Renters' Rights Bill (Eighth sitting)

David Simmonds Excerpts

Committee stage
Tuesday 5th November 2024 Public Bill Committees

[Carla Denyer (Bristol Central) (Green)]

I beg to move, That the clause be read a Second time.

I rise to move the new clause tabled in the name of the hon. Member for Walthamstow (Ms Creasy). The purpose of this probing new clause is to explore how we can ensure that renters’ credit scores are better protected against the negative consequences of having to move. I do not seek a vote on the new clause, and the detail of the wording may not be exactly right, but its purpose is to let us discuss what we can do to fix an injustice.

When tenants move repeatedly, it can affect their credit scores, making it harder for them to secure mortgages and get reasonable credit on credit cards and so on. It is not the actual act of moving home that affects someone’s credit report, but the admin that goes with it. Lenders like to see stability in personal details, so if someone moves house often, it will show up on their personal records as part of their credit report and could be a red flag. Opening more than one account with a utility provider in a six-month period would likely cause a person’s score to drop until they can prove they can pay their bills responsibly and on schedule, at which point it would start to build back up again.

It is important that we protect renters who are forced to move because their landlord seeks possession of a property for a reason that is not connected to their behaviour or ability to pay their rent. It is an injustice that renters’ credit scores suffer as a result of such actions. Fortunately, the Financial Conduct Authority is undertaking a review of credit referencing. I raise this issue in Committee because it is relevant to the work we do, but rather than looking for a vote, I am looking for a commitment from the Minister to write to the Financial Conduct Authority to ask for renters’ credit scores to be included as part of its current work.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Sir Roger. We aired the issue of credit worthiness and its impact on prospective tenants’ ability to secure a property during earlier deliberations on the Bill, and the Minister has given detailed responses about how the Government are treating this issue. I welcome the fact that the new clause is a probing one. In my view, it is a sensible question to pose, as is the question about the availability of rental insurance to those who may have a poor credit history when they seek to secure a property and undergo checks as part of the affordability process. I hope the Minister will give us an indication of how the issue will be dealt with, but I am confident that the Government have it in their sights and an appropriate solution is in the offing.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

It is a pleasure to serve under your chairmanship, Sir Roger. I add the support of the Liberal Democrats for the intent of the new clause. Clearly, tenants should not be penalised for having to move frequently, and we are interested in the Minister’s response on the subject.

[Carla Denyer]

I and thank the Minister for his consideration and beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Review of the impact of the Act on the housing market

“(1) The Secretary of State must publish an annual report outlining the impact of the provisions of this Act on the housing market in the UK.

(2) A report under this section must include the impact of this Act on—

(a) the availability of homes in the private rental sector;

(b) rents charged under tenancies;

(c) house prices; and

(d) requests for social housing.

(3) A report under this section must be laid before Parliament.”—(David Simmonds.)

Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss the following:

New clause 3—Report on certain matters relating to tenancy reform—

“(1) The Secretary of State must make arrangements for an independent person to prepare a report on—

(a) the impact of sections 1 and 2 on the provision of relevant tenancies;

(b) the extent to which the grounds in Schedule 2 to the 1988 Act as amended by this Act—

(i) operate effectively;

(ii) are comprehensive;

(iii) are fair.

(2) The Secretary of State must, within the period of 18 months beginning with the relevant date, lay before both Houses of Parliament—

(a) a copy of the report, and

(b) a statement setting out the Secretary of State’s response to the report.

(3) Nothing in subsection (1) prevents the Secretary of State from arranging for the independent person to include in the report matters additional to those mentioned in that subsection.

(4) In this section—

‘relevant date’ means a date 18 months after the coming into force of sections 1 and 2 of this Act;

‘relevant tenancy’ means an assured tenancy within the meaning of the 1988 Act other than a tenancy of social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008.”

New clause 7—Impact of Act on provision of short-term lets—

“The Secretary of State must, within two years of the passing of this Act, publish a review of the impact of sections 1 to 3 on the number of landlords offering properties on short-term lets rather than in the private rented sector.”

This amendment would require the Secretary of State to review whether the prohibition on fixed term contracts had increased the number of landlords choosing to offer short-term lets instead of letting in the private rented sector.

[David Simmonds]

I suspect that we rehearsed this debate earlier, when the Minister gently rebuffed the point and commended me for trying to secure a degree of impact assessment in advance of the implementation of the measures in the Bill. These new clauses are designed to increase the degree of scrutiny on the Government, in respect of both the Bill’s potential impact in advance, where we are able to consult on that, and its impact on the housing market, on which new clause 2 would require an annual report. A lot of the debates in the Committee’s evidence sessions revolved around the impact on supply of various of the Bill’s measures. We know that those are valid and legitimate concerns, and I would be interested to hear what the Minister has to say in response to the new clauses.

[Mr Amos]

rose—

--- Later in debate ---

[Matthew Pennycook]

I will come to the specific proposals under consideration for short-term lets and holiday lets. The use class was consulted on as one of a number of measures that the previous Government introduced. I will touch on that specific point shortly.

I will preface this with a point that I think all Committee members appreciate. The Government are very alive to the fact that there are many parts of the country—coastal, rural and some urban constituencies—where excessive concentrations of short-term lets and holiday homes are having detrimental impacts, not least on the ability of local people to buy their own homes or, in many cases now, rent their own homes. I have stated this on many occasions in the House since being appointed, but I will say it again: that is the reason why we will progress with abolishing the furnished holiday lets tax regime, and with the introduction of a registration scheme for short-term lets. That will give local authorities access to valuable data on them.

Those measures were committed to by the previous Government, and we will take them forward. However, as I said a number of times in the previous Parliament, we do not think they go far enough and we are considering what additional powers we might give to local authorities to enable them to better respond to the pressures they face as a result of the excessive concentrations of short-term lets and holiday homes. I hope to say more on that in due course.

In respect of this Bill, we are committed to robustly monitoring and evaluating the impact of our reform programme in line with the Government’s evaluation strategy. However, setting an arbitrary deadline in law for this work is unnecessary and may detract from our efforts in that regard. On that basis, I encourage Members not to press their new clauses.

[David Simmonds]

Given the Minister’s response, I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 4

Assessment of operation of possession process

“(1) The Lord Chancellor must prepare an assessment of the operation of the process by which—

(a) on applications made by landlords, the county court is able to make orders for the possession of dwellings in England that are let under assured and regulated tenancies, and

(b) such orders are enforced.

(2) The Lord Chancellor must publish the assessment at such time, and in such manner, as the Lord Chancellor thinks appropriate.

(3) In this section—

‘assured tenancy’ means an assured tenancy within the meaning of the 1988 Act;

‘dwelling’ means a building or part of a building which is occupied or intended to be occupied as a separate dwelling;

‘regulated tenancy’ means a regulated tenancy within the meaning of the Rent Act 1977.”—(David Simmonds.)

Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

At risk of rehearsing the debate we have already had, the new clause seeks to address the assessment of the possessions process. In evidence to the Committee a degree of concern was expressed on the part of landlords that the backlog in the courts may make it difficult to secure possession when that is necessary. Governments of all parties, including the previous Government, have put in place measures seeking to address that. We know that they are beginning to bear fruit, but it is important in maintaining the confidence of landlords both to come to the market and to remain in the market that they know it is possible to secure a court hearing, should one be necessary to gain access to the property. The new clause seeks to ensure that an assessment of that process is carried out.

[Matthew Pennycook]

New clause 4 would require the Lord Chancellor to prepare an assessment of the operation of the process by which the county court is able to make possession orders for rented properties and by which such orders are enforced. The assessment would be published at such time and in such a manner as the Lord Chancellor saw fit.

Hon. Members who followed the debates in the last Parliament will recall that the previous Government introduced a similar clause to their own Renters (Reform) Bill in the late stages of that Bill’s progress, via a Government amendment, together with a clause that prevented the Secretary of State from laying regulations to bring tenancy reforms into force for existing tenancies until after the Lord Chancellor’s amendment had been published. This Government have been clear that we will not follow a similar approach. We do not consider it reasonable that the implementation of our reforms should be constrained by such an assessment, not least an assessment of the kind proposed in the new clause, which is extremely broad and undefined.

The hon. Member for Ruislip, Northwood and Pinner tabled amendment 64, which would delay commencement until the Lord Chancellor has carried out and published the proposed assessment. I reaffirm that we have no intention of delaying these urgent and necessary reforms while awaiting an unnecessary assessment of the possession process against what is an unspecific metric. We will instead move ahead with tenancy reform as quickly as possible, but in conjunction with an extensive parallel workstream with colleagues from the Ministry of Justice and His Majesty’s Courts and Tribunals Service to ensure that the courts are ready at the point of implementation.

In any case, the assessment required by new clause 4 is entirely unnecessary and unhelpful, because data on the operation of possession proceedings for rented properties is already published by the Ministry of Justice on a quarterly basis, and will continue to be. Court rules specify that possession claims requiring a hearing should be listed between four weeks and eight weeks of receipt.

The Committee may be interested to know that figures for April to June 2024 show that claim to order median timeliness is 8.1 weeks, suggesting that—I am not necessarily attributing this to the shadow Minister—some of the more alarmist statements about the readiness of the county court system may have more to do with fundamental opposition to the abolition of section 21 and the current tenancy regime than they are an impartial assessment of court performance.

The proposed assessment would provide no obvious additional insight or benefit to any interested parties, in our view, and would merely detract from the vital work of the courts and tribunals by subjecting them to a nugatory additional process. All our focus is on ensuring that HMCTS is ready to stand up the new system at the point of commencement, and that should be our focus in the coming weeks and months. On that basis, I kindly ask the hon. Gentleman to withdraw his new clause.

--- Later in debate ---

[David Simmonds]

It is pleasing to hear from the Minister that the performance of the courts in this respect was so good under the previous Government. I am aware that one of the challenges has been the construction of a new IT platform to enable the new measures envisaged in the Bill to operate efficiently. This might be a legitimate concern for landlords to express, especially given that although the overall performance was good, there have been regional variations that have given rise to concern. However, bearing in mind what the Minister has said and the fact that there would be a degree of transparency about the data, I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 5

Repeal of requirement for selective licensing

“Part 3 of the Housing Act 2004 (Selective licensing of other residential accommodation) is repealed.”—(David Simmonds.)

This new clause would remove the ability of local housing authorities to designate areas as subject to selective licensing.

Brought up, and read the First time.

[David Simmonds]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss new clause 9—Changes to discretionary licensing—

“(1) The Housing Act 2004 is amended as follows.

(2) In section 60(2), omit ‘five’ and insert ‘ten’.

(3) In section 84(2), omit ‘five’ and insert ‘ten’.

(4) In section 90(1), at the end of the subsection insert ‘or its condition and contents’.”

This new clause would increase the maximum duration of discretionary licensing schemes from five to ten years and would enable local authorities operating selective licensing schemes to use licence conditions to improve housing conditions.

[David Simmonds]

The measures for selective licensing have been in place for some time, and we certainly see lot of learning from the local authorities that have operated them. On the whole, those have tended to be in high-density urban areas. Clearly, a concern for the Opposition is how that interacts with the new measures introduced in the Bill, whereby there will be a nationally procured database with a set of accountability measures operated by the Secretary of State. That could interact unhelpfully with local databases. I hope that the Government are determined to learn the lessons from those existing selective licensing arrangements. The Opposition’s view is that given the measures introduced by the Bill, selective licensing in the way that it is currently undertaken would no longer be necessary nor appropriate.

[Carla Denyer]

New clause 9 would head in the opposite direction from new clause 5. It is about removing unnecessary barriers to the use of licensing schemes to improve housing standards. The new clause would do two things. First, it would increase the maximum duration of discretionary licensing schemes from five years to 10. Secondly, it would enable local authorities operating selective licensing schemes to use licensing conditions to improve housing conditions.

Licensing can be an effective way to improve housing standards for at least three reasons. First, it is proactive. It provides a means for local authorities to inspect privately rented housing using enforceable conditions and to identify and resolve problems without the need for tenants to have complained, and it provides that proactive regulation in a locally tailored form. It makes major contributions to area-based issues such as crime, antisocial behaviour and waste management, and it brings together a range of bodies to focus additional support services—for example, for landlords and tenants, improving public health and reducing burdens on the NHS. There are a huge number of wins, and I have experienced that at first hand with licensing schemes in my local authority.

Secondly, licensing is self-funding. It means that the market pays for its own regulation, which is a good principle, rather than relying on the taxpayer. It provides a sustainable and predictable source of income that enables local authorities to maintain staffing levels and support the training of new officers.

Thirdly, licensing is targeted. It enables local authorities to target regulation where that is most needed, so that the worst landlords and the most vulnerable tenants get the most attention and landlord costs can be minimised in other areas.

The problem, however, is that local authorities have to implement licensing schemes with their hands tied behind their backs, because previous Governments have made various decisions that have placed unnecessary and irrational barriers in their way. Given that licensing schemes are expensive and time-consuming for local authorities to initially introduce, it does not make sense to restrict the period over which they can act to only five years.

New clause 9 would amend sections 60 and 84 of the Housing Act 2004 to increase the maximum duration of discretionary licensing schemes, which includes both selective licensing schemes and additional—sorry, jargon again—for HMOs from five to 10 years. That would allow local authorities to advertise for longer-term posts for officers and to include training of new staff in those schemes. It would also provide more time for local partnerships formed through such schemes to become embedded and effective.

The new clause also addresses another issue, which was highlighted by the Chartered Institute of Environmental Health during oral evidence. That respected body pointed out that it does not make any sense to have the current peculiar disconnect in the 2004 Act, whereby local authorities can introduce selective licensing schemes to address poor housing conditions, but they cannot include a directly enforceable requirement relating to the housing condition as a condition of the licence—so they do not have the tools to do what they are set up to do. The new clause would therefore amend section 90 of the 2004 Act to enable local authorities to use licence conditions to improve housing conditions directly.

I stress that the new clause does not cover all that needs to be done to remove barriers to licensing. For example, I also urge the Minister to commit the Government to removing the Secretary of State’s ability to veto selective licensing schemes covering more than 20% of the local authority area.

--- Later in debate ---

[Matthew Pennycook]

As we have heard, new clause 5 seeks to abolish selective licensing. This would remove the ability of local authorities to set up a selective licensing scheme of any size in their area. In contrast, new clause 9 seeks to extend selective and additional licensing of houses in multiple occupation by allowing local authorities to increase the maximum duration of schemes from five to 10 years. It also seeks to allow local authorities to use licence conditions under selective licensing to improve housing conditions, as the hon. Member for Bristol Central made clear.

This Government support selective licensing. It allows local authorities to proactively and more intensively target specific issues in private rented properties, where it is needed most. That includes tackling poor housing conditions and antisocial behaviour. If we abolish selective licensing, local authorities will lose a crucial tool in taking effective enforcement action against landlords who flout the rules. However, I take the shadow Minister’s point, and I reiterate that it is important that the selective licensing system, and the system introduced by the Bill, operate effectively alongside each other. That is very much our intention.

However, we recognise that licensing imposes a burden on landlords. Correspondingly, we think a maximum duration of five years for discretionary licence schemes strikes the right balance for the following reasons. It gives local authorities time to realise improvements while ensuring that landlords are not by default subject to increased regulation for prolonged periods. Of course, licensing in any given area may be part of a longer-term strategy. That is why, where a scheme has expired and there is still a case for licensing, local authorities may simply introduce a new scheme to drive further improvements. The duration that the hon. Member for Bristol Central is seeking selective licensing schemes to cover can be achieved in any given local authority area, if the local authority simply extends matters through a new scheme. We think that a five-year timeframe gives an opportunity to review the effectiveness of individual discretionary licensing schemes and ensure that they are proportionate in achieving their aims.

The broad intention of the hon. Lady’s new clause is to improve housing conditions. Let me be clear again that every private renter, not just those in licensed properties, has the right to a good-quality home. That is why, through the Bill, we are introducing a decent homes standard and applying Awaab’s law to the sector to tackle the blight of poor-quality homes.

Our reforms will establish a level playing field across the sector, ensuring that all renters and local authorities, not just those in areas with licensing schemes, can challenge and enforce against dangerous conditions. I will not address the hon. Lady’s specific point on the Secretary of State’s veto, because it is somewhat outside the scope of the Bill, but I take that on board. On the chartered institute, I will say nothing more at this stage other than that we will continue to review the use of selective licensing as we develop the database and other measures in the Bill. On that basis, I ask the hon. Members not to press their new clauses.

[David Simmonds]

We remain a little concerned that where selective licensing schemes are in operation alongside the measures introduced by the legislation, a degree of ambiguity and potential confusion is created, especially for some landlords who may seek to evade responsibility. Two schemes of a similar nature will be in place, with potentially different fees and standards in operation. However, I accept the numbers on the Committee, so I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

[The Chair]

New clause 6 has been debated and there is no requirement to call it for a decision, unless a Committee member wishes to move it—Mr Amos?

--- Later in debate ---

[Matthew Pennycook]

May I take this opportunity, Sir Roger, to put on the record my thanks to you and to the other Chairs of the Bill Committee? Several Committee members are new to the process, and you and the other Chairs have done an incredibly effective job, with patience and generosity, of helping everyone to navigate the process.

I thank our exemplary Clerks, the Hansard Reporters, and the Doorkeepers for overseeing our proceedings. I also thank my officials and private office team, who have supported me and worked tirelessly over a short time to bring forward the Bill that we have debated in recent weeks.

Finally, I thank all hon. Members, including the shadow Minister, the hon. Member for Taunton and Wellington and the hon. Member for Bristol Central for the spirited and constructive dialogue we have had. I value all the contributions and the challenges that have been made. I know that we are united in wanting to deliver the best legislation that we can for all our constituents.

As we end this stage of scrutiny and prepare for Report stage, I hope we can all agree that these important reforms will finally provide certainty for the sector and deliver meaningful change to millions of renters and landlords. I look forward to further engagement with all hon. Members as the Bill progresses through its remaining stages.

[David Simmonds]

I share the Minister’s sentiments. I will pay him the highest compliment that I can: at times, he could have been a Conservative in the way he addressed the issues that I raised. I add my thanks to the officials, as I know that the Minister’s swift responses would not have been possible without their diligent work behind the scenes; I am enormously grateful that issues have been dealt with in such detail. I also add my thanks to Committee members for their sensible and sound contributions. I am sure the debate will continue, but we have carried out an efficient piece of work.

[The Chair]

All that is strictly out of order, but I am sure that the comments will be appreciated. I add my thanks to the Committee and to the Officers of the House, without whom our work would simply not be possible.

Question put and agreed to.

Bill, as amended, accordingly to be reported.