Renters (Reform) Bill

Baroness Lawlor Excerpts

2nd reading
Wednesday 15th May 2024 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Carrington, and I thank my noble friend the Minister for her helpful introduction to take us through the Bill. Before speaking, I should declare my interest as in the register of interests; I am and have been a landlord, as well as a tenant and a leaseholder. I am not confident that this Bill will do what paragraph 1 of the Explanatory Notes says it aims to do, which is

“to ensure private renters have access to a secure and decent home and that landlords retain the confidence to repossess their properties where they have good reason to”.

I think we all agree with this very important aim; the Government are right to want it, but I am not sure that the Bill is the best method for achieving it. Rather, it will make for uncertainty in a number of ways. Here are some of them: the ending of assured fixed-term tenancies under the 1988 Act; the ending of no-fault evictions under Section 21 yet the introduction of alternative provision for landlords to repossess their properties when the Bill says they have good reason to do so; and the provision for a two-stage transition period for these arrangements—the second stage uncertain, to be fixed by the Secretary of State once the arrangements for the courts have been changed to accommodate the new system.

Other problems have been discussed by noble Lords. The noble and learned Lord, Lord Etherton, spoke about the powers granted to local authorities to impose fines of £30,000—powers which I agree, and I urge your Lordships to think along the same lines, are properly for the courts to impose. The noble Lord, Lord Marlesford, discussed the implications for privacy around the data that will be collected on individuals. The noble Lord, Lord Adonis, talked about pressure on the courts, as did the noble Lord, Lord Carrington, and others. The noble Lord, Lord Truscott, spoke about the costs for private landlords.

Like the noble Lord, Lord Marlesford, the noble Earl, Lord Lytton, and my noble friend Lord Frost, I am particularly concerned about ending assured fixed-term leases. I will focus on what I see as the most problematic and unsettling proposal in the Bill: the abolition of assured fixed-term tenancies under the 1988 Act, which lays down that tenancies can be periodic, renewable after the rent period—typically a month—or fixed-term. We have heard today about some of the lengths of tenancy which are already in use and popular. This arrangement gives both landlord and tenant the security of knowing how long their letting is for and the option to propose and agree a variation to reflect wishes and circumstances, including renewal. Instead, the Bill proposes that in future all tenants will be on a single system of periodic tenancies, which are little more than a rolling tenancy of a month where tenants give notice of leaving and landlords cannot provide any notice of ending the lease other than on the stipulated “reasonable grounds” set out in the legislation. This is conceived in the Bill as part of a package, along with abolishing no-fault evictions. The overall aim is said to be to give greater security to the tenant to deal with problematic landlords who use no-fault evictions to end the tenancies. I understand that was a manifesto commitment by the Conservative Government, but getting rid of fixed-term tenancies was not, and, as other noble Lords pointed out, it is unnecessary to do so given the aims of this Bill. Yes, there are bad landlords, and the problem can and should be addressed, but you do not need to overturn the arrangements under settled law to address the problem of shameful properties let in appalling conditions.

I disagree with the Secretary of State, who told the House of Commons that this is a Conservative measure in the tradition of measures introduced by Conservative Prime Ministers. Previous measures were based on the principles of common law and the protections that it offers both parties, while improving on how they operated. Labour’s Rent Act 1977 did not permit no-fault eviction, but subsequent Conservative measures did. The Housing Act 1988 introduced the concept of the assured shorthold tenancy only when complex notice procedures were followed, while the Housing Act 1996 introduced amendments to make the assured shorthold tenancy the default option unless the parties agreed to the tenancy. I am grateful here to iHowz and Andrew Butler KC, who made available to Parliament an analysis of the background and have provided a more nuanced proposal than that provided in the Bill.

We have seen the extension of the private rental sector to account for one in five households. It seems rather silly, to put it mildly, to end the arrangements on which the private rental sector is based and has succeeded so well, and mushroomed, since the 1980s.

In a free society, the less interference there is by the state in people making contracts with each other the better, rather than politicising transactions in an area that should be a politics-free zone under the principles and protections of settled law. Yes, there should be regulation against unfair contracts. People should be able to enter into a contract with full knowledge of what they are taking on—each party, tenant and landlord. Entering an agreement with each other with full knowledge, openly, protected by law, should be for them to decide. Tenants should be able to stipulate their conditions, and so should landlords, and an agreement met. I agree that fixed-term tenancies should be an option for landlord and tenant alike.

Our think tank has been a commercial tenant. We have been on the receiving end of a request—not an obligation—to end a lease early, and the landlord made a generous offer of a rent-free period of a few months which gave us a cushion on which to perhaps find a more expensive property, have confidence and sort out problems before the lease would have otherwise come to an end. Indeed, during the pandemic, when the service charges amounted to more than the cost of the lease per annum, I asked a landlord whether we could leave because of our not-for-profit status being charitably funded. In both cases, these requests were met with due consideration by the tenant and the landlord —I being the tenant and the landlord making an offer on another occasion—and without any interference or bureaucracy on the part of the courts. This is how it should be when we enter into a transaction in this country: two parties under the rule of law.

I hope that we can amend this measure to leave in place fixed-term assured tenancies so that landlords and tenants alike will have the option of the certainty, if they want it, of a fixed-term lease, and that the security that the Bill aims for can be achieved by compensation clauses; for instance, by giving tenants a rent-free period in the case of a no-fault eviction. Such arrangements leave in place the clarity of contractual arrangements, rather than replacing them with a cocktail of written statements, responsibilities, letters, property portals and an ombudsman, the individual parts of which will become opaque under the bureaucracy that will surely follow in the Bill’s wake—that is, unless, with your Lordships’ help, we can ensure the real security at which the Bill aims.