather than their landlord when repairs are not carried out within the expected framework. However, we must be clear-eyed about this. How would it operate in practice? Who would this independent individual be in real terms? Would it be the redress scheme ombudsman? If so, is it appropriate or even realistic for them to be holding and distributing rent payments? Would they have the resources, legal authority or financial infrastructure to do so? It is overcomplicated.

There is also the question of safeguards. What mechanisms would ensure that the process was fair to both parties? What happens if a tenant withholds rent on the basis of a dispute that turns out to be unfounded? How long might rent be withheld, and what impact would that have on smaller landlords with limited financial resilience? It is entirely right that landlords should meet their obligations to maintain safe and decent homes, but we should be cautious about creating a system that effectively withholds rent before any formal adjudication. That could introduce significant uncertainty into the private rented sector. Would this approach encourage resolution or would it risk entrenching disputes? Might it push responsible landlords out of the market while rogue landlords simply continue to ignore the rules?

In short, while the amendment is well intentioned, and of course we sympathise with all individuals living in poor conditions and battling with irresponsible and careless landlords, it raises complex questions about implementation and unintended consequences. On balance, we are not persuaded that the provision as drafted would be workable in practice. However, there must be a better, more practical way to ensure that tenants are protected without creating further layers of bureaucracy and pushing good landlords out of the market.