Renters' Rights Bill (Seventh sitting)

David Simmonds Excerpts

Committee stage
Tuesday 5th November 2024 Public Bill Committees

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to continue our proceedings with you in the Chair, Mr Betts. We now turn to clauses 84 to 86, which deal with access to the data collected on the database and the circumstances in which that may be shared.

Let me start by speaking to clause 84. One of the central objectives of the database is to provide tenants and prospective tenants with the data to allow them to make informed decisions about which landlords to rent from. For that reason, the clause gives the Government a regulation-making power to make certain information on the database visible to the public.

For the database to be a success, it is crucial that tenants have access to key information about a landlord and a rental property. The information that the Government plan to make available to the public will include details of the landlord, details of other parties involved in the management or ownership of the property, and information about the rental property. The Government also intend to use the database to make landlords’ unspent housing-related offences or penalties visible to the public. Tenants will be able to make a judgment about whether to rent from a landlord, and good landlords will be distinguished from the minority of landlords who commit offences.

Information about spent offences will continue to remain visible to local authorities until those offences must be removed from the database, as described under clause 87. That will help local authorities to devise their enforcement approaches. However, spent offences will not be visible to the public. The Government will make information from the database public only if that is necessary and proportionate to meeting the aims of the database. We are committed to providing tenants with the information they need to make sound decisions about renting, but we are determined to respect landlords’ rights to privacy and to follow data protection and human rights legislation.

The clause also gives authorities such as local housing authorities, which have an interest in enforcing property standards, unlimited access to the information on the database. That will ensure they have access to the data necessary for them to carry out their enforcement activities.

Clause 85 outlines circumstances in which restricted data may be shared. The database will contain information that could be useful to various third parties. Although it could be useful, it remains essential that the information is protected in such a way as to respect the privacy of landlords and to ensure that the data is disclosed only for the intended purpose. Under clause 84, access to information will already be possible for relevant enforcement authorities, and regulations made under clause 85 can be used to extend that access to restricted information to other important third parties. That could be another Department or other third parties, such as the police service and the fire service.

The Government remain committed to protecting the privacy of landlords, as I said, and will ensure that any data disclosed is disclosed only for the specific purposes outlined in clause 85 and in full compliance with data protection legislation. The clause contains limitations to ensure that restricted information is disclosed to third parties only when necessary—for example, to help to fulfil statutory requirements and functions, or to facilitate compliance with the rule of law.

The Government have yet to confirm which organisations will have access to that information. We believe that certain elements of the information contained in the database may be useful to other Departments and other external agencies, as I said. Should the database operator or other persons breach the restricted data disclosure restrictions imposed by clause 85, they could be guilty of an offence punishable by a fine.

Clause 86 outlines the circumstances in which data can be used by certain public bodies that are granted access. The clause restricts the use of database information by those bodies to housing-specific functions. I will list the agencies in turn, for the benefit of the Committee: local housing authorities may use information from the database only in relation to their functions concerning housing, residential landlords and residential tenancies; local weights and measures authorities will be able to use the information from the database only for purposes related to their enforcement of housing standards; the mayoral combined authorities and the Greater London Authority may use information only in connection to their housing-related functions; and, if the Government nominate a lead enforcement authority—we will discuss that in more detail in respect of a later clause—it will be allowed to use information from the database only in relation to its functions as a lead enforcement authority, and the provision of the landlord legislation for which it is responsible.

Clause 86 will mean that although those agencies will have access to the information collected by the database, they will be able to use the data only where necessary and connected to their work related to housing. That will provide for better intelligence gathering on the private rented sector, enhancing enforcement activities and driving up standards, while also ensuring the privacy of landlords. I commend the clauses to the Committee.

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

It is a pleasure to serve under your chairmanship, Mr Betts. We spent some time on the use of the database in the previous Committee sitting, and the Opposition are satisfied with the Government’s direction of travel.

I have a question for the Minister in respect of his comments about those who will have access to the data and the purposes for which it is used. He spoke specifically about local authorities having the ability to access the data only for the performance of their housing functions. Predictive analytics are in quite widespread use in local authorities, largely based on the gathering of data from a number of sources—for example, the Ofsted databases that contain indicators relating to children, which might include the potential for a household to be made homeless, which would then trigger a requirement for a local authority to intervene.

It would be helpful if the Minister could clarify, perhaps in writing subsequent to this morning’s sitting, how housing functions will be defined so as not to inhibit the entirely commendable use of predictive analytics to identify households where there might be a risk that would trigger the local authority to intervene. How would that interact where elements of the service were provided by, for example, children’s trusts as a third party to the local authority, in order to ensure that the good work that is already being done to prevent households with children or vulnerable people from becoming homeless, and then requiring the intervention of a local authority, continues, and so that earlier intervention can forestall the level of risk?

[Matthew Pennycook]

I thank the shadow Minister for that question. To reassure him, any access to restricted information that is not displayed publicly through the database must be shown to facilitate compliance with a legal requirement, a rule of law or, as I said, the performance of a specific statutory function. I understand and recognise his point—namely, what are the limits? What is the definition of what a housing function is? What are the limits of what that applies to where statutory services are—I hope I have taken the shadow Minister’s meaning correctly—not strictly housing related but shade into housing-related issues? I will happily provide him some specific detail on that point through correspondence.

Question put and agreed to.

Clause 84 accordingly ordered to stand part of the Bill.

Clauses 85 to 87 ordered to stand part of the Bill.

Clause 88

Restriction on gaining possession

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clauses 88, 89 and 90 introduce a restriction on repossession for unregistered properties and new offences and financial penalties in relation to the database.

Clause 88 prohibits landlords from gaining a possession order for a property unless they have registered themselves and their property on the database. A comprehensive record is essential for the database to be of use to tenants —in the way I described in relation to the previous clauses—and to local authorities and central Government. This approach will incentivise landlords to register on the database, thereby empowering renters to make informed choices about where they live. However, the Government recognise the importance of tackling antisocial behaviour. It will therefore be possible for a possession order to be granted under grounds 7A or 14 if the matter relates to antisocial behaviour, even if a landlord and their property are not registered on the database.

The Government can, through regulations, amend the person to whom or circumstances in which the restriction on granting a possession order applies. This will allow the legislation to evolve to match the changing needs of the database and ensure that the possession restriction targets the right landlords.

Clause 89 allows local authorities to levy financial penalties on individuals who fail to comply with the database provisions. A transformative database will equip local authorities and tenants with the intelligence needed to make informed choices in the private rented sector. A strong enforcement framework will be crucial in maintaining the database’s integrity and ensuring that it serves its intended purpose. The clause grants local authorities powers to tailor penalties for non-compliance, and outlines a transparent and proportionate system for increasing penalties in cases where initial measures fail to achieve such compliance.

Clause 89 also allows local authorities to impose fines of up to £7,000 on persons who breach the restrictions in clause 80 regarding the marketing, advertising or letting of properties. Repeat offenders who commit similar breaches within five years, or continue to engage in unlawful behaviour, may face fines of up to £40,000, under clause 90. To further safeguard the integrity of the database, local housing authorities will have the power to impose fines of up to £40,000 on anyone who knowingly or recklessly submits false or misleading information to the database operator. Those fine levels will act as a powerful deterrent for landlords and agents, thereby ensuring high levels of compliance with the database provisions. The Secretary of State can amend the level of fines to reflect inflation; this power will ensure the continued effectiveness and relevance of our enforcement measures.

We understand that the database is a new service for local authorities, and we are designing the service to be as streamlined as possible. Our research indicates that a dependable source of information on the private rented sector will improve the efficiency of local authority enforcement practices. The clause mandates local authorities to have regard to guidance on financial penalties issued by the Secretary of State. The power will enable the Government to assist local authorities to fulfil their new responsibilities.

The success of the private rented sector database hinges on landlords and property agents fulfilling their new duties. Clause 90 will establish new offences for continued or repeated breaches of the requirements relating to the restrictions on the marketing, advertising and letting of a property imposed by clause 80. Those who continually or repeatedly breach the requirements within a five-year period are liable to an unlimited fine, following a successful prosecution.

Furthermore, clause 90 will establish a new offence where a person knowingly or recklessly provides false or misleading information to the database operator. Again, those who breach that requirement will face an unlimited fine on conviction. To ensure accountability in the private rented sector, we have extended liability for the offences to include corporate bodies. That will deter non-compliance and promote responsible behaviour among corporate entities and their representatives.

To combat these illegal practices, the Government will make regulations under the Housing and Planning Act 2016 to categorise the new offences established under clause 90 as banning order offences, which must be recorded on the database. As a result, depending on the decision of the local housing authority, landlords, agents or others convicted of such offences may be subject to a banning order.

The stringent penalties outlined in the clause will serve as a powerful disincentive for those who do not comply with the requirements of the database. By ensuring greater compliance, we will equip local authorities and tenants with essential information, while also enabling reputable landlords to differentiate themselves from those who do not, or refuse to, meet the required standards.

[David Simmonds]

Again, the Opposition support the measures, and I welcome the Minister’s words in introducing them.

On the restrictions around gaining possession, I have a brief question concerning the potential interaction between the database and planning law—for example, where a landlord has been registered and is letting a property that has not been authorised in planning terms. That is quite common on caravan sites, where the land might be illegally occupied, with a complex set of transactions leading up to that situation. The most vulnerable individuals and households are often accommodated in that type of property, which is sometimes of very poor quality. A local authority, therefore, needs to go down the appropriate enforcement path, in planning terms, to end the potentially illegal or unlawful use of that land.

Because planning law permits unlawful use to be rendered lawful by the seeking of retrospective permission, there is a potential risk to a tenant occupying such a property, if the local authority undertakes different courses of enforcement action simultaneously against a banned bad landlord and against a landowner or developer who has created a property that is not fit for occupation but is part of a rented-out property portfolio. I would like confirmation that those circumstances have been considered. Constituents of mine have been in that situation. I do not want to find that the most vulnerable and marginal households cannot benefit from the rights that the legislation intends to create.

[Matthew Pennycook]

I thank the shadow Minister for that question. I will give him the opportunity to clarify, if he feels that would be helpful. If I have understood him correctly, he is asking what would happen where there is an unauthorised development and potential planning enforcement in place, but the landlord is required under the new system to register with the database. Would they essentially be allowed to register with the database and comply with the requirements in the Bill, were they subject to a form of planning enforcement?

[David Simmonds]

Yes.

[Matthew Pennycook]

I will take that away and write to the shadow Minister. It is a good, detailed, specific question. We need to consider how various elements of local authority enforcement action relate to the Bill and how the Bill interacts with other requirements.

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[Matthew Pennycook]

I am more than happy to include that in my correspondence with the Committee.

[David Simmonds]

I am grateful to the Minister for his response. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) held a Westminster Hall debate on the topic of unauthorised development, but there are also issues with authorised development in places where there may be conflicts in planning law. For example, somebody occupying a caravan or temporary structure on land where they are subject to planning enforcement, but where they have a legal contract with a landlord, is in an especially vulnerable position. We want to ensure that they are not at risk of having their rights taken away as a result of ambiguities in the legislation. I am grateful to the Minister for looking into that.

[Matthew Pennycook]

Let me, hopefully, bring the exchanges on this matter to a close. I have taken away from this a very valid point. Under the provisions in the clause, if landlords correct a matter of non-compliance, vis-à-vis the requirements in the Bill, the possession process will be allowed to continue. Hon. Members have asked a reasonable question about whether, in circumstances where planning enforcement is still a live issue, it impacts in any way, and that can also apply in respect of HMOs. I commit to coming back to the Committee with fulsome detail on the subject.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Clauses 89 and 90 ordered to stand part of the Bill.

Clause 91

Power to direct database operator and local housing authorities

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clauses 91 to 94 deal with the power to direct the database operator, amendments to the Housing and Planning Act 2016, provisions for joint landlords and the interpretation of chapter 3.

The Government are aware that in order to achieve the aims of the database—to raise standards in the sector—we may need to direct the database operator or local authorities in respect of how they carry out certain functions in relation to the database. Clause 91 allows the Government to give the database operator or local housing authority instructions on how they exercise their functions. This may include giving instructions to local housing authorities on how to investigate and enforce property standards. The power will provide an agile database that can respond to the changing needs of the sector.

To ensure that local authorities can build a complete picture of enforcement activities, it is essential that banning orders and banning offences are recorded in one location. Clause 92 will require local authorities to record banning orders and banning order offences in respect of landlords on the private rented sector database once it has come into force. The clause amends section 28 of the Housing and Planning Act 2016 to signpost people to the new PRS database established under the Bill.

The purpose of clause 93 is simply to ensure that we have the ability to streamline the process for joint landlords in order, where possible, to avoid the duplication of entries. We anticipate creating a single sign-up process for joint landlords, with one lead landlord registering on behalf of others.

To help the understanding and aid the interpretation of the proposed legislation concerning the database, clause 94 defines certain key terms used in the legislation, or signposts readers to definitions elsewhere. Those terms are “database”, “lead enforcement authority”, “the landlord legislation”, “relevant banning order”, “relevant banning order offence” and “unique identifier”. I hope the Committee will have no issue with these simple, straightforward clauses.

[David Simmonds]

Once again, we support the clauses, but I have a question for the Minister. A little later, we will debate the allocated enforcement authority—which local authority has the power to undertake the enforcement. It will be a challenge for areas of England with two-tier councils where the housing authority is the district council, because the county council also has certain responsibilities that it must fulfil. For example, under the Children Act 1989, the county council has a duty to house somebody who is at risk of homelessness even if they have no recourse to public funds, because of the risk to children of being made homeless. Were the council not able to access the database because it was not the enforcement authority for that area, it would not be able to undertake the same level of due diligence.

I want the Committee to be confident that when the allocation of powers and duties is undertaken, the process will be sufficiently comprehensive for all the parts of the local government system that could have duties triggered under various parts of this legislation to have equality of access to the database to enable them to discharge their functions properly.

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[David Simmonds]

I share the Minister’s view of the amendment. We note the evidence that the vast majority of the MOD estate already meets the decent homes standard. The previous Government acted to apply the decent homes standard to the MOD estate in 2016 and, as far as I am aware, the commitment given by the previous Minister, Jacob Young, remains the Government’s position unless we hear otherwise. However, the amendment highlights a significant issue across Government: the NHS has a significant residential estate for the accommodation of nurses and doctors on hospital sites, and the Home Office also has a significant estate.

As the Minister outlined, because it broadly falls within the private rented sector, the vast majority of asylum accommodation is likely to come within the purview of the Bill by one means or another—and the decent homes standard applies to it anyway. There are a couple of issues that arise in respect of that. One is the way in which that standard will interact with unregulated children’s homes. As part of the care leaving pathway under the Care Act 2014, local authorities have a duty to secure accommodation, which is designed to provide an element of support for a young person preparing to move towards adulthood.

In many cases, because of the need for that support, but also due to that young person’s age, the home falls outside the regulation of Ofsted, which normally conducts inspections of regulated children’s homes. We have known for some time that the Department for Education is looking at issues that have arisen from time to time with the standard and quality of that accommodation. It would be helpful to understand how the decent homes standard may be applied, or whether there is separate action within the remit of the Department for Education—which has made announcements about this—that is designed to address the issue.

Finally, I welcome what the Minister said about temporary accommodation—that there is a degree of discretion, but that the aim is to bring the temporary accommodation estate within the remit of the decent homes standard. One of the challenges is around the homelessness duty introduced by the Homelessness Reduction Act 2017. Many local authorities will have a conversation with a homeless household about that household or individual securing for themselves private rented accommodation. Sometimes the quality of that accommodation is not good, particularly in areas with high demand for it.

With that, I return to the subject of temporary structures, such as caravans, chalets and things like that, which are sometimes on authorised sites with planning consent, but sometimes not. We simply want an assurance that, where individuals access accommodation through that route—where the local authority is paying or subsiding the rent to prevent homelessness—but the structure is unlikely to meet the decent homes standard from the outset, there will be an appropriate enforcement mechanism or at least clarity, so that, in a sector with the highest satisfaction rate but also the most egregious outliers, the most vulnerable and marginalised people can enforce their rights.

[Carla Denyer]

I rise to support amendment 72, tabled by the hon. Member for Taunton and Wellington, who made a compelling case for the need to provide adequate housing for those who serve us in the armed forces. I want to pick up on the reassurance that the Minister attempted to offer us on the existing regulatory regime for asylum accommodation, which he believes is sufficient. There is a two-word answer to whether it is sufficient: Bibby Stockholm. Would the Bibby Stockholm meet the decent homes standard? No, it clearly would not, and the Bill is an opportunity to fix that.

[Mr Amos]

The hon. Member for Ruislip, Northwood and Pinner believes that the commitment from the last Government that the decent homes standard will be applied to Ministry of Defence housing still stands, but the Minister says that the decent homes standard will not apply to MOD homes and instead that the MOD has it under review.

[David Simmonds]

The Minister and the previous Government were clear that the decent homes standard has applied to MOD accommodation since 2016, so it is in effect already. That is the evidence the Committee has heard. This debate is therefore not about whether to apply it; it already applies, and has done for some time.

[Mr Amos]

That is not consistent with what Jacob Young said in 2023, as recorded in Hansard, namely that the intention was to extend the decent homes standard to cover Ministry of Defence accommodation. That is the intention of the amendment. That is why I tabled it and why my hon. Friend the Member for North Shropshire tabled it in the last parliamentary Session. We are hearing that someone in the MOD has it under review. At the moment, that is not a huge reassurance. The whole subject of MOD housing and the need for serving personnel to benefit from it has been omitted.

The Minister mentioned the difficulty of enforcing the decent homes standard because MOD accommodation is behind the wire, but according to him we know that 96% of MOD accommodation would meet the standard. That work has been done, surveys have been carried out and the information is being freely exchanged, so clearly it is not that difficult to inspect the accommodation and understand what standard it meets. All accommodation on MOD bases can be easily accessed with the permission of the officer commanding the base. All sorts of inspections are carried out on MOD bases.

I accept that the Government are supportive of the principle of improving the standard of asylum seeker accommodation, but as with MOD housing, the fact that it is under review is not much of an assurance. I therefore will not withdraw the amendment.

[Matthew Pennycook]

Unless the hon. Gentleman is pressing his amendment simply to make a political point, I ask him gently: what outcomes are we seeking? He wants to bring MOD accommodation up to the decent homes standard. I have made it very clear to him that the MOD has been benchmarking minimum housing standards to the decent homes standard since 2016, and the shadow Minister has made the same point. The MOD inspects its properties. It knows what that standard is. It reports that 96% of its accommodation meets that standard.

The MOD also has a higher standard, the MOD-developed decent homes-plus standard, to which it benchmarks its accommodation. It found that 84.4% of its accommodation meets that standard. So we know that the MOD is already inspecting and monitoring its standards. The MOD has made it very clear under the present Government that it is reviewing how it takes forward those standards and—this is important to the point about outcomes—that in driving up standards in its accommodation, it is seeking an equivalent standard that we will introduce for the private sector through the Bill.

I gently say to the hon. Gentleman that we share the same objective; it is about how that is achieved. I have tried to give him the reassurance that the MOD is not just brushing off the review; it is absolutely committed to driving up standards through its particular route, given some of the challenges it faces. I have a barracks in my constituency, and it is not that easy for local authority enforcement officers to just make an appointment to visit it and inspect. It is for the MOD to take this forward, and it is absolutely committed to doing so. If the hon. Gentleman’s point is simply about how we achieve the same objective, I am very confident that the MOD should be the one to do it through the specific route it has outlined, rather than by bringing military accommodation into the Bill, which could have all manner of unintended consequences.

[David Simmonds]

The Minister said earlier that there is a requirement for a consultation on the decent homes standard. It is important to recognise that a decent homes standard already exists, and in fact has existed since the previous Labour Government, which introduced it for social housing. The MOD is benchmarking its accommodation to that existing social housing decent homes standard, which includes things such as the state of repair of the property and its thermal insulation—the property needs to be sufficiently warm for safe occupation. Those criteria already exist and are already in use. Where there is an element of doubt is on the specific decent homes standard that the new Government would apply to the private rented sector. But there is already a decent homes standard, which is in use in the Ministry of Defence now.

[Matthew Pennycook]

I give way to the hon. Member for Taunton and Wellington.

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[Matthew Pennycook]

We expect that the vast majority of landlords will do the right thing and meet their new legal responsibilities, but there will be a minority who fail to do so. That is why, for this package of reforms to be effective and achieve its aims, consistent and effective enforcement by local authorities is absolutely necessary.

Clause 104 places a duty on every local housing authority in England to enforce the new measures in their areas. We expect local authorities to take a proactive approach to enforcing these reforms and give this area the priority that it deserves. Equally, we want councils to have flexibility and take action in a way that best addresses local problems and priorities. The duty is broadly framed to allow that to happen.

We recognise that different types of enforcement will be more suited to different cases. When considering enforcement, local authorities will be able to issue a civil penalty as an alternative to criminal prosecution for an offence, allowing them to decide the most effective method of enforcement in each case. Clause 104 also empowers county councils that are not local housing authorities to take enforcement action, and it enables local authorities to take enforcement action outside their own local authority areas.

Clauses 105 and 106 set out the notification requirements where local authorities take enforcement action outside their own boundaries, or where a county council that is not a local housing authority takes enforcement action.

Clause 107 places a duty on local authorities to supply information to the Secretary of State, as required, on the exercise of their functions under the measures created or amended by the Bill. Regular and robust data from local authorities will be vital to understanding the impact of our reforms and the action taken by local authorities. We will work with local authorities to agree a data reporting framework that is rational, proportionate and helpful to both local and central Government, and in line with similar data collections.

Clause 108 allows the Secretary of State to appoint a lead enforcement authority for the purposes of any provisions in the landlord legislation, which include many of the provisions in the Bill.

Clauses 109 and 110 outline the functions of the lead enforcement authority, which include: overseeing the operation of the provisions in the legislation for which it is responsible; providing guidance, advice and information to local authorities; and, where necessary, enforcing the provisions. We are carefully considering whether having a lead enforcement authority for any of the provisions in the landlord legislation will be beneficial, and we will continue to engage with local authorities and other stakeholders to shape our plans. I commend the clauses to the Committee.

[David Simmonds]

Although the Opposition are supportive of the clauses, it is important to clarify a few things. First, the aim of clause 104 is clearly to ensure that a very high standard is met in the private rented sector. Many local authorities will take action themselves to ensure that the standard is met in a property—particularly in respect of social housing—if the landlord fails to do so. The powers under this legislation do not go as far as that; they extend to imposing a financial penalty or instituting proceedings against a person for that offence. Renters may expect that the local authority will effectively take possession of a property to remedy a problem giving rise to a breach—for example, a breach of the decent homes standard at the property—and it is important to recognise their expectations.

I will ask the Minister a question about clause 110. Local authorities will generally find it more efficient to enforce the decent homes standard as a single function, rather than having separate private rented sector and social housing functions, both of which effectively do the same work. The financing of the social housing element would normally come through the housing revenue account, which, like a number of other local authority revenue accounts, is ringfenced—something I know you are familiar with, Mr Betts—meaning that resources raised through that account cannot be applied to another purpose. Clearly, we would not wish to allow a degree of inefficiency to creep in by creating duplication.

It would be helpful if the Minister could say whether the guidance provided to local authorities will clarify that there is no objection, in respect of the private rented sector, to a sharing of services that are funded partially through the housing revenue account and partially through the regime introduced by the legislation. I know that this issue has been significant in different types of funding provided to local authorities for particular functions.

[Matthew Pennycook]

I will be fairly brief, because I am more than happy to go away and check whether this is an error on my part rather than that of the shadow Minister, but we have to be very clear which provisions in the Bill these enforcement powers relate to. Clause 104 sets out that every local housing authority has a duty to enforce the landlord legislation in its area, which covers chapters 3 and 6 of part 1 of the Bill, part 2 of the Bill, sections 1 and 1A of the Protection from Eviction Act 1977, and chapter 1 of part 1 of the Housing Act 1988.

We will consult on it, so further detail will come forward, but, to put it simply, enforcement of the decent homes standard will come via a different track. Nothing in the enforcement provisions will interfere in the housing health and safety rating system, or the enforcement of Awaab’s law or the decent homes standard to come.

I am more than happy to go away and check, and I will write to the shadow Minister if I have misunderstood his question. To reassure him, though, I think we are talking about enforcement against specific parts of landlord legislation under the Bill.

Question put and agreed to.

Clause 104 accordingly ordered to stand part of the Bill.

Clauses 105 to 110 ordered to stand part of the Bill.

Clause 111

Power of local housing authority to require information from relevant person

Question proposed, That the clause stand part of the Bill.

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[Matthew Pennycook]

I turn to part 5, on general provisions.

Clause 134 sets out the meaning of three terms used in the Bill: “lease”, “local housing authority” and “the 1988 Act”. Clause 135 sets out the Bill’s application to the Crown. Clause 136 sets out its application to Parliament.

Clause 137 clarifies various aspects of powers to make secondary legislation under the Bill. In particular, it contains a power to make consequential, supplementary, incidental, transitional or saving provision. It also clarifies which powers in the Bill will be subject to the affirmative or the negative procedure where exercised.

Clause 138 contains a power that will allow the Welsh Ministers to make consequential amendments arising from part 1 of the Bill. Clause 139 contains a power that will allow the Scottish Ministers to make consequential amendments arising as a result of chapter 5 of part 1 of the Bill, which makes provision to address rental discrimination in Scotland.

Clause 140 will give the Secretary of State the power to make consequential amendments arising from the Bill, such as by removing now defunct terms from other legislation. This is necessary to ensure that existing legislation continues to function as intended once the Bill has passed into law.

Clause 141 provides that the Bill’s extent, for the most part, is England and Wales. Housing is within the devolved legislative competence of the legislature in Wales, and in practice the application of the majority of the clauses will be to England only. A small number of changes will apply in England and Wales to address remaining aspects of the tenancy system in Wales that are still dependent on English law. Chapter 4 of part 1 applies the rental discrimination measure in Wales. Similarly, chapter 5 of part 1 extends only to Scotland and applies the rental discrimination measure in Scotland. I commend the clauses to the Committee.

Question put and agreed to.

Clause 134 accordingly ordered to stand part of the Bill.

Clauses 135 to 141 ordered to stand part of the Bill.

Clause 142

Commencement

[David Simmonds]

I beg to move amendment 45, in clause 142, page 150, line 26, leave out from “subject to” to end of line 27 and insert—

“—

(a) the publication of an economic impact assessment in relation to the bill, which must include the impact of abolishing fixed term assured tenancies on the student housing market; and

(b) subsections (2) to (6).”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 64, in clause 142, page 150, line 26, leave out from “subject to” to end of line 27 and insert

“—

(a) the publication of an economic impact assessment of the bill, including abolishing fixed-term tenancies on student accommodation;

(b) the publication of an assessment under section [Assessment of operation of possession process]; and

(c) subsections (2) to (6).”

Clause stand part.

Clause 143 stand part.

Schedule 6.

Clauses 144 to 146 stand part.

[David Simmonds]

Amendments 45 and 64 would require the Government to give broader consideration to the economic assessment required to understand the full implications of the Bill. A lot of the evidence that we have heard on the Bill, and on the Renters (Reform) Bill in the last Parliament, concerns impact on supply, especially on the supply of accommodation for particular categories of tenant. Those categories include people in the student housing market, to which both amendments refer.

We are all aware that for local authorities and other public bodies such as transport authorities, the ability to predict and plan the need for student accommodation in particular locations is very significant. Transport for London and other transport authorities in major cities plan bus routes and other public transport based on the need for students to get to and from the places where they receive their education. The same is true in respect of retirement homes and so on.

This is a matter not merely of general political interest, but of practical interest for the public bodies whose responsibilities will be affected by the Bill. Although we recognise that a substantial amount of the Bill was already envisaged under the previous Government and has been through a significant process of scrutiny, we do not fully understand what the impact will be on supply, particularly on the supply of homes required by students. We have heard a great deal of evidence about the economic significance of students for our towns and cities, as well as for our university sector. The Opposition regard that as very important. I am interested to hear what the Minister has to say about our amendments and the clauses to which they relate.

[Matthew Pennycook]

I will speak briefly to the clauses in the group and then discuss the shadow Minister’s two amendments.

Clause 142 provides how and when the provisions in the Bill will be brought into force. This Government have made it clear on multiple occasions that we are determined to end the scourge of section 21 evictions as soon as possible. I think it has now been more than five years since the previous Government promised private renters across the country that section 21 evictions would be abolished. Renters have waited far too long for a Government to take action. We are determined to act for them to end the insecurity that they face, including the risk of homelessness, and—this is a point I have tried to stress throughout our discussions—to give good landlords certainty about what change means.

The clause provides the mechanism for ending section 21 once and for all for private tenancies. The new tenancy system for the private rented sector that is set out in chapter 1 of part 1 will come into force in a single stage for all assured tenancies. On that date, the new tenancy system will apply to all private tenancies. Existing tenancies will convert to the new system; any new tenancies signed on or after that date will also be governed by the new rules. This will give all private tenants the same security immediately: that will be the effect of clause 142(8). I reassure the Committee that we will work closely with all parts of the sector to ensure a smooth transition to the new system and that we are committed to providing sufficient notice ahead of implementation.

Beyond tenancy reform, the clause sets out how and when other provisions in the Bill will be brought into force. Some provisions, such as the investigatory powers in part 4, will come into force automatically two months after Royal Assent.

Clause 143 provides that the commencement of chapter 1 of part 1 will not have an impact on the continuation of existing tenancies. The Bill will apply to those tenancies, but they will not be treated as new tenancies. For example, although the landlord will not be able to use a section 21 notice in relation to such tenancies, the protected period during which the moving and selling grounds cannot be used will count from when the tenancy first began.

Schedule 6 will ensure a smooth conversion for existing tenancies to the new tenancy system by making specific provision to avoid unnecessary cliff edges, for example by maintaining the validity of rent increases and notices served prior to implementation. This will ensure that landlords and tenants are clear about which legal framework applies before and after the transition.

Clause 144 provides clarity about what happens when a fixed-term assured tenancy expires and becomes a statutory periodic tenancy. This will ensure that the periodic tenancy will be treated as continuous, meaning that any provisions in the Bill that apply from when the tenancy began will count from the beginning of the original tenancy rather than from when the statutory periodic tenancy arose.

Clause 145 will give the Secretary of State the power to make regulations that have transitional or saving provision in connection with the coming into force of any provision of the Bill. It will give powers to Welsh and Scottish Ministers to make transitional or saving provision in connection with the coming into force of chapters 4 and 5 respectively of part 1, which apply the rental discrimination measures in Wales and Scotland. The clause will also give the Secretary of State power to make provision concerning pre-application instruments that the Secretary of State considers will not operate effectively as a result of the Bill. It is standard and appropriate for the Secretary of State to have the power to make transitional or saving provisions; this is important to facilitate an orderly implementation of the new regime and to ensure that agreements and private legal instruments that were entered into prior to the Bill continue to operate as intended under the new regime.

Clause 146, as I think is self-evident, provides that the short title of the Act will be the Renters’ Rights Act 2024.

I turn to the shadow Minister’s amendments 45 and 64. Amendment 45, as he made clear, would require the publication of an economic impact assessment for the Bill, including an assessment of the impact of abolishing fixed-term assured tenancies on the student housing market, before its provisions are commenced. Amendment 64 would do the same, but would also make the publication of any assessment by the Lord Chancellor of the operation of possession proceedings for rented properties a prerequisite for commencing the provisions of the Bill.

I say gently to the shadow Minister that I have tried this trick before in a previous role, and I do not for one second condemn him for doing so, but we are committed to robustly monitoring and evaluating the private rented sector reform programme and the implications of the Bill. Our approach builds on the Department’s existing long-term housing sector monitoring work, and we will conduct our processes, impact and value-for-money evaluation in line with the Department’s published evaluation strategy. We will publish the evaluation findings in a timely manner that is consistent with our policy for the publication of research. Further data on the operation of possession proceedings for rented properties, to which amendment 64 refers, is already published and will continue to be published quarterly by the Ministry of Justice.

We are committed to ending the scourge of section 21. The sector and particularly tenants have waited too long for these changes to come into effect. We are therefore not minded to tie implementation to any additional requirements of the type that the shadow Minister mentions. I do not begrudge his trying, but I ask him to withdraw his amendment.

[David Simmonds]

I will have to accept the Minister’s gentle rebuff, but we have heard from the housing sector and from student organisations that these are very important issues. We recently debated rough sleeping in Westminster Hall; one challenge that emerged is that we did not count the number of rough sleepers until 2010, so it is very hard fully to understand what was going on. That is a lesson in the importance of doing the research and having impact assessments: they are a key part of the evidence that the Committee needs to consider to understand the direction of travel and whether it will do the job intended. However, I take the Minister’s point.

[Matthew Pennycook]

May I briefly intervene? I do not want to deprive the hon. Member for Broadland and Fakenham of an answer to his question about clause 124. I am told that the power is in place for very limited exceptions, in particular where an agent might face aggression from an occupier of a property and is therefore unable to show identification. The powers mirror the provisions in the Consumer Rights Act 2015 that apply to trading standards officers. It is a very limited exception for those circumstances. I hope that that provides some clarification and reassurance.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 142 ordered to stand part of the Bill.

Clause 143 ordered to stand part of the Bill.

Schedule 6 agreed to.

Clauses 144 to 146 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

Renters' Rights Bill (Fifth sitting)

David Simmonds Excerpts

Committee stage
Thursday 31st October 2024 Public Bill Committees

[Matthew Pennycook]

It is an absolute pleasure, Mr Betts, to continue our consideration of the Bill with you in the Chair, not least because you will have extensive knowledge of what we are talking about as we proceed through the clauses.

Before we proceed to the substantive matter, I draw the Committee’s attention to the letter that I sent the Chair this morning, responding to the various technical questions put to me in the previous sitting. I hope that Members find my responses useful. I look forward to continuing this co-operative approach as we debate the remaining clauses.

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

I put on the record my thanks to the Minister for the prompt and detailed response to the points made. We had a brief discussion this morning about a small omission involving, for example, school caretakers or NHS staff who are provided with accommodation on site as part of their employment. I am grateful that the Minister has undertaken to respond to that, too, in due course.

--- Later in debate ---

Finally—this is an important point, and I hope the hon. Lady will take some reassurance from it—the private rented sector landlord ombudsman will be able to handle prospective tenants’ complaints about inappropriate landlord actions or behaviours, which could include discrimination. The ombudsman will review each complaint on a case-by-case basis and—to address amendment 78 directly—would in any case take into account previous compensation paid as they strive to put things right for tenants. For those reasons, notwithstanding my sympathy with the objective of ensuring that tenants who face discrimination make a complaint to the relevant local authority, I kindly ask the hon. Lady not to press her amendments.

[David Simmonds]

The Opposition broadly support the clauses. I have some questions for the Minister, which are matters not of amendment but of clarification.

Clause 35 deals with tenancies where there may be restrictions on children either visiting or living in a property. There has been a significant increase in the number of retirement communities across the UK, and it is quite common for them to set out a condition— for example, that occupiers must be aged over 55. That housing supply is important, especially to encourage people who are under-occupying family homes to choose to move later in life to a retirement property that is designed and built specifically for that purpose. I seek assurance from the Government that while the clause effectively nullifies any restrictions on the ability for children to live in a property, bespoke retirement communities, constructed specifically with the needs of older people in mind, will not find it a problematic provision.

We support the Government’s position in clause 40, on taking income into account. It is clear that the purpose behind the previous voluntary codes, introduced under previous Conservative Governments, and under Labour Governments with the support of the Conservative Opposition, was to bear down on the practice of restricting benefit tenants from accessing private rented property. However, as the Minister clearly said, there is a requirement for referencing checks to be undertaken. Clause 40 specifically says that there will be no prohibition on taking income into account. There is clearly a risk of a loophole in the clause, given that the Bill does not clearly specify what is meant by referencing checks.

Landlords can use insurance to cover the risk of a loss of income where a tenant defaults on a rental payment. If the insurer says, “We consider the risk of anybody on benefits to be too high,” the landlord may say, “We do not directly discriminate, but our referencing check will always decline to provide insurance for an individual in those circumstances.” There is potentially the risk that benefit claimants will fall between two stools. Universal credit is flexible and provides a top-up on a person’s rental income, so they may eligible to receive the benefit but fall outside it for a period of time. We need to ensure that that is fully taken into account. I ask the Minister to clarify the position, perhaps in writing.

Finally, I have some points relating to the interaction of all the clauses. I previously raised the issue of people who have no recourse to public funds. They are not eligible to receive benefits but may be the beneficiary of an obligation on a local authority to provide support—for example, under the Children Act 1989 or previous housing legislation. It would be helpful to understand how the clauses will apply to that group of individuals. They are likely to be creditworthy and to apply for private rental on the basis that they have a job and an income. They are not eligible for the state benefits listed in the examples of benefits that are included. We therefore need to ensure that, so far as the Government intend, they fall within the ambit of the Bill.

There is a similar issue for care leavers, about which the Minister said he has received representations. The Children (Leaving Care) Act 2000 creates a set of obligations on local authorities to secure appropriate accommodation for care leavers as they enter adulthood. Although I understand the Government’s decision not to bring a specific category of care leavers within the scope of the legislation, those who are the beneficiaries of that obligation on behalf of somebody else will find themselves discriminated against not because of rights arising from their personal circumstances but because of the obligation to somebody else—in this case, that a statutory authority has to provide support for them.

Finally, we support the Government’s position on the amendments. Although I have complete sympathy with the point being raised, as the Minister does, there is clearly a risk that what is intended to be a matter of criminal law—discrimination against an individual, whereby a court can make an order for compensation—is mixed up with a civil penalty that is designed to ensure that landlords pay appropriately.

The Minister is correct, but he may need to provide total clarity for the sake of parliamentary proceedings that a local authority will use that civil penalty in the same way as would apply if it were dealing with an issue of fly-tipping, littering or environmental nuisance, as opposed to having to prove to a criminal standard that discrimination is taking place. As those two things are different, they need to be handled differently in the way that the legislation addresses them, as my hon. Friend the Member for Broadland and Fakenham alluded to.

[Matthew Pennycook]

Let me address that group of questions, which are well understood and well made. I will respond to each in turn.

I think the shadow Minister may have got the clause wrong, because clause 35 deals specifically with superior leases and ensuring they are not enforceable. However, I take his point about what is usually older people’s bespoke accommodation. I am sure that we would all welcome children visiting those sorts of accommodation. I will provide a specific written answer to confirm this position, but I would expect a provider to argue that refusing tenants living with children in such a block would be a proportionate means of achieving a legitimate aim and would therefore be appropriately accommodated within the legislation.

On clause 40, the Bill will allow landlords to check if a tenant has sufficient income to ensure that they can afford to pay for a tenancy and it is sustainable. The shadow Minister made the point again, as he did in the evidence sessions, about insurance and referencing checks. I will give him a specific answer as to whether particular referencing checks or insurance products will, as a matter of course—I think this was his point—rule out universal credit applicants as tenants who can afford to pay. I do not necessarily think that that should be the case, but if it is, I will give it due consideration.

[David Simmonds]

It is helpful to have this conversation with regard to insurance that covers the loss of rent and insurance that specifically requires the prohibition of a child living with tenants, as referred to by clause 35. Our concern is that although the Bill’s intention is to create a clear situation where there is no discrimination against a tenant with children who would be living with them or visiting them at the property, there is a risk of ambiguity if a landlord finds, for example, that they cannot gain any insurance or that the cost of insurance is prohibitive. They would then argue that they simply could not meet their obligations as a landlord if they were to allow tenants with children who live at or visit the property. We need to therefore bring clarity so that we do not leave a loophole through the insurance market that effectively nullifies the intended impact of the legislation.

[Matthew Pennycook]

I appreciate and understand that point, and the shadow Minister is right to say that we need to bring the requisite level of clarity in this area. He has asked a series of questions in Committee on insurance products more generally and I will attempt to give him a more comprehensive answer in writing so that we can draw a line under some of his concerns.

The shadow Minister asked specifically about no recourse to public funds and care leavers, which again is a specific subset of issues that he is right to raise. I will come back to him on those as well.

On civil penalties and whether they can be proved, we have taken a different approach in the Bill from Scotland and Wales where the situation is different. While they seek to enforce discriminatory provisions through a criminal offence, we have deliberately taken the civil route because of the lower burden of proof required for local authorities, and the ease with which they will therefore be able to take enforcement action against cases of discrimination where they have sufficient evidence.

--- Later in debate ---

[Carla Denyer (Bristol Central) (Green)]

I will quickly clarify the comments made about my amendment 78 by the shadow Minister, and then I will discuss my amendment and answer some of the Minister’s points. If I heard correctly, the shadow Minister said that he did not support the amendment because it mixes up compensation with criminal penalties, but my understanding of the conversation that we have just had is that the clause uses civil law rather than criminal law, so that point does not stand—or have I misunderstood something?

[David Simmonds]

I raised the question to bring some clarity to it. My hon. Friend the Member for Broadland and Fakenham, who has a lot more legal experience than I do, highlighted that different standards are applied to the burden of proof, and that the way in which those standards are applied also varies because of the tariff. It is important to fully understand what we are dealing with. As the Minister’s response showed, the Government’s approach is correct in that the bringer of the enforcement action would be the recipient of the penalty.

[Carla Denyer]

In that case, I am pleased to confirm that I have anticipated those questions and concerns, and I can answer them now. Amendments 78 and 79 provide a mechanism for the complainant—the tenant, or the prospective tenant in this case—to receive a portion of the financial penalty imposed by a local housing authority as compensation for being discriminated against.

First, let me give a little context. As the Committee has heard in oral and written evidence, discrimination is rife in our private rented sector, and the Bill has the potential to deliver real change for those who find themselves wrongly and consistently locked out of housing. A YouGov survey from last year shows that 52% of landlords harbour a preference against tenants who are in receipt of benefits, and the English housing survey 2021 to 2022 found that one in 10 private renters said they had been refused a tenancy in the past 12 months because they received benefits. That shows the scale of the problem.

Families with children also face serious discrimination. There are 1.4 million families in the private rented sector with dependent children, and we have already discussed the harmful effect that it can have on them.

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[Carla Denyer]

I will follow up with the Minister on the details.

[David Simmonds]

Not that they need it, but the Government have our support in their stance on this issue.

The hon. Member for Bristol Central raises an important point. From my experience in local authorities, I know it is often extremely complicated when they seek to allocate or judge issues of compensation on civil penalties. For example, similar legislation applies in respect of environmental nuisance, and we know it is incredibly difficult to identify who has been a victim, how to quantify the level of harm they have suffered and then how to allocate an appropriate level of compensation.

Given the good will the Minister has shown on the issue, I hope there is scope for some further discussion to ensure that if there is a pattern of egregious behaviour by a specific landlord who is clearly discriminating against particular groups of people—we recognise that particularly in London there is often a high level of demand, and a tenant may visit a dozen or more properties to secure a tenancy—there is a means of providing some form of restitution for the waste of that person’s time as a result of that discrimination.

[Matthew Pennycook]

Can I make a further point, which I have made before but is clearly not registering? This is where we need to take a step back and look at which different parts of the Bill do what. The ombudsman can review each complaint on a case-by-case basis. Complaints can be about discrimination and the ombudsman has the powers to put things right, including by ordering the landlord to pay compensation or correct the behaviour in question. It is not that we do not think there is a case for the suggestion—we will come to the significantly strengthened rent repayment orders that we have included in the Bill—but that this is not the place for it. Clause 39 is a quite simple provision to allow local authorities to issue fines for breaches and to be able to keep that money to fund further enforcement activity. For that reason, we cannot support the amendments.

Question put and agreed to.

Clause 32 accordingly ordered to stand part of the Bill.

Clauses 33 to 41 ordered to stand part of the Bill.

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[Matthew Pennycook]

I will be brief on this group of clauses, which simply provide for rental discrimination powers and prohibitions in Wales that mirror those in England, with minor adjustments made in order to fit them into existing housing offence enforcement procedures. The measures are broadly equivalent to chapter 3 of the Bill for England, which we have just discussed at length, with adjustments made to align with the existing Welsh enforcement framework.

As I have already mentioned, Wales is taking a criminal enforcement approach, while the same conduct is a civil breach in England. That reflects the private rented sector enforcement regime in Wales, where criminal offences are in line with other housing legislation. I commend the clauses to the Committee.

[David Simmonds]

As the Minister has outlined, this is a fairly straightforward translation. First, I presume the measures will require a legislative consent motion on the part of the Welsh Government, and ask the Minister to clarify that.

Secondly, in respect of the proceeds of the fines, it is clearly envisaged in England that it will be the local authority that carries out enforcement and that the revenue from the fines will finance that. If it is a criminal matter in Wales—a criminal enforcement regime—will the same rules apply? We briefly debated the issue of whether fines in a criminal matter would go into the consolidated fund, as is currently the case with criminal penalties, or directly to the local authority, in order to finance the enforcement regime; will the Minister clarify how the matter will be dealt with in Wales?

[Matthew Pennycook]

I thank the shadow Minister for those questions. There is a simple answer to the first: yes, it requires a legislative consent motion on the part of the Senedd to bring the measures into effect.

On the approach in Wales more broadly, as I said, it reflects the established private rented sector enforcement regime in Wales. There are a number of differences. The Welsh Government, and the Scottish Government, take the criminal offence path, rather than the civil one. What that means—this is one of the reasons why we determined to go with the civil offence approach in England—is that fines are capped at £1,000 in the Welsh and Scottish contexts, whereas under the approach in the Bill we can levy £7,000, and do so repeatedly if breaches are continuous and ongoing. That is why that is reflected.

On the consolidated fund point, as it applies to the Welsh Government, I am afraid I do not have the answer. I will more than happily get an answer to the hon. Gentleman in writing.

[David Simmonds]

What the Minister said in respect of the consolidated fund is very helpful. I posed the question because, under the Bill, we will create responsibilities for the local authority to be the enforcement body, which as I understand it will apply in Wales as well, but the decision to take the criminal route is a matter for the Senedd, which is not the local authority. Indeed, there is some tension in the relationship between the Senedd and local authorities. Clearly, if the income is going into a consolidated fund or to the Senedd, the risk is that the enforcement body given the duty under this legislation will not receive any of the financial income raised through enforcement action. I ask so that we are completely clear about where the legislation will stand in Wales once passed.

[Matthew Pennycook]

I understand that point and will get the shadow Minister a precise answer in writing. It is important for the Committee and the public to have clarity on precisely all the ways in which the enforcement is, and in some cases is not, aligned in the Welsh and English contexts. I will come back to him on that point.

Question put and agreed to.

Clause 42 accordingly ordered to stand part of the Bill.

Clauses 43 to 48 ordered to stand part of the Bill.

Clause 49

Discrimination relating to children or benefits status

Question proposed, That the clause stand part of the Bill.

Renters' Rights Bill (Sixth sitting)

David Simmonds Excerpts

Committee stage
Thursday 31st October 2024 Public Bill Committees

[The Minister for Housing and Planning (Matthew Pennycook)]

It is an absolute pleasure—I genuinely mean that—to continue our proceedings with you in the Chair, Mrs Harris.

The clause will end the unfair practice of pitting renters against each other in bidding wars. Many members of the Committee will have come across that as councillors and as Members, and they do not need me to tell them about the severe impact on renters. Those of us who represent constituencies with particularly hot rental markets are all too familiar with the common story: a prospective tenant arranges a viewing and turns up in person, only to find themselves being asked to compete with other tenants on the spot. Their experience is not that of a viewing, but of a kerbside auction. The impact on renters of the practice is clear.

In other cases, the growth of social media and other platforms allows this practice to occur without prospective tenants even being in the same place. Renters who have applied for a property may find themselves being added to a WhatsApp group and asked to submit offers in front of each other. Again, the detrimental impact of that practice on renters cannot be overstated.

Rental bidding restricts tenants’ ability to make an informed choice about one of the most financially significant decisions they face. It is clearly an unfair practice, and one that, thankfully, only a minority of landlords make use of. The clause will end the practice for good. It will require landlords and letting agents to state a proposed rent in any written advertisement or offer. Landlords and letting agents will then be prohibited from asking for, encouraging or accepting bids above that price. That will improve the experience of prospective tenants across England and provide clarity to all involved in the lettings process.

I turn to clause 56, which sets the enforcement framework for breaches of the rental bidding measures set out in the previous clause. Once enacted, clause 56 will give local housing authorities the power to impose a financial penalty of up to £7,000 on persons who are in breach of the prohibitions. In addition, local authorities will be able to issue multiple civil penalties to any landlord or letting agent who repeatedly breaches the requirements set out in clause 55. In line with the new burdens doctrine, we will fully fund the cost of all additional duties on local government from enforcing the rental bidding prohibition. With that, I commend the clauses to the Committee.

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

I echo the Minister’s comments about it being a pleasure to serve with you in the Chair, Mrs Harris.

I will not take too long on this point. The measure has been the subject of some controversy. Clearly, there is a philosophical question about the ability of the owner of an asset to gain the best possible market return, but the Government are determined on the matter. I will, however, make some practical points.

The first is about how to address the situation where the property in question is the asset of an organisation whose directors have a fiduciary duty to maximise the return on it, as is common in the case of pension funds, investment trusts or other bodies that may invest in property. Clearly, there is an obligation in law on the directors to seek the maximum possible return, but this legislation will prohibit them from undertaking any form of bidding process.

The second is about a situation where an intermediary sits between the tenant and the owner of the property. Clauses 55 and 56 set out what is meant by a prospective landlord but, in pursuit of their fiduciary duty, the ultimate owners of an asset might seek bids from a prospective managing agent or other intermediary party. They might bid to secure the maximum possible rent on that group of properties, in turn letting them out individually to tenants at a higher level of rent. Both those situations potentially create a degree of conflict.

I agree entirely with the point about the egregious practices of some landlords. It seems to me, however, that we must consider the situations that I have highlighted so that the legislation does not inadvertently lead to trustees and directors of pension funds that invest in property being in breach of their duties, or to the establishment of a get-out by means of a managing agent who sits between the property owner and the tenant.

[Matthew Pennycook]

I thank the shadow Minister for those well-made questions. This is a specific problem that we are trying to target, and the majority of landlords do not engage in rental bidding. We are trying to stamp out the egregious practice of a minority of landlords who exploit the fact that, particularly in hot rental markets, there is a lack of supply vis-à-vis demand. Tenants can be pitted against each other in ways that ensure the rent of a tenancy escalates to a point beyond which many of them can afford, or which, if they can afford it, puts incredible financial strain on them.

Once these provisions are in force, we think landlords will—in much the same way as the tribunal might—determine what the market rent is in a given area and what they can expect to receive from their property, and then advertise the rent at that price. I have been asked how that would work. Will landlords not advertise a price below what they could otherwise expect? We cannot have it both ways. If a landlord can expect a certain price through a competition, that suggests that tenants can pay a slightly higher price and bid up. We expect landlords to look at the market price in a given area and advertise the property at that rent, and these provisions will ensure that they cannot encourage or invite bids over that amount.

On the specific cases that the shadow Minister raises, I would not expect organisations of the type he lists to be in breach of their fiduciary duties as a result of these provisions. I understand his point about intermediary agents, particularly in groups of property where they might look to get the best deal on any of those things. I will come back to him on that specific point in writing, because I understand the need to work through those hard edge cases, but we think that only a very small minority of landlords will be affected. This is not the usual practice across every part of the country. His points were well made, and I will come back to them.

Question put and agreed to.

Clause 55 accordingly ordered to stand part of the Bill.

Clause 56 ordered to stand part of the Bill.

Clause 57

Penalties for unlawful eviction or harassment of occupier

--- Later in debate ---

[Matthew Pennycook]

The death of two-year-old Awaab Ishak, as many Members will know, was caused by prolonged exposure to mould in his social rented home in Greater Manchester. It was an avoidable tragedy that shames us as a nation, and it should never be repeated. I had the privilege of meeting Awaab’s family. Following a campaign by them, the Manchester Evening News and Shelter, the previous Government legislated to introduce Awaab’s law for social housing tenancies. I must credit the previous Government and the former Secretary of State, the then right hon. Member for Surrey Heath, for introducing that legislation. It was absolutely the right thing to do. We supported it in opposition, but it was only a welcome first step. This Government are clear that we need to go further and ensure that no tenant is forced to live in a home that places their health and safety at risk. That is why, in our manifesto, we committed to extending and applying Awaab’s law to the private rented sector.

Clause 59 will extend Awaab’s law to tenancies in the private rented sector. It will allow us to set legal requirements about how private landlords must tackle hazards in their properties, including setting clear timescales for repairs. It will ensure that those living in privately rented homes are empowered to challenge dangerous conditions, and that landlords cannot ignore their complaints. We recognise that there are important differences between private and social landlords, such as the average size of property portfolios, so we plan to consult on the detail of how we will apply Awaab’s law to the private rented sector. That will allow us to ensure that our approach works effectively for the sector, and that it is fair and proportionate for both tenants and landlords.

Clause 60 allows Awaab’s law to be applied to accommodation occupied under licence. A licence to occupy is used rather than a tenancy in certain circumstances, mainly for short-term arrangements or where there is no exclusive right of occupation. In general, it would be disproportionate to apply Awaab’s law to accommodation occupied under licence, such as when homeowners have a lodger staying in a spare room. However, there are cases where it may be appropriate to do so. For example, some temporary homelessness accommodation and supported housing is occupied under licence. We should explore whether vulnerable tenants of such accommodation should be subject to the protections provided by Awaab’s law as part of the consultation to which I have referred. Clause 60 will therefore allow us, as part of that wider consultation, to consider and consult on what types of accommodation occupied under licence should be in scope. It will then allow regulations to be made to bring such accommodation within scope.

Government amendment 22 is a minor and technical amendment that will ensure that Awaab’s law continues to apply to social rented properties let by private registered providers under tenancies of more than seven years. It is simple and straightforward.

[David Simmonds]

This measure was introduced by the previous Government. We supported it then, and we support it in opposition. Will the Minister reassure me that, as part of the consultation, he will include large public sector landlords, particularly the Ministry of Defence and the NHS? They have significant numbers of people in employment-related accommodation, and we are all aware that there has been a history of issues such as those that this legislation is specifically designed to tackle.

[Matthew Pennycook]

I hope I can give the shadow Minister some reassurance in that regard, taking Ministry of Defence accommodation as an example. Colleagues in the Ministry of Defence are clear that they want to mirror the same level of standards as we intend to apply across the sector, but the approach that we are taking through this Bill is not necessarily appropriate for the unique circumstances that surround Ministry of Defence accommodation. That is a good example of where a Department is taking forward its own work on standards separate from this Bill. I will get the shadow Minister a full written response that sets out exactly how such accommodation, which is not necessarily within the scope of this clause, aligns with not only Awaab’s law but the decent homes standard more generally.

Amendment 22 agreed to.

Clause 59, as amended, ordered to stand part of the Bill.

Clause 60 ordered to stand part of the Bill.

Clause 61

Meaning of “residential landlord”

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

We move on to part 2 of the Bill, which concerns landlord redress schemes and the private rented sector database. Clause 61 sets out the meaning of “residential landlord”, “relevant tenancy” and “dwelling” for the purpose of defining which tenancies fall within the scope of that database and ombudsman service.

Most private rented sector tenants have assured or regulated tenancies, and those arrangements are covered under this clause. Certain other tenures and dwellings are excluded by clause 61. That is because some tenures, such as licences, provide tenants with very different rights from assured tenancies, while some dwellings, such as non-permanent structures, are subject to different standards requirements from typical PRS properties. Landlords of social housing will also be excluded from the requirements.

We are aware that the private rented sector is dynamic and continues to evolve, and that is why we have included a power in this clause to amend the definition of “residential landlord”, “relevant tenancy” and “dwelling”. That power is required so that the legislation can keep pace with changes in the sector. It will give us the flexibility to extend landlord redress and the database to further tenures or dwellings, if that proves necessary. I commend the clause to the Committee.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62

Landlord redress schemes

[David Simmonds]

I beg to move amendment 65, in clause 62, page 89, line 25, after “residential landlord” insert—

“, whose property is not managed by an agent who is a member of an independent redress scheme approved by the Secretary of State,”.

This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 62 if their tenant does not already have access to one by virtue of the landlord using an agent who is a member of another approved independent redress scheme.

[The Chair]

With this it will be convenient to discuss the following:

Government amendment 23.

Clause stand part.

Clauses 63 to 71 stand part.

Schedule 3.

Clause 72 stand part.

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[David Simmonds]

We move on to the chapter on landlord redress schemes. The Opposition agree on the need for effective measures, but we need to make sure that those measures are functional in practice.

[Matthew Pennycook]

The private rented sector has lagged behind other housing tenures when it comes to access to redress. For example, tenants in social housing have long been able to escalate complaints through the housing ombudsman’s social landlord redress scheme. Private tenants have had, in comparison, severely limited options for resolving issues, in spite of the fact that they suffer from poorer housing standards on average. I believe that once tenants no longer have the threat of section 21 evictions hanging over them, they will finally feel able to challenge poor practice from landlords at the disreputable end of the market without the fear of retaliatory evictions.

The Bill introduces a new mandatory landlord ombudsman service, which will give tenants free access to redress if their landlord fails to resolve a legitimate complaint. The landlord ombudsman scheme will be a non-adversarial route for escalating complaints, and it will empower tenants to challenge landlords who provide a poor level of service or who behave inappropriately. The ombudsman will benefit landlords who are committed to providing a decent home and a good service. It will give them access to an impartial decision maker to resolve complaints in the quickest and most cost-effective way. This will help to maintain landlord-tenant relationships and therefore, we hope, sustain tenancies for longer.

Clause 62 allows the Secretary of State to make regulations to require landlords, as defined under clause 61, to be members of the private rented sector landlord ombudsman. The provisions in clause 62 will allow prospective, current and former tenants to raise complaints to the ombudsman. This is because things can go wrong for tenants at any point in the rental process, so tenants should be able to seek redress for issues that occur during the pre-letting period or at the end of a tenancy.

Clause 62 will allow the ombudsman to provide voluntary services as well as mandatory redress, which could include mediation services. As I think I said in the evidence sessions last week and on Second Reading, we are exploring options for introducing landlord-initiated mediation to complement the landlord ombudsman service. That is another example of how we are trying to take pressure off the courts and tribunals system.

Government amendment 23 to clause 62 will enable us to require landlords to register all their properties with the landlord ombudsman and keep that information up to date. That was always the intention, and the amendment clarifies that in the legislation. If a landlord chooses not to provide the correct information, they will be liable for enforcement as set out in clauses 64 and 65. That will ensure that landlords pay the correct fee, where fees are based on the size of their property portfolio.

Clause 63 allows the Secretary of State to set out in regulations the conditions that a private rented sector redress scheme must meet before it is approved or designated by Government. By putting conditions in regulations, we will set the framework for a high-quality redress service that can adapt to an ever-changing housing market. For example, to be approved, the scheme must include provision about accepting tenant complaints and requiring landlords to put things right. That could be achieved by making a repair or paying compensation. We will ensure that the ombudsman’s decisions are enforceable by requiring the scheme to set out a route of expulsion. That means that if a landlord does not comply with a redress order, they could be expelled from the scheme and liable for local authority enforcement.

The clause allows the Secretary of State to set out in regulations how a scheme will be approved or designated. In pursuit of a simple and effective user journey, we will set out in regulations in due course that only one scheme will be operational at any one time. It is crucial that the ombudsman is supported by a robust enforcement regime, so that all landlords understand the importance of abiding by the requirements to join the scheme and tenants can get the resolution that they deserve.

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Amendment 65 would contradict that aim by excluding some private tenants from access to landlord redress. It would create confusion about the different but complementary purposes of landlord and agent redress, and that would make it more challenging for tenants to know where to raise their complaints. I am confident that that was not the shadow Minister’s intention in tabling his amendment, but it would create inconsistencies in tenants’ access to redress, depending on the landlord’s business model. It would give rise to new sources of complexity and unfairness across the sector and open loopholes for unscrupulous landlords and agents to exploit. The Government remain committed to requiring all landlords in the PRS to be members of the new ombudsman scheme. I therefore respectfully ask the shadow Minister to withdraw his amendment.

[David Simmonds]

It has been helpful to hear from the Minister in detail on those points. The intention of amendment 65 was to avoid a risk of double jeopardy for a landlord if they had a managing agent who was a member of the redress scheme, but if they were also required separately to be a member of the redress scheme by virtue of the fact that they were a landlord. The Minister has set out how he intends to deal with that in regulation.

I ask the Minister to clarify something—perhaps not today, but in due course. He mentioned examples of where damp and mould would be considered a landlord issue as opposed to a managing agent issue. We are all aware that certain blocks, which may be owned by an absentee landlord or someone who works abroad, are let and managed entirely by an agent who handles the day-to-day responsibility in return for payment and under a contract. We do not wish to exclude completely the possibility of redress through the agent, where the agent has been explicitly given responsibility for dealing with such things, by saying that that will always be a matter for the landlord. Will the Minister write to me to explain how that issue—most of us have seen it from time to time in our constituencies—will be dealt with, should it arise in practice?

[Matthew Pennycook]

I am more than happy to write to the shadow Minister to clarify that. If I have understood him properly, there are certain issues that we think are the landlord’s responsibility, and that is why our approach is the right one. To address his point directly, I will happily set out in some detail in written correspondence how that will operate when landlords are completely absent for the process, and the managing agent’s role in that situation vis-à-vis the new redress scheme.

[Matthew Pennycook]

I suspect I know the noble Lord that the hon. Gentleman refers to. I have had many extensive conversations with the noble Lord about the matter, and I will continue to engage with him. We supported the implementation of the Lord Best review in opposition. We took the view that the Bill was not the appropriate place to consider those measures, but we intend to set out our approach to the regulation of managing agents, letting agents and estate agents in due course. If the hon. Gentleman wants a specific comment from me, I refer him to the answer I gave in oral questions a few a days ago on this point in response to one of his colleagues. We understand the necessity for regulation in this area, and I hope to have further discussions with him and others in due course.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 23, in clause 62, page 90, line 16, at end insert—

“(4A) Regulations under subsection (1) may require a person—

(a) to provide relevant property information to the administrator of a landlord redress scheme, on applying to become a member of the scheme;

(b) at any time after becoming a member of a landlord redress scheme, to notify the administrator of the scheme of any change to relevant property information previously provided by the person as soon as reasonably practicable, or within a period, as specified in the regulations.

(4B) For the purposes of subsection (4A), ‘relevant property information’ means such information as may be specified in the regulations relating to—

(a) any residential tenancy under which the person is the residential landlord;

(b) any dwelling which is proposed to be marketed for the purpose of creating a residential tenancy under which the person will be the residential landlord.”—(Matthew Pennycook.)

This enables regulations made under clause 62 (landlord redress schemes) to require a person on applying to join a landlord redress scheme to provide certain information about residential tenancies of which they are the landlord, or dwellings that will be marketed for the purpose of becoming residential tenancies of which they will be the landlord. There is also a separate duty to notify the scheme administrator of any changes to such information.

Clause 62, as amended, ordered to stand part of the Bill.

Clauses 63 to 71 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 72 ordered to stand part of the Bill.

Clause 73

The database

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clauses 74 to 83 stand part.

Clause 87 stand part.

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The success of our enforcement efforts hinges on the accuracy and completeness of the database. By providing a repository of current and reliable information on private rented sector offences, we can empower local authorities to develop targeted strategies, to collaborate effectively and to address malpractice before it becomes criminality. I thank the Committee members for their forbearance and I commend the clauses to them.

[David Simmonds]

I have a few questions and would be grateful for the Minister’s response. In this chapter of the Bill, the regulations will clearly do a lot of the heavy lifting on what the database is like and what the tenant and landlord experience will be. First, how will the proposed database interact with the existing selective licensing schemes that a number of local authorities have in place? In the regulations, will the Government draw on the learning from the existing schemes to inform the database’s operation? It is not entirely clear how it will interact, given the different regimes in Wales and Scotland that the Minister has announced. Again, I do not necessarily expect him to answer those questions straightaway, but it would be helpful to know, particularly given that a different enforcement regime will apply in Wales.

It is also not entirely clear what the Government’s thinking is about the geographical extent of the database and the way in which it will be designed. Given that designated local authorities will be enforcement bodies, will it operate in the same way as, for example, existing children’s social care databases? Will it be maintained by individual local authorities, but in a connected way so that we can extract data from it? Will there be a single national database or an England-wide database? I appreciate that the answers to some of those questions will result from the process of engaging with the market on who the provider will be. We know, from examples where such policies have been successful or gone badly wrong, that there are significant risks to the effectiveness of the Bill if we do not get this right. It would be helpful if the Minister could address those points, either now or later in writing.

[Matthew Pennycook]

I am grateful for the opportunity to provide some clarification, particularly on selective licensing, because I know that is a source of interest to many Members.

The Government are clear that selective licensing and the private rented sector database have different purposes. The database is not designed to replace selective licensing. Unlike the database, selective licensing schemes aim to target specific local issues in specific local geographies by enabling more intensive practical enforcement strategies. We believe that selective licensing is a valuable tool when used appropriately and combined with other measures. It enables local authorities to drive better outcomes for local residents, tenants and responsible landlords.

What is important, and what we are committed to doing, is ensuring that the use of selective licensing complements and is aligned with the new private rented sector database. There is some important work to do, which we are already engaged in, to refine the way the two systems will work together once they are both in force.

The shadow Minister asked me a reasonable question about the geographical extent of the database. I will come back to him on that specific point, particularly in respect of how it interacts with the rental discrimination provisions in the Bill, given our previous discussions on their application in Wales and Scotland.

Renters' Rights Bill (Fourth sitting)

David Simmonds Excerpts

Committee stage
Tuesday 29th October 2024 Public Bill Committees

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

It is a pleasure to serve under your chairmanship this afternoon, Dame Caroline. The Opposition agree with the Government’s position on amendment 76. It is clear that interest rates set by the Bank of England are not a suitable proxy or measure to be used when setting a reasonable level of rent. If we look at examples in recent history, we see that we have gone through a period of sustained very low interest rates, followed by a rise prompted by the decision of the United States Federal Reserve, which sets the baseline for the rest of the world, to raise interest rates, so they sit at today’s present rate. Of course, inflation throughout that period was very much determined by Russia’s invasion of Ukraine and the consequent increase in energy costs in particular, and also in basic foodstuffs. All those things do not amount to an effective basket of measures that can be used. What the Minister has said on that point is important.

[Mr Amos]

Would the hon. Gentleman accept that the main costs landlords face are not from the price of goods in the shops, but the price of borrowing—the price of the loans with which they have acquired their properties—and, therefore, it is about the logic of the increasing costs to landlords being passed on through a relationship to the base rate of interest?

[David Simmonds]

No, I do not entirely accept that. For a start, we need to recognise that the costs landlords face when looking at purchasing a property will be based on the commercial cost of borrowing, rather than the Bank of England base rate. A landlord who is considering, for example, refurbishment or investment in a property is considering the rising cost of maintenance and servicing the property to the appropriate standard. The costs driving that, and the inflation behind them, are related not to the Bank of England base rate, but to what is going on in the market for those particular goods and services. It is important that we recognise that.

I hope the Government will acknowledge that it is particularly important to recognise that bringing in investment to create more private rented homes depends on the build to rent sector and on investors, including investment funds, that may specifically choose to come to this market on the basis of a reasonable, if modest, rate of return. If the investors considering creating new homes are deterred because the Government are fixing the available return on rent at a low level compared with alternative investments, that will lead to an exodus of investment from the private rented sector, which will be deeply harmful to the needs of renters.

[Mr Amos]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clause 8

Challenging amount or increase of rent

[David Simmonds]

I beg to move amendment 52, in clause 8, page 11, line 38, leave out from “date” to end of the line and insert—

“of the application under section 14(A1)”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 50, in clause 8, page 11, line 39, leave out from “is” to “the tenancy rent” in line 2 on page 12.

Amendment 53, in clause 8, page 12, line 24, leave out from “13A(2)” to the end of line 32 and insert—

“or

(b) a date that the appropriate tribunal directs, if it appears to the tribunal that applying paragraph (a) would cause undue hardship to the tenant.”

Amendment 51, in clause 8, page 12, line 35, leave out from “is” to “the proposed rent” in line 37.

[David Simmonds]

The amendments relate to the role of the tribunal and the tribunal process. One of the concerns that was extensively aired in debate, and about which we have heard a great deal of evidence, is the impact of a process whereby from a tenant’s point of view, going to tribunal is a no-lose situation because the only possible decision the tribunal can take is to reduce the rent they would pay. That would mean that it would essentially always be in the tenant’s interests to go to the tribunal, because it would at worst defer the point at which any higher rent took effect. We have very significant concerns about the tribunal’s capacity to absorb that level of work and about the fact that to be fair to landlords as well, we should not have a situation where a tribunal can operate in only one direction. By proposing these amendments, we seek to make it possible for changes in rent to be backdated.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

We are talking about perverse incentives here. One way to tackle that would be through a costs regime associated with the tribunal. Is it my hon. Friend’s understanding that the current intention is that there would be no adverse costs orders awarded against a tenant, should they go through a tribunal process and not be successful in reducing the level of rent?

[David Simmonds]

My hon. Friend raises an extremely good point. As he outlined, this is very much about perverse incentives. We do not want to create a situation in the market where it is always in the interests of the tenant to push this to the tribunal. We need to make sure that that point is effectively addressed, and the amendments seek to do that.

[Matthew Pennycook]

Clause 8 amends section 14 of the Housing Act 1988, and the amended sections set out the circumstances in which a tenant can submit an application to the tribunal to challenge the rent amount either in the first six months of a tenancy or following a section 13 rent increase notice. Amendments 50 to 53 seek to alter the process for challenging initial rents and rent increases at the tribunal.

I must stress that, in the first instance, under this new system, the Government strongly encourage landlords and tenants to communicate early about what adjustments to rent are sustainable for both parties. Where an agreement cannot be reached, the Government are clear that tenants should submit an application to the tribunal only where they believe that a rent increase is above market rates. Such rises may represent an attempt by the landlord to exploit a tenant who simply wishes to remain in their home, or they may be an underhanded attempt to remove a tenant without pursuing the very clear possession grounds laid out in schedule 1. That is why we think clause 8 is so important.

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[Matthew Pennycook]

I completely understand the hon. Gentleman’s point, but let me give him a bit more insight into my thinking. I recognise his point that there are incentives that operate in both directions. There is no wholly perfect, win-win solution. We have taken this decision partly because it was in our manifesto to protect renters from unreasonable within-tenancy rent rises, and also because we believe that landlords will adjust around the point in the annual cycle when they serve the section 13 notice to account for the period of time it will take for the tribunal to make a determination.

The hon. Gentleman is right that if the tribunal determines that the rent increase is reasonable, a landlord may have missed out on a short period of the rent increase—not the whole rent, but the rent increase. We want to bring down the time of tribunal determinations so that it is a very short process. I will be very clear about this: we took the view that it was better that tenants were not, by facing the prospect of significant arrears, disincentivised from taking any cases to tribunal to challenge what could be, on a number of occasions, completely unreasonable within-tenancy rent increases. We felt that that is of more benefit than ensuring that they would face significant arrears at every point, which would be too harmful to their ability to challenge, given that we have not introduced rent controls—rent stabilisation—of the kind that other parties are calling for. To address the hon. Gentleman’s point specifically, my expectation is that landlords will adjust around the point that the section 13 notice is served.

The whole system should operate in a way that, hopefully, incentivises landlords not to propose unreasonable rent hikes that might be challenged. There is a clear incentive for landlords and tenants to come to an agreement—we know this will happen in a good number of cases—on what a sustainable rent increase is that reflects the market conditions. The hon. Gentleman is more than welcome to intervene on me again if he wants, but I will just develop my argument a bit further in relation to some of the amendments.

The shadow Minister proposes that a tribunal should be able to increase the rent above the current rent payable if the rent is challenged in the first six months of the tenancy and, where a later rent increase is challenged, that the tribunal should be able to set the rent higher than what the landlord asked for. We believe that these amendments would exacerbate the worry that tenants already face in going to a tribunal to challenge their landlord. Tenants will not challenge rents if they risk being in an even worse position following a tribunal ruling. That is the sort of perverse incentive that we believe would pertain on the part of tenants if the amendment was taken forward.

As a slight challenge to Conservative Members opposite, the shadow Minister and the hon. Member for Broadland and Fakenham, their party once recognised this point. The proposed approach in the previous Government’s White Paper, “A fairer private rented sector”, is the one that we have taken in this Bill—namely, that the tribunal cannot increase the rent beyond what the landlord asked for. It is slightly disappointing to see hon. Members rescind that previous approach, which we think is appropriate.

The Bill encourages tenants to engage with the tribunal when they have legitimate concerns. By reinforcing the rights of tenants to do so, we are disincentivising the minority of landlords who may be tempted to hike rents beyond what is reasonable. The shadow Minister’s amendments not only remove these important measures but put tenants at real risk of losing their home, undermining security of tenure, which is obviously a key principle of the Bill. I therefore ask the shadow Minister to withdraw his amendment.

[David Simmonds]

I am grateful to the Minister for talking through the Government’s thinking, and for his points about the debates on the previous Bill. The Opposition remain concerned that the envisaged process, whereby there will be an online application for a modest fee, will make it almost invariably in the interest of the tenant to challenge, because there is no negative outcome for them regardless. A great deal will rest on an issue we will deal with later on: the capacity of tribunals to make decisions quickly. I am mindful, however, of the numbers on the Committee, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[David Simmonds]

I beg to move amendment 47, in clause 8, page 13, line 6, at end insert—

“(12) The Secretary of State must—

(a) conduct a review of—

(i) the impact of this section on the tribunals responsible for the determination of rent, and

(ii) the ability of tribunals to manage an increase in applications for a review of a proposed rent increase; and

(b) consult with the Competition and Markets Authority on any measures necessary to ensure that tribunals are able to assess market rents without having a distorting effect on the market.

(13) The Secretary of State must lay the review made under subsection (12) and the Government’s response to the review before Parliament.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 75, in clause 8, page 13, line 6, at end insert—

“(12) The Secretary of State must consult on—

(a) the adequacy of the existing resources of the tribunals responsible for the determination of rent;

(b) the need of the tribunals for further resources to manage an increase in applications for a review of a proposed rent increase.”

This amendment would require the Secretary of State to consult on whether tribunals responsible for the determination of rents are appropriately resourced to manage any additional workload arising from this Bill.

Clause stand part.

Amendment 46, in clause 142, page 150, line 26, leave out from “subject to” to end of line 27 and insert—

“—

(a) the publication of a review under section 8 on the impact of that section on the tribunals responsible for the determination of rent; and

(b) subsections (2) to (6).”

[David Simmonds]

Amendment 47 relates to an issue that was briefly aired in the previous debate: the capacity and ability of tribunals to deal effectively with the workload that is likely to come their way once the Bill has made its passage through Parliament.

I understand that for a new Government there is a great deal of desire to bring forward legislation to address things that may be manifesto issues, but there has also been criticism of the risk. We have seen a lack of impact assessments that would enable us as Members of Parliament to consider properly the likely impacts of the legislation, and what resources will be required to mitigate those impacts. That issue ran through the previous debate on the ability of tribunals to make timely and efficient decisions so that both landlords and tenants are treated justly. It will also run through other debates, such as that on local authorities’ capacity to enforce effectively so that both tenants’ and landlords’ rights are protected in practice, notwithstanding what the legislation says.

Amendment 47 is designed to address the issue and ensure that the Competition and Markets Authority, which has a much wider remit in looking at how regulators and markets interact, can examine this issue and, having considered the impact of the legislation, provide us with some evidence that would then inform our thinking about the timing and operation of these facets of the Bill.

[Matthew Pennycook]

Before I speak to clause 8 and respond to the amendments, it might be worth my making it clear to the shadow Minister that the Government submitted an impact assessment for the Bill to the Regulatory Policy Committee on 16 September 2024, and we will publish that in due course. In line with usual practice, the Government will always consider the impact of any policies when taking legislation through Parliament.

As I set out in the debate on the previous group of amendments, clause 8 amends section 14 of the Housing Act 1988. It stipulates when a tenant can submit an application to the first-tier tribunal. They may do so to challenge the rent amount in the first six months of a tenancy or following a section 13 rent increase. When a tenant brings an application to the tribunal, the tribunal will both assess what the landlord could expect to receive if the property was re-let on the open market and determine the rent. The tribunal has, as I have noted, experts who are experienced in understanding the different factors that influence the market rate, which include the rent for similar properties in the area, the quality of fixings or the proximity to amenities.

For too long tenants have feared challenging a rent increase at the first-tier tribunal. We will end that by ensuring that the tenant will not pay more than what the landlord asks for following a tribunal determination. We are going further: we will end the practice of backdating rent increases, to stop tenants being thrust into debt. To protect the most vulnerable tenants, in cases of undue hardship the tribunal will be able to delay the start of the rent increase for up to two months from the date of determination. That puts tenants in a stronger position to challenge rents through the first-tier tribunal.

It is important to note that tenants are often scared to engage with the judicial process, so we hope that the measures I have outlined will give them more confidence to do so. Although we anticipate that there will be an increase in cases, we do not accept the frankly scaremongering assertions we have heard about the tribunal being completely overwhelmed, or about tenants risking a deterioration in the critical relationship with their landlord by challenging every single rent increase that is given to them. Nor did we hear, when they gave evidence to the Committee last week, that the groups that support tenants would recommend such action. Engaging the tribunal requires effort and time, and we believe that tenants will do so only where they have legitimate concerns, such as when a within-tenancy rent increase is unreasonable. We will continue to work with the Ministry of Justice, His Majesty’s Courts and Tribunals Service and the judiciary to ensure that the tribunal has the capacity to deal with any increase in cases.

Taken together with the measures in clause 7, the provisions in clause 8 will ensure that tenants always have a right of appeal and will prevent rent increases from being used to evict them. Rent increases outside the statutory process, such as in rent review clauses, will be outlawed. We believe the measures will ensure that all parties are clearer on their rights and responsibilities and will empower private rented sector tenants to challenge unreasonable rent increases.

Amendment 46 is drafted to prevent the Bill from coming into force until a review is published on the impact of clause 8 on the tribunals responsible for the determination of rent. The review would be provided for by amendment 47. The Government are committed to ending the scourge of section 21 as quickly as possible and have also committed to empowering private rented sector tenants to challenge unreasonable rent increases, thereby stopping unscrupulous landlords from using them as a back-door means of eviction. The sector has waited far too long for these changes, so we will not tie implementation to any arbitrary requirements, as the previous Government determined to do in the previous Parliament. As I said, we are working closely with the Ministry of Justice and HMTCS to make sure that the justice system is prepared for any changes to case load and the procedures that will be required for our reforms.

Amendment 47 would introduce a legal requirement for the Government to publish a review of the impact of the reforms to rents in clause 8 on tribunals and their ability to manage any increase in the volume of applications that challenge the amount of rent payable. As I have made clear—I will put it on the record again—we are working closely with colleagues in the Ministry of Justice and HMTCS to make sure that the justice system is prepared for the Bill’s implementation, which will come at a single point at the point of commencement. In Committee last week, we heard of the growing role of the first-tier tribunals and we heard—it is important to note this—praise for their handling of cases. We seek to build on that good practice.

We currently have no plans to consult the Competition and Markets Authority on whether any action is necessary to ensure that our reforms in clause 8 do not have a distorting effect on the market. I say respectfully to the shadow Minister that I have seen no credible evidence of that and, to be candid, I think the CMA has far better things to do with its time. The tribunal’s decision reflects market conditions rather than distorting them, so we do not think it realistic that the tribunal could affect market prices. The tribunal is also likely to determine rents for an extremely small proportion of the total rental market. We will of course continue to monitor the impact of the reforms on the market in the normal way.

Finally, amendment 75 would require the Secretary of State to launch a consultation to seek views on whether tribunals that are responsible for the determination of rent currently have adequate resource, and whether they will require further resources due to the rent reforms in the Bill. Given the ongoing work I have outlined, we do not think that launching a consultation at this time is required, and making a commitment to do so on the face of the Bill would be wholly unnecessary. I therefore ask Members not to press their amendments to a vote.

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For all those reasons, we definitely want to see more resources for the court and tribunal systems. I therefore tabled amendment 75 to at least put a consultation into the Bill to see how resourcing for the tribunal system goes.

[David Simmonds]

One of the benefits of having been in government is that I have had the opportunity to consider many of these issues from the inside. We on the Opposition Benches remain concerned that it will be challenging to deliver the necessary level of capacity to provide the efficient service that tribunals need, and are expected, to provide for the benefit of both tenants and landlords. However, recognising that it is a game of numbers, I am happy to withdraw amendment 47.

[Matthew Pennycook]

Briefly, on the capacity of the Courts and Tribunals Service to effectively implement the new system, at the risk of repeating my extensive comments on Second Reading, it is worth trying to provide Committee members with some reassurance. First, at the risk of injecting a somewhat partisan note into the Committee, I agree entirely that our courts are in a terrible state after 14 years—I say 14 years because I am afraid the coalition Government had a hand in it—and we absolutely believe that improvements to HMCTS are needed to ensure that the new systems function effectively.

As I said, we are working closely with colleagues in government to ensure that improvements are made, as well as the exploring options for, for example, improved alternative dispute resolution so that only those cases that need a judgment come to court. There are a number of improvements we might make to take some strain off the courts, and those are the ones we are exploring.

[Matthew Pennycook]

But not the Ministry of Justice, I say gently to the hon. Gentleman.

Nevertheless, I want to reassure colleagues on the substantive point. We have chosen to implement the new tenancy system in a single stage. The commencement date will be made clear in due course, but we will ensure that the Courts and Tribunals Service is prepared for the implementation of the new system. That is essential, and a huge amount of work is going on to ensure that that will be the case.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.

Clause 9

Repayment of rent paid in advance

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss new clause 6—Limit on rent to be requested in advance of tenancy—

“In the 1988 Act, after section 14ZB (inserted by section 8 of this Act) insert—

‘14ZBA Maximum rent to be paid in advance

No rent may be requested or received in advance of any period of the tenancy which exceeds the rent for one month of the tenancy.’”

This amendment would impose a limit of one month’s rent on the amount of rent which can be asked for or paid in advance of a tenancy.

[Matthew Pennycook]

I will be relatively brief because this clause serves a specific function, but I will focus on what it achieves. I am aware that the wider issue of rent in advance concerns a number of hon. Members—indeed, it featured in our discussions during the oral evidence sessions last week, on which I will say more shortly.

The clause will require landlords to refund a tenant for any rent they have paid in advance, where the tenancy has ended earlier than the period for which a tenant has paid. That serves a practical purpose—for example, if the tenant has paid for the month that they are in occupation and the tenancy is ended by the landlord two weeks into that month, the clause allows the tenant to reclaim the additional two weeks’ rent.

On the issue of rent in advance more broadly—which also pertains to new clause 6, to which I think the hon. Member for Taunton and Wellington will speak shortly—as I stated when I gave evidence to the Committee on Tuesday, Government Members have long recognised that demands for extortionate amounts of rent in advance put financial strain on tenants and can exclude certain groups from renting altogether. We are clear that the practice of landlords requesting large amounts of rent in advance must be prohibited.

Although it might be argued that the interaction of the new rent periods provided for by clause 1 and the existing provisions of the Tenant Fees Act 2019 relating to prohibited payments provide a measure of protection against requests for large amounts of advance rent, I accept that there is a strong case for putting the matter beyond doubt. As I made clear to the Committee, I am giving careful consideration as to how best that might be achieved.

Let me briefly address new clause 6, which seeks to limit the amount of rent in advance that can be paid prior to a tenancy period to no more than one month’s rent. Many of us will have heard anecdotal stories of the pressures placed on renters through demands for rent in advance, and it is for similar reasons that we have taken steps in the Bill to tackle rental bidding. I heard the evidence from last week, and we are looking at the matter carefully to ensure that we put the matter beyond doubt on the face of the Bill.

[David Simmonds]

I am grateful to the Minister for what he said about looking at this area in detail. We raised, and discussed in some detail, the issue of how those with a poor credit history, or people who wish to secure a property for a fixed period—for example, international students—would be dealt with under the measures. We know that there are already limitations on the level of deposit that can be requested, but, particularly for those with a poor credit history, the ability to offer a larger sum of rent in advance can be a means of accessing a home in the private rented sector when they would otherwise not be able to access a home at all.

I am grateful to the Government for considering that particular group of people, who are in many cases extremely vulnerable tenants and often fall outside eligibility for support from the local authority under homeless duties, particularly if they have a job and an income. We need to make sure that we do not create a situation in which, inadvertently, a particular group of prospective tenants is effectively pushed out of the market. I am glad that the Government are taking that issue on board and considering how best it can work.

[The Chair]

Does the hon. Member for Taunton and Wellington wish to comment on new clause 6?

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[David Simmonds]

Clearly, there are a number of ways in which this issue may be addressed, and adding a third-party liability element to domestic insurance, contents insurance or building insurance would be one means of doing that. We know that the industry is likely to respond, as we have just heard from the Minister. I congratulate him on his choice of dog name; Clem sounds like the kind of animal that a future leader of the Labour party would like to have when profiled. Had the dog been called Jeremy or Karl, it might not have been quite as popular.

As we have just heard in some detail, the Government have been looking at this issue and engaging with the market to ensure that insurance providers understand the upcoming demand. I recognise the publicity that many pet and animal charities have brought to the issue, which I think will help to create a climate in which those businesses are more likely to bring forward these products. In the light of those points, and on the understanding that we are making serious progress on this matter, I am happy not to press amendment 55 to a vote.

[Rebecca Smith (South West Devon) (Con)]

I wonder—forgive me, because this is also my first Public Bill Committee—how this will work in a house in multiple occupation compared with a dwelling house, and who will have to have the insurance. If a HMO is operated on a joint-licence basis, who is responsible for the insurance and the indemnity that goes with it?

On another point, what safeguards are we putting in place to ensure that any noise issues arising from pet ownership can be tackled, and where does responsibility for that sit? I appreciate that, where someone owns their home or rents a home that allows them to have a pet, it is probably done through the local authority, but I am conscious, particularly in the HMO setting, of how we would mitigate against that and ensure that we do not end up in a situation where neighbours do not know who to approach to ensure that either the insurance or the antisocial behaviour is acted upon.

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[Matthew Pennycook]

We believe the rental market works better when all tenants are clear on their rights and obligations. That prevents misunderstandings and means that both parties know what to expect. Without clarity about their rights, tenants may be unable to take advantage of the new rights that the Bill will give them. That is why it is critical that tenants understand what they are signing up to from the outset. Landlords benefit from clarity too. By being clear on rights and responsibilities at the beginning of a tenancy, responsible landlords can more easily comply with the new rules and ensure that they are providing a good service to their tenants.

That is why clause 12 requires landlords to provide tenants with a written statement setting out the terms of the tenancy. This includes a requirement to state where the landlord might wish to recover possession on certain prior-notice grounds. We will set out in secondary legislation details of what must be included in the written statement, but we expect that it might include details such as the rent, contact details for the landlord, and basic rights and responsibilities that apply to both parties. It is worth pointing out that most landlords already do that, and this requirement will ensure that good practice is extended across the sector. In time, this will lead to fewer disputes and help ensure that both parties comply with the law.

Turning to clause 13, the Government will have zero tolerance for any attempts by unscrupulous landlords to evade the new tenancy system. While the majority of landlords are good and do right by their tenants, we know that there are some who will seek to evade the new laws. That is why we are strengthening the enforcement regime to identify and fine unscrupulous landlords, drive out bad actors from the sector, and protect tenants from back-door evictions. Driving out bad actors is to the benefit of good landlords and tenants alike.

All landlords must be aware of their legal obligations and operate accordingly. I know that landlords can fall into the practice of renting out a property through many different—sometimes sad—circumstances. That is, of course, where the term “accidental landlord” comes from. Many of those landlords are good people doing their best, but that cannot be an excuse for the tenant suffering, and it is not an excuse for landlords not to understand their legal obligations. If a tenant is renting a home, it should not make a difference who their landlord is. Everyone has the right to a safe, decent and secure home.

Let me be clear: the law is not accidental and must be followed. If it is not, then the Bill sets out a robust enforcement framework. With a new tenancy system coming into force, we must ensure that landlords always use the correct procedures when gaining possession and evicting a tenant. The prohibited behaviours outlined in clause 13—for example, purporting to bring a tenancy to an end by service of a notice to quit or orally, by phoning a tenant to tell them that they need to leave the property by a certain date—reflect this responsibility.

In opposition, I was clear that we had a number of reservations about the enforcement measures in the previous Government’s Renters (Reform) Bill. As a result, we have worked hard to close any potential loopholes that a small minority of unscrupulous landlords may seek to exploit. We have taken action in a number of areas. For example, we have increased the restriction on re-marketing or re-letting the property after the use of grounds 1 or 1A to 12 months. That is a significant increase, and is necessary to avoid the grounds being used to effect back-door eviction. It will make it unprofitable to evict a tenant simply to increase the rent, and will stop landlords using the grounds as a back-door section 21. It will allow tenants to enjoy protection from no-fault eviction, while ensuring that there are comprehensive possession grounds in place so that a landlord can get their property back.

Clause 14 clarifies that the duties of landlords set out in new sections 16D and 16E of the Housing Act 1988 can be fulfilled or contravened by someone acting on their behalf. Many landlords will use the services of a letting agent, for example, and that is a sensible means of meeting their obligations, such as to provide a written statement of terms. For most landlords, the clause will make compliance easier. For example, if someone acting on behalf of the landlord issued a written statement of terms to the tenant, that would meet the landlord’s duty to provide the statement. However, landlords should not be able to absolve themselves of legal responsibility for providing a safe and secure home simply by appointing an agent. The clause ensures that landlords retain overall responsibility for complying with the law.

Government amendments 10 and 11 are merely consequential provisions. They qualify the new duty to provide a written statement of terms where a demoted tenancy is transferred to a new landlord. In such circumstances, the new landlord will have 28 days from the date that they become the landlord to comply with the requirement to provide a written statement of terms, instead of having to do so before the tenancy was entered into, which they obviously would not be able to do. We do not expect that circumstance to arise often in practice, but the amendments ensure that the law will operate effectively if the situation occurs.

[David Simmonds]

The Opposition broadly welcome the work the Government are doing in this area. Bringing clarity to the process is very important. In our work as constituency Members of Parliament, we will all have seen many cases where a lack of clarity on whether a notice has been properly served, or on whether a tenant or landlord fully understands their responsibilities and duties, is at the heart of a dispute or difficult situation. I have a brief question for the Minister, but I wanted to be clear on the record that bringing this level of clarity is important.

The enforcement process that the Minister referred to rests on a number of different organisations. Principally, the Bill envisages local authorities as the agent of enforcement. The fire brigades are a significant part of determining the suitability and safety of properties, and they bring prosecutions in the magistrates court when they find properties that have been occupied and rented to tenants but are clearly not safe on grounds that give them the power to prosecute. What consultations has the Minister undertaken with fire brigades about those prosecutions and the evidence that emerges from them about the circumstances of tenants found in such conditions? Those tenants are often among the most vulnerable, and they may not even have a written tenancy agreement, never mind a good understanding of their rights or a landlord who understands their duties and responsibilities.

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[David Simmonds]

In practice, the measures contained in this section of the Bill will probably be the most important for our constituents who are tenants. Their ability to secure enforcement, where there is a breach of the legislation, will be critical. The Minister will know that the Opposition have shared concerns about ensuring that the resource from the enforcement regime will be sufficient to be self-sustaining. It strikes me that the enforcement regime, as set out, is very similar to that which already exists for local authorities in respect of environmental crime, such as fly-tipping, where it is assumed that the proceeds from fines and costs will be sufficient. Most of us will recognise that, in reality, that is rarely the case—carrying out that enforcement action always represents a cost to the council tax payer. Although it is not a matter for legislation, it would be helpful to understand how the Government intend to engage with local authorities to understand the cost of these new burdens fully and use the new burdens doctrine to ensure that they are appropriately resourced.

As the Minister has said, there is a point at which enforcement action outside criminal prosecution is taken, and there is a stage at which criminal prosecution may be the only available option. With other types of enforcement, many local authorities find that the push towards criminal prosecution is necessary to bring an end to the antisocial behaviour that is causing the problem in the first place. The challenge is that the proceeds of any fine resulting from criminal prosecution go into the consolidated fund of central Government expenditure, rather than accruing to the local authority. Even if there is not an award of costs, the largest part of that resource, which in theory is available to sustain the system, in fact goes into a different Government pot for other uses. It would be helpful if the Minister indicated what process of engagement and consultation the Government envisage they will take with local authorities. That must be designed to ensure that the resources derived from enforcement find their way to the sharp end of it, so that in practice, in the real world, it makes the difference that we hope it will.

[Matthew Pennycook]

I completely agree with the shadow Minister that many of the provisions in the Bill will not work as intended without robust local authority enforcement. We have increased the fines from the levels in the previous Government’s Bill to £7,000 and £40,000. It is also worth noting that those fines can be issued repeatedly—they are not a one-off—if landlords continue to breach the relevant provisions.

More generally on local authority resourcing, I make two points. First, it is important to note that many of the provisions in the Bill will not need to be enforced immediately. They will come into play one or two years down the line, so not every measure in the Bill that needs enforcement will require it from the date of Royal Assent. We have made it clear in previous debates that although we think that fines are part of the answer—we want the “polluter pays” principle to be at the heart of the Bill—we recognise that in many cases, they alone will not be enough. That is why I have set out that in accordance with the new burdens doctrine, we will ensure that additional burdens on local authorities that result from our reforms are fully funded.

The shadow Minister made an interesting point, as he has done several times today, that challenges me to go away and think about the final destination of fines from criminal prosecutions. I will take that away and give it serious consideration. We are in agreement that we need to ensure that where local authorities enforce breaches of the provisions set out in this Bill, those funds should come to local authorities. I will come back to him on the point he raises about the consolidated fund, if he is amenable to me doing so.

[David Simmonds]

The Minister’s response prompts me to ask a further question. I am grateful to him for undertaking to write back on the consolidated fund. In other enforcement regimes modelled on this system that provide scope to issue significant fines, there is a common pattern of local authorities outsourcing the responsibility to third-party enforcement agencies. We see that with littering, environmental crime and all manner of areas of local authority duty. Essentially, business makes a pitch, and if they receive the delegated authority to act on behalf of the council in the performance of its duties, they will enter into a profit share agreement. In the case of parking regimes, historically, for each parking ticket that was issued, some money went to the company and some money to the local authority.

That creates a risk—this was mirrored in the earlier debate—of perverse incentives. At local authority level, the incentive could be to pursue the landlords who are easiest to deal with and most likely to yield financial restitution to contribute to the bottom line of the business undertaking the work. That could result in a scarcity of resources to deal with the more difficult and intractable cases, and the most vulnerable tenants.

Have the Government thought about how, in their engagement with local authorities, they will seek to ensure that the regime is enforced equally? Local authorities have an understandable desire to outsource. Particularly in built-up urban areas where there may be a high density of rogue landlords, how can we ensure that the process will not result in extremely vulnerable people falling outside the enforcement regime because it simply is not profitable to pursue it in other parts of the country?

[Matthew Pennycook]

I thank the shadow Minister for that thoughtful point. To be entirely open, it is not one that I have considered. I think it is a fair challenge, and I will go away and give some thought to how we can ensure that local authorities look at all breaches in the round and apply the same approach to each, rather than targeting the low-hanging fruit. To provide reassurance on the concern about good landlords being caught up in the process, I repeat that the process allows landlords to make representations to local housing authorities and the first-tier tribunal if they think that that has happened.

The other point, which we will debate in quite extensive detail, is that enforcement by local authorities is not the only means that the Bill provides of tackling rogue landlords and breaches. I draw the shadow Minister’s attention to the significant strengthening of rent repayment orders, which offers an alternative, tenant-led enforcement mechanism. As I think I said in my evidence to the Committee last week, across the country—in local authority terms, enforcement is a real postcode lottery—the most effective thing I have seen is where well-resourced and effective local authority enforcement is complemented by tenants taking action with rent repayment orders. When the two work in tandem, it can be of real benefit in driving bad landlords out of the sector. I will give further consideration to the shadow Minister’s specific, well-made point.

[Matthew Pennycook]

If I have understood the hon. Lady correctly, and if she is amenable to it, I will fold this point into the written response that I have already promised her, but multiple fines can be levied for breaches. If a landlord in a particular part of the country with multiple properties is in repeated breach over that portfolio of properties, local authorities will be able to levy fines on more than one occasion, so it is not a £7,000 limit in the first instance, or £40,000 for more serious cases, per landlord. Again, I will expand on it in a written response, but I think the database can do some work here in terms of landlords in a particular area registering all their properties. I think it will become apparent quite quickly—it depends on how we use the database—if particular landlords show a pattern of behaviour whereby they are not treating their tenants appropriately. Let me come back to the hon. Lady in more detail as part of the response that I have already committed to.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clauses 16 to 18 ordered to stand part of the Bill.

Clause 19

Notices to quit by tenants under assured tenancies: timing

[David Simmonds]

I beg to move amendment 49, in clause 19, page 31, line 19, leave out from “substitute–” to end of line 34 and insert—

“‘(b) it satisfies—

(i) subsection (1ZA), if it is given by a tenant in relation to premises let under an assured tenancy, or

(ii) subsection (1ZC) in any other case; but in relation to landlords under assured tenancies see section 5(1) of the Housing Act 1988 (notice to quit by landlord is of no effect).’

(3) After subsection (1) insert—

‘(1ZA) A notice to quit satisfies this subsection if—

(a) it is given not less than—

(i) any length of time before the date on which the notice is to take effect, not exceeding two months, that the landlord has agreed to in writing, or

(ii) in the absence of agreement under sub-paragraph (i), two months before the date on which the notice is to take effect, and

(b) it is in relation to premises let under a repeat tenancy or, if it is in relation to premises let under any other assured tenancy, it is to take effect—

(i) no earlier than any time, within the period of six months beginning with the day on which the terms of the tenancy provide for the tenancy to begin, that the landlord has agreed to in writing, or

(ii) in the absence of agreement under sub-paragraph (i), on or after the last day of the period mentioned in that sub-paragraph.

(1ZB) In subsection (1ZA)(b) “repeat tenancy” means an assured tenancy under which the tenant becomes entitled to possession of the premises within the period of one month beginning with the day after the last day of a previous assured tenancy—

(a) under which the same premises were let, and

(b) which was between the same parties.

(1ZC) A notice to quit satisfies this subsection if it is given not less than four weeks before the date on which it is to take effect.’”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 66, in clause 19, page 31, line 31, at end insert—

“(aa) where it is given by a tenant who meets the student test under Ground 4A, not less than ten months before the date on which the notice is to take effect;”.

Amendment 67, in clause 19, page 31, line 31, at end insert—

“(aa) where it is given by a tenant in relation to a premises in which they are the first tenants since its construction, not less than twenty-four months before the date on which the notice is to take effect;”.

Clause stand part.

Clause 20 stand part.

[David Simmonds]

One issue that we have debated—I think, once again, it falls to a small p political and philosophical difference—is ensuring the availability of appropriate options for levels of term, in pursuit of our aim of freedom of contract for those to whom these terms would most lawfully and best apply. The purpose of this amendment is to move us on towards achieving that, and I believe that it would.

[Mr Amos]

The intention behind amendment 66, which stands in my name, is to take landlords at their word that they value hugely the opportunity for fixed-term tenancies, which of course are being removed by this Bill. We support the move to longer tenancies—periodic tenancies—in the Bill. Our policy was to extend them to at least three years, and in effect this Bill extends periodic tenancies almost indefinitely. But for the student population, it is a big disadvantage that students can no longer really rent premises or rent accommodation for the 10 months for which they need it. They nearly always face being forced to rent for 12 months, and paying rent over the summer period when they do not want to do so.

We are taking landlords at their word that they really value fixed-term tenancies, and that fixed-term tenancies would unlock investment and support from the landlord sector. The amendment would offer landlords and student tenants the option to enter into a 10-month fixed-term tenancy, which would benefit students in not having to rent for 12 months. MoneySuperMarket.com—other websites are available—has said that according to a survey in 2023, average student rents are £535 a month. Saving each student two months’ rent would save them £1,000, which is well worth it from their point of view. From the landlord’s point of view, if, as we heard in oral evidence, landlords value fixed-term tenancies, the option to have such certainty would be of value to them.

Having looked at the amendment again in the cold light of day, I will be withdrawing it, because I am not sure that the wording—for which I take full and complete responsibility—delivers my proposal as an option; it seems to indicate a requirement for a rolling 10-month notice period. However, I encourage the Committee to consider the benefits to students of reducing their tenancies from 12 to 10 months.

--- Later in debate ---

[David Simmonds]

I would like to ask the Minister, not at this stage but in due course, to provide a little bit more detail. In his response to these amendments, he referred to what sounds like an asymmetric process in the expectations of how notices would be given. It would be a requirement for a landlord to put a notice of any kind to the tenant in writing, but the tenant would be able to give notice by means of a text message. It seems very clear that that situation could give rise to disputes about whether information or notices were properly served in both directions. I urge the Government to ensure that, as the Bill makes progress, there is sufficient symmetry. For example, when disputes arise that might go before the courts or the tribunal, there needs to be real clarity, by way of an audit trail of what has been said to each party.

[Matthew Pennycook]

I thank the shadow Minister for that. I will undertake to provide him with more detail on the specific point he has made, which is noted and understood, either at an appropriate point in our further consideration of the Bill or in writing.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 ordered to stand part of the Bill.

Clause 20 ordered to stand part of the Bill.

Clause 21

Limitation on obligation to pay removal expenses

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Section 11 of the Housing Act 1988 currently requires landlords of assured tenancies, who have been awarded possession under the redevelopment ground 6 or suitable alternative accommodation ground 9, to pay the tenant reasonable moving expenses. These grounds are mostly used by social landlords, who use assured tenancies and do not have access to section 21 no-fault evictions. The grounds support social landlords to manage their stock, ensuring that social housing is good quality and remains available for those who need it.

Clause 21 amends section 11(1) of the 1988 Act to ensure that only private registered providers of social housing will be required to pay removal expenses for grounds 6 and 9, once all tenancies become assured tenancies. We think it is unlikely that private landlords will regularly use grounds 6 and 9. However, on the rare occasions that they need to use them, they will not be required to pay removal expenses, ensuring that they are able to manage their assets in a reasonable way. I commend the clause to the Committee.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22

Assured agricultural occupancies: grounds for possession

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

As Committee members may be aware, qualifying agricultural workers are automatically entitled to an assured agricultural occupancy, which offers enhanced security of tenure to those who qualify. Tenants under AAOs cannot be evicted using section 21 or if their employment by the landlord comes to an end. Clause 22 makes consequential changes to AAOs to reflect the new tenancy system. That includes preventing landlords from evicting AAO tenants under the employment ground, now 5C, as well as ground 5A and the new superior landlord grounds. Those grounds cover circumstances where tenants under AAOs cannot currently be evicted, but they are being amended or introduced by the Bill and may pose a risk to their security in the new system. The clause will maintain the status quo.

Clause 23 seeks to replicate the existing mechanism in the Housing Act 1988 that allows landlords of qualifying agricultural workers to opt out of providing assured agricultural occupancies. They can issue assured shorthold tenancies instead, as long as they inform the tenant from the outset. We understand that many landlords make use of the opt-out, as it provides more flexibility for the agricultural sector and helps to maintain the supply of rural housing for workers. The clause therefore replaces the existing opt-out in a way that will be compatible with the new tenancy regime once ASTs are abolished, giving landlords access to the full range of new possession grounds.

I hope that both clauses are uncontroversial, and I commend them to the Committee.

[David Simmonds]

I can assure the Minister that we do not want to push these clauses to a vote. I am grateful to him for his explanation. It is important to recognise that agricultural workers are one category of tenant who often have different sets of circumstances, as their access to a home is connected to their job. School caretakers are another common example; it is not unusual for there to be a property on the school site that the post holder has the right to occupy.

It has become increasingly common, rather than going down the route of creating a tenancy from the outset, for the employment contract to have a side agreement of a licence to occupy, so the home is made available to the individual not as part of a tenancy agreement, but as part of a licence to occupy connected to their role. I would like the Minister to illuminate the Committee with the Government’s thinking on that issue.

There is a second issue. As has been described to us by a number of representatives from rural businesses, it is quite common for landlords to ask a tenant to vacate a particular property because its location or its facilities are directly connected with a role that they formerly did, and to offer them another like or equivalent property on the same estate. Traditionally, that has been a way of ensuring that, for example, farm workers who retire from a role in the care of animals where they had to be on the site 24 hours a day, and therefore cease to carry out that function, can be moved to another property on the estate without having to go through an extremely complicated and bureaucratic process. That process may not be good for the landlord, who has an urgent need for a worker on site to look after the animals, or for the tenant, who may have expectations about how their new accommodation will be secured, particularly at the point of retirement.

I would be grateful if the Minister could illuminate the Committee with the Government’s thinking on how that issue could be effectively addressed, so that we can take the matter into full consideration for those rural communities where it is particularly important.

[Matthew Pennycook]

I thank the shadow Minister for his points. If I have understood him correctly, I fear that those matters are slightly outside the scope of these clauses. I reiterate that we understand that many agricultural landlords use the opt-out to provide ASTs to their tenants instead, and that opt-out is retained by clause 23. We do, however, think that AAOs are a crucial part of the tenancy system, and we do not want to reduce their security by abolishing them outright and bringing these tenants into the wider assured tenancy system. I will take on board the points the shadow Minister made and come back to him in writing, if he will allow me; they raise a number of matters pertaining to housing that may or may not be in the scope of the Bill and these clauses. I think it is probably better if I come back to him in writing, given how specific and somewhat technical they are.

--- Later in debate ---

[Matthew Pennycook]

The Bill will remove fixed tenancies and section 21 evictions, as we have discussed at length. These changes mean that we also need to amend part 7 of the Housing Act 1996 to ensure that councils’ statutory homelessness duties align with the new system. Clause 24 makes three changes to homelessness legislation to ensure that is the case.

First, clause 24 makes changes to how local authorities discharge their main housing duty. One of the ways in which local authorities may currently bring their main housing duty, which is a duty to secure settled accommodation, to an end, is by making an offer to a tenant of a suitable private rented sector tenancy with a fixed term of at least 12 months. With the removal of fixed-term tenancies, section 193 of the Housing Act 1996 is amended to instead refer to an assured tenancy.

Secondly, the clause amends sections 193(1A) and 193C of the Housing Act 1996, which concern the consequences when a person owed either the prevention or relief duty deliberately and unreasonably fails to co-operate with the local housing authority. If the local housing authority is satisfied that the applicant is homeless, is eligible for assistance, has a priority need, and is not intentionally homeless, then the applicant is still owed a duty to be accommodated. This duty, however, is currently a lesser one than the main housing duty. The lesser duty is to offer a fixed-term tenancy of at least six months as opposed to the period of at least 12 months that is required under the main duty. With the repeal of fixed-term tenancies, the lesser offer is redundant, and is removed by the clause.

Thirdly, subsection (4) of clause 24 repeals section 195A of the Housing Act 1996, which is the duty in homelessness legislation to offer accommodation following re-application after a private sector offer, known more commonly as the re-application duty. The re-application duty was introduced, alongside the introduction of private rented sector offers, as a means to end the main homelessness duty. It was introduced to respond to concerns that due to the short-term nature of assured shorthold tenancies, applicants who accepted a private rented sector offer may become homeless again within two years, and no longer have priority need.

The increased security of tenure and removal of section 21 evictions means that the re-application duty will no longer be relevant. The change will streamline the management of re-approaches and ensure that all applications will be treated according to their current circumstances at the point of approaching. There will no differential treatment between those placed in either private rented or social housing accommodation. The clause makes necessary and reasonable changes to the homelessness legislation as a consequence of the tenancy reform that we are introducing. I commend it to the Committee.

[David Simmonds]

The Homelessness Reduction Act 2017 was the main vehicle for ensuring that the homelessness duty might be addressed through an offer in the private rented sector. That was a means of ensuring that people who are not able to immediately access the kind of accommodation they need through the local authority can instead secure it in the private sector, and it has, to an extent, been very successful.

I want to ask the Minister what consultations are being undertaken across the Government to ensure alignment between parts of Government that have different responsibilities and duties, particularly in respect of notices that might fall within the scope of this Bill. I am thinking, in particular, of young people leaving the care system, who may be accommodated under section 20 by the local authority because of their risk of homelessness. In addition, when asylum seekers are placed in accommodation by the Home Office, there is a move-on period; the Home Office-owned legislation may result in their needing to access accommodation, so they may fall within the scope of this Bill. What consultation is being undertaken to ensure that those notice periods are aligned? I have to acknowledge that that was an issue for the previous Government—particularly in respect of asylum seekers, for whom the homelessness duty set out a different period from the Home Office’s move-on period, so individuals found themselves falling between those periods and were therefore unable to access the support they needed to find accommodation through their local authority.

[Matthew Pennycook]

I thank the shadow Minister for that point. I hope he will be satisfied with the following answer: extensive engagement has taken place between Departments in developing this Bill as it pertains to areas that cross departmental responsibilities. Again, given the extremely technical nature of his question—particularly in relation to asylum accommodation, which is not within my area of responsibility—I will come back to him in writing.

Question put and agreed to.

Clause 24 accordingly ordered to stand part of the Bill.

Clause 25

Tenancy deposit requirements

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clause 25 will maintain important deposit protections so that tenants can be confident that their money is being handled safely. Landlords will be required to comply with deposit protection rules before a court can make an order for possession under section 8 of the Housing Act 1988. That will apply only if the landlord has failed to store the deposit in one of the prescribed schemes or comply with the applicable rules.

The clause also makes consequential amendments to the Housing Act 2004 to ensure that deposit protection rules continue to apply in the future once assured shorthold tenancies are abolished. Deposits taken for existing assured shorthold tenancies will still need to be protected after the new system has come into force. Deposits taken for assured tenancies created after commencement will also need to be protected. This is an extremely straightforward and simple clause, and I look forward to the extremely technical question that the shadow Minister will put to me on it.

[David Simmonds]

The Minister will be delighted to know that I do not have a detailed, technical question to ask him on this clause, but I am sure that if he gives me some time, I will be able to come up with one.

--- Later in debate ---

[Matthew Pennycook]

Clause 26 amends the Tenant Fees Act 2019 to ensure that its provisions remain applicable and relevant to the tenancy reforms in the Bill. In particular, it removes the provision that prevents a landlord from serving a section 21 notice where they are in receipt of a prohibited payment from a tenant. Removing that provision is necessary, given that section 21 notices will be abolished. There will remain strong enforcement mechanisms in the Tenant Fees Act, including offences for landlords who require payments from tenants that are prohibited under that Act. That will ensure that under the new system tenants will continue to be protected from unfair and prohibited payments that were previously outlawed.

Clause 27 amends council tax rules to clarify council tax liability once fixed-term assured tenancies are abolished. That will ensure that assured tenants remain liable for council tax until the end of their tenancy agreement. That will include where they have served notice to end the tenancy but leave the property before the notice period has ended. In that instance, the liability will not fall to the landlord until the tenancy has ended. I commend clauses 26 and 27 to the Committee.

[David Simmonds]

I would be grateful if the Minister shared the Government’s thinking on the interaction between this issue of liability for council tax and the legal duties on local authorities to collect it, where they have an obligation to ensure that, as part of the efficient delivery of public services, they maximise the level of council tax collected. I understand the purpose of what the Minister has just described. I would try to ensure that, in situations where there may be an end to the tenancy, we do not create a situation both where the liability is difficult to assign and there is potentially an issue of who needs to be pursued for that council tax. Clearly, it is important to ensure that local authorities with a separate set of legal obligations in that respect are fully sighted on what the impact of this may be, and on the performance of their duties.

[Matthew Pennycook]

To reassure the shadow Minister on the general matter, there has again been extensive engagement with local authorities on the development of this Bill. I think he referred to clause 27, and it is our view that tenants should obviously be responsible for council tax payments until the tenancy has formally ended. When a tenant serves notice, the tenancy does not end until the notice period has expired, even if the tenant leaves the property before then. This measure will not change anything for most tenants, but clarifies where they will be liable for council tax until the end of the notice period, including where they have served notice to end the tenancy but leave the property earlier. It simply ensures that council tax remains aligned with other household costs, such as rent and bills. I hope that reassures the shadow Minister, but if not, I am more than happy to pick it up at a future point or in writing.

[David Simmonds]

That goes a long way in providing the necessary assurance. It is necessary for there to be clarity, for example, where a contract includes not just the rent but council tax within a single payment to the landlord, who will then be paying the council tax on behalf of the tenant, as happens under some rental contracts. We do not want to create a situation where the local authority is pursuing a tenant for the council tax at that point, because the tenancy has ended and the tenant argues that they have already made that payment to the landlord and it has not been passed on. I simply wanted to ensure that, in the performance and function of the collection fund, which I know is high level and a very important part of the Department’s overall calculation of the level of local government finance, we are not at risk of creating any potential loopholes.

[Matthew Pennycook]

That has usefully clarified the point that the shadow Minister is driving at. Local authorities are well-experienced in the administration of council tax, including determining who is liable. For example, they have powers to require residents, owners or managing agents to provide information to help establish liability, and where that is not complied with, they can impose a penalty. We will work closely with the local authority sector when implementing the new system to ensure that the new rules are well-understood, but we think local authorities have sufficient powers to determine liability for council tax in any particular circumstance.

Question put and agreed to.

Clause 26 accordingly ordered to stand part of the Bill.

Clause 27 ordered to stand part of the Bill.

Clause 28

Other amendments

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

Most other changes are minor and technical in nature, ensuring that the rest of the statute book is coherent and continues to function. Government amendment 21 repeals sections of the Localism Act that inserted sections into the Housing Act 2004, which are being replaced by the Bill and are therefore spent provisions. I commend the provisions to the Committee.

[David Simmonds]

I commend the Government for the work they are doing to ensure that the statute book lines up across all the different pieces of legislation. Will the Minister inform the Committee how the changes to the homelessness prevention duty will impact on tenants who have no recourse to public funds in the UK?

--- Later in debate ---

[Matthew Pennycook]

With this clause, we turn to chapter 2 of part 1, which deals with tenancies that cannot be assured tenancies. The clause excludes from the assured tenancy regime fixed-term leases of more than seven years, which is particularly relevant for leasehold homeowners and those who purchased via shared ownership, who can sometimes be legally considered tenants under the assured regime despite having purchased their property. The clause will therefore exclude entirely such fixed-term leases and any others over seven years in length from the assured regime, thereby supporting the continued operation of shared ownership and providing additional security to shared ownership homeowners by exempting them from the grounds for eviction in the Housing Act 1988. It will also exclude leaseholders from the assured tenancy system, finally closing the so-called tenancy trap. It is unjustifiable, in the Government’s view, that leaseholders who have purchased their homes can face repossession for rent arrears through the assured tenancy regime. The exemption will therefore ensure they are protected.

I am grateful to stakeholders for raising concerns with me over the ways the clause could be undermined or abused. Let me be clear: we will not tolerate attempts to get around the abolition of section 21 by abusing this clause. I am therefore considering whether any action is needed to ensure that the system operates as intended, and that no abuse of the system can take place.

Clause 31 rectifies an omission to ensure that, as is the case for other specified sections where local authorities have an interim duty or discretion to provide temporary accommodation, a tenancy granted pursuant to section 199A of the Housing Act 1996 cannot become an assured tenancy. This will allow the private landlord to regain possession of their property once the local authority’s duty to provide it by way of interim accommodation ceases.

[David Simmonds]

From our constituency work, many of us will be aware that when an individual has a “no recourse to public funds” condition because of their immigration status, although they may be employed in the UK and potentially in the public sector, the local authority has no duty to house that individual. That, however, may be compromised if, for example, there are children in the household, where duties under the Children Act 1989 and the National Assistance Act 1948 are triggered and the local authority effectively has a responsibility by another route. Although the individual may occupy a private rented sector property that has been procured for them by the local authority under those duties, they do not have any rights to public funds to pay for it, and therefore fall into a slightly ambiguous position with respect to this Bill. Some clarity would be helpful, especially given that there is a significant market of landlords, many of them directly contracted with the Home Office, who specifically provide accommodation for people who find themselves in a NRPF situation.

Renters' Rights Bill (Third sitting)

David Simmonds Excerpts

Committee stage
Tuesday 29th October 2024 Public Bill Committees

[The Chair]

Welcome, everybody, to the first sitting of the Committee in which we consider the Bill’s content in detail. The only announcement that I will make at the beginning is that it is very helpful to Hansard if people hand over or email any notes they may have.

I recognise that this will be the first time that some Committee members have served on a Public Bill Committee. My view is that the best way to learn and understand the procedure is to listen to what is going on rather than looking at your phones and emails. On that basis, I am not going to make massive announcements at the beginning about the rules of procedure, because I assume that people will be able to pick them up pretty quickly.

Clause 1

Assured tenancies to be periodic with rent period not exceeding a month

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

I beg to move amendment 48, in clause 1, page 1, line 13, at end insert—

“unless the tenant meets the student test where the tenancy is entered into.

(1A) For the purposes of this section, a tenant who meets the student test when a tenancy is entered into has the same meaning as in Ground 4A.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 54, in clause 1, page 1, line 13, at end insert—

“, unless the landlord and the tenant mutually agree to have a fixed term during which period the landlord agrees to suspend the ability to seek possession under Ground 1 (Occupation by landlord or family), Ground 1A (Sale of dwelling-house) or Ground 6 (Redevelopment) of Schedule 2.

(1A) During a fixed term tenancy agreed under subsection (1) the landlord shall not be entitled to increase the rent as provided for by section 13.”

Clause stand part.

Clause 2 stand part.

[David Simmonds]

It is a pleasure to serve under your chairmanship, Sir Christopher. I hope the Committee will forgive me; this is the first time I have served on a Public Bill Committee as a shadow Minister. I think it is the Minister’s first time as well. I am sure we will crave your indulgence as we go forward to make sure that the Committee runs efficiently and effectively.

Amendments 48 and 54 aim to address a number of issues, relating to the situation students face when securing appropriate accommodation, that were raised both in our oral evidence sessions and in evidence that several organisations submitted to the Committee for consideration. In summary, the amendments aim to ensure a carve-out— as previously considered in deliberations on the Renters (Reform) Bill—so that not just purpose-built student accommodation but student lets more generally fall outside the direct scope of the measures in the legislation.

There are in the evidence a number of examples of how the Bill will affect the ability of students to access the accommodation that they require while they are at their place of study. International students are a significant part of our UK university financial infrastructure, and the ability for them to secure, often from another country, appropriate accommodation in advance, for a fixed period of time, and sometimes for groups of students, is extremely important, not only to them, to meet their housing needs, but to the university because of the fees they contribute.

We heard representations about the impact on students of the need to take properties off the market to make them available to rent again, which occurs largely around the time of examinations, because of the annual cycle of student accommodation. Student organisations expressed a deal of concern, particularly in the context of student mental health—a significant issue that universities are concerned about—that the pressure created would be considerable if people are required to seek new accommodation at the same time as studying for examinations. We need to ensure that the student market retains the degree of flexibility that enables student landlords to address that issue.

The Bill has a broader interaction with areas where there are student communities. Most of us will know, either from our constituencies or nearby, that where there are universities, student communities have grown up and become established and there are landlords that specifically serve that market. Accommodation that may historically have been family homes has been converted specifically for student use, with landlords who specialise in that market.

We would not wish to see that supply of student accommodation significantly diminished because, given the changes in the Bill, it may become more profitable for a landlord to make a property available to the local authority for temporary accommodation, or simply to move it entirely into a different area of the private rented market. Where there is an established market for student accommodation that is vital for the local economy and for the university, we want to make sure that that is preserved.

Finally, there is the article 4 direction issue. Because of the proliferation of houses in multiple occupation in areas proximate to universities, many local authorities have introduced controls with a view to ensuring that an appropriate supply of student accommodation remains, without other types of houses in multiple occupation springing up. That is despite the fact that the physical nature of the accommodation would lend itself to a number of different uses in that market. Ensuring a carve-out would help to guarantee the long-term supply of student accommodation, so that young people who study can secure the accommodation they need at an affordable price.

I hope I have summarised the Opposition’s thinking in tabling the amendments and look forward to hearing what the Minister has to say.

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to serve with you in the Chair, Sir Christopher. Before I respond to amendments 48 and 54, tabled in the name of the shadow Minister, I put on the record my thanks to the witnesses who gave up their time last week to give evidence to the Committee and inform our deliberations.

It is agreeable to serve opposite the shadow Minister. He and I are of different political persuasions and, although I hope to persuade him otherwise, I fear we may not be of the same mind regarding some aspects of this legislation. He is, however, a sincere and thoughtful individual, and I know that, even when we disagree strongly in the sittings ahead, the debate will be measured and reasonable. The same applies to other Opposition spokespeople.

As the shadow Minister clearly set out, amendment 48 seeks to amend the new section 4A that clause 1 inserts into the Housing Act 1988, to provide an exemption from the single system of periodic tenancies for those who meet the student test in new ground 4A, set out in schedule 1—that is, all full-time students, irrespective of their living arrangements. The effect would be to require such students—even those who may be the sole occupant of a rented property—to continue to have fixed terms, denying them the benefits of the new tenancy system introduced by the Bill.

The shadow Minister made the case for the amendment on the basis that we require a carve-out for the student sector. I would argue that we have introduced in the Bill a limited carve-out in the form of ground 4A ground for possession. That will ensure that non-typical students can enjoy the benefits of the new tenancy system, as well as typical students, within the limited confines of that ground for possession. It should ensure that landlords can maintain the cyclical nature of that market. As I said in the evidence sessions, I suspect that that ground for possession may be used only in limited circumstances. There is no evidence to suggest that tenants overstay their tenancies en masse. We think that limited carve-out provides what is needed to maintain the unique business model in the student sector.

Amendment 54 would have the same effect for all tenants, ostensibly on a voluntary basis, providing as it does for fixed terms in circumstances where a landlord and a tenant mutually agree to them, on the basis of possession grounds 1, 1A and 6, and rent increases under section 13 are suspended for the duration.

I am afraid I cannot accept either amendment. The Government have been clear that there is no place for fixed terms of any kind in the new tenancy regime that the Bill introduces. Fixed terms mean that tenants are locked into tenancy agreements and do not have the freedom to move should their personal circumstances require that—for example, if they want to take up a job in another part of the country or if a relationship breaks down. Fixed terms also mean that tenants must pay rent regardless of whether the property is fit to live in, reducing the incentive for unscrupulous landlords to complete repairs. As a point of principle, the Government will not deny any type of tenant, including full-time students, the rights and protections afforded to them under the new tenancy system the Bill introduces.

I also find the argument that fixed-term tenancies are more beneficial to both parties than rolling periodic tenancies utterly unconvincing. In circumstances where a responsible landlord and a good tenant have a mutual wish to sustain a tenancy over a defined period without a rent increase—the conditions that underpin the rationale for amendment 54—fixed-term tenancies would provide no clear advantages beyond those that both parties will already enjoy under periodic tenancies, as introduced by the Bill.

If the shadow Minister’s argument is instead that the benefit of fixed terms is that they ensure that a tenancy is sustained, even in the event of either party having good reason to end it—for example, if the landlord wanted to sell the property, or if a tenant wanted to buy and move into a first home—that simply exposes the unnecessary restrictions that fixed terms would impose in those circumstances, locking in either party against their interests.

Finally, I want to make it clear that amendment 54 would leave the new tenancy system open to abuse. In my view, it overlooks the power imbalance between landlords and tenants. In hot rental markets across the country the mismatch between supply and demand is acute, and one could easily imagine circumstances in which a disreputable landlord says to a tenant that the only way they are going to get the tenancy, which they may be desperately in need of, is if they take on a fixed-term tenancy. Tenants could feel forced to take on a fixed-term tenancy, perhaps without even knowing the condition of the property. I accept that the two sides of the Committee may have a legitimate and sincerely held difference of opinion on fixed-term tenancies, but I urge the shadow Minister to withdraw the amendment.

On the purpose and effect of clauses 1 and 2, the single system of periodic tenancies is at the heart of the legislation, and these clauses are key to its operation. Clause 1 provides that in future all assured tenancies will be periodic and can no longer have fixed terms. Any terms of an assured tenancy providing for the duration of the periodic tenancy to be different to the rent period—in other words, fixed terms—will be prohibited and legally unenforceable, and the tenancy will instead be a periodic tenancy. The clause also ensures that the tenancy’s periods will be the same duration as the period for which the rent is paid. Terms of a tenancy that state that the duration of the tenancy is different from the rent period will have no legal effect.

Clause 1 also limits the length of the rent period of an assured tenancy, stipulating that it must either be monthly or no more than 28 days long. Terms in a tenancy agreement that try to create a longer tenancy period will, again, be of no legal effect. Instead, the tenancy has effect as if it provided for monthly periods, with rent payable on the first day of each period. It is important to note that tenancies will be able to have periods of less than a month—which is an important feature for the social sector, where rent is more likely to be paid weekly or fortnightly—but it will not be possible to have a tenancy period of longer than one month, ensuring that disreputable or rogue landlords cannot seek to abuse the clause by demanding long rent periods to recreate fixed terms.

The new tenancy system introduced by clauses 1 and 2 —and others in chapter 1 of part 1 of the Bill—will provide tenants with greater security and stability and empower them to challenge bad practice without fear of retaliatory eviction. As long as they provide the required notice, they will be able to end the tenancy at any point. Landlords will also benefit, through more straightforward regulation, clearer and expanded possession grounds, and the requirement for tenants to provide two months’ notice, which will ensure that landlords can recoup the cost of finding a new tenant and avoid lengthy void periods.

I appreciate that some landlords and groups are concerned that tenants will misuse rolling periodic tenancies as short-term or holiday lets. That concern was expressed on Second Reading and that also arose in the oral evidence. Although I understand the general apprehension and anxiety that surrounds such a significant change to the regulation of the private rented sector, those concerns are unfounded. The notion that tenants will routinely pay up to five weeks’ deposit, complete referencing checks and commit for at least two months, simply to secure a short-term or holiday let, has always struck me as improbable to say the least. As I argued on Second Reading, tenants simply do not move home unless it is absolutely necessary. Under the new tenancy system, when they do leave, they will be required to provide two months’ notice, giving landlords sufficient time to find new tenants.

Clause 2 removes the provisions of the Housing Act 1988 that established assured shorthold tenancies, so that such tenancies cannot be created in the future. The clause also removes section 21 of the 1988 Act. In addition, it removes section 6A of that Act, which provided the mechanism by which private registered providers of social housing could apply to a court to demote tenants from an assured to an assured shorthold tenancy if they committed antisocial behaviour. The change is being made because ASTs will no longer exist once the new single system of periodic tenancies has come into force.

As a result of the assured shorthold tenancy regime, and the ever-present threat of arbitrary eviction via a section 21 notice, millions of people in England live day in, day out with the knowledge that they and their families could be uprooted from their home with little notice and minimal justification. We know that a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to a retaliatory eviction.

The insecurity embedded in the current system fails both tenants looking for a stable home for their families and responsible landlords who are undercut by the minority of unscrupulous landlords willing to exploit and mistreat them. A single system of periodic tenancies will provide greater security for tenants, while retaining the important flexibility that privately rented accommodation offers. It will mean that tenants can stay in their homes for longer, build lives in their communities, save—with fewer unwanted moves—and avoid the risk of homelessness.

Removing section 21 will level the playing field between landlord and tenant, empowering tenants to challenge poor practice and unjustified rent increases. It will also incentivise landlords to engage and resolve legitimate issues of concern, given that they will be able to regain possession of a property only where there is good reason, using the clear and expanded possession grounds set out in schedule 1. With a single tenancy structure, both parties will also better understand their rights and responsibilities.

Far too many tenants are evicted from a private tenancy each year without due cause, which is why so-called no-fault section 21 notices are a leading cause of homelessness in England. As I argued on Second Reading, this broken system can no longer be tolerated, not least because the private rented sector now houses not just the young and mobile, but growing numbers of older people and families with children, for whom greater security and certainty is essential for a flourishing life. To ensure that private renters get a fair deal, we need to transform how the sector is regulated and level the playing field between landlord and tenant.

This Government will succeed where the previous Government failed, by finally modernising regulation of the sector and abolishing arbitrary evictions. I commend both clauses to the Committee.

[The Chair]

I assume that no one wishes to participate in the debate on clauses 1 and 2 and the amendments. Unlike in the informal hearing in which we took evidence, if people wish to participate in the debate, they must rise in their places so that I can see they wish to speak. In the absence of anyone wishing to participate in the debate, I call the shadow Minister.

[David Simmonds]

I thank the Minister for his comprehensive response. When we consider the history of this sector of our housing supply, it is clear that there have been many attempts by Governments over many years to address the challenges that reflect different eras. Having sought the advice of the former Member for Henley, who was the Secretary of State who introduced the assured shorthold tenancy, I know that it was originally conceived as a means of increasing supply and reducing cost, so that tenants could more easily access accommodation of the necessary quality at an affordable price. There is no doubt that it achieved that end, but we also recognise that, although according to the Government’s own figures tenants in the private rented sector expressed the highest level of satisfaction with their accommodation, compared with occupants in any housing sector, there continue to be issues that partly reflect supply but also reflect the presence of some of the unscrupulous landlords the Minister referred to.

Clearly, there is a degree of philosophical and political difference, in that we on the Opposition Benches are strongly committed to the concept of freedom of contract. We can identify many examples, including those I mentioned, where people wish—for example, because they have a fixed-term contract with particular employment —to secure accommodation for a specific period. People coming for a course of study also may wish to secure accommodation for a fixed period, especially international students who are here for a period and then wish to leave the UK to return to their families elsewhere. In such cases the opportunity to have such arrangements is significant, and it is in the interests both of the landlords who specialise in providing that type of accommodation and of the tenant themselves that freedom of contract continues to be available.

Amendment 54 explores the issue that was raised previously in Parliament by the former Member for Totnes—the Mangnall amendment. Given that, as the Minister said, the Government are not minded to accept it, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Clause 3

Sections 1 and 2: effect of superior leases

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Mr Amos]

I hear what the Minister says. The case was made forcefully by witnesses in oral evidence that the discretionary grounds for eviction are far too limited and that we need to see further discretion given to the courts. This would not prevent evictions continuing or the courts from making the decisions in accordance with the Bill’s provisions, and it would provide discretion to the courts. I urge the Government to consider widening the categories of discretion for the courts in evictions. I hope that the Government will consider that issue during the passage of the Bill, and I am happy to withdraw the amendment on that basis.

[David Simmonds]

I certainly do not want to imply that there would be any degree of political love-in, but on this matter, I agree with the Minister. It is worth saying for the record that we in the Opposition understand that when the courts are considering this matter, the first issue will be an evidential test: has the necessary threshold for the mandatory ground to be triggered been met? If the court’s opinion is that there is some doubt about that, clearly it has the discretion to act differently because it considers through an evidential test that the threshold has not been met.

In practice, courts deal with this matter with a high degree of discretion, as they do with all other matters that are alike. As Members of Parliament, we will be aware of situations where constituents have been victims of serious, persistent, long-term antisocial behaviour. The grounds outlined are examples where evidence has been accumulated and a court can swiftly make a decision to grant possession in order for the situation to be resolved for the wider benefit of other people affected.

We therefore support the Government’s position that the mandatory grounds should be framed in this way and that moving to make all grounds discretionary would add an element of doubt over and above the evidential test. That would, in turn, enable those who wish to perpetrate long-term antisocial behaviour to get away with it for a longer period of time.

[Mr Amos]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Mr Amos]

The Minister says that the amendment does not include what would happen if the evidence was not provided—clearly, the evidence would not be there and the case would be weakened on that basis. I contest the idea that this is an onerous or burdensome requirement. The statement of truth is an extremely simple document—many on the Committee will have seen them—that can be produced easily and at little expense. I also contest the idea that courts need separate processes to look at statements of truth. They look at statements of truth all day, every day; new processes are not required.

The engagement of a solicitor in the sale of a property is not a particularly onerous requirement on someone selling their property. I assume that the person selling the property would, in any event, have to engage a solicitor, and would therefore need a letter of engagement. It is not an onerous requirement in any shape or form. The Minister said that judges would have less discretion. Again, I contest that, because judges would simply have more evidence in front of them; it would not have any effect on the amount of discretion that judges have. I urge the Minister to continue considering the issue, but I can do the maths, so I am happy to withdraw the amendment.

[David Simmonds]

Again, I agree with the Government on this matter. A lot of residential property transactions are undertaken by licensed conveyancers rather than by solicitors. That is a much more affordable and efficient option, often done on a fixed-fee basis, and that is particularly relevant to smaller landlords. Introducing a requirement that a solicitor must be used would be unduly onerous and would inhibit the number of transactions in the market.

[Matthew Pennycook]

I wish to provide further reassurance to the hon. Member for Taunton and Wellington, because I fear that we are dancing on the head of a pin here. Under the provisions in the Bill, judges will have to consider evidence to justify the use of mandatory grounds 1 and 1A. When I gave evidence to the Committee, I provided examples of the types of evidence that judges may require. It is up to individual judges to ask for that evidence and to make a decision on the basis of what is put in front of them. We trust judges to do that. With regard to the hon. Gentleman’s amendment, I do not accept the idea that judges are not looking at evidence and not ensuring that the use of these grounds is properly justified. That is misplaced, so I am glad he has indicated that he will withdraw the amendment.

[Mr Amos]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[David Simmonds]

I beg to move amendment 56, in clause 4, page 6, line 14, leave out “1A,”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 70, in clause 4, page 6, line 15, leave out “4A,”.

Amendment 57, in clause 4, page 6, line 16, at beginning insert “1A,”.

Amendment 71, in clause 4, page 6, line 20, after “4,” insert “4A,”.

[David Simmonds]

These amendments relate similarly to the issue of notice periods for grounds for sale. It is important to recognise that a very significant part of our housing supply continues to come from the private rented sector—in particular, from the buy-to-let market. Drawing on my experience as a financial adviser, one of the key issues for lenders in advancing buy-to-let mortgages arises because of the risks associated with them—in essence, people are much more likely to pay their mortgage payments on their own home than when they are borrowing to secure a home for investment purposes—so there is a risk premium, or a rating, on the mortgage interest. Consequently, a significant supply of finance is required to support the development of the buy-to-let market.

The introduction of significant restrictions on the length of notice periods will mean that when there is a default on those payments and they are not being made, it will be more difficult for the possession for the purposes of sale and the settlement of the outstanding debt to the bank to be progressed. That could have a chilling effect on the ability to secure finance and, in turn, an impact on the supply of properties available to those needing to secure a home in the private rented sector.

Once again, it is part of a broader, small “p”, philosophical and political argument. We are very much of the view that securing the maximum possible supply is very important, and we need to strike the correct balance so that we do not see a chilling effect having the unintended consequence of a reduction in supply.

[Matthew Pennycook]

As the hon. Gentleman has just made clear, amendments 56 and 57 seek to reduce the notice period for the selling ground 1A from four months to two months. The Government believe that the notice period for tenants being evicted through no fault of their own should be four months, to give them adequate time to find new accommodation. An eviction notice can turn a family’s life upside down, and four months means they will not be forced to move during a school term. I draw the Committee’s attention to the remarks I made previously about the changing nature of the private rented system and the fact that more older people and families now live in it compared with the situation in the late ’80s, when the system was introduced.

Selling a property is often a long-term decision that involves significant planning on the part of landlords. We do not believe that landlords are likely to need to evict tenants with only two months’ notice, given the time it takes to secure a sale. They also have the option of selling with tenants in situ.

Amendments 70 and 71 were tabled by the hon. Member for Taunton and Wellington. They would make an extreme change that would reduce the notice period for the new student ground 4A to a mere two weeks from the current four months.

The Government believe that students are just as deserving of adequate notice as other tenants. The purpose of the student ground is to try to balance security of tenure with the need to preserve the annual cycle of typical student tenancies. These amendments do not assist the ground in that purpose at all. Student landlords plan their business models long term around the academic year, and after our reforms will factor the four-month notice into their planning.

There is no circumstance where a competent student landlord would suddenly need to evict tenants in line with the academic year with only two weeks’ notice. Indeed, currently they have to give two months’ notice under section 21. The hon. Gentleman’s amendment is a retrograde step vis-à-vis the current iniquitous arrangements that we are trying to undo.

Students often lack the capital to organise a move at short notice. A two-week notice period means it is likely they are given notice to leave during the summer break when they might be working, or even during their exams. We believe that it is right that they have four months’ notice to organise their move.

I therefore ask the hon. Members not to press their amendments.

--- Later in debate ---

[Matthew Pennycook]

I will consider that matter further. To be candid with the Committee, some judgments on provisions relating to student accommodation are finely balanced. We are trying to strike a balance between giving student tenants the right level of security while maintaining that annual cyclical nature of student accommodation.

As the hon. Gentleman knows, we are treating purpose-built student accommodation differently from that of students living in the general PRS. We recognise the limited market for such accommodation. Regarding students in the general PRS, I am reluctant to accept the hon. Gentleman’s advice. Student landlords will adapt to the system and factor the four-month notice period into their business models. I am happy, however, to reflect further on the arguments he made.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 1, in clause 4, page 7, line 6, at end insert—

“(5) After section 11 of the 1988 Act insert—

‘11A Possession on ground 6A: compensation of tenant

(1) This section applies where a court makes an order for possession of a dwelling-house let on an assured tenancy on Ground 6A in Schedule 2 to this Act (whether or not the order is also made on any other ground).

(2) The court may order 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.

(3) In deciding whether to make an order under this section, and what compensation to order, the court must (in particular) take into account the circumstances which led to Ground 6A being available as a ground for making an order for possession (including any conduct by the tenant which caused or contributed to Ground 6A being available).’”

This gives the court power to order the landlord to pay compensation to the tenant where possession is obtained on Ground 6A (failure of premises to comply with planning requirements etc).

--- Later in debate ---

The amendment also ensures that the court considers whether any actions from the tenant caused the landlord to use ground 6A. Such a situation may occur if, for example, the tenant moved into the property without the landlord’s knowledge, causing overcrowding. The new provision will increase fairness for tenants being evicted when the landlord is at fault, helping them to meet the costs of an unexpected and unfair move.

[David Simmonds]

The Opposition supports the vast majority of these measures. We all recognise situations where a landlord is in breach of planning regulations, resulting in a property being overcrowded and potentially being turned into an HMO without the appropriate licence and so on, which can bedevil our constituents. It seems appropriate to take these steps to raise the stakes for landlords who seek to behave in that manner and drive them out of the market.

[Matthew Pennycook]

I do not have much to add to what I have already said. I commend the clause to the Committee.

Amendment 1 agreed to.

Clause 4, as amended, ordered to stand part of the Bill.

Schedule 1

Changes to grounds for possession

--- Later in debate ---

[Carla Denyer]

The Bill rightly seeks to address the fact that tenants do not have security in their homes. Amendments 42 and 43 would amend schedule 1 to lengthen the proposed period of protection against eviction under grounds 1 and 1A from one year to two years. This would be just one measure to start to address insecurity of tenure. It is worth recalling that the King’s Speech background briefing notes explain that one of the primary aims of the Bill is to increase tenant security and stability.

Private renting does not have to be insecure. The median length of tenancy in the UK is just under three years, while the average in Germany is 11 years. Insecurity erodes renters’ sense of belonging, and constant moving has a heavy financial cost. For children who are in privately rented homes—the Minister pointed out that they make up an increasing proportion of private renters—this insecurity takes a wider toll. Each school move at a non-standard time of year reduces expected GCSE grades by 0.5. Shelter has found that 13% of tenants with children in their household said that their last house move was stressful or upsetting for their child.

The Committee will no doubt be aware that constant moving is a major problem for private renters. Research by Shelter in 2022 found that a quarter of all private renters had lived in three or more privately rented homes in the previous five years—three different homes in five years. Amendments 42 and 43 are part of an effort to urgently change the renting culture and our ideas about what is acceptable when a property is rented out as someone’s home. I hope the Minister will look at them, not least because a central aim of the Bill is about addressing the deep unfairness of private tenant insecurity.

That unfairness is a massive problem in my constituency of Bristol Central, where a huge 47% of households are in the private rented sector. It affects many people. To give just two examples, a constituent I spoke to had to move six times in six years, and another constituent literally received her notice as she was moving her possessions into her new flat. That is unacceptable. Security is vital to allow renters to put down roots in their community and plan for the future. It is clear from the evidence gathered by the Renters’ Reform Coalition that the vast majority of tenants want security and the power to decide when to move on. They do not want the anxiety, discomfort and expense of being forced to move by a distorted, malfunctioning market.

Unwanted, unexpected home moves are stressful and costly. Generation Rent estimated in its evidence that an unwanted move costs a typical two-adult renting household more than £2,000. Almost half of renters have no savings at all. Moving frequently or a short period of time after the previous move impacts tenants’ financial resilience. For many, those costs are prohibitive and will push them into homelessness, not least because finding somewhere new can often prove impossible or mean accepting dangerous, substandard accommodation. To give one example among many from my constituents, after months of searching with no luck, a constituent and her partner had to settle for a grim place with an “unshakeable smell of damp” that made almost everything she owned “fuzzy with mould”.

Competition for properties in the private rented sector is fierce. Tenants often have little time in which to find a new home and little power to influence the terms of their tenancy agreements. They often sign 12 or six-month contracts under the current regime simply because that is the only option available to them, not because they actively prefer to be protected for only one year. Many tenants would prefer long-term security in their home. The proposed two-year protected period in amendment 42, coupled with rolling tenancies, would allow tenants a combination of flexibility and security.

We should reflect that the two-year protected period I am proposing is not radical or new—far from it. It was what was initially proposed in the former Conservative Government’s 2019 consultation, “A new deal for renting”, to ensure that security of tenure for tenants would not be undermined once fixed-term tenancies come to an end. However, when legislation was eventually brought forward, that Government watered down the protected period to just six months. The current Minister, then a shadow Minister, rightly supported a two-year protected period with regards to grounds 1 and 1A in the Renters (Reform) Bill Committee.

As well understanding its history, it is important to reflect on the fact that a longer protected period has the potential to drive professionalism in the sector. As ever, good landlords have nothing to fear from this provision. A two-year measure of security at the beginning of a tenancy is needed to create a disincentive for any abuse of the exemptions to no-fault eviction, and it would be a triple win: better for renters, for the local communities they move into, and for homelessness reduction.

The Renters’ Rights Bill is a once-in-a-generation opportunity to set out clear principles for the roles of both landlord and tenant and to develop a regulatory regime that reflects and incentivises that vision. While some landlords will have to make changes to their business plans, a two-year protected period should not amount to a significant change for many landlords or interfere with their business model. In the Renters (Reform) Bill Committee, when speaking to his amendment to create a two-year protected period, the hon. Member for Greenwich and Woolwich rightly said:

“We believe that any landlord likely to use ground 1 or 1A in good faith will have some prior awareness that they or a family member may need the property for use at some point in the coming years, or that they may wish to sell it in the near future.”––[Official Report, Renters (Reform) Public Bill Committee, 21 November 2023; c. 173.]

Buy-to-let mortgages are often made available at fixed rates for two years or longer and, currently, the average tenancy in the private rented sector is longer than two years. This should not be overly disruptive, and it can provide much-needed stability for those in most need of it.

To conclude, the change to a two-year protected period would be one of the most important things the Government could implement in the Bill to more fully deliver on their ambition to decisively rebalance renting in favour of renters. The amendment seeks to understand the reasoning behind the proposal for a protected period of one year rather than two years, as was the Minister’s position previously. While 12 months is obviously an improvement on six, we can do better to improve the security of private renting, which has such a big impact on tenants’ health, wellbeing and life choices.

[David Simmonds]

I rise to speak to amendment 58. In general terms, I am very sympathetic to the points made by the hon. Member for Bristol Central. In comparison with the UK housing market, most European countries have a much higher degree of long-term rental as part of their housing supply. The UK has a more mixed supply with a more significant owner-occupation sector. That is a challenge for the new Government, as it was for previous Governments, as we see overall demographic change bringing us a bit more in line with the housing markets of other countries. The UK, however, still remains significantly adrift of that position, which is why I am concerned that the hon. Lady’s amendments would potentially have, as with mortgage finance, a chilling effect on supply.

[Carla Denyer]

Would the hon. Gentleman be able to speak slightly louder? It is difficult to hear down here.

[The Chair]

Was the hon. Gentleman able to hear what the hon. Member for Bristol Central said?

[David Simmonds]

I shall do my best. It may be that, although seeking to comply with the rule of speaking to the Chair, I need to turn around more regularly to address the Committee. The point I was making is that while we have a lot of sympathy with the points made by the hon. Member for Bristol Central, given that the changing nature of the UK rental market will result in these becoming more significant issues, we believe the issue of notice periods needs to be addressed through amendment 58.

[Matthew Pennycook]

As the hon. Member for Bristol Central has set out, amendments 42 and 43 seek to extend the protected period for the moving in and selling grounds to two years. Amendment 58, in contrast, seeks to remove the protected period for the selling ground entirely. We believe that the Bill strikes the right balance in this area.

The hon. Member for Bristol Central is right that during debate on the Renters (Reform) Bill, I probed the then-Government on increasing protections for tenants beyond the six months they had proposed. I did so given the relative lack of security that that Bill afforded to tenants, which we have improved on. I reflected very carefully on this point in the development of the Bill. Viewed in the context of the many strengths and protections that we have introduced to benefit tenants, I feel that a one-year protection period against the main landlord circumstances ground—this is not a general period of protection that applies to any arbitrary eviction, but is specific to grounds 1 and 1A—strikes the right balance between tenant security and ensuring that landlords can respond to genuine changes in their circumstances.

The shadow Minister highlighted the thinking that has led to me coming down to one year, instead of remaining with two. A two-year protected period for the moving and selling grounds is, I fear, too long. It would prevent landlords from being able to respond to changes in circumstances, and therefore harm confidence in the sector and risk decreasing supply. In some circumstances, landlords may only be able to let their property for a year—for example, if they temporarily moved abroad—and a longer period may therefore remove valuable supply from the market.

Most importantly, I was convinced that a one-year protected period would deter abuse from disreputable landlords seeking to circumvent the protections in place. The one-year protected period mirrors the typical one-year fixed-term tenancy. We think it strikes the right balance, but I am more than happy to give further consideration to the points made by the hon. Member for Bristol Central. I sympathise with and understand the significant costs borne by tenants from repeated moves. I understand, as I hope I have made clear in the debate so far, the need for stability and security, but we think that in this particular area, the one-year protected period is appropriate.

--- Later in debate ---

[Matthew Pennycook]

I will begin by discussing Government amendments 2, 3, 4, 5 and 9. Rent-to-buy tenancies help prospective homeowners to get on the housing ladder. New possession ground 1B will allow social landlords to take possession in specified circumstances, to ensure that rent-to-buy schemes can continue to function in the future assured regime. Landlords must be able to take possession in all the necessary circumstances. The amendments therefore widen ground 1B, so that landlords can simply grant another assured tenancy, without its having to be on a rent-to-buy scheme. That will ensure maximum flexibility for social landlords to meet the demands of local housing markets. However, the period of the existing rent-to-buy tenancy will need to have expired and the sitting tenant must have been offered the opportunity to purchase the property, in line with the contract. This means that it will never be a surprise for the rent-to-buy tenant if the tenancy is ended. The amendments also clarify the definition of “market rent” in possession grounds 1B and 5H, to ensure clarity and consistency.

I will now discuss Government amendments 6 to 8. New ground 6A will allow landlords to evict their tenants when eviction is necessary to comply with enforcement action. We have already debated this matter in relation to a previous Government amendment. For example, if a property were overcrowded or the landlord had received a banning order, new ground 6A would apply. The amendments ensure that the new ground also covers situations in which a tenant’s occupation needs to be brought to an end in order to comply with planning enforcement action. For example, where an industrial unit has been converted to residential use without planning permission, a local planning authority may issue an enforcement notice requiring the residential use to cease.

If planning enforcement were not included in ground 6A, there would be no guarantee that the landlord could evict the tenant in those circumstances. That would risk undermining the planning system’s ability to enforce effectively against unauthorised development. That could result in poor outcomes for residents, the community and surrounding businesses. This measure will ensure that landlords are not left in legal limbo, where the only way to comply with planning enforcement action is for a tenant to cease to occupy a dwelling, and ensures that the tenancy itself can be brought to an end appropriately. We are also bringing forward an amendment to ensure that tenants are fairly compensated when they are evicted under ground 6A, ensuring that the measures are balanced.

Amendment 2 agreed to.

Amendments made: 3, in schedule 1, page 157, leave out line 30.

This leaves the definition of “market rent” out of Ground 1B, as it is superseded by Amendment 4.

Amendment 4, in schedule 1, page 157, line 33, after “rent” insert

“(and here “rent” and “market rent” include any amount payable by way of service charge)”.

This ensures that any service charge is taken into account in both the rent and the market rent (when determining whether the rent is higher than 80% of the market rent).

Amendment 5, in schedule 1, page 165, line 18, leave out from “than” to “, and” in line 22 and insert

“80% of market rent (and here “rent” and “market rent” include any amount payable by way of service charge)”.—(Matthew Pennycook.)

This replaces the term “affordable rent” with a reference to rent that is no more than 80% of the market rent.

[David Simmonds]

I beg to move amendment 60, in schedule 1, page 168, line 26, at end insert—

“20A After Ground 6 insert—

“Ground 6ZA

The landlord or superior landlord who is seeking possession intends to undertake such works as are necessary to ensure that the property meets the standards set out by regulations under section 2A of the Housing Act 2004 and the intended work cannot reasonably be carried out without the tenant giving up possession of the dwelling-house because—

(a) the tenant is not willing to agree to such a variation of the terms of the tenancy as would give such access and other facilities as would permit the intended work to be carried out, or

(b) the nature of the intended work is such that no such variation is practicable, or

(c) the tenant is not willing to accept an assured tenancy of such part only of the dwelling-house (in this sub-paragraph referred to as “the reduced part”) as would leave in the possession of his landlord so much of the dwelling-house as would be reasonable to enable the intended work to be carried out and, where appropriate, as would give such access and other facilities over the reduced part as would permit the intended work to be carried out, or

(d) the nature of the intended work is such that such a tenancy is not practicable.””

I have realised, in the course of debate, that the Minister has the benefit of being a bit closer to the overhead microphones than I am, so I will do my best to direct my remarks in a skywards manner, Sir Christopher.

The amendment seeks to bring in additional grounds for possession, and it is partly on the basis of evidence that we are aware of as a Committee and which stems from the social sector, where we know that there are many examples of landlords, including local authorities, that have to go to enormous lengths to access a property to carry out basic maintenance—often, in the case of local authorities, at no cost to the tenant, who is a council tenant—and to ensure that minimum safety standards, for example gas inspections, electrical safety inspections and remedial works to deal with issues such as damp and mould, are applied. We know that there has been extensive debate and consideration of evidence in relation to Awaab’s law and the need to ensure that properties meet the decent homes standard. Therefore the aim of this proposal is to ensure, where it is necessary for a landlord to recover the property in order for those works to be carried out and the tenant does not wish to co-operate, that there is provision in the Bill to achieve that.

[Matthew Pennycook]

As the shadow Minister just made clear, amendment 60 would introduce a new mandatory ground for possession—6ZA—into schedule 2 of the Housing Act 1988. It would allow landlords to evict when they need to undertake works to meet the decent homes standard introduced by the Bill and those works cannot be completed without evicting the tenant. The objective that the hon. Gentleman seeks is reasonable and appropriate, but the Government do not believe that the ground is needed. I expect that the vast majority of works to meet decency requirements could be completed with the tenant in situ. Landlords may also undertake more substantial works between tenancies.

The proposed new ground is also unnecessary in the light of ground 6. The Bill’s revised ground 6 already permits a landlord to evict a tenant when they wish to undertake substantial redevelopment work that cannot be done with the tenant in situ. I am therefore reluctant to introduce a new ground that is not strictly needed, given what is in place in the Bill. However, I hope I have provided the Committee with sufficient reassurance that landlords will not be left unable to comply with the new decency requirements, as I say, in circumstances where the tenant must move out.

[David Simmonds]

I want to probe the Minister a bit on the point about substantial redevelopment. We are aware that to remedy issues of damp, for example, it is not uncommon for a landlord to need to remove all the plaster and potentially take out the flooring or ceiling for a lengthy period of dehumidification. Following that, extensive works would need to be undertaken to ensure that the damp does not reoccur. Those works being completed does not represent redevelopment of the property by, for example, building an extension or adding an additional floor, but leave the property substantially the same as before. It therefore does not seem to us that it would meet the test of redevelopment envisaged in the Bill.

The argument we are advancing is that in examples that may represent a significant risk to the health or safety of the tenant but the tenant does not wish to move, we need those additional grounds to be absolutely clear that that is a reasonable basis on which a landlord can seek to regain their property, so that they can carry out those works.

[Matthew Pennycook]

I thank the shadow Minister for that intervention, and I understand the point he makes. If it is acceptable to him, I will write to him with the technical detail about what substantial development entails. As I say, in most cases where substantial development is not taking place, works to ensure that homes come up to the new decent homes standard will be able to take place in situ. On the specific hard-edged case he mentions—that is, where the health and safety of a tenant is put at risk by the works required to take place or the conditions that the works are intended to remedy—I point him to provisions in the Bill like the extension of Awaab’s law, which will ensure that landlords have to respond to such hazards in a defined timescale and make accommodation for the tenant to move out in such circumstances. What I am reluctant to do here is to introduce a new ground that would have a substantial impact on tenants. They would have to leave the property and find new accommodation, and they might be owed a homelessness duty in those circumstances. That is a huge amount of disruption.

As I say, we think the existing provisions in the Bill do the job, but on the point he makes, which is a well-made one, as to precisely what the definition is and where the boundary lies between substantial and non-substantial redevelopment works, I will write to him with some more technical detail. I therefore ask the hon. Member to withdraw his amendment.

[David Simmonds]

On the basis of those assurances, I will withdraw the amendment. Clearly, we will have the opportunity to return to this debate later on. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 6, in schedule 1, page 168, line 30, leave out “situations has occurred” and insert “applies”.

This changes the opening wording so that it works better with the provision which follows.

Amendment 7, in schedule 1, page 169, line 30, at end insert—

“(g) compliance with a planning enforcement notice or injunction would be, or is, incompatible with continued occupation of the dwelling-house by the tenant.”

This enables the landlord to obtain possession where planning enforcement action has been taken and compliance with that action would be incompatible with continued occupation under the tenancy.

Amendment 8, in schedule 1, page 169, line 37, at end insert—

““planning enforcement notice or injunction” means—

(a) an enforcement notice issued under section 172 or 182 of the TCPA 1990 that has taken effect,

(b) a breach of condition notice served under section 187A of the TCPA 1990,

(c) an injunction granted under section 187B of the TCPA 1990,

(d) a listed building enforcement notice issued under section 38, 45 or 46 of the P(LBCA)A 1990 that has taken effect, or

(e) an injunction granted under section 44A of the P(LBCA)A 1990;

“P(LBCA)A 1990” means the Planning (Listed Building and Conservation Areas) Act 1990;

“TCPA 1990” means the Town and Country Planning Act 1990;” .—(Matthew Pennycook.)

This defines the term “planning enforcement notice or injunction” which is used in Amendment 7.

[David Simmonds]

I beg to move amendment 62, in schedule 1, page 170, line 3, at end insert—

“(za) for the first unnumbered paragraph, substitute—

‘At the date of the service of the notice under section 8 of this Act relating to the proceedings for possession—’”.

[The Chair]

With this it will be convenient to discuss amendment 63, in schedule 1, page 170, line 6, at end insert—

“(ba) in paragraph (b), at end insert ‘and at the date of the hearing any rent is unpaid.’”

[David Simmonds]

Amendments 62 and 63 also deal with grounds for possession. Amendment 62 is intended to address situations where possession of a property may be required for persons on whom the landlord may rely in order to carry on living their lives, such as a carer. We heard evidence from organisations representing landlords in the more rural parts of our country on situations where grounds for possession may be necessary to enable a person with caring responsibilities to occupy the property.

Amendment 63 deals with a similar process in respect of antisocial behaviour. We have already debated the issue extensively, so I will not speak further to that amendment now.

[Matthew Pennycook]

Taken together, amendments 62 and 63 seek to remove the requirement for a tenant to meet the arrears threshold for mandatory eviction at the date of hearing. Instead, they would allow a tenant to be evicted only if they met the threshold at the date of the notice and had any arrears at all remaining at the date of their hearing. I am sure we all agree we should encourage tenants in financial difficulty to pay off their arrears, but we believe the amendments would act as a significant disincentive to even try to do so, as it would mandate eviction of a tenant who has done the right thing and tried to pay off their arrears.

I understand that, with the amendments, the hon. Gentleman is most likely trying to address the perceived problem of tenants gaming the system by paying off a nominal amount of arrears, placing them just below the threshold at the date of hearing, and thus frustrating a landlord’s attempt to evict the tenants. That was the rationale that underpinned new ground 8A in the previous Government’s legislation. However, this is not a problem recognised as occurring frequently, if at all, by me or by those who advise tenants going through the eviction process—in fact, it is hard to find cases of people trying to extensively game that system.

The previous Government’s solution to this problem was ground 8A, which we consider to be punitive. Similarly to these amendments, ground 8A would have punished tenants who did the right thing in trying to pay off their arrears. While we understand how frustrating rent arrears can be for landlords, we have to accept that most tenants act in good faith when trying to pay off their arrears, and they should be encouraged to do so. I hope hon. Members agree that we should encourage the right behaviour in tenants who are trying to bring down their rent arrears.

The amendments would therefore be fundamentally unfair and, most importantly, create the wrong incentives. I therefore ask the shadow Minister to withdraw amendment 62.

[David Simmonds]

I managed to make the dubious mistake of making the wrong points when I moved the amendment, but the Minister has brought us back to exactly the points I omitted to make. Concerns remain, particularly where there may be delays in accessing the courts to get a decision, either because of a lack of capacity—as we know, that remains a problem—or because of future resourcing issues in the new world that this Bill seeks to introduce, in which a number of routes will be open in the event of a dispute.

The Opposition remain concerned about the risk that those who wished to could seek to game the system. Most Members of Parliament will have had constituents who have been affected by tenants who failed to pay the rent. Those constituents may be accidental landlords renting out the property of a deceased relative while waiting for probate, and they may find that someone is occupying their property and perhaps sub-letting it for cash without passing that money on, leaving them in an incredibly difficult position. We want to ensure that people who behave in that way cannot continue to game the system. Having acknowledged the Minister’s points, however, I am happy to withdraw the amendment.

[Matthew Pennycook]

In addition to the points I made previously, I briefly draw the shadow Minister’s attention to the fact that ground 8 will remain mandatory, and discretionary grounds will also be available when arrears do not meet the mandatory threshold, such as in cases of repeated late payment. We think the courts have the necessary provisions to be able to take action on rent arrears. What we find particularly objectionable in the amendment is that it would mean that anyone with any amount of arrears at the hearing would be subject to mandatory eviction. We think that that goes too far, so I am glad that the shadow Minister has agreed to withdraw the amendment.

[David Simmonds]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[David Simmonds]

I beg to move amendment 59, in schedule 1, page 170, line 13, at end insert—

“23A After Ground 8 insert—

‘Ground 8A

The landlord who is seeking possession, or, in the case of joint landlords seeking possession for at least one of them, requires the dwelling-house for the purposes of providing care to—

(a) a person under the age of 18;

(b) a person who has a disability under section 6 of the Equality Act 2010; or

(c) a person who requires personal care on the grounds of age, illness or injury.’”

I will not repeat at length the comments I made when I previously introduced amendment 59 in error. The amendment relates to the grounds for use when a landlord needs to put a carer into a property. It seeks to ensure that the required flexibility is available where the needs of a cared-for person must be put first.

[Matthew Pennycook]

As the shadow Minister has just made clear, amendment 59 seeks to introduce a new ground for possession into schedule 2 of the 1988 Act to allow landlords to evict tenants when they wish to use the property for the purposes of providing care. Although I appreciate the sentiment behind the shadow Minister’s proposals, I do not believe that this ground is needed. Ground 1, which is a mandatory ground, allows a landlord to move in close family members. That includes children, grandchildren, parents, grandparents and siblings. It could be used if the landlord wished to obtain possession to provide care for close family members.

This relates to a point that we have just discussed. We think that a two-year protected period might lead to such cases being prohibitive for landlords who need to make use of the grounds. We think the existing ground 1 is likely to cover the vast majority of cases of the kind that the shadow Minister seeks to help, without increasing the complexity in the system. I therefore ask him to withdraw the amendment.

[David Simmonds]

Each new Bill is an opportunity to consider as widely as possible the issues that our constituents may face. A property that has been adapted for occupation by someone with care needs may have been rented out by, for example, a military family who need to move to a placement abroad. They may find that they cannot access the property on their return, when it is essential that they are able to do so in order for those facilities to be available. We think it is reasonable to raise such situations.

Recognising the points that have been made, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[David Simmonds]

I beg to move amendment 61, in schedule 1, page 170, line 13, at end insert—

“23A In Ground 14, in each of paragraphs (a) and (aa), for ‘likely to cause’ substitute ‘capable of causing’”.

Amendment 61 seeks to broaden out the debate on the opportunity for a landlord to seek possession on grounds where antisocial behaviour on the part of the occupant is a factor. We have considered this quite extensively in Committee, but it is clear that it remains a significant issue in some cases. As I have said, most of us will have had experience, as constituency Members of Parliament, of matters arising from the antisocial behaviour of tenants. We will be aware of the enormous frustration, at both the landlord and the community level, at the inability to tackle that effectively under the current system. We want to ensure that those powers are as strong and as flexible as possible.

[Matthew Pennycook]

Amendment 61 seeks to expand the discretionary antisocial behaviour ground to include behaviour “capable” of causing nuisance or annoyance. Members may recall that this was proposed in the previous Government’s Renters (Reform) Bill. When in Opposition, we strongly opposed the change, because it had the potential to significantly reduce security of tenure and, most importantly, put vulnerable tenants at risk of eviction. I remain concerned that it would leave tenants open to eviction, even when their behaviour was not causing any problems.

A huge range of behaviours are “capable” of causing a nuisance or annoyance. I was tempted to say that some of the behaviour of my children, on occasion, is more than capable of causing nuisance or annoyance. We can all agree that such a subjective term potentially includes a huge range of behaviours, and it would not be fair for someone to lose their home on the basis of some of them. For example, a baby crying frequently is capable of causing another tenant annoyance. In those cases, and there are many others that I could cite, it would be fundamentally wrong to put a family at risk of eviction because of that. Worse still—this is a point I recall very clearly from the discussions I had with domestic violence charities at the time of the previous legislation—we heard from many organisations that represent victims of domestic abuse that sometimes such abuse can be mistaken for antisocial behaviour, because of loud noises, banging or disruption in the property next door. The amendment increases the risk that tenants in such a situation could be evicted.

I understand that the shadow Minister wants to ensure that landlords have confidence that they can evict tenants who engage in genuine antisocial behaviour. That is an honourable aim, but there are already measures in the Bill to address that, including reducing notice periods so that landlords can make a claim to the court immediately when using the antisocial behaviour grounds, as we have discussed. We have also made changes to section 9A of the Housing Act 1988 to include amendments to ensure that the court considers the particular impact of antisocial behaviour on victims living with perpetrators in HMOs, which was a specific concern raised by the sector. We will also encourage the use of mediation and other tools by ensuring that judges take into account whether a tenant has engaged with attempts to resolve their behaviour, making it easier to evict perpetrators who do not engage.

For the reasons that I have set out, we believe that lowering the threshold from “likely” to “capable of” causing nuisance or annoyance could have extremely damaging consequences, and I do not believe it is in the spirit of what the Bill is trying to achieve. I therefore ask the hon. Member to withdraw his amendment.

[Mr Amos]

I rise to support the Government on this issue, as Liberal Democrats did in the context of the Renters (Reform) Bill in the previous Parliament. To my mind, introducing a definition of antisocial behaviour that is simply about what is “capable” of causing annoyance and disturbance is tantamount to an authoritarian approach. When the Minister talks about crying babies, I cannot help being reminded that my own crying baby was complained about by the next-door neighbour when I was in rented accommodation. She does not cry so much now—she is 32. The very idea that anything capable of causing annoyance should be regarded as formally antisocial behaviour in law is an extreme concept, and it is an extremely good thing that this new Bill has left such thinking behind. This amendment should not be accepted.

[David Simmonds]

I will withdraw the amendment, because again the numbers are against me. It is important to recognise as we consider it, however, that there are examples—loud music is one—that might not within the definition of “likely” to cause nuisance or annoyance, but potentially would fall within our proposed definition.

I hope that the Minister and the Government will consider this issue. We know that a children’s party—I speak as a guilty individual in this regard—can be a very noisy occasion that generally takes place in the middle of the day for a brief period of time, whereas playing loud music for one’s own freedom of enjoyment all day and night may cause significant issues. Most of us, as Members of Parliament, have seen examples of behaviour that of itself and on an individual, case-by-case basis would not cause a nuisance, but that can cause significant upset to neighbours when repeated. That can range from the environmental impact of an activity such as servicing cars or maintaining vehicles to things such as loud music, and people can do those things at times of the day and night that are antisocial in the context in which the home is located. It is important that the Government give further consideration to the matter, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 9, in schedule 1, page 172, leave out lines 29 to 32.—(Matthew Pennycook.)

This is in consequence of Amendment 5.

Question proposed, That the schedule, as amended, be the First schedule to the Bill.

[Matthew Pennycook]

I beg the indulgence of the Committee to spend a little time setting out the Government’s position on this schedule, because it is a key part of the Bill. As we have discussed, the Bill reforms the grounds for possession to ensure that tenants have greater security in their homes and, importantly, that good landlords can regain a property when necessary. Without section 21 and the threat of arbitrary evictions, tenants will have that greater security in their homes. Landlords will have to use one of the defined grounds for possession in schedule 2 to the Housing Act 1988, as amended, when they need to evict a tenant. They will be able to repossess their property only when it is reasonable to do so.

Schedule 1 inserts new grounds and amends existing ones, ensuring that landlords have robust grounds for possession when there is good reason to take their property back. As we have discussed, that includes repossessing to sell, to move in or if their tenant engages in antisocial behaviour or falls into rent arrears. Although many of the grounds are broadly similar to those in the previous Government’s Bill, we have made some important changes that we believe ensure a fairer balance in the sector. There are three main types of ground: those relating to a change in the landlord’s circumstances, those to allow specialist sectors to operate and those where the tenant has not met their obligations. I will not cover each in detail here, but I will give a brief overview of some of the key provisions.

--- Later in debate ---

[Matthew Pennycook]

I thank the hon. Gentleman for that reasonable question. He and many others in the House have significant concerns about the impact of excessive concentrations of short-term and holiday lets in particular parts of the country. A landlord who has moved a family member back in under the mandatory grounds that he cites would not be able to re-let the property for 12 months and would be penalised if they attempted to do so. It was a three-month void period in the previous Government’s Bill, and we thought that it would not have acted as a serious disincentive. I frequently encounter landlords who can comfortably wear a three-month void because of the levels of rent that they charge, and I am sure that is the case in many other parts of the country. We think that a 12-month no re-let period will provide the necessary protection to ensure landlords are not incentivised, and do not feel able, to abuse the mandatory grounds for possession.

[David Simmonds]

The Minister has given a helpful and comprehensive overview of the matters that we have debated so far. Although we clearly have a different opinion about how to strike the correct balance, I accept that he is acting in good faith and, to a great degree, in line with the points previously made and the content of the Renters (Reform) Bill. The key issue we remain concerned about is the impact that all these regulations will have on supply. We all know that we have a constrained private rented sector, with areas in which significant numbers of people are chasing properties. We need to ensure that properties remain of a decent standard, at an affordable price, and in sufficiently ample supply. We have debated those concerns, and I hope that we can continue to deal with this Bill in the same co-operative and constructive spirit.

Schedule 1, as amended, agreed to.

Clause 5

Possession for anti-social behaviour: relevant factors

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

It is always better to resolve issues without resorting to eviction, but we recognise that when tenants are committing antisocial behaviour and it is impacting on neighbours, housemates and communities, it is sometimes necessary. In these cases, landlords need to have confidence that they can gain possession of their property quickly. The clause expands the matters that judges are directed to consider when deciding whether to award possession under the discretionary antisocial behaviour ground. We are making the change because we recognised landlords’ concerns about evicting antisocial tenants without section 21, and it is important that judges consider pertinent factors to ensure eviction can happen when it is right to do that.

Judges will take all relevant factors into account when determining whether to evict under these grounds, because they are discretionary, but under the current legislation, they are also guided to explicitly consider the impact of antisocial behaviour on victims. Clause 5 ensures that judges must also have regard to the question of whether the perpetrator has engaged with measures to resolve their behaviour. This will serve two purposes: making it more likely that landlords work with tenants to resolve poor behaviour, and making it easier to evict those tenants who do not engage. The change will contribute towards increasing the amount of dispute resolutions short of eviction in the private rented sector.

The clause also asks judges to give regard to the impact of antisocial behaviour on other tenants within houses of multiple occupation. Antisocial behaviour within house-shares can have a severe impact on those who live in close proximity. The clause will make it easier to evict perpetrators, which was a specific concern raised with us by a number of external stakeholders. Fellow tenants are the worst-affected victims of antisocial behaviour within HMOs, and landlords were concerned about their ability to evict perpetrators without section 21 notices. The clause ensures that courts can consider these factors.

[David Simmonds]

The Opposition welcome the points made in this debate. We want the following issue to be addressed. If it is expected that a dispute resolution process will be undertaken or that some form of external mediation will be accessed, there needs to be sufficient capacity to ensure that that happens in a timely manner. We do not have an example of a case in which someone who is evicted on grounds of antisocial behaviour is expected to endure a considerable period of time in order for mediation to take place, following which grounds for possession might then be sought. We need to make sure that the process is done swiftly and effectively, but we support the concept behind it.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Form of notice of proceedings for possession

Question proposed, That the clause stand part of the Bill.

[Matthew Pennycook]

Clause 6 provides for regulations that will allow the Secretary of State to publish the form to be used when landlords serve notice of intention to begin possession proceedings. It is crucial that the information landlords are required to provide reflects current law. This gives tenants the best opportunity to enforce their rights and seek appropriate support. The clause will allow regulations to be made so that we can update the forms at speed and respond to changing circumstances. It is a simple and straightforward clause.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

Statutory procedure for increases of rent

Oral Answers to Questions

David Simmonds Excerpts

Monday 28th October 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

Certainty for councils is vital for housing delivery, but given the uncertainty created by the Government’s new top-down targets, which will delay the implementation of local plans and therefore planning decisions, how confident are the Government of meeting their housing targets?

[Angela Rayner]

Britain is facing the sharpest housing crisis ever because of the failure of Conservative Members. We will ensure, through our mandatory housing targets and in the announcements that have been made, and that will be made in the Budget, that we get the houses that Britain needs. [Interruption.]

[Mr Speaker]

Order. I do not want to hear a conversation all the way through.

[David Simmonds]

In the rush for numbers, we must not ignore the need to ensure that new homes are built to appropriate standards. Given that the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Bethnal Green and Stepney (Rushanara Ali), has been stripped of responsibility for building safety because of conflicts of interest, can Ministers assure the House that the haste for targets will not undermine building safety?

[Angela Rayner]

We will ensure that houses are built to decent homes standards, which we have already set out, and that we meet those targets—unlike in the 14 years under the Conservatives.

Rough Sleeping

David Simmonds Excerpts

Wednesday 23rd October 2024 Westminster Hall

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

It is a pleasure to serve under your chairmanship again, Sir Christopher, so soon after we were engaged on local government matters yesterday. I congratulate the hon. Member for Ealing Southall (Deirdre Costigan) on bringing forward this debate—I know her constituency well as mine is nearby—and I congratulate Members on their contributions, which have illuminated not just some of the policy and political angles, but the genuine complexity of the rough sleeping issue.

The measurement of rough sleeping across the United Kingdom commenced in 2010. The last Conservative Government felt that it was a high priority and, consequently, we moved from a situation under the previous Labour Government in which less than a quarter of local authorities measured the number of people rough sleeping in their area at all, to one where all local authorities were required to use a standard methodology to count the number of rough sleepers and indicate the composition of that population.

That measure fed into a number of policy initiatives over those years. We saw a growth in the number of people recorded as rough sleeping on the streets from 2010 to 2017, and then some ups and downs. We saw a reduction from the 2017 peak to the number we see today, with a particularly low figure recorded during the covid pandemic, when the Everyone In policy was rigorously pursued by local authorities across the country.

It is clear that this matter is not simply one of political will. We note that, despite the high priority that Labour placed on it in opposition, the highest increases in the number of rough sleepers on the streets were in Labour-led local authorities, and the most effective authorities at reducing the number were Conservative-led. I see some shaking of heads, but Westminster, Camden and Bristol consistently top the list of authorities with the highest numbers of rough sleepers on the streets.

We also need to note that around 46% of all the people sleeping rough are in London and the south-east. The hon. Member for Ealing Southall provided a graphic description of what she has seen—one reflected on the streets of our capital, in particular. As other hon. Members have acknowledged, it also reflects a complex set of issues that lead to people sleeping rough.

The issue of veterans was a high priority for the previous Government. I have to note the work of the former Member for Plymouth Moor View, Johnny Mercer, in driving forward the so-called Operation FORTITUDE, which set up a direct and guaranteed route out of rough sleeping for any veteran who required it.

[Tom Hayes]

Will the hon. Member acknowledge that many of the Labour local authorities he was just referencing are in densely urban areas, which, according to research into homelessness, tend to have larger numbers of homeless people? Will he recognise that those authorities, like Conservative authorities, have been significantly starved of funding in recent years, to the point that council leaders, both Conservative and Labour, have been crying out for relief from Government? Will he also acknowledge that, with the starvation of many of our public services, people who are sleeping rough could otherwise often have received support earlier, but because they did not they now have to sleep rough—and that that is the fault of the Conservative Government?

[David Simmonds]

It is not an excuse. It is clear when we look at the performance of local authorities in that respect, and in particular in respect of the effectiveness of the many measures introduced following the Homelessness Reduction Act sponsored by my hon. Friend the Member for Harrow East (Bob Blackman), that the authorities that were good at everything demonstrated that they were also good at reducing the number of people who were sleeping rough. Those of a more questionable performance standard, however, did not demonstrate that they could step up to the plate, despite being provided with additional resources.

Seeking to make a political point rather glosses over the complexity of the matter, as highlighted by many hon. Members. I will finish my point around veterans. We know, according to the current snapshot, that around 3% of those sleeping rough are thought to be veterans of our armed forces. Providing a specific guarantee, with a freephone number and an online portal, so that accommodation that met their requirements could immediately be found for anybody in that situation, was an important example of how that particular group can be addressed.

It is also interesting to reflect that the snapshot data consistently shows that those sleeping rough tend to be older adults aged over 26; that they are overwhelmingly male, although I acknowledge that female rough sleeping is sometimes hidden; and that the numbers recorded are very small—in some years, zero—for people under the age of 18. That goes to the complexity of the issues highlighted by a number of hon. Members. It is not simply a matter of a lack of supply.

We know about the complexities around addiction, domestic violence, patterns of previous accommodation by local authorities that have ended with difficulties with landlords, issues of settled status—or lack of it—and immigration circumstances. All those factors contribute to the complex set of reasons that affect an individual who should be able to access help from a local authority. Like many other hon. Members, I have sat through homelessness interviews with constituents who seek that help and accessing it can be incredibly difficult when a number of those complicating factors come together.

How is the issue to be tackled? From 2010 to the most recent election, a number of measures were introduced. I refer to the Homelessness Reduction Act, which sought to give both additional duties and powers to local authorities to work with those at serious risk of becoming homeless—not just to prevent rough sleeping but to stop people from being placed in substandard temporary accommodation that did not fully meet the needs of their household.

More recently, we saw the introduction of “Ending rough sleeping for good” in 2022, which was a £2.4 billion multi-year programme aimed at bringing to an end, as far as possible, rough sleeping on the streets of our country. Although that was clearly not a matter of law, it was a significant and important Government programme. Many hon. Members participated actively in the debates on that and brought their views to bear on shaping a programme that included the rough sleeping accommodation programme, with an additional 6,000 units of accommodation aimed at bringing people in off the streets.

As I move to a conclusion, I will share some reflections on my time in local government. The snapshot is beginning to be taken in a consistent way, so we have a reasonably good idea of at least the trends, if not the detail, of the numbers that may be sleeping rough. One of the challenges, however, is that the snapshot always takes place around the same period in autumn. We know that the numbers of people sleeping rough in our country tend to be higher in the summer when the weather is better and that the numbers decrease as winter comes on.

One major factor that the rough sleeping snapshot is not readily able to capture is the availability of temporary accommodation in night shelters and short-term shelters set up, for example, by churches and other charities and voluntary organisations. We know that they are incredibly important for those who have not found assistance for whatever reason in the statutory sector.

My local authorities have contracts with local charities that open up those shelters when the weather begins to turn cold; they staff them and provide beds, heating, food and showers. In the spring, those services are unwound, and that means that some of those people are either back on the streets or, if the service is performed as we would hope, they have been found a pathway into a job and into more permanent housing.

The consequence of that patchwork provision still means that we do not always have a clear idea of the number of people in that situation because they genuinely have nowhere to go on that occasion; many who may have been booked accommodation by a local authority instead choose, typically because of addiction, to be on the streets with others who share their addiction rather than to use that accommodation. That is frequently cited as a major issue with the operation of the Homelessness Reduction Act. This is a complex issue. The numbers overall in our country are small, and they are declining.

[Tom Hayes]

The hon. Gentleman made valid points about using a street count to determine the number of people sleeping rough. Does he therefore agree that the numbers of those recorded as sleeping rough over the past 14 years are the tip of the iceberg and that the vulnerability, often in urban areas, is far higher?

[David Simmonds]

That reinforces my point. We have gone from a situation under the previous Labour Government in which there was no counting at all. There was no serious effort to understand the numbers of people sleeping rough on our streets. As a councillor, I was responsible for some of that period for housing and social care; rough sleeping was one of those major challenges that was simply put in the too-hard-to-deal- with box.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

Although I accept the hon. Gentleman’s point—data may not have been gathered before—there has been a 134% increase in homelessness in Yorkshire and the Humber since 2010. Does he not agree that the strategies put in place by the previous Government have not worked? There is now a need to review them and for the new Government to introduce the things we have talked about: homes for veterans and places where people can go as soon as they are in trouble. That would provide the support they require for their addictions and mental health.

[David Simmonds]

It is also striking that the biggest reduction in homelessness in Yorkshire and the Humber has been achieved by North Yorkshire’s Conservative-led unitary authority. Local authorities have been able—through the Homelessness Reduction Act, the use of their various powers and the resources brought to bear on this issue, including the homelessness prevention grant—to deploy those resources efficiently and effectively. I would not wish for this issue to become purely a matter of politics. The matter is over. The fact is that rough sleeping has been an issue over decades; it has been recorded over centuries, not merely the past 14 years.

[David Smith]

I repeat my declaration of interest: I have been chief executive of a homelessness charity for the past eight years. Does the hon. Gentleman not agree that, although homelessness has always been with us, it has increased in the past 14 years—by more than 140% between 2010 and 2018 and by an aggregate of more than 120% between 2010 and 2024? Does he also agree that, apart from Everyone In, which brought about a dramatic reduction, there was an ongoing and consistent increase in rough sleeping under the last Government? Does the hon. Gentleman not also agree that Everyone In—I was part of that response—was evidence of what Government can do if they treat rough sleeping as a public health concern? Does he agree that the lessons were not learned from the initiative and that, since it finished, there has been another spike in the past few years?

[David Simmonds]

Given the time constraints, that is the last intervention I will take. I agree with some of the hon. Gentleman’s points. The evidence around Everyone In was positive. The way in which it was carried out by individual local authorities varied enormously because they tend to know their population and situation much better than anybody in Whitehall ever would. The flexibility introduced by the Everyone In policy was carried forward in the rough sleeping action programme and is intended to address the issue much more effectively.

Although I do not deny that the statistics show that following the success of Everyone In there has been an increase, and more recently a decrease, in the numbers of people recorded in that rough sleeping snapshot, I would not agree that there has been no attempt to learn lessons. In fact, when we reflect on the debates in which we all participate in Parliament and on non-legislative issues such as the “Ending rough sleeping for good” programme, which was specifically designed to implement the lessons of the Everyone In programme in a more long-term and sustained way, we see no suggestion at all that there was a lack of attention or effort. The question is whether the outcomes fully reflect that.

Let us consider what the Opposition’s asks or challenges might be as the Government reflect on the policy going forward. No recourse to public funds was introduced by the last Labour Government following the expansion of the European Union. They decided, ahead of other countries, to increase the numbers of countries from which people could come to the UK under free movement. The decision was taken because that Labour Government had a concern about the public’s perception of people coming to the UK to access benefits. We know that that was not the case. That is simply not a factor, but that was the reason why that last Labour Government introduced that policy.

The former Member for West Ham, Lyn Brown, did a huge amount of work on this matter in opposition and the Department for Work and Pensions is now looking at it, partly to consider whether those no recourse to public funds measures, introduced in the 1990s, are still the best fit for the situation today, and also to reflect on the fact that there has been a very large increase in the population of our country during that period. A significant number of people came to our country with no recourse to public funds as part of, for example, working visa conditions.

The last Government debated a question that the new Government will now have to consider: whether no recourse to public funds is applied to the extent that it should be and how it should interact effectively with our immigration system. As I have experienced myself, the issue clearly manifests at a local level with people who, for example, have come to the UK to work in an important public sector job or to fulfil vital services. For whatever reason, they have fallen out of that job and are then, because of the no recourse to public funds condition, not able to access benefits. They find themselves in great difficulty. Although from Whitehall’s perspective that should act as a powerful disincentive to staying in the UK, the fact that legislation going back to the National Assistance Act 1948 compels local authorities to provide varying packages of support and, particularly if there are children in the household, to house people, despite the fact that they have a no recourse to public funds condition, creates significant local cost and significant complexity in working through those cases.

My asks to the Government are about the continuation of Operation Fortitude and the 3% of rough sleepers calculated to be veterans who have benefited enormously from having access to it. Operation Fortitude is designed specifically for those from a military background who might have found it for whatever reason difficult to access statutory support; it guarantees the provision of accommodation immediately through access to a freephone number or a website, allowing for people’s different circumstances. That important programme was implemented by the previous Member for Plymouth Moor View, Johnny Mercer. If the Government are to continue with it, that is welcome. If they are not, an effective, appropriate and equivalent alternative should be provided.

On the rough sleeping initiative, I ask the Government to continue to commit to the funding. The programme is under way and funded until spring next year. It has done a huge amount to support local authorities to bring about the reduction in rough sleeping from the 2017 peak. My ask to the Government is that they either commit to continue the policy of the previous Government or announce an equivalent programme that will bring about the same outcome: bearing down on rough sleeping.

Finally, I ask the Government to acknowledge that the rough sleeping snapshot shows an incredibly diverse and variable issue. The Bournemouth, Christchurch and Poole local authority has also reported a significant increase in the number of rough sleepers. Members representing coastal towns, for example, have started to describe that issue, which was previously seen as more of an inner city, urban matter. We need to ensure that we have a good handle on what is happening.

When the Minister updates the snapshot and looks at the guidance provided to local authorities about how that snapshot is counted, she should ensure that we build on the effectiveness of the work since 2010 to understand for the first time what is happening with rough sleeping in our country, and try to make it more sophisticated. We need to better capture, for example, rough sleeping households that might include children and are often reluctant to make themselves visible at all to statutory authorities.

We need to ensure that women in particular, who may fall outside the snapshot, are captured more effectively in it, and that those under the age of 18 not travelling with adults in a family, but on their own, are better captured. That group are frequently sofa-surfing rather than sleeping rough, but they still have nowhere permanent and safe to go. They are currently not captured by the data because the system is simply not designed to do that. With those asks, I close for the Opposition.

Renters' Rights Bill (First sitting)

David Simmonds Excerpts

Committee stage
Tuesday 22nd October 2024 Public Bill Committees

[The Chair]

For the very last question—a short question and short answer—I call David Simmonds.

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

Q Mr Beadle, reflecting on what you said in respect of the right of the tenant to challenge rent increases, it seems to me, as drafted, that the consequence is that a tenant will always challenge the rent increase, because the worst possible outcome is that they defer having to pay the higher rent until they get the hearing, and the best outcome is that there is no increase. Is that the view of your members?

Ben Beadle: Yes. Straightforwardly, yes it is. Landlords will have to act differently under section 13. I would encourage landlords to speak with their tenants. No one wants to get a section 13 notice through their door as a surprise, so landlords do need to have some soft skills about them and have a sensible chat with their tenants, but yes is the straightforward answer.

[The Chair]

We have to bring things to a close now as the next witnesses are due in. I thank both our witnesses very much for coming and giving evidence this morning.

Examination of Witnesses

Tarun Bhakta and Tom MacInnes gave evidence.

[The Chair]

Good morning to both our new witnesses. Could you begin by introducing yourselves? Then I will go to Members to ask questions.

Tom MacInnes: Good morning. My name is Tom MacInnes. I am the director of policy at Citizens Advice.

Tarun Bhakta: My name is Tarun Bhakta. I am policy manager at Shelter.

[David Simmonds]

Q This is the second time that Parliament has had a go at reforming renters’ rights. Could you tell us how you feel this Bill is different in what it means for tenants, compared to the previous attempt to reform the rented sector?

Tarun Bhakta: First, I would like to thank the Committee for inviting us to give evidence today. To answer your question on how the Bill is different, there are significant changes from the previous version of the Bill. In our view, the previous version was of good intention, but full of aspects that would undermine its core purpose, particularly as the Bill moved forward and changes were introduced, for example to essentially remove periodic tenancies or reintroduce fixed-term tenancies—that minimum period for tenants.

Similarly, there were policies with a lot of shortcomings —ideas such as the no re-letting period after landlords evict a tenant. We have seen in Scotland that one in five landlord sale evictions have not ended up in sale, so there is evidence of abuse in the system. It is really important that there are measures to deter landlords from abusing the new section 8 system, and to catch landlords who are dishonestly evicting tenants. The previous Bill included only a three-month no re-letting period, which would have been much too small a deterrent for landlords seeking to abuse the eviction grounds and evict tenants dishonestly. We are really pleased to see changes in this Bill that go significantly further, such as the 12-month no re-letting period.

There were measures in the previous Bill that we would call half-baked, particularly when it came to notice periods. We know that the most common type of eviction in the new system will be for landlord sale or for landlords moving in. The previous version of the Bill included just two months’ notice, which would have retained and recreated many of the problems that we see in our current private rented sector, where tenants are faced with short notice and unreasoned evictions. We think many of those are avoidable, but we also know that that short notice is not long enough for renters to find a new place to live. There are really positive changes in this Bill in comparison with the previous version. We think it will go a very long way to addressing the needs, but given that we are so early in the Parliament —we welcome the speed at which the Bill is being implemented—it is still important to view this Bill as a work in progress.

In our evidence today, we will pick out two key areas. First, we think the Bill can go further in chapter 3—the discrimination clauses—on improving access to rented homes. Secondly, we think the Government need to take another look at rent increases. Looking at the evidence from tribunal cases, we do not think the current approach in the Bill—to tweak the work of the tribunal, as discussed in the previous panel—will achieve its aim of preventing evictions by the back door, or economic evictions, as they have been called. We think that the evidence that we have heard today on the tribunal today shows that we need to go further there.

Tom MacInnes: We would agree with quite a lot of that. The Bill does improve the position for renters. We agree with the changes around re-letting, but we would say that that is probably only as strong as the enforcement, so we would be interested in looking at that further. We also welcome the longer notice period and the stronger rules on discrimination against families and those receiving benefits. Those are definitely things that we think are improvements.

We may come on to this, but there are other areas in which we might be looking for a couple of improvements. In particular, there was some discussion earlier around the portal and the use of the portal. We think that it could be used for better establishing what the market rent was in an area. If you are talking about in-tenancy rent rises, is that possibly a place where you could agree what actual rents were, rather than past rents? There could be something useful there, but broadly speaking it is a step in the right direction.

[David Simmonds]

Q May I pursue a couple of points, Mr Bhakta, on the difference between things set out in legislation and the use of guidance? I know that you gave evidence previously on this issue, which has come up not just in the context of this Bill. Could you draw the Committee’s attention to your views about how that has an impact in the real world and how it would most effectively be addressed, given the complexity and, sometimes, the timing and flexibility of some of the issues that that is designed to address?

Tarun Bhakta: Yes, I think so. I think you might be referring to talking about the evidence requirements on eviction grounds.

[David Simmonds]

indicated assent.

Tarun Bhakta: It has long been our call that the Bill should specify and set a higher threshold and make that clear, particularly for the landlord sale and the landlord moving in eviction grounds. We also think that the Bill should introduce a post-eviction proceeding.

There are two really important parts to establishing that clarity in the Bill. First, tenants and landlords need absolute clarity about what constitutes a legitimate eviction. We see through our legal services that the decision on whether to challenge an eviction notice in court is an incredibly complex and difficult one for tenants to make. The process of going through the courts to challenge an eviction is time-consuming, costly and very stressful for tenants, so it is about setting out that clarity, particularly in those landlord sale and landlord moving in eviction grounds. Making that threshold clear would provide clarity for tenants to help to make that decision. We believe that that would also have the effect of supporting tenants to understand where an eviction is legitimate and prevent some of those cases from making it to court.

Secondly, the current wording in the Bill is very open. It goes further in Scotland, in our view, and although it is all very well being confident in setting guidance for the courts and hoping that the judges make the right decision in court, tenants need that clarity before we reach the court stage. Also, judges do need some steer; we see some inconsistency in cases between judges, and it is not the case that they will all interpret the law in exactly the same way, so setting that clarity in the legislation is important. We cannot have a situation in which the landlord states that they intend to sell the property and that is case closed: we need more clarity than that.

[Matthew Pennycook]

Q Thank you both for coming to give evidence to the Committee. Can I pick up on two points? The first is on rent increases. The Government have been very open that we have no plans to implement rent controls, and we have been clear about our reasons why. I take the point that you might have a different view, but we will set that to one side for the moment. What are your concerns around how the process in the Bill could be used by landlords as an effective section 21 by the back door? Perhaps we can have a bit of an exchange about this, but why do you think it does not provide that protection against unreasonable, within-tenancy rent increases?

Tarun Bhakta: It is difficult to set that to one side, so you will forgive me if I do not.

--- Later in debate ---

[The Chair]

Could the panel begin by introducing themselves?

Tom Darling: I am Tom Darling, director of the Renters’ Reform Coalition, which is a group of 21 leading housing organisations that have been campaigning for progressive reform of the private rented sector.

Ben Twomey: Good morning. I am Ben Twomey. I am a private renter myself. I am also chief executive of Generation Rent, the voice of private renters across the UK.

[David Simmonds]

Q I have two questions, the first of which concerns the role of the insurance industry in the sector. I am sure that many of us have heard from constituents that most landlords’ insurance requires a prospective tenant to pass a credit check. If the tenant fails, the insurance company will not insure that property if it is rented to that individual. I am interested in the view of your members or participants in your organisations about how that issue impacts the availability of rented properties.

Tom Darling: I think you are asking about affordability assessments and the role they play in tenants being able to access rented housing. Is that right?

[David Simmonds]

Q It is not so much about the affordability assessments. When a tenant applies for a property, the agent will usually, as part of the requirements of the landlord’s insurer, put them through a credit check, and if they do not meet the standard that that insurer requires, the insurer will say, “You won’t get insurance if this tenant is occupying the property.” Therefore, that is the end of that discussion. I am interested in the extent to which you have come across that as an issue.

Tom Darling: As regards the Bill, we think that those sorts of affordability checks are acceptable, but we think that measures—as you have heard from previous witnesses—that go beyond that can be discriminatory, and often look to punish tenants and discriminate against tenants on the basis of their income. You heard about rent in advance and guarantors. We would like to see a limit to guarantors that says that, if you pass an affordability check, you should not be asked for a guarantor in addition.

Ben Twomey: We are in an interesting situation where someone could be working in a key worker or essential worker role but there are parts of the country in which it is unaffordable from them to live. They probably would not be able to pass some of these affordability checks to rent privately. That would be fine if there were other options available, but most private renters cannot afford to become a homeowner if we want to and cannot wait the 10-plus years to access social housing if we need to, so the only option is to find a way into private renting—otherwise we find ourselves in temporary accommodation. There are 150,000 children living in temporary accommodation right now. The Bill needs to go further to try to address that, because it speaks to some of the wider Government ambitions around making work pay. It does not really help us if our income increases but it is taken off us by our landlords before it reaches our pocket. Wider affordability questions, which I am sure we will come to, are relevant to the credit checks and the ability to rent privately.

[David Simmonds]

Q I want to ask you briefly about the enforcement regime. It is envisaged that local authorities will be the key enforcers of new rules and regulations. What is your view about the capacity for that and how it should be resourced?

Tom Darling: We think that local authorities should be funded on a per privately rented property basis. We have heard that the Government will set out new burdens funding, but we think that the funding should be allocated according to the size of the private rented sector in that area. I want to be really clear that we support selective licensing and would like to see it enhanced and deepened alongside the new database, and we think that a number of changes made by previous Administrations to the way selective licensing worked made it harder for local authorities to apply for selective licensing schemes. There are some straightforward changes that this Government could make: removing the Secretary of State’s veto over the schemes; allowing local authorities to refer to housing conditions when they are applying for selective licensing; and extending the schemes from five years to 10 years. We think that would work well alongside the database and not in lieu of the database.

Ben Twomey: If I could take the resourcing point and slightly widen it, there was a cost of £1.7 billion in the last year to local authorities for temporary accommodation —for housing people who are no longer in their homes. This Bill will end section 21, which is really welcome, because that is the leading cause of homelessness and ending it will hopefully make some savings for local authorities, as well as bring enormous benefits for tenants, who will be better protected.

There is also a Government cost of local housing allowance, which has been in the billions in the last few years. That is to give benefits to people so that they can afford to privately rent. This Bill could go further with affordability not only to protect people in their own homes but to make the Government change the way they resource the support they provide for people in their homes—moving some of that burden of cost away from the need to pay so much for private renting and towards a better-regulated market, which would put limits on the ability of landlords to raise rents.

[David Simmonds]

Q If I may pursue that final point, do you have any financial modelling about the impact on the homelessness budget that would derive from the Bill?

Ben Twomey: I do not have any with me, but I can take a look at that and write to the Committee.

[Matthew Pennycook]

Q Thank you, gentlemen, for coming to speak to us this morning.

It would not be a Bill Committee evidence session if every interest group was not telling us that it had a way to improve the Bill in some way and from different perspectives. We have heard a lot this morning about the various concerns and how they are being addressed. In general terms, however, particularly given your concerns about the previous Government’s Renters (Reform) Bill, do you think this Bill strikes the right balance and levels the playing field between landlord and tenant?

Tom Darling: I will start by introducing the situation in the private rented sector as it is today. The Resolution Foundation said this year that

“the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy.”

The private rented sector is the worst of our ageing housing stock; in fact, it is the worst of the worst. It is the least secure, the worst quality and the most expensive of the housing tenures in this country, and we have the worst of any major country in the world. That is embarrassing and that is what we are talking about here. We need root and branch reform. We are happy that the Government have acknowledged that more significant reforms are required than those that the previous Government put forward, but we still need to see some changes to the Bill to go even further and deal with the scale of the crisis we are dealing with.

Ben Twomey: We are delighted that the Government are pressing on with this work very quickly, and there is a promise in the manifesto to end section 21 immediately—as quickly as we can get this law passed. That is really welcome, as it will protect people from homelessness.

There are also lots of things in the Bill that I have no notes on. For example, the bidding wars legislation seems well-written; it seems like it will make a genuine difference to people like me, who have experienced being invited to bid on homes just because we reached the front of a queue and the landlord realised that they could up the rent. Some of the provisions—including the introduction of Awaab’s law into private renting—are beginning to create more of an even playing field, as you say, for renters compared with other tenures.

I want to take a moment to talk about someone I will call Ayesha from Hertfordshire. She is a schoolteacher and a single parent, and she has been struggling to keep up with the relentless rises in rent that she has faced in recent years. She says, “There are moments when I feel so overwhelmed and exhausted, like I’m carrying the weight of the world on my shoulders. I try to stay strong for my children, but the stress and anxiety are always there, lingering in the background. I just want to provide them with the life they deserve, but with the way things are going I fear that I might not be able to. It’s a lonely, terrifying feeling, and it’s hard not to feel defeated by this constant struggle.”

It is important for people like Ayesha—given what is being said in this Committee, this Government and this Parliament as a whole; every MP in this room promised to end section 21 and, in more words or less, promised a fairer deal for renters—that this Bill takes the opportunity to resolve these issues. Maybe we will come to this, but we believe that that will involve limiting the ability for landlords to raise rents—not raising them to the market rate, but instead limiting them to the level of inflation or wage growth, so that rents begins to match the real, lived experience of people who are renting.

--- Later in debate ---

[The Chair]

This is our final witness; please introduce yourself for the benefit of Members.

Richard Blakeway: Thank you very much. I am Richard Blakeway, the housing ombudsman for England.

[David Simmonds]

Q May I ask about the role that the landlord insurance industry plays, particularly in the context of people being able or unable to access accommodation? Reflecting a question put to an earlier witness—if a landlord is insured and the insurer says that to rent the property to the tenant they have to meet a certain standard of credit check, and that that has to be done or they will not insure them if the property is rented to that tenant—do you have a view on how the Bill might address that issue?

Richard Blakeway: That was not the first question I was expecting, but thank you very much. One of the requirements the Bill introduces is for landlords to be on the landlord database, with the checks required on that database, and then for them to join the ombudsman service. Whether or not there is a requirement around that as part of the criteria to be eligible to let properties is a consideration, and then that depends on whether or not they would join the ombudsman service.

In terms of the decisions that any ombudsman in the future might make, if there were issues around insurance—typically those are matters that tend to sit with the courts—or a landlord not facilitating claims around insurance, there might be an issue around whether or not insurance is in place, and that might be something that we then highlight in our decisions, which might be information we should share with the lead enforcement agency under the duty set out in clause 109. You may feel I have not fully answered your question.

[David Simmonds]

Q That is helpful, and it leads me to my next point, which is about the evidence you gave to the Levelling Up, Housing and Communities Committee stressing the need for there to be clarity of jurisdiction. Does this Bill provide that clarity? If not, what improvements need to be made to ensure that clarity is there?

Richard Blakeway: The Bill is obviously quite comprehensive and will make a significant difference as a piece of legislation, but a considerable amount of information will be set out in statutory instruments after the Bill. There are, then, some answers in the Bill and some that will come in future regulations.

Your point about the clarity of jurisdiction between an ombudsman and other actors is fundamental. One of the most important elements to clarify the role of the ombudsman service will be the ombudsman’s scheme. Clause 63 sets out requirements around what should be in the scheme—what must be in the scheme and what could be in the scheme. I would probably encourage there to be more in the choices for Ministers as to what could be in the scheme than in the list of what must be in the scheme, because there will need to be agility, as the ombudsman—whoever is appointed as the ombudsman service—and the other actors start to come together.

The importance of clarity is obviously for individuals to know what route to take if they are seeking redress, and it is also important to make sure that there is real coherence in terms of raising standards and promoting good practice in the rental sector.

I can give a specific example where I think there would be nuance between the ombudsman service and the tribunal, which is around changes to rent. If a section 13 notice were issued, the decision on the rent would be a matter for the courts, and the Bill seeks to change the role of the courts, or the tribunal, in relation to that. But we or whoever was appointed as the ombudsman service could potentially play a role to decide whether a fair process had been gone through rather than the actual level of the rent. That is very similar to what we have today on the social rented sector and service charges, and our role as an ombudsman in the social rented sector and the role of the tribunal.

[David Simmonds]

Q Thank you. May I pursue that last point a little further? One of the issues that has been raised in the evidence so far is about the tenant’s right to challenge rent increases. It is helpful that you have introduced the point about service charges. Clearly, one of the options for a landlord who cannot get the money through a rent increase is to look to secure it through a service charge increase instead. How would you see the current set-up and the set-up proposed by the Bill addressing that kind of issue?

Richard Blakeway: If you look at our current powers, role and approach around charges, we are very clear that we will consider transparency around why those charges are being made and their purpose, we will consider whether the service has been provided and the quality of that service, and we will consider whether an appropriate process was gone through. For example, at the moment we would consider section 20, where significant charges have to go through a process, and ask whether that process was followed. Those are decisions that we make and we can therefore very clearly consider what the requirements are, either set out in statute or under the provider’s own policy. That is the basis on which we would make a judgment.

I think that is a parallel that is relevant in your example in this space. Clearly, if we were seeing evidence that another mechanism was being used to increase the charges on a tenant and that was unclear and potentially unjustified, that could be a point of maladministration where we would uphold a complaint.

[Matthew Pennycook]

Q Richard, thank you for your time this morning. I have put it to other witnesses that, in general, the potential of the database and the ombudsman to make a real difference as part of the new system is often underplayed and I do not think it gets enough attention. You rightly made the point that there is a spectrum between “must” and “could”, but the intention is very clear, on the tenant side, to provide access to services to deal with complaints, and there is potential on the landlord side around landlord-initiated mediation and the role the ombudsman could play there. Can you give us your best sense of how much the new PRS ombudsman could alleviate pressures on other parts of the system, including the courts?

I have a follow-up question; I will ask them in one go, Mr Betts, and leave more time for others. We have been very clear already that the new ombudsman will need to work collaboratively with others to resolve complaints and that will be set out in statutory guidance. What do you think needs to be included in that guidance to ensure, in particular, that the ombudsman is working effectively with local authorities?

Richard Blakeway: Those are really important questions. The Bill introduces a new framework of rights and responsibilities for both landlords and tenants and, as you set out, the ombudsman service—whoever is appointed as the ombudsman—plays a part in that. I would say as an aside very early on that I welcome the Government’s recognition of the strategic benefits of bringing together the social rented sector and the private rented sector, particularly given the common body of existing and new legislation that is tenure blind and speaks to both the private and rented sector, whether that is the existing Landlord and Tenant Act or the potential to extend Awaab’s law and the decent homes standard. I think there is a real benefit to system coherence and the right relationships, as you highlight, and also to making sure that benefits do not unintentionally fall in the wrong place, by appointing the housing ombudsman as the provider of redress.

I think there are three key relationships. There is the lead enforcement body, and working out the role of that body. In particular, looking at clause 109, information sharing between the ombudsman service and the lead enforcement body will be vital, so codifying that role will be important.

There is the tribunal, which we have alluded to. One of the really important pieces of work is to develop, very early on—I would have thought in advance of any statutory instruments—a draft scheme for the ombudsman service, and to collaborate with a number of bodies, including the courts, on what is in the scheme and therefore the decisions that the ombudsman might take, and what is outside it and clearly rests with the courts. I have given the example of section 13. The ombudsman could potentially play a role in looking at aspects of section 13, which might relieve pressure on the courts.

There is then the relationship with local authorities and enforcement. On the database itself, I think there has to be a decision about who owns the database and is going to provide it—whether it sits with the Department or the lead enforcement agency, for example—and the pace at which it could be developed to support the introduction of the redress service.

One of the other areas to consider, where there may be a pressure that emerges in the system—a pressure that I think the legislation recognises but could go further to address and relieve—is enforcement. The Government have rightly indicated that there is concern around compliance with ombudsman remedies. There was a survey in, I think, 2018 that showed 46% of private landlords not complying. At the moment, the Bill includes a kind of last resort to try to enforce compliance, which would be introduced later through statutory instruments. I wonder whether consideration should be given to bringing that forward, so that compliance issues are not having to be directed towards local authorities, and creating pressures there.

I also wonder whether the legislation could go further by, for example, amending clauses 66 and 96 to include rent repayment orders as part of non-compliance with ombudsman decisions. The Bill is rightly clear that if a landlord does not sign up to the ombudsman service then it could be subject to a rent repayment order, but it is silent on whether a landlord that is non-compliant with the ombudsman’s decisions should also be subject to a rent repayment order. I think that if you were to introduce that, that would strengthen compliance and reduce the need to direct things around the system to try to address them.

Renters' Rights Bill (Second sitting)

David Simmonds Excerpts

Committee stage
Tuesday 22nd October 2024 Public Bill Committees

[The Chair]

Thank you very much. David Simmonds will ask the first question.

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

Q49 I would like to ask you about the impact that the Bill will have on first-tier tribunals and whether they are ready for the potential consequences. Perhaps we can develop that to ask about the interactions with ombudsman services as well, with one of the issues being how renters whose rights are infringed, or where there is a dispute, can achieve reasonable restitution, whether that involves going to court, a tribunal or the ombudsman service.

Justin Bates KC: Obviously, the best people to ask about the FTT’s resources and whether it is ready will be the FTT staff, the president and so on. I simply note that Parliament has given the first-tier tribunal a lot of new powers over the last few years, and I am sure it would welcome additional funding to enforce all these things. My impression, as a practising barrister, is that the FTT works better than the county court system; my experience is that it is generally faster and more responsive. But you are giving it a lot of new work to do, and I am sure it would be grateful for any money you can send its way.

Giles Peaker: The ombudsman would have to answer the question on the ombudsman. My impression is that the ombudsman—the social housing ombudsman as it is—is currently receiving a lot of complaints and there is some impact on the timescale in which they deal with matters. Clearly, if there were an extension or a new ombudsman, the resourcing of that would have to be looked at. I do not think any of us could say that the county courts are not under strain at present—they are, across the board. How much of an increased workload there would actually be as a result of the Bill, though, is more of an open question.

Liz Davies KC: I just add, in respect of the county court, that part of the problem with litigation at the moment is litigants in person. There are new rights in the Bill that tenants will want to rely on. Housing legal aid is in crisis, there are what are called housing deserts across the country, and frankly, it is more efficient for tenants to be able to receive early legal advice so that they know whether there is or is not a point to take to the county court. I suppose one message to you, although it is beyond your remit, would be to try to increase legal aid as well. It would make litigation more efficient.

[David Simmonds]

Q Thank you. That is a really helpful point. Are the terms of the new possession grounds introduced by the Bill reasonable for both tenants and landlords? In summary, do you feel that the Bill gets the balance right?

Liz Davies KC: I am concerned about mandatory grounds 1 and 1A. Clearly, they bring an end to no-reason evictions, with the end of section 21, but they are still no-fault evictions as far as the tenant is concerned. It is helpful that the period will be one year and that there is four months’ notice, rather than the two months’ notice in the previous version of this Bill, the Renters (Reform) Bill. But I am concerned that the balance is not right.

Mainly, I am concerned about the idea of a court being faced with mandatory grounds when the tenant has done nothing wrong, and there may be incredibly compelling circumstances about the tenant but the court cannot look at them; it has absolutely no remit and no jurisdiction. So the tenant might say—I am sorry to have to say this—“Myself or a member of the household has a very serious terminal illness. To ask me to move within four weeks or two weeks, or what have you, is going to have an appalling effect on that.” They might say, “We have a very severe disability and so it will take us longer than other people to find somewhere to live.”

My preference would be to make all grounds discretionary, because I think that does provide the balance. But even if Parliament were to reject that view, it seems to me that courts ought to have the opportunity, in exceptional circumstances, to look at the tenant circumstances and to either reject a possession order, or have the flexibility to make a possession order that is suspended for a certain period of time—postponed for a certain period of time. It seems to me wrong in principle that a court cannot consider any circumstances of the tenant, whatever they are. That is my concern on 1 and 1A, and I think Justin will speak about 6A.

Justin Bates KC: Can I ask you to also look very carefully at ground 6A when it comes to scrutiny? Ground 6A is the new ground for possession, where the landlord needs possession, because they are on the banned landlord database or because they are operating an overcrowded house in multiple occupation—the landlord is effectively a criminal landlord and needs possession to deal with the consequences of their criminality. Presently, that is a mandatory ground for possession. I understand why, because I can see that there is a difficulty with one arm of the state saying, “You are breaking the law and you will keep breaking the law if we don’t act, and we won’t allow you to get people out.”

Can I flag two concerns? First, there is a concern among those in frontline tenant services that it will act as a disincentive to people reporting their rogue landlords, because if you report your rogue landlord to the local authority and it then puts them on the banning order list, you face a mandatory ground for possession.

Secondly, it strikes me as odd that a tenant who has done nothing wrong—save had the misfortune to have a criminal landlord—is required to move with no compensation and no provision of suitable alternative accommodation and so on. I can understand why we need 6A. I understand that we do not want to leave people committing crimes because a judge will not give a possession order, but it strikes me that you could look at some sort of compensation scheme. If you were minded to do so, the model is section 34 of the Housing Act 2004, which already gives the tribunal the power to order compensation when people have to leave because of prohibition orders. You could steal lots of the language from section 34, put it into ground 6A, and you would have much less scope for the unfairness that seems to me to be evident.

Giles Peaker: On the broader question of whether a balance is struck, I think it is a political decision as to where the balance falls, but broadly there is one. I do have specific concerns about 1 and 1A, as well as those raised by Liz, which are in terms of the evidencing of a mandatory ground. If the ground is the landlord wants to sell, or the landlord wants to move in or move in a family member, what standard of evidence is required for them to demonstrate that? In terms of the current wording, it would probably be enough to simply express an intention to do so. My sense is that there needs to be at least a level of formality—a signed declaration of truth on a statement or a particulars claim signed by the landlord—in terms of bringing possession proceedings on the back of that.

But there is also what follows on from that, and I think this issue has come up in Scotland, where there is a similar sort of provision. If a landlord re-lets a property within the 12 months proposed, the potential enforcement is great: it is a criminal breach, with a prospective civil penalty, and a prospective rent repayment order application by the former tenants. That is all great. The question is how you get from the possession order being made to action on the breach. As it stands, it appears that the only way in which that could possibly happen is if the ex-tenants realise that the property has been re-let—heaven knows how, and heaven knows where they will be in the country by that point—and then notify the local authority, which can take enforcement action. It strikes me that there should be some kind of recording that that ground has been used—a landlord database might be a place for that. The local authority can be aware that that ground has been used, and if it becomes aware of a re-letting, the full enforcement apparatus can kick in.

[The Minister for Housing and Planning (Matthew Pennycook)]

Q Thank you all for coming to give us your expert opinion. I have two questions, one specific and one general. First, to follow up on grounds 1 and 1A, I understand the general push for all grounds to be discretionary, but we took a view that these should be mandatory, in terms of getting that balance right. But I very much hear the points being made about evidential requirements.

Could I ask you to draw out a bit further how you expect this to work? In a sense, when we talk about discretionary grounds, we are always told, “Let’s trust judges”—that was certainly the case with the previous Bill. In a sense, what we intend to do here is trust judges’ judgment on whether those grounds have been used appropriately, and we would expect the type of evidence that they look at to include things like a letter instructing solicitors or an affidavit. But do you not expect the courts to operate in that way on the basis of the Bill? Do you expect them to act in a more light-touch way, as you have suggested? It is not usual practice for Governments to force the courts to consider certain types of evidence, and if that is the case—if you accept that—where do we go to try to influence the courts to look at certain categories of evidence, to ensure that these grounds are being used appropriately?

Giles Peaker: In terms of how you can specify things, to some degree, it is a question of wording. Grounds 1 and 1A are expressed as an intention, and if the intention is there, the ground is made out. If a landlord has written to the court to say, “I intend to sell”, it seems quite difficult for the court to go behind that, unless the tenant has evidence to the contrary. So partly it is around language. Intention—settled intention—needs looking at. But with different wording, a different evidential requirement may well follow—so potentially, as you say, the landlord would have to evidence engagement with an estate agent or a solicitor on a sale, or would need evidence from the relative who was intending to move in, to the same effect.

--- Later in debate ---

[The Chair]

Order. I am going to stop you there, because this is an opportunity for Committee members to ask questions of the people who have come along as witnesses. We have limited time and once we start opening up a debate with other Committee members, it will be at the expense of being able to hear what we hope is, and is likely to be, very valuable evidence. If you have a question for any of the members of the panel, I shall be happy to take it, but if not, I suggest that you have your arguments with other Members when we get into full line-by-line consideration, when there will be plenty of opportunity for you to intervene on another Member with whom you disagree.

[David Simmonds]

Q I would like to ask the panel for their views on issues around insurance. You can get different kinds of landlord insurance; some are optional and some are not. Some provide you with a guarantee to pay the rent if the tenant fails to pay in time. Some insure against damage caused to your property by a tenant while they are occupying it. Others may be insurances that are required as a condition of a mortgage, such as buildings insurance. There may also be contents insurance, which is normal but not strictly legally required.

I know there is some pressure around issues such as tenants with pets and making sure that they have a right to occupy. A landlord may discover that the cost of insurance is significantly higher because of the pet or because of some other circumstance relating to the tenant —for example, they might have a poor credit history and are therefore not insurable for failing to pay the rent via the landlord’s normal insurance company. I am interested in how you see the Bill dealing with that issue and ensuring that tenants are not effectively barred from applying to rent particular properties because of those insurance issues and also that landlords do not find that the insurance they must have is so expensive as to effectively make their business as a landlord impossible.

Giles Peaker: My understanding was that the tenant could be required to have pet insurance. It is a permitted payment.

Liz Davies KC: Or the landlord has the insurance and the tenant refunds them. You have made a broader point, but just looking at clause 11 on pet insurance, the tenant will refund the landlord, so it becomes an exempted permitted payment under the Tenant Fees Act 2019. On the cost of insurance, I am sorry, but that is certainly beyond my legal expertise.

Giles Peaker: In terms of that situation, it is hard to see an impact on building or contents insurance. For insurance for unpaid rent, you would have to ask the insurers, but my immediate sense would be to ask why it would be different from now, when the tenant will face possession proceedings for rent arrears if the rent is not paid. But that would have to be one for the insurers.

[David Simmonds]

Q The question is about the impact on supply. A prospective landlord may decide from the outset to insure their rental income from the property, but after the required credit check on a tenant, the insurer may say, “We won’t insure this tenant. If you put that person in the property, we won’t cover it”—for instance, if they had a bad credit history. At the moment, the tenant and landlord can negotiate a higher deposit or a similar way to deal with that, but if that is precluded and you cannot go for a higher deposit or rent in advance or different arrangements fixed in the contracts of guarantors, the result may be that that person cannot rent a property because they cannot achieve the relevant credit check. I am keen to ensure that people who are in that situation—I have had constituency examples—do not find themselves effectively excluded from the private rented sector because they become uninsurable as tenants.

Giles Peaker: Deposits are already capped.

Justin Bates KC: You cannot do it through deposits, because paragraph 2 of schedule 1 to the Tenant Fees Act 2019 will stop you doing that. You can presently do it through rent in advance, because the Bill does not prevent that, although I query whether it should. You could not do it by increasing the rent above market value, but you cannot do that anyway because section 13 as it stands would kick in.

Liz Davies KC: Is Giles’s point not right that this is a current problem in any event? Sorry to be asking you questions, but he is suggesting that it is alleviated because of the mechanism of section 21.

[David Simmonds]

Q What I am hearing from constituents affected by it is that rent in advance is the method by which they get around this, as well as guarantors potentially, but if the Bill removes that scope, then the one route they have to negotiate—because of their bad credit history—is effectively removed and they are potentially excluded from that market. I am just trying to understand whether this is genuinely a problem.

Liz Davies KC: So it is the rent-in-advance point. We would have to look at what the Bill says about guarantors. I am sure the Minister knows, but that would be the answer—something around advance rent or guarantors. It negates the point earlier, I accept that. This needs some thought.

[Lola McEvoy (Darlington) (Lab)]

Q I want to interrogate further what opportunities you see the landlord database providing for private renters and good landlords as a result of the Bill. Your area of expertise is vast and it is a joy to listen to you contribute, so I would like you to elaborate on any positive outcomes you think could come from the Bill—we want to make sure those can happen.

Liz Davies KC: The fact that landlords are required to be registered will raise the bar for good landlords. We do not yet know what information should be on the database. I cannot remember whether it is in the Bill or the explanatory notes, but it is assumed that any enforcement action or rent repayment orders they have had to make—anything that affects their quality as a landlord—will be there. That must raise the bar and set a minimum standard for landlords, which we currently do not have. Tenants, frequently those at the bottom of the market, are then subject to the consequences and disadvantages of that, so having that bar is really important.

The other thing is that making the information, when we know what it is, publicly available is extremely important because it holds landlords to account. Finally, it also affects the local authority’s ability to bring the various enforcement measures they have under both the Housing Act 2004 and the Bill.

Justin Bates KC: I did not hear Ben Beadle’s evidence this morning, but if you get the right details on the database—so that it is a publicly searchable database that shows you whether your landlord has done anything in a list of prohibited things and so that it has details about the safety of the building, for example whether the gas safety certificate has been uploaded or not—I would have thought that he and the NRLA would have been crying out for something like the landlord database. It gives them what they have always wanted: a way of differentiating the good landlord from the bad landlord and a simple way for a tenant to identify the good landlord and the bad landlord. If I put your name in and it comes up on the database that you are subject to a banning order, I probably should not rent from you. If I put the property address in and discover a prohibition order—those are registered on the database—I probably should not live there. That is what you should be able to do if you can get the database to work properly.

The way you have done it, for obvious reasons, it is all at the level of principle. The critical information is what you will do in secondary legislation about what is accessible. But if you get the database right, you go a really long way towards helping tenants to make informed decisions and helping good landlords to drive bad landlords out.

--- Later in debate ---

[The Chair]

Welcome; please introduce yourself.

Judicaelle Hammond: I am Judicaelle Hammond, director of policy and advice at the Country Land and Business Association. We represent 26,000 members in England and Wales who own and run land-based properties. We estimate that our members account for about a third of properties in the rural private rented sector.

[David Simmonds]

Q Your organisation previously warned that young people could be forced out of rural communities due to a lack of affordable and available homes. How do you feel this Bill will affect that situation?

Judicaelle Hammond: Unfortunately I do not think the Bill is going to make it much better in the sense that the main issue is the availability of housing full stop, and particularly the availability of affordable housing. Our members are doing a great deal already to provide that. We reckon that 23% of our members’ properties are let out at less than 80% of market rates, but at the end of the day there probably is not enough to go round and therefore we see the changes to the planning sector as the key. What the Bill might do, particularly with the demise of section 21, is to make it more difficult for people to enter or want to stay in the private rented sector, which is an issue. Again, as I said, it is by no means the only issue. I think the real key is supply.

[David Simmonds]

Q Thank you very much indeed; that is helpfully clear on the point about supply. In written evidence you have warned that some proposals to reform the private rented sector could risk overcorrecting in favour of tenants. Do you still have those concerns about the Bill in its current form?

Judicaelle Hammond: Yes. The main issue is the ability of the courts to deal with the extra cases that might be coming their way. One of the solutions, perhaps, is to look at some of the mandatory grounds and make them paper-based. That might improve things.

In terms of section 21, I should make it clear that among our membership the average time that the tenancy lasts is 7.5 years, which is nearly twice as long as the national average. Our members are responsible landlords; many of them will have had tenants who have been there for decades. We are not in the business of evictions or fast turnaround. We are not using section 21 very much, but when it has been used—it has included, for example, issues about antisocial behaviours—we have had some horror stories of members waiting for 12 to 18 months to get their properties back.

Without section 21, in the courts I think it takes at the moment 24 weeks from application for possession to actual possession, and some members are taking far longer than that with county courts that have closed. Digitisation might be a good thing, but how long will that take? There is an issue for us about reducing, unwittingly perhaps, the supply of private rented sector properties in rural areas as a result of the Bill.

[David Simmonds]

Q I have one final question. I would like to explore the specifically rural and agricultural aspect of this. I know it is common in rural areas for properties to have things like agricultural worker conditions on their occupation and for properties to be provided with a licence to occupy rather than through a tenancy in the traditional sense, because the accommodation is connected with the work that the person does at that specific location. What is your view of how the Bill will impact or deal with those types of situations?

Judicaelle Hammond: We are grateful to the Government for the new ground 5A, which deals with incoming agricultural workers. That will help—no question about that. And we are grateful for the new ground 5C, which is a ground to get property back because a job has ended, where the property was limited to the employment.

There are a couple of other grounds that are not covered at the moment and would be needed for rural businesses. The vast majority of rural businesses are not linked to farming or agriculture, but there might still be times when—we hear this from our members all the time—the provision of accommodation is necessary to attract or retain people, particularly when there is nothing else around. They could be in a really remote rural area or it could be because, for example, the person in that job needs to be on call, which would apply to security, caretakers or vets. Or it could be for people working antisocial hours in hospitality, for example, or at a wedding venue, where there is no longer public transport available at the time they are meant to finish or they need to start really early to set up before the wave of tourists come—and so on.

Increasing and expanding ground 5A to include service occupancies in very defined circumstances would be really helpful. To avoid abuse, there are definitions of what that could cover in other legislation that could be referred to. That is the main ground.

The second ground that is needed for agricultural workers is a new ground for what is known as suitable alternative accommodation. Some categories of agricultural workers have protected tenancies under existing legislation—the Rent (Agriculture) Act 1976—and assured agricultural occupants are also protected under the Housing Act 1988. For example, you might have a retired dairyman or indeed their widow who is still in the main dairy. You need to recruit somebody to replace that dairyman. If you have more than one property, it would be useful to have a ground to get it back, in order to then move the retired dairyman or the widow in that property. Obviously, if you have only one property, it is game over, but in the case that you have a small portfolio, it would be really useful to have that, because you have a legal obligation to rehome that person but you need the property in which they currently are.

[Matthew Pennycook]

Q In response to the previous Government’s White Paper, “A fairer private rented sector”, you questioned whether we should look to introduce a decent homes standard to the private rented sector. Is that still your view and, if so, could you elaborate on why?

Judicaelle Hammond: Yes, sure. I think it needs updating because it was designed for problems in the social sector. It might or might not be applicable to the private rented sector. It also does not deal very well with older properties, which is the vast bulk of what our members have. To judge the private rented sector against the decent homes standard as it currently is would be, I think, misleading, and it would have all sorts of unintended consequences. For example, in small cottages in rural areas, there are typically very small kitchens and so on. They would not necessarily fit, and it would destroy the character if you were to change that—

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[The Chair]

Straighten your ties, because we are now going to be on Zoom. We have until 3.20 pm. Please can you introduce yourself?

Anna Evans: I am Anna Evans, director of Indigo House. We are a housing consultancy based in Scotland, but we cover the UK in terms of affordable housing research and consultancy.

[David Simmonds]

Q Particularly given your experience in Scotland, it is valuable to have you as a witness. Your organisation talks about wanting to improve the effectiveness and affordability of the housing market. To what extent do you think the Bill will contribute to achieving those goals?

Anna Evans: I am here as an expert on the Scottish private rented tenancy and the reforms that have happened in Scotland, so I do not think I could necessarily answer the question about what the Bill could do. So far, the legislation in Scotland, through the private residential tenancy, has failed to address anything on affordability. It brought in rent adjudication and what were called rent pressure zones, which local authorities had the power to determine. Those failed due to a lack of data, and the rent adjudication system has been effective for only about 230 tenants out of the 300,000-odd households in the private rented sector. The Scottish Government are looking to address that through the current Housing (Scotland) Bill, rent regulation and rent control, but to date, the legislation has done nothing for affordability.

[David Simmonds]

Q That is enormously helpful, because clearly, the Bill is very similar to the legislative underpinning of what is going on in Scotland. We are also interested in how it will impact on regeneration projects and the ambition to deliver more housing—we know, for example, that the build-to-rent sector is interested in that. So we are interested in your perspective on how the Bill will impact the ability to deliver regeneration projects, or how the similar situation in Scotland has done so.

Anna Evans: We have not examined that particular question, but in terms of supply, new build in the private rented sector in Scotland has probably stabilised rather than grown. Most of the growth in the private rented sector has been through the existing stock, and of course, there is growth in purpose-built student accommodation. There has not been a huge amount of new build and regeneration in the private rented sector, certainly over the last five years, but I do not think you could necessarily attribute that lack of growth solely to new tenancy. A huge number of other things have been happening in regulation in Scotland, and there is obviously the wider tax regime, too.

[David Simmonds]

Q Final question: what are the main consequences you expect from the Bill for residential landlords and tenants in the private rented sector?

Anna Evans: For tenants, the positives are a new foundation of rights and there should be more legal security. Tenants in Scotland enjoy open-ended tenancy and specific grounds for eviction, and there are longer notice periods. It is gradually moving to more of a contractual, rather than a subjective, relationship.

I should say, though, that there are very considerable differences in satisfaction between the general population of private rented tenants and the lower end, where lower income tenants or those who are more vulnerable are still disadvantaged. That is because of the overriding demand-supply imbalance. There is a fear among tenants about challenging, if they know that there are very few affordable alternatives on the market.

For landlords, I would say that they are generally settled with the private residential tenancy now—it has been in place for over five years, and they can see the consistency in practice and greater clarity in rights and responsibilities. Clearly, it is less flexible, but the difficulties that landlords have in Scotland are to do with subsequent legislation, and in particular, rent control.

[Matthew Pennycook]

Q Perhaps I can just check this, because I am not entirely clear: did your organisation author the Nationwide Foundation report?

Anna Evans: Yes.

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[The Chair]

The acoustics in this room are notoriously bad, so it would help us all if you were able to keep your voice up, please.

Victoria Tolmie-Loverseed: I will do.

[David Simmonds]

Q The situation with student rentals has been a much aired part of this process so far. Can I ask a couple of questions about the way in which the Bill interacts with students? The first is around the Bill exempting purpose-built student accommodation from the move to periodic tenancies. We have heard mixed feedback about the impact of that on students, particularly on those who may know they will be in a particular place for two years, let us say, and might wish to secure a property for that period. Do you agree with that exemption, or do you have other views that you can share?

Victoria Tolmie-Loverseed: I agree with that exemption. Purpose-built student accommodation exists for a very specific purpose. Therefore, operators of that kind of accommodation need to ensure that they are renting only to tenants—they need to have the means to regain possession. Often, they have planning obligations linked to the fact that they should only house students in that type of housing, so if they had a situation where students were able to stay for an indefinite period, they might start to have non-students living in the accommodation, which would be problematic for the ongoing management of the property.

[David Simmonds]

Q Do you have a view of how that impacts on, or relates to, property that has been converted to be student accommodation, as opposed to that which is purpose built? Many of us have universities in near proximity to our constituencies, where often a large number of houses have been turned into student accommodation. The university would not wish to see that accommodation lost to the student market, although the accommodation is not purpose built.

Victoria Tolmie-Loverseed: Yes, that is problematic. Every year, about 700,000 students live in the kind of housing that you describe, which I will call off-street housing. I hope everybody knows what I mean by that: a shared student house or flat that is not in purpose-built accommodation. About 700,000 students rely on that type of housing every year. It is more affordable, and it is available when students need it, which is at the start of their academic cycle. We are concerned about the potential loss of that housing, and we are concerned that because of elements of the Bill, it could become more expensive over time. It is an affordable part of the student housing sector at the moment. Rents are generally much lower than for other types of student housing—about £130 a week, on average—so it supports students with lower budgets to live at university in a more affordable way. We are concerned about the loss of that type of housing.

[David Simmonds]

Q Propertymark called for new grounds that would allow landlords who rent houses—HMOs, or houses in multiple occupation—to students to seek possession in advance of the academic year. Do you agree with that suggestion, or do you have an alternative way to address the concerns that you outlined?

Victoria Tolmie-Loverseed: In principle, I support the idea that landlords who are part of some sort of accreditation or recognised scheme should have an exemption for their accommodation in the same way as PBSA does. There are other ways of doing that. We at Unipol submitted some evidence with a suggestion that there should be a student tenancy for use in the off-street housing sector, which offers a fixed term with some other elements to it that would be very advantageous to students. Student housing is niche—it is very specific and has a very specific function—and certain practices and elements in there we think need special attention.

A fixed-term tenancy for students would allow landlords to regain possession but provide the security of a fixed term to students, as well as benefits to them that speak to their specific needs. For example, people should not be able to use guarantors for students—that is restrictive and difficult for students from low-income backgrounds —and students should be able to give notice in certain circumstances, such as if they have left their course. If they are no longer at university, it would be very handy if they could give two months’ notice and that is that. We think that would be right.

We also think that there is a real problem of early renting in the world of student housing—students who might need a tenancy from July end up renting places in September and October, because of pressure in the market. There is a shortage of student housing, and that is a real issue, so students rent earlier and earlier to get ahead of the market. We think that a cooling-off period should be attached to a student tenancy.

Those are real pressures and difficulties that students experience, so we think that they need special treatment in the Bill. As I said, there are 700,000 students, which is not an inconsiderable number. They should have special treatment.

--- Later in debate ---

[The Chair]

And Suzannah Young, who is joining us on Zoom.

Suzannah Young: Thank you, Chair. I am Suzannah Young, a policy officer at the National Housing Federation. We represent housing associations in England—social landlords providing 2.7 million homes to 6 million people. I will say a word about housing associations, if I may, because the Bill will have implications for them, as they offer assured tenancies. As they are not for profit, housing associations invest any income back into the development and maintenance of homes and into supporting residents and communities. They seek to provide tenants with long-term stability and security of tenure in good-quality, safe and affordable homes. We are a sector that has always offered assured tenancies and lower rents, and that delivers housing types unlikely to be found in the private rented sector, including three quarters of supported housing for people on low incomes with care and support needs. We therefore support the Bill’s aims to give greater rights and protections to renters.

[David Simmonds]

Q This is a very broad-based panel with different perspectives. My first question is about the impact on housing associations. Could you each give us a brief introduction from the perspective of your organisations on what you think the impact of the Bill will be, in particular on the supply of private rented sector homes in the UK?

Melanie Leech: Shall I kick off? Thank you for the question. The first thing to say is that we support the aims of the Bill and the drive to raise standards in the private rented sector. In particular, I would highlight measures such as the compulsory ombudsman—of course, many institutional landlords are already voluntarily members of the housing ombudsman service—along with the landlord database, which we have been calling for since 2008, the application of the decent homes standards and Awaab’s law to the sector, and recognition of the particular nature of the purpose-built student accommodation sector, which of course you have just been talking about.

Our major concern with the Bill is that the courts will not be ready for the abolition of section 21. A cross-party consensus that a better functioning court system is an essential part of the reforms has been a significant factor in maintaining landlord support for rental reform. Its importance has consistently been recognised in the political debate—by the Select Committee on Housing, Communities and Local Government in the last Parliament, which looked at the previous Government’s reforms, and by the Mayor of London in his work on a London model. However, despite serious discussions starting on rental reform in 2017, we have made almost no progress on court reform, which leaves landlords with little confidence that sufficient improvements will be made to make these reforms work well. That, of course, should be the objective: not just to pass these reforms, but to ensure they work well for both landlords and tenants.

One way of improving the court process is to digitalise both the process and the interface with claimants and defendants. We are really pleased that the Housing Minister is committed to continuing with the digitalisation project, but that is not going to deliver improvements any time soon. We are therefore heartened to hear the Housing Minister also talking about additional resource. This is essential because with section 21 gone, the courts will need to consider and process possession cases under section 8. Government data suggests that it currently takes just over seven months to process section 8 possession cases, including cases related to antisocial behaviour and rent arrears. It is worth stressing that that is an average. It is not uncommon to hear of cases taking more than a year.

There is also a huge shortage of court bailiffs in parts of the country. For example, in some London boroughs it can take five months to secure the services of a court bailiff, even when your claim has been vindicated. That also, of course, has consequences for people who cannot access those homes that would be freed up, for example in cases of poor behaviour and rent arrears.

While we recognise that improving the courts will not be a precondition of section 21 ending, at the very least we can call on the Government to outline what the justice system being ready means, both for tenants and responsible landlords; to commit to bringing waiting times down when it comes to the courts considering and processing legitimate possession cases; to ensure that the courts have clear and commonly agreed key performance indicators, which the Select Committee in the last Parliament recommended; and to improve staffing of the courts and tribunals, including recruiting more bailiffs.

We would also urge this Committee to scrutinise that aspect of the Bill in detail, and to consider calling for evidence from the Ministry of Justice—so far as we are aware, we have never actually heard directly from the Ministry of Justice, which is best placed to explain what procedures will be in place to make sure the courts are strengthened to deal with these cases—and to ask what progress is being made on digitalisation. We urge the Committee to scrutinise the justice impact test shared between the Ministry of Housing, Communities and Local Government and the Ministry of Justice—which will contain the projections on which the impact for this part of the Bill is based—so that we can all see that those have been properly scrutinised and that the court reforms that we need can be delivered.

Timothy Douglas: At Propertymark, we recognise that there is an ongoing cost of living crisis and there is huge demand for private rented property. We also recognise the manifesto commitments from this Government and the other parties to the changes contained in the legislation. We certainly acknowledge a drive towards improved standards, but we all have to recognise the unintended consequences and the impact of the changes on landlords, agents and the supply of property.

Certainly, our members are left wondering how this Bill will help to meet the huge demand for private rented property. Our data shows that on average there are almost 10 new applicants registered for each available property. One member in the west midlands, who has 13 offices across the region, has seen their lets—the number of properties—reduced from 5,348 to 5,006 since the start of the year, so we cannot underestimate the incentives for landlords or the investor appetite. These are significant changes. As has been said, we must get a commitment to reform the courts, the grounds have to be robust, and we must see enforcement of the existing rules by local authorities, never mind the raft of additional heavy-handed measures included in this legislation. We must retain fixed-term tenancies as an option where mutually beneficial for all parties, to retain flexibility and choice in the market.

[The Chair]

Suzannah Young, do you wish to add to your initial remarks?

Suzannah Young: In response to the specific question on the private rented sector, it is not an area where I have the most evidence to give, as my main area is the impact on housing associations. However, one thing I can say specifically is that we think that the proposed private rented sector housing ombudsman is absolutely right. Residents in the private rented sector should have access to an ombudsman. It is important that access is clear and easy to navigate for tenants, and that they have routes to redress where things have gone wrong.

From that perspective, and from the perspective of housing associations, we would like to ensure clarity about the remit of the new ombudsman. There is already an ombudsman service for social housing. However, some housing associations also provide market rent homes. It will therefore need to be clear what the expectations on housing associations are, in terms of reporting on their market rent homes, and it should also be clear to tenants which ombudsman they should go to. For example, sometimes there will be social and market rent tenants in the same building with the same landlord. We need clarity on remits so that there is no confusion.

I would like to comment on the points that Melanie Leech made about the readiness of the courts. Housing associations have experience of the impact of delays in the courts and the fast-tracking of possession cases during lockdown. Our members have experience that could be of use in the future. Our members report to us that there are already delays in the court system, which we heard earlier. It can take many months to get a possession hearing. That is a particular problem where possession is being sought, for example, for serious antisocial behaviour or domestic abuse, where delays to possession can increase the risk to tenants from perpetrators.

If the Government wish to implement, for example, a system of fast-tracking of serious cases, there will need to be a robust mechanism. If all cases are fast-tracked, we will be in the same position as if no cases are fast-tracked. We had some feedback from our members about how the courts could have helped with improving their capacity, such as increasing bailiff availability, increasing clerk availability to help to deal with the paperwork and logging of cases on the new online portal, ensuring training for district judges, and addressing the health and safety concerns of bailiffs. If the Committee wishes, I can also give some evidence, either now or later, on the impact on housing associations.

[The Chair]

I think we will stop there for the moment and hear some further questions.

[David Simmonds]

Q I have two related questions. First, as has been said by all three of you, there will be an ombudsman, a tribunal and a court, all of which will have a slightly different role. I am interested in how you think the Bill can provide clarity for both tenants and landlords on where to go with different issues, thereby ensuring that they can enforce their rights and deal with things appropriately.

Timothy Douglas: I think more clarity is needed in the letting agent space. Letting agents are already required to sign up to one of the two Government-approved redress schemes, but those two schemes do not adjudicate in the same way. The property ombudsman will work to a code of practice, and the property redress scheme would work to that code of practice or common law in order to make the adjudication. We are adding an additional layer to that through a landlord ombudsman. Our recommendation would be that those landlords who are fully managing property should sign up to a redress scheme, but we realise that that argument is not necessarily in the legislation and has not been won.

We must look at the myriad management practices—let and rent collection, or fully managed. As a tenant, working with both a landlord and an agent, we have to get adjudication of this new scheme and the existing schemes, and get a code of practice in place for the sector, so that we are all working to the same standards and the same adjudication. Are we also expecting landlords, like agents, to have a complaints procedure that tenants have to work through? We need that parity before we even talk about tribunals and the other things.

We must use the existing schemes and that expertise in the sector. There are 19,000 letting agents in England, and roughly 50% of landlords use an agent, so 50% of landlords are already plugged into those schemes. They have knowledge and experience. Let us get a code of practice built in, so that we are all adjudicating on the same level. Let us get some sort of housing complaints portal across tenures, so that the tenant can make a complaint that is filtered to the relevant ombudsman. We must help the consumer. We are adding a layer of complexity and we need to iron out some of those issues first.

Melanie Leech: I will build on that, but by standing back slightly from the question, because I think this is a subset of a much broader set of issues around transition. This will be hugely complex. We have 4.6 million tenants who will need new leases. Some of them are sub-letting and so on. We have all those new agreements to draft. We are going to need lots of training for the professionals who are managing this. We will need new processes and guidance for agents and local authorities. We will need adjustments to insurance and mortgage policies. The lesson from Wales and Scotland is that a big bang approach does not necessarily work because you cannot get all of that right in one go. We are keen to work with the Government to start thinking now about the implementation strategy. Clarity for tenants and landlords about how the new system will work, where to go and so on is critical to that, but we need to start thinking about that now and to create an implementation framework, because if we do not, these new reforms will not work well.

Timothy Douglas: Scotland has been talked about as an example, but of course, it has phased in private residential tenancies—there still are assured tenancies working in Scotland. But Scotland has a long-standing landlord register, and it has letting agent registration and regulation. There is a tribunal that is free to use for both landlords and tenants. Scotland definitely had a 12 to 15-month phase-in approach for the PRT to kick in. From what we are hearing, we will have Royal Assent, three months and a commencement, and then all these tenancies will switch over. That is an issue for all agents, but certainly for our larger agents, who are managing thousands of tenancies up and down the country. A consideration of the impacts of the transition and extending that would be welcome before the implementation of this legislation.

[David Simmonds]

Q Briefly, there is another subset of a broader issue around things like the decent homes standard. We have heard from various sources of evidence that there is a need to ensure that property owners have the time and necessary support to achieve that. We know in the rest of the UK housing stock that that can be a challenge due to the physical nature of it. What are your views as to how the Bill addresses that issue?

Timothy Douglas: From Propertymark’s point of view, we want to see warm, decent homes. The agent can actually be a layer of enforcement, whether they instruct the landlord to take on that property or not, as well as mortgage providers. Unlike social housing, which is designed to specific specifications, the property redress scheme comprises a range of property without specification. The decent homes standard was argued about in the previous Session. It was consulted on by the last Government. There were numerous working groups with the last Government and, yes, it is going to be consulted on again.

From Propertymark’s point of view for the private rented sector, we have to link up with local authority assessments. We have to focus on fit-for-purpose. I know that local authorities—certainly a local authority in the midlands—will, without fail, change all the boilers every five years in their housing stock. I am sorry, but private rented landlords do not have the money to do that, and the social rented sector has received billions of pounds in eco funding as well. If we are to get that parity between the private and social rented sector, the private rented sector needs to see that funding come forward, certainly in the thermal comfort space—cool in the summer, warm in the winter. Why, for the 18 different archetypes of property across the country, are we going for a one-size-fits-all energy efficiency target? That is going to nullify older properties in England and Wales where the regulations extend and rural properties. Let us simplify the HHSRS as well. There are existing levers that we need.

Finally, on this point about extending decent homes and Awaab’s law, we welcome these steps as long as we get them right for the uniqueness of the private rented sector. In the Social Housing (Regulation) Act 2023, which was passed in the last Parliament, there is a requirement for all property managers in the social rented sector to be qualified. We think that should be extended to the private rented sector to all letting agents as well. If we can get that code of practice in place through adjudication and redress, we can qualify our letting agents. We get parity, drive up standards and help enforcement. That would certainly go a long way towards the decent homes standard and Awaab’s law being implemented in this sector.

[Matthew Pennycook]

Q Melanie, can I address a specific question to you about suppliers? There has been a lot of discussion today about the mismatch between supply and demand. We have touched on the provisions in the Bill about how tenants can challenge within-tenancy rent increases and so on. In terms of overhauling the private rented sector, the Bill is part of a wider transformation of the housing system that we want to carry out. There is absolutely a chunk of private renters, particularly in the bottom half of the market, who should be in social rented housing, and we want to build more of that, but we also want to grow future supply in the PRS. What do you think the Bill will do specifically to build-to-rent providers? Do you think they will accommodate themselves to these changes? Are there lingering concerns that you think will impact on investment in that future supply and professionalising the private rented sector as we grow it?

Melanie Leech: The first thing to say, as you know, is that institutional investment into the build-to-rent sector specifically is a growing part of the housing supply mix. It is bringing in genuinely additional investment, because it is the type of investment that does not typically invest in build to sell—you have people wanting to use large amounts of capital to generate secure income streams so that they can match against pension liabilities, insurance liabilities and so on. Probably the key word in that is “secure”. Anything that damages investors’ confidence that the income they will get from their investment is at risk will undermine our potential to unlock investment into homes and the rental sector. Currently, the peak year for build-to-rent delivery was 15,000 homes. We think that you can double that to 30,000 homes, with the right conditions, and some of my members would go further and say that you can double that again. We are looking at an investment stream that could be a very significant part of helping to deliver the Government’s aspirations to build more homes.

What I have already talked about, in terms of the ability of the courts to cope with the reforms, is an important indicator of confidence. Investors will look at that and think, “This changes the basis on which I have invested. It makes it more difficult for me to manage the property efficiently.” I think the issues around rent determination also have that potential, so there is nervousness around needing to use section 13 and rent increases. There is a suspicion that tenants have nothing to lose by challenging any rent increase, so it is about getting the framework right around how we define what an unreasonable rent increase might be and how we manage those cases that might come before tribunals. There are some issues around that that we would like to see more clarity around and redressed.

In general, we are really supportive, because in the part of the market that I represent the decent homes standard already would not cause us an issue in terms of implementation and so on. We are trying to raise standards in the private rented sector, and we are raising standards in the private rented sector, but the key thing is to implement the reforms in a way that does not undermine investor confidence, so that we do not inhibit the supply of homes.

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[The Chair]

We have Dr Dawson here physically and Councillor Hug on Zoom. Could you please introduce yourselves briefly?

Dr Henry Dawson: Good afternoon. My name is Dr Henry Dawson. I work as a lecturer at Cardiff Metropolitan University and I am a member of the Chartered Institute of Environmental Health’s housing advisory panel. I am here today to represent the Chartered Institute of Environmental Health.

Cllr Adam Hug: I am Councillor Adam Hug. I am the Local Government Association’s chair for local infrastructure and net zero, which basically means its housing spokesman, among other things, and I am the leader of Westminster City Council. I am here at the LGA conference in Harrogate; apologies for that.

[David Simmonds]

Q I have two questions, and perhaps we can start with the one that is relevant to both organisations. Both of you have expressed concerns about the enforcement burden that provisions of the Bill would place on local authorities. Although there is a new burdens protocol out there, could you share your views about the level of funding that would be required to enforce correctly and how that would best be financed?

Dr Henry Dawson: Councillor Hug, shall I start and then pass on to you?

Cllr Adam Hug: Okay.

Dr Henry Dawson: At the moment, we have quite considerable extra burdens being placed on local authorities. The two major areas for that would be in the enforcement around the database and in managing the landlords who have either been rejected from or refused to join the ombudsman’s scheme.

In both cases, the fees that are available to be charged for the schemes will generate some revenue. However, national schemes, by their very nature, will have to be relatively low cost. Rent Smart Wales is a good example. It has an application fee that is little more than £100, so that allows for some intervention. However, the majority of the burden for the enforcement side of things under this new Bill will be placed on local authorities. If just 5% of a sector was to refuse to engage with one scheme or the other, a typical local authority would have around 700 properties that it had to carry out formal enforcement work on, and an awful lot of those would require civil penalty notices or prosecutions.

The CIEH is very keen to see that the funding for local authorities is linked directly to the fees for these schemes and represents the cost proportionately, with the additional burden being placed on the enforcement bodies for the private rented sector—environmental health and private housing enforcement teams.

The notable exception in the Bill is that the ombudsman fees are permitted to cover the cost for the ombudsman to enforce its statutory functions, but there is nothing specific in there, as there is for the database, for those funds to be passed on directly to a local authority.

The other thing we have found with previous legislation is that there is usually short-term additional funding from the Secretary of State’s general budget to support local authorities in introducing these new burdens, but then that sort of tails off. It is replaced with a whole miscellany of short periods of funding, which makes it impossible for local authorities to manage staffing and attract and train up new staff. We are therefore ending up with a situation where approximately half the posts we have for local authority enforcement teams in environmental health are going unfilled for more than six months. It has been a real hand-to-mouth existence for local government enforcement teams. If we could have funding proportionate to the size of the sector in a particular area coming directly from the fees for these national schemes, it would be very gratefully received by local authorities.

[David Simmonds]

Q Councillor Hug, do you have anything to add to that point?

Cllr Adam Hug: To echo that, I think it is important to understand where we are starting from. We have seen environmental health teams in councils cut over the last 14 years, because of the financial situations councils find themselves in. Environmental health officer posts are one of the top three most challenging roles for councils to fill at the moment. It is really important that the new burdens doctrine is applied properly, with up-front funding to make sure that councils can build teams to deliver this as quickly as possible.

We welcome the proposed fine retention, but we think there may be a case for raising the upper limit for the most egregious cases from the current £7,000 up to about £30,000 to fully capture the impacts of some of the worst properties, but also to ensure that revenue can fund council services that are enforcing this. We welcome this, but we must make sure that local councils are properly resourced to deliver it.

Dr Henry Dawson: May I make one additional comment, please? At the moment, the Bill makes substantial use of civil penalty notices. We welcome the use of them. It is very welcome to see funding coming directly into local authority enforcement coffers, as it is something we do not get through prosecutions that are carried out through the courts. It is, however, worth pointing out that they represent the very thinnest end of the wedge for the enforcement activity of local authorities. We only use them where all the informal approaches—service of legal notices and so on—have been unsuccessful, and we are forced to resort to taking more punitive action.

In the majority of cases, we can resolve things informally with landlords, and the majority of landlords are good providers. It is just worth noting that while the penalties are a source of income, they are not predictable or particularly sustainable. Only around 50% of what we charge in penalties at the moment is collected, because of the difficulties in trying to capture the money at the other end of the process. I would just caution against assuming that they are a very reliable source that will keep us going. There are an awful lot of other things we have to pay for.

[David Simmonds]

Q That is a point I made on Second Reading, so I entirely agree.

Under the Homelessness Reduction Act 2017, local authorities are significant users of the private rented sector for people who would otherwise be at risk of homelessness. It is common for local authorities to pay rent-in-advance deposits and use various other guarantee schemes to secure private rented sector homes for people who would otherwise not be able to access a home. Councillor Hug, I am interested in how you think the Bill would impact on the performance of that duty.

Cllr Adam Hug: In terms of the ability for councils to procure accommodation, having stability in the rental market will help us in managing demand pressures. We are conscious that there is an interaction with the Housing Act 2004 requirements around the prevention duty. That is one of the major challenges created by this Bill, so we want to ensure that local authorities are properly resourced to cover the potential additional time beyond the current 56 days, where we are having to provide prevention support to people while enforcement happens—[Interruption.]

[David Simmonds]

Q You froze for a moment there. We missed about the last 20 seconds.

Cllr Adam Hug: Apologies; I was just saying that the biggest area of concern about our homelessness duties is ensuring that the increased costs to councils of providing the additional prevention duty over the length of time for which the section 8 notices are going through the court are properly captured. That, on the interaction with housing, is the area we are most concerned about, but it is all perfectly solvable.

[David Simmonds]

Q Could we address the Homelessness Reduction Act 2017 element? It is common for local authorities to engage with private rented sector landlords and act as guarantor to secure a property for someone who would not otherwise be able to access that property but would be put into temporary accommodation by the local authority. It is a better solution for the tenant and less costly for taxpayers. If the Bill were to prohibit local authorities from acting as guarantor in that situation, would that have an impact on their ability to secure those properties?

Cllr Adam Hug: We are not aware that this Bill creates a particular problem in that regard. We can come back to you in writing if there is anything further, but it is not an area of particular concern to us at the moment.

[David Simmonds]

Q Can we move on to licensing schemes? I know there has been much debate in the local government world about them, and I have seen at first hand their operation in London. Would you be able to say a bit about the barriers that exist at the moment to the implementation of licensing schemes? Do you think the Bill sufficiently addresses those barriers?

Cllr Adam Hug: No, we do not think it does. The key thing for us is that you have the current selective licensing mechanisms, but councils face bureaucratic hurdles in terms of getting the Secretary of State’s sign-off for large schemes that wish to go down that route. In terms of ensuring decisions are made at the right level, in line with the Government’s commitment to devolution, we think that for selective licensing to really fulfil its potential we must ensure there is no longer a need for the Secretary of State’s sign-off.

Obviously, that sort of licensing can improve standards in the sector, help councils to recruit environmental health officers, beef up the function and make sure we are playing a proactive role in helping manage the private rented sector in a local area. Different councils have used it, but at the moment it is hamstrung by the bureaucratic hurdle of getting it up to the Secretary of State. Obviously, we have a Secretary of State who is probably more minded to support the use of such schemes than was the case in the past, but it still creates an unnecessary hurdle and a delay when councils could just get on and use these licensing schemes that are desperately needed.

Dr Henry Dawson: May I add some responses? At the moment, we have a maximum five-year duration for discretionary licensing schemes. Once the schemes have been brought into force, it takes a certain amount of time to create the partnerships with other organisations, such as waste and street scene departments, police and antisocial behaviour teams, and antisocial behaviour schemes within the council, other charities and NHS-related bodies. They usually take between one and three years to mature.

Local authorities are also required to entice enough staff to be able to immediately provide a strong inspectorate to run these schemes. That can be anything from five to 50 staff, depending on the size of the scheme. We find that the five-year duration of schemes is a significant impediment, so it would be much more welcome to see something like a 10-year timeframe. That would permit us to train up new staff through the existing one or three-year qualifications. It would also allow these partnerships to mature so we see some of the true benefits of the schemes.

The other thing is that a large private rented sector is required; that is a point that a local authority has to prove when it is setting up one of these selective licensing schemes. We see that as an unnecessary hurdle to their introduction. They are part of a package of measures to address a range of problems associated with housing conditions, crime and antisocial behaviour across an area, and we see that as being an unnecessary impediment to their execution. It is one more thing that the local authority has to prove.

Finally, discretionary schemes, and particularly selective licensing, are one of the few things that provide access to properties. Even though the legislation has been changed, with some regulations to expand the use of selective licensing to include dealing with poor housing conditions, under the Housing Act 2004 we are unable to enforce conditions relating to the condition and contents of a property. We can only change those in HMO licensing conditions; we cannot change them in selective licensing conditions. Therefore, this is the first opportunity that we have really had, with a piece of primary legislation, to amend the Housing Act 2004 to provide parity in what local authority environmental health officers can require in the conditions and contents of properties through selective licensing, in addition to HMO licensing.

[Matthew Pennycook]

Q Could I follow up on the point about local authority enforcement? The Bill introduces an effective, consistent and proportionate framework for enforcement, but we have to ensure that local authorities can enforce in practice, and we know that there is variation across the country in their ability to do so. There is also the wider context about resourcing of local government over the recent period. We are clear that we want to primarily target along the “polluter pays” principle, with bad landlords covering the cost of their own enforcement.

You mentioned the fines—£7,000 for first or minor compliance issues, and £40,000 for more serious ones— and they can be levied repeatedly. I just want to get a sense of how much of the cost of enforcement you think those fines can account for. We recognise that it will not be enough, and that the new burdens principle will have to operate, but have you got a sense of it in terms of, as you say, how many cases are resolved before it reaches that point? What will be the willingness under the new system to levy these kinds of fines, and what proportion of the enforcement costs do you think, on average, local authorities might see those fines account for?

Dr Henry Dawson: Thank you for your question, Minister. At the moment, we have the use of civil penalty notices, and I would defer to a report by the National Residential Landlords Association to provide a summary of their use over the period between 2001 and 2003. We see that approximately £12 million was given in penalties over that period, and around £6 million of that was recorded as collected through penalties over that period.

It is also worth noting that these civil penalty notices are intended to be an alternative to a prosecution through the courts; they are not intended to be a revenue generator. The licensing fees, the ombudsman fee and the database fees are where we can generate the revenue at the front end. These civil penalty notices are being used as a final, ultimate punishment for some of the worst offenders. Yes, we can administer £7,000 for the initial offence and £40,000 for ongoing offenders, but they really are intended to be a deterrent, as opposed to a source of revenue.

The majority—maybe 90%—of a local authority’s work is carried out through informal advice giving, with people ringing up and asking for guidance in what is a very complex legislative environment. That is certainly something that landlords and letting agents would like to have more of. We serve formal legal notices, but it is only when we have gone through a whole series of informal approaches that we move to a formal approach through a legal notice and, ultimately, a prosecution or penalty notice. Therefore, really, we are looking at maybe 5%—to pluck a figure out of the air—which is a tiny proportion of what we have got across the country, and probably the only national figures we have on this are those that have been pulled together by the NRLA.

--- Later in debate ---

[The Chair]

Anny Cullum, would you like to introduce yourself?

Anny Cullum: I am Anny Cullum, and I am the policy officer at and a founding member of Acorn, an organisation that has been running for the last 10 years. It has been operating like a trade union but on community issues, so we have lots of members who campaign on housing issues and operate effectively as a tenants’ union in around 27 places across England and Wales.

[David Simmonds]

Q Anny, I would like to ask about your view on the enforcement regime. Do you feel that what has been outlined in the Bill and how it is likely to be reflected in the real world will be sufficiently robust both to deter rogue landlords from bad practices and to ensure that tenants are able to both enforce their rights and act in accordance with the law?

Anny Cullum: We are pleased to see stricter measures and penalties for landlords laid out in the Bill, and we are particularly happy that new burdens funding will be available to councils to enact them. However, our experience as a tenants’ union is that often councils are so overstretched trying to do the things that they already have to do that tenants are waiting months before getting the support they need. Often their landlords have been given very informal notices and long timescales to get things done, which is no good for a tenant living in a dangerous home.

A great thing about this Bill is that section 21s will be banned. Something that we have seen a lot—we had a member in Sheffield go through this recently—is a local authority coming in and investigating poor conditions in a home, giving an informal notice to the landlord, and the landlord then issuing a section 21; the tenant basically has to pay for the fact that they dared to complain. We are really pleased that that will end, but we think there should be more funding for local authorities, not just extra burden funding for the new things, but for the stuff that they already have to do.

Our union really supports landlord licensing. We have done campaigns in this area in 11 different places around the country. It is incredibly popular with our members; it came out as one of our top motions at our recent conference. If done well, landlord licensing can be self-funding, and—this is a great thing to think about—it gives councils the ability to inspect homes without the tenant having to raise the issue themselves, so you can find out about bad practice and malpractice without the tenant feeling at risk of complaining. Obviously, they will have fewer risks once this legislation comes through, but it will take a long time for tenants to feel comfortable raising their voices, which our organisation tries to help them to do.

We really support the points made by colleagues in the Chartered Institute of Environmental Health. We have campaigned in a lot of places for city-wide landlord licensing, as it is something that our members really care about, but a lot of councils have told us that they are not willing to take the risk of trying to implement wider licensing schemes, because they can be turned down by the Secretary of State. They have said that the work you need to do to put that application in is quite labour-intensive, and they do not want to risk doing all that work for it not to come to fruition. In the spirit of devolution and supporting local authorities to do the job they should be doing, give them back powers to license as much of the city as they want, increase the term to up to 10 years, and do away with the bureaucratic hurdles and the evidence gathering they need to do to get the wider licensing schemes.

[Matthew Pennycook]

Q Given the time, I will ask you a more general question. Do you think—it sounds like you do—that the Bill broadly strikes the right balance and properly delivers for renters? Are there any omissions, things you would like us to address or parts of the Bill you think we need to look at more carefully?

Anny Cullum: One area our Members feel particularly strongly about that could be strengthened in the Bill to ensure that it delivers the change we all want to see is measures against illegal evictions. It will be wonderful when section 21 is banned, but we know that there are lots of landlords who issue section 21 eviction notices in response to tenants complaining, because they do not want to maintain their properties. For that unscrupulous group, we are worried that illegal evictions might take the place of section 21 evictions once section 21s are banned. We feel that the Bill could go further to make sure that this is not an easy option for them to take.

Hardly any cases of illegal eviction ever make it to court. Safer Renting data showed that there were 26 prosecutions in 2022—the year we have the most recent data for—but it knew about 9,000 cases of illegal eviction. Even when illegal evictions get to court, the fines are £1,000. That is less than my monthly rent. It is not a deterrent for the average landlord. We would like to suggest some changes to make sure that this is not used as a back door to get around the legislation.

We would like to see local councils given a statutory duty and the funding to investigate all cases of illegal eviction. Recently we had a member in Leeds whose landlord kept issuing false eviction notices—ones that he could not go to his local council to ask for support with, so he stayed there. The landlord used many different underhand ways to try to force him out, including sending men with knives to cut the wires in his house so that he did not have any electricity. He has been on the phone for hours to his council and the police, and they have not been very helpful. We want to see those bodies empowered with both the duties and the money to act for tenants.

Police forces need more training. I have supported tenants who landlords have tried to intimidate out of their house. The police do not seem to know that this is a criminal offence or that they have the ability to act on it, so it would be good if there was training on that. We would also like it to be made easier for people and councils to take these criminal cases forward. It can be quite hard to meet the evidence threshold needed to get a rent repayment order, so we would like to see changes there, which I have laid out in our written evidence. We would also like the civil penalty notices that councils can use to be raised to up to £60,000. I know that sounds high, but being forced out of your home with your family is a horrendous thing to happen to anyone. We want to ensure that this is treated with the seriousness that it deserves.

Illegals eviction is one area that my members asked me to speak about. I have also spoken about landlord licensing. A further issue is rent in advance. We are overjoyed that this Bill will end bidding wars, which is something we have campaigned for in different places across the country. We have tried to get agents themselves to pledge not to do it and then mystery shopped them to make sure that they are not. But if you allow agents and landlords at the start of a tenancy to ask, “How many months up front can you give me? Someone else said they could give me a year”, that is another form of bidding war, just at a different point of the process.

We conducted some research at the start of this month and found that benefit claimants were three times more likely to be asked for a year’s rent up front than people not claiming benefits. We are pleased that the Government are keen to crack down on discrimination in the private rented sector against people on low incomes, but this is one way that it is happening and we feel that the Bill could do more on that issue. I have two more areas that my members want me to speak to, if that is okay.

--- Later in debate ---

[The Chair]

Minister, would you introduce yourself very briefly, please?

Matthew Pennycook: Yes. I am Matthew Pennycook and I am the Minister of State for Housing and Planning.

[David Simmonds]

Q I think that today has been a very illuminating opportunity and I would like to ask you, Minister, to share your thinking around three points that have been raised that I think are quite striking.

The first question is simply this: what advice have you received so far and what are the plans in respect of the interaction with the Homelessness Reduction Act 2017? That is the point I was asking Councillor Hug about—the Homelessness Reduction Act creating that opportunity for local authorities to act as a guarantor to pay deposits, including rent in advance, to secure a property that would not otherwise be available to that tenant. I ask that question in the light of some of the evidence that we have heard about the impact of guarantors and deposits within the Bill, which I appreciate is not yet a settled matter.

Secondly, I invite you to share your thoughts on enforcement authorities, which my hon. Friend the Member for South West Devon highlighted, which are referred to in chapter two. I have an idea why this might be the case, but the Bill creates a specific measure, in clause 104(4), that says:

“A county council in England which is not a local housing authority may—

(a) enforce the landlord legislation;”—

The joy of local government: the Minister will know that county councils are not housing authorities, so it would perhaps be helpful if you could set out the Government’s thinking around that, and say how any advice or engagement may have taken place already with local Government to determine the way forward on that.

Matthew Pennycook: Did you say three or two questions?

[David Simmonds]

There are three questions, but I have forgotten the third one, so I will ask you those two questions and then find the third question and come back with it, if I may.

Matthew Pennycook: Let me take those two questions forward.

The point that I took from Councillor Hug was a very specific one about the trigger for homelessness prevention duties under the Bill. Currently the trigger is a section 21 notice; once the new system is in place, it will be a section 8 notice. In theory, that broadens the scope of the duty, if you like, and therefore we will consider new burdens funding for local authorities as a result, because it could increase the costs to them.

On the specific point about county courts, I want to make sure that I have understood the hon. Gentleman properly. I think it might be better if I write to him with the specifics, but I would assume that his question is linked to the fact that in many cases we need to look to assign a lead enforcement authority in particular parts of the country, because of the specific arrangements of governance in particular areas. However, I am more than happy to write to him with further detail on the point about counties.

[David Simmonds]

Q Thank you; I suspect that that is exactly the issue.

I have a final point. A number of the witnesses today have made a point that clarity about what is permissive versus what is required is a significant issue for their organisations. In particular, we heard about that in respect of the ombudsman, the tribunal and the courts.

I am interested in hearing your thoughts about how this process evolves, and your degree of openness about bringing a higher degree of clarity, either through a greater degree of transparency about what may well find its way into the guidance given to those different organisations, or through those areas that you feel are more appropriate to becoming part of the Bill and then the Act itself.

Matthew Pennycook: On the database and the ombudsman, through this Bill we broadly mirror the provisions in the previous Government’s Bill, in the sense that the powers in the Bill are broad framework powers. A lot of the detail will come forward in secondary legislation.

There was a debate when we considered the previous Bill, which I think we will return to because it is a worthwhile one, about what prescriptive requirements, if any, you put in the Bill for either the database or the ombudsman. In general, my sense is there is a lot of value in putting most, if not all, of that detail into secondary legislation in a way that allows us to ensure over time that the database and the ombudsman evolve properly with changes to the sector, so you would not want to get too prescriptive. But we can tease out in the debates—I hope we do; we have today—the type of thing we expect the ombudsman to do, and the full range. The Housing Ombudsman made clear that there is a “must” and a “could” on the ombudsman side. Similarly, there is a skimmed and a full-fat version of what you might include on the database.

As I have said, some of my contributions indicate that I think the database in particular could be an incredibly powerful tool. We should therefore be thinking through what we might include on it that would help tenants to assess who is a good landlord and who they should be comfortable signing a tenancy agreement with, and give local authorities the relevant information they need to bear down properly on disreputable and particularly criminal landlords. I am happy to be relatively open about that. We can be, and I hope are, fairly open in some of the debates about the type of things we and our constituents might like to see in secondary legislation.

[Jacob Collier]

Q I am a younger Member of the House. My generation feel that we are locked into renting, with many people unable to save in order to get on the housing ladder. How do you see the Bill making renting more stable and affordable, so that young people can build up the savings we need?

Matthew Pennycook: That is a good question. Like a lot of the debates we have had today, it is slightly out of the scope of the Bill, but you are right to ask it in the sense that the Bill is one part of the Government’s agenda for changing the housing system. There are lots of things we have to do on the home ownership side. You will know from our manifesto that we are committed to a permanent and more comprehensive mortgage guarantee scheme and a first dibs for first-time buyers scheme. In general, the Bill will hopefully empower renters by giving them greater protections, rights and security so that they can stay in their homes longer, build lives in their communities, avoid the risk of homelessness and, in many cases, by bearing down on unreasonable within-tenancy rent hikes, have the opportunity to save, which many do not have at the moment.

In answer to your question very specifically, the Bill is part of a wider agenda and touches on the supply issues we have debated. The Bill is not our answer to affordability in the private rented sector, and it cannot be. There are things that go beyond the scope of the Bill. However, in terms of the security, stability and certainty it provides for private renters, who are mainly at the top end of the market but would have, under better circumstances, the chance to save and buy a first home, the Bill will help in a number of ways.

City and Town Centres: Regeneration

David Simmonds Excerpts

Wednesday 16th October 2024 Westminster Hall

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

It has been a pleasure to serve under your chairmanship, Mr Vickers.

[Sir Roger Gale in the Chair]

I am sure it will continue to be a pleasure to serve under the chairmanship of Sir Roger.

The debate has been wide ranging. It has gone from the commanding heights of the international economy to the truly micro. I commend the hon. Member for Derby North (Catherine Atkinson) for having brought together a wide group of Members with a clear interest in the role of local authorities and in regeneration specifically, but more broadly in the future success of our high streets.

It is always worth remembering that when there are international investment summits, 70% of people in work in the UK are in an enterprise with less than five staff. It is easy for big businesses to turn up and meet the Government. I very much welcome the investments that were announced at the investment summit. I welcomed them when they were announced under the previous Government and I welcome them again. But we need to make sure that those investments continue to manifest as a benefit on our high street.

The pressure of time perhaps meant the hon. Member for Derby North did not have the opportunity to talk about the input of people such as Councillor Barry Lewis, the leader of Derbyshire county council, and Councillor Ben Bradley, the leader of Nottinghamshire, who are examples of local leaders who have championed inward investment. Of course there are many from across the political spectrum.

Here in Parliament is an opportunity for us to reflect that although it is easy to describe the problem, we need to focus on what we can do to make a difference. My hon. Friend the Member for Bromsgrove (Bradley Thomas) shared some examples of that from his experience as a council leader. I hope that when the Minister responds he will have something to say about the impact of business rate reliefs.

Currently any English business that is a shop, restaurant, café, bar, pub, cinema, music venue, gym, spa, hotel or any form of leisure venue, can obtain a 75% discount on business rates, capped at £110,000 per business per year. I am aware that that rate relief is not available to the same extent in Labour-run Wales and aware that the Government are about to embark on some Budget decisions. But it is clear that the ability of businesses, such as those that are anchors on our high streets, to secure that relief has been extremely important, especially in the post-covid era, in making sure that our high streets remain vibrant. That sits alongside measures such as—

[Helen Grant (Maidstone and Malling) (Con)]

As we have heard today, town and city centres like mine in Maidstone desperately need a range of vibrant and varied shops and businesses. Does my hon. Friend agree that a reduction in business rates, not just a reform, would incentivise businesses to set up, especially independents and new start-ups? At the same time it would ensure that a level playing field starts to be set with e-commerce and home delivery services.

[David Simmonds]

My hon. Friend represents the county town of Kent and presses the case that the leader of Kent county council, Councillor Roger Gough, makes: as the county town, it is particularly important that Maidstone demonstrates a vibrant and thriving high street. My hon. Friend is a vocal champion for that.

Measures such as business improvement districts and local enterprise partnerships have enabled combinations of local employers, business investors, local authorities, land holders and housing providers to come together to look at how regeneration schemes can best be designed. There is cross-party consensus that local leaders know their communities best and are best placed to design projects to bring the maximum possible benefit.

I acknowledge that it has been challenging to implement the process set out in the Levelling-up and Regeneration Act 2023 and the schemes that followed from it. For many years, the EU cohesion fund was the key source of inward investment at a strategic level, and in the post-covid and the post-Brexit era, central Government have found it challenging to design a multi-year financial arrangement that replicates it, serves a similar purpose and is deliverable at scale. I wish the new Government well with that challenge.

The 2023 Act also included planning reforms that enable long-empty shop units to be converted to much-needed housing on our high streets. That reflects a longer-term change on our high streets from retail to night-time, leisure and hospitality economies. Those are the businesses that benefit from the highest level of business rate relief, and they are becoming mainstays on our high streets. A number of hon. Members have mentioned the benefit to microbusinesses of approaches such as safer by design, which uses planners’ expertise to build out antisocial behaviour and crime from buildings and developments from the start through their design, layout and physical security measures.

It is important to reflect on the successful regeneration projects of other nations. This debate is focused on towns and cities, but when German reunification took place, national politicians were clear from the start that the project to rebalance the country was going to take 30 years. They were also clear that it would start with significant investment in large cities to create employment and prosperity, and that that would then feed into the wider social and public infrastructure around those towns and cities to ensure that, in due course, everybody in the country could benefit from a higher standard of living. Although we set out an ambition on that scale with the levelling-up projects, we did not have anything like the time and resources to deliver it on the scale that we wanted to, especially with the relentless calls for higher spending on covid in the background, which were a key part of shaping the Government’s financial approach at that time.

I note with a degree of pride that an average of 400 new jobs were created for every single day that the last Government were in office over 14 years. We must remember that work is key to regenerating our high streets—if people have money in their pockets, they will spend it locally. When we left office, youth unemployment was half what it was when we entered.

I read the Crewe business improvement district proposal, which, like many such projects, started out with very specific words: this is a “private sector led proposal”. That is a recognition that private sector investment will be crucial, and I think we are seeing a similar recognition from the new Government.

I have two asks of the Minister. First, will he set out the timetable for the next round of devolution? If he is unable to do so now, would he give us an indication of when he will do so? There are local authorities looking to switch to the elected mayor model. The East Midlands combined authority will be significant for places such as Derbyshire, but there are many other parts of England that are looking to do that.

Secondly, will the Minister commit to, or give us a deadline for a statement on, the retention of the 75% business rate relief that was introduced by the previous Government and is still being followed by the Treasury? It has been critical for keeping investment and employment buoyant on our high streets. We need to make sure that vital lifeline is retained into the future.