Renters’ Rights Bill

Baroness Jones of Moulsecoomb Excerpts

Thursday 24th April 2025 Lords Chamber

[Baroness Grender (LD)]

My Lords, we welcome the Government’s commitment to rebalancing the relationship between landlords and tenants, and the abolition of Section 21, but we must ensure that the protections afforded to tenants are as robust as possible if the Bill is truly to deliver for the people who find themselves on the front line of this housing crisis. The Bill introduces new mandatory eviction grounds. Although we understand that the intention is to provide clear routes for landlords to regain property, making grounds mandatory removes the courts’ vital ability to act as a backstop and consider the individual circumstances of the tenant. It is important to test this issue in Committee, which is why we tabled Amendment 31.

Although most repossessions will be able to proceed without a hitch under the new Act, ensuring that exceptional cases have a discretionary element is critical—a discretionary element that the Labour Front Bench argued for with some vigour in the previous Parliament. Indeed, the Renters’ Reform Coalition argue that the lack of discretion is one of the most significant shortcomings in the Bill. The Renters’ Reform Coalition comprises some of the leading charities that work tirelessly on the issues of tenancy, homelessness and housing, including Shelter, which I used to work for. I thank the coalition for its work on this amendment and its support on this issue.

It is not difficult to imagine situations where compelling reasons for refusing immediate possession should exist. For instance, a tenant or a member of their family may have a serious terminal illness such as cancer, with a very limited life expectancy, a severe disability, or caring responsibilities for a disabled person, meaning they will necessarily need a longer period to find the most suitable accommodation. In the previous Parliament, the shadow Housing Minister, Matthew Pennycook, provided us with a useful hypothetical example, in which a terminally ill cancer patient could be evicted and at risk of homelessness because the landlord wishes to sell—a landlord, in this hypothetical scenario, with a portfolio of, say, eight houses and no compelling need to sell. In that scenario, he argued, a judge should have discretion.

Mandatory grounds, such as grounds 2ZB and 2ZC, which cover possession when a superior lease ends, prevent the court taking these profoundly human factors into account. Making all grounds discretionary would offer a vital layer of protection. It would allow the courts the potential to act as a backstop, consider all factors and potentially propose alternative courses of action to avoid a damaging eviction.

Obviously, some will argue that this cannot be done on the grounds of backlogs in the courts. Reforms in Scotland, where grounds for possession were made discretionary in October 2022, have shown little evidence of significantly worsening court backlogs. Indeed, if backlogs in courts, or in any institution right now, were applied to every piece of legislation that comes before us as a rationale for not proceeding or making a decision, we would be very hampered indeed as a legislative body.

We all know that the reality and likelihood of tenants taking up this course of action, just like the First-tier Tribunal, will be minimal, but the existence of the discretionary approach would ensure that an all-important safety net is in place for the worst possible cases. This amendment would remove “must” and insert “may” in the relevant heading of part 1 of Schedule 1, and omit the heading of part 2. This would provide the courts with the flexibility needed to consider the specific context of each case. I understand that the Housing Minister, Matthew Pennycook, in the House of Commons has countered that this is “a step too far” and would remove “certainty” for landlords, but we disagree—or rather, we agree with his original arguments, which are no different from mine today.

Should the Government remain resistant to making all grounds fully discretionary, can we please explore, between now and Report, robust mechanisms to prevent evictions that would cause severe hardship? As a fallback position, we advocate strongly for the introduction of a mandatory hardship test that courts must apply when considering possession orders under any mandatory grounds. This test would require the court to explicitly weigh the potential severity of the hardship caused to the tenant, considering factors such as health, disability, how many children there are, access to alternative accommodation and the impact on the ability to maintain employment or education, against the landlord’s stated reason for seeking possession. This hardship test would ensure that the most vulnerable tenants are not rendered homeless or forced into the inadequate temporary accommodation that we have heard described by the noble Baroness, Lady Warwick, simply because a mandatory ground is technically met without consideration of the dire circumstances in which the tenant finds themselves. It would provide a necessary safety net, ensuring that, while good landlords could regain their property for legitimate reasons, the system does not blindly facilitate deeply unfair and harmful evictions.

We must listen to the voices of those who live with the constant fear of losing their home. We owe it to future generations to get this bit right. This amendment would strengthen the Bill to ensure that security, fairness and compassion are at its heart by making grounds discretionary—or, at the very least, by introducing a mandatory hardship test.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, my Amendments 35 and 71 both aim to help people who rent. I declare an interest as someone who rents a two-bedroom flat.

I have tabled Amendment 35 because I am worried that the Government’s good policy will actually end up penalising the very people that it is aiming to help. I hope the Minister will go away from here thinking, “The Green Party had quite a good idea on that, and how nice it is to have them on our side for once”.

The Government are doing the right thing for the climate and for people in putting in higher energy efficiency standards—that is a given—and doing the right thing for landlords with grants to help them meet those standards. However, the only people who do not get a guaranteed better life are the poor tenants who have to put up with the work, dust, noise and inconvenience of the energy improvements being done, with the possibility that their rent will be going up as their energy costs go down. Amendment 35 is an attempt to give tenants a guarantee that they will also get some direct benefit from the drive for net zero with two years of lower energy bills, without that saving being cancelled out by a landlord focusing on profiting from a government grant. I think this is a sensible amendment and I hope it will find favour with the Minister.

Amendment 71 aims to shift the debate firmly on to the needs of the tenant and to discourage landlords from constantly changing their minds about letting out their properties. It builds on the Government’s welcome attempt to get rid of no-fault evictions by adding a new clause to the eviction process that gives the tenant a one-month financial head start. With all the costs involved with moving—the deposit and moving costs—it can be a long, drawn-out process, and, for many tenants who are self-employed or on zero-hours contracts, time is literally money and moving is a time-consuming business.

I hope that passing this legislation will create a new era of stability for those in the private rental market. A whole generation of young people has had to suffer from an overheated rental market, which was firmly loaded in favour of investors and those with the money to buy properties. This legislation does not actually solve that problem, because only the Government building hundreds of thousands of social homes could probably do that, but I welcome the start the Bill is making and I hope the Minister will consider the needs of tenants even more in this way.

[Lord Cromwell (CB)]

My Lords, I rather like the look of Amendments 26 and 27 from the noble Baroness, Lady Thornhill, and look forward to hearing her describe them. They also relate to my Amendment 142, which I will now speak to.

The Bill restricts a landlord to four instances where they can recover their property and require a tenant to leave. One of these is if the landlord is selling the property. The purpose of this amendment is to ensure that, where a landlord seeks to sell a property under the new ground 1A but fails to do so, the property is made available again on the rental market without unnecessary delay.

The Bill requires that the property is on the market for sale for at least 12 months before, if no sale is forthcoming, it can be re-let. Market statistics show that typically about 20% of rental properties taken off the rental market do not sell and come back to the rental market. Savills puts the figure higher, at 33%. According to Hamptons, on average properties come back as available to rent after about 90 days, or three months. Where properties do sell, Zoopla figures indicate that the period between first marketing and completion is typically six months. This amendment responds to these facts and reduces to six months the period when the property is required to be unavailable to rent.

I move from the market facts to the Government’s approach. I am very grateful to the Minister for the opportunity that we had to discuss this and the understanding I obtained of the Government’s thinking. I understand that the Government’s concern is that landlords seeking to increase the rent might claim the property is on the market as a means to obtain vacant possession, apparently expecting much higher rent thereafter. They would leave it standing empty for, say, six months with no rental income, and then re-let it not just at a higher rent but at one that would both recover the rent lost in that six-month period and obtain a higher ongoing rent. The assertion is that making the required period 12 months would make such assumed motivation and behaviour unworkable economically.

I have struggled without success to find a period as long as 12 months credible for this purpose. So I ask the Minister: if the current rent on a property is for some reason set below the market rate, would it not be possible for the landlord simply to seek an increase to the market level in the normal way, rather than going through the convoluted processes and expense involved in removing the tenant, putting the property on the market and then re-letting it? If the rent is close to the market rate, it is surely unrealistic to expect that a landlord would be able to leave the property empty for six months, with ongoing costs but full loss of income, and then rent it out again at an uncompetitive rate, well above the market rate, in order, as the Government’s thinking seems to be, to recover six months of losses and then settle at what would be, I repeat, by definition, an uncompetitively high rent. I just do not see how that would have a chance of working.

To give a quick numerical example, a landlord receiving £2,500 a month in rent who puts the property on the market and receives no rent for just six months would, after leaving aside any other costs incurred in departing the tenant and marketing the property, lose at least £15,000 of rental income. To recover this over the subsequent six months and raise a base rental amount to, say, £3,000 per month compared with the £2,500, which for our evil, rapacious landlord is a pretty modest increase of £500, would mean seeking to rent out the property at £5,500 a month—a 220% rent increase over just a six-month period. If Mr Rapacious wanted to recover his losses faster, say in one quarter—three months—the rent would have to go up to £8,000 a month, a 320% increase in rent over just six months.

I must therefore say to the Minister that just six months off the market is easily more than enough to make evicting a tenant simply to achieve a rent increase a highly implausible strategy. Requiring it to be off the market for a full 12 months is not only unnecessary but a distorted intervention that simply reduces the availability of rental accommodation.

Finally, I draw to noble Lords’ attention the two provisions included in the amendment. First, the property would have to have been demonstrably available to purchase on the open market at a fair market price with no suitable offers received and, importantly, the tenant and the courts could require evidence of these points and would be able to decide whether the landlord had made genuine attempts to sell. Amendments 26 and 27, which are coming up shortly, I believe, are also very helpful in this area.