Renters’ Rights Bill

Baroness Warwick of Undercliffe Excerpts

Thursday 24th April 2025 Lords Chamber

Moved by

[Baroness Warwick of Undercliffe]

24: Clause 4, page 5, line 22, at end insert—
“(5ZB) The court may not make an order for possession of a dwelling-house on Ground 6B (whether or not an order is also sought on any other ground) where the landlord has not complied with section 11A of this Act.”Member's explanatory statement
This amendment would make possession under ground 6B contingent on compensation being paid, rather than compensation being dependent on court proceedings.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I declare an interest as chair of the Property Ombudsman, TPO, for the private rented sector. I have two amendments in this group, Amendments 24 and 30. Both relate to repossession under ground 6B. Their intention is to make possession on that ground contingent on compensation being paid, rather than being dependent on court proceedings. I am grateful for the very helpful briefing on this matter to the National Renters Alliance and specifically to Safer Renting, a renter advocacy service operated by the social action charity Cambridge House.

Ground 6B provides landlords with a route to vacant possession, evicting the renter in the process, to give the landlord the possibility of avoiding a range of sanctions that could be imposed or taken by a local authority when breaches have occurred. As I understand it, the purpose is to protect renters from poor landlord practice—for example, poor housing conditions—while enabling landlords to comply with enforcement action. However, it gives the non-compliant landlord grounds for possession of the property in cases where renter wrongdoing may not have occurred, yet resulting in potential homelessness for the renter. An amendment was made to the Bill in another place to give the court the option of ordering the landlord to pay to the tenant such sum as appears sufficient as compensation for damage or loss sustained by that tenant as a result of the order for possession.

This is a welcome addition to the Bill. The intention of that amendment is to compensate the renter appropriately for the damages of possession. However, Safer Renting, whose staff are experts in supporting renters to access redress, believes that the mechanism for doing so via a court order has significant complications. Under the current proposal, any compensation ordered by the court may not be paid to the renter before their eviction. If compensation is not paid before the eviction, renters may be left to foot the bill for any relocation or legal expenses out of their own pockets.

This is wholly inappropriate and leaves the renter in an extremely perilous position. It is surely contrary to natural justice. Ground 6B would mean that the renter is evicted from their home, forced into finding alternative accommodation—potentially at a higher rate—or faces homelessness. The renter is burdened by the highly stressful situation of having to find a new private tenancy. The renter is likely to be forced to pay for a new deposit in the intermediary period before the possession and the compensation payment, which they may not be able to afford. The renter’s housing move-on is at the mercy of the court system for their compensation—a court system with extreme backlogs and under extreme pressure. This is likely to cause a prolonged period of uncertainty and stress. The renter must find legal representation, potentially at prohibitively high costs, and is expected to take on the additional burden of pursuing an unscrupulous landlord for unpaid compensation. By making the possession contingent on compensation paid up front, the renter does not suffer these consequences and is fairly compensated for any stress and burden experienced.

There are further considerations if a renter is evicted. Renters in priority need must be placed in temporary accommodation and rehoused by the council, at substantial cost to the individual local authority and the public purse. This is further complicated by the prospect that a mandatory ground for eviction could financially disincentivise councils from pursuing the necessary enforcement action against the non-compliant landlord, contradicting the local authorities’ enforcement strategy as the costs of rehousing are passed on to the local authority. This is during a period in which local authorities are spending £2.3 billion on temporary accommodation housing more than 120,000 households, and many councils are in severe financial trouble.

In addition, with deposits now averaging around £1,218, the cost of a new deposit is potentially a major prohibitor to finding new accommodation quickly. Should the landlord fail to return the renter’s deposit on their vacating the property, the renter would be expected to find an additional cash sum likely to be over £1,000. This is highly prohibitive for most renters and leaves them either in potentially dire financial straits or unable to afford access to a new home.

A recent survey by the property company Reposit showed that, of 1,000 renters surveyed, nearly half—48%—had to borrow money to afford a deposit. By ensuring that compensation for possession is paid prior to the possession order, renters will be able to move properties more seamlessly and not face potentially prohibitive financial burdens or barriers.

As the Bill is currently presented, for the renter to access compensation they must rely on the landlord, who has already broken the law, to comply with the court order to pay compensation. There is no guarantee that any compensation ordered by the court will be paid to the renter. In this event, the renter must take the landlord to court. The courts, as I have said, are currently under record backlogs, with most recent data suggesting that the wait time for a small claims hearing is 54 weeks—more than a year. This is an egregious length of time to wait to receive the necessary and appropriate compensation for a vacant possession through a landlord’s non-compliance.

Legal representation is also a major financial barrier that may prevent renters from attempting to claim compensation. Vacant possessions are typically ordered on poor-quality housing where the rent is lower; therefore, the income of the renter is also likely to be lower. It is logical to assume that the majority of renters who receive a possession order will not have the funds to support a legal claim against the landlord for the compensation that they are due. This would be a significant injustice; I hope it can be prevented.

Although some renters would be able to access legal aid funding, the majority and an increasing proportion would not. Legal aid cuts have resulted in 34% fewer legal aid funded possessions proceedings since the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012—according to analysis from Safer Renting.

Furthermore, compensation is not always paid by criminal landlords, even following a court order, as Safer Renting has witnessed in a high number of cases. Safer Renting’s data reveals that, in instances where award for a rent repayment order has been given against a landlord, with the proper status and assets, only 40% of landlords have complied with the order to pay the renter. When the order has been made against an intermediary landlord, compliance with the order drops even further to just 5%. This is contrary to natural justice and the intentions of Parliament in bringing forward the Bill.

I hope my noble friend the Minister will consider how, without compensation paid prior to the possession of the home, renters—particularly those on low or no income—will find the necessary funds to pay for a deposit on a new home while they await a court order. What estimate do the Government make of the additional costs that local authorities in England will incur in cases where priority-need renters are evicted from their homes and placed into temporary accommodation? Will legal aid be made available to renters to enforce compensation orders made by the court under the existing provision for representation in relation to possession proceedings? If so, what is the Government’s calculation of how much extra this will cost? Finally, can the Minister say whether there is an appropriate timeframe for a renter to receive compensation following their eviction?

I hope I have shown that my amendments would deliver a fairer and more just outcome for the renter, where the landlord has acted unscrupulously or without compliance. I beg to move.

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

All noble Lords, including my noble friends, will of course be welcome to any meetings that are held.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I will not attempt to critique the Minister’s response to other amendments or indeed to summarise comments on them. They were all about repossessions, but they were so very different that it would be impossible to do that. I admire the Minister, and indeed the Opposition Front Bench, for trying to pull them all together into one discussion. I will not critique them, but I will look very carefully at what the Minister has said. I particularly thank the noble Baroness, Lady Thornhill, for her support for my amendments.

I know the Minister sought to reassure me that the Bill was capable of covering the concerns that I had expressed. She commented that the courts were best placed to decide on compensation—of course I appreciate that—and that the courts would set out a timeframe for compensation, which I very much welcome and understand. But I am still very conscious of the concerns of the Renters Alliance and its various constituent organisations about the impact of these repossessions, particularly on the most vulnerable, when they are evicted at no fault of their own and are in financial difficulties and under a lot of stress as a result.

I hope the Minister will agree to see how this very real problem could be resolved. I am reluctant to ask her for another meeting when so many others have already been agreed to, but I would appreciate it very much if we could sit down and discuss this, because I feel I would need personally to be reassured that there are parts of the Bill that would satisfy the concerns that I have expressed. I beg leave to withdraw my amendment.

Amendment 24 withdrawn.