Renters (Reform) Bill

Eddie Hughes Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Michael Gove]

I am grateful to the Chair of the Select Committee, but the view of the Ministry of Justice, His Majesty’s Courts and Tribunals Service and others involved in the court system is that the creation of a specialist housing court would divert resources from the effort to make the existing system work better. But good people can disagree on that point.

[Eddie Hughes (Walsall North) (Con)]

I rise as what is known as an “accidental landlord”, who conveniently owns and rents out a property in Tamworth. Speaking as a landlord, I welcome the Bill—particularly the property portal, which will allow councils to focus their resource better on landlords who provide poor-quality accommodation and give councils the opportunity to drive them out of business.

[Michael Gove]

My hon. Friend is absolutely right. Two of the less conspicuous but important parts of the Bill are the creation of the property portal and the role of the private rented sector ombudsman. If they work effectively, both should obviate the need for the court processes that the Chair of the Select Committee and my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) have mentioned. The property portal should ensure that we can identify properties in the private rented sector whose landlords have not registered, and we can focus our enforcement action on them.

Renters (Reform) Bill (First sitting)

Eddie Hughes Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Eddie Hughes (Walsall North) (Con)]

I am also the joint owner of a property that is let out for rent.

[Craig Tracey (North Warwickshire) (Con)]

I am an owner of a property let out for commercial rent.

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[Lloyd Russell-Moyle]

Thank you very much.

[Eddie Hughes]

Q That all sounds quite exciting, Paul, in terms of your being able to apply your finite resource as effectively as possible. At the moment, if you have a complaint about a property, you do not know whether that landlord owns 10 other properties in your area, and we anticipate that the portal will allow you to do that. Do you not see this as an exciting opportunity, contrary to the negative spin that you put on it at the start, to be able to more effectively manage the properties you have?

If I remember correctly, you and I met at a social housing decarbonisation fund demonstrator. With your decarbonising hat on, surely now you could have the opportunity to be able to communicate directly with landlords. You do not know who they are or where they are at the moment. You would be able to communicate with them directly and say, “The Government have this scheme. We can help you improve and replace your boiler,” and so on. There is no end of benefits, yet you seem to focus only on the negatives. Why is that?

Paul Dennett: I am definitely not only focusing on the negatives.

[Eddie Hughes]

You certainly did in your opening comments. It was all doom and gloom.

Paul Dennett: I was asked about resources.

[Eddie Hughes]

But this helps you improve the use of them.

[The Chair]

Order. Mr Hughes, we are asking questions; witnesses are giving evidence. We are not arguing.

[Eddie Hughes]

I am sorry, Mr Gray—no hectoring.

Paul Dennett: Renters should welcome the property portal, as it will inevitably create a more transparent system for tenants and provide a single place to check what is important information for tenants and also for local authorities about the properties. For the portal to be effective the Government must also require landlords to display eviction notices on the portal. That would support local authorities in enforcing the prohibited letting period associated with the new eviction grounds. For example, were a landlord to evict a tenant on a legitimate basis covered by the Bill, but then sought to re-let the property, logging that eviction on the portal would make it clear whether the property was within the prohibited letting period or not. Obviously that requires the portal to operate in real time, which is something we would certainly support in the Local Government Association.

What is absolutely critical to the success of the portal, and to secure its longevity, will be for the Government to commit the resources, both financially and non-financially, to the portal, and ultimately how that then interfaces with local government from an enforcement point of view.

[Lloyd Russell-Moyle]

Q Richard, you are ready and willing to take on the ombudsperson duties in the Bill. At the moment there are myriad redress schemes for deposits in the private rented sector. You never know the outcomes of them because they are all kept secret. There is no case law built up, so you could have one redress scheme coming to a very different conclusion to the next redress scheme. The only way tenants can deal with that is by going to the courts directly. Do you think that the ombudsperson’s purview should be extended to include a right of appeal for the deposit redress schemes?

Richard Blakeway: A couple of thoughts. In direct response to your question, I think the ombudsman has been developed partly in the context of pressures and backlogs in courts. In designing the role of the ombudsman you need to give consideration to how that ombudsman’s jurisdictions could go further in relieving those pressures on the courts, not least so that the courts can focus on section 21, which in itself will be essential to give residents confidence to use the complaints process. There is plenty of evidence out there to suggest that until section 21 is removed, residents will be cautious about using the complaints procedure.

You give a compelling example of where an ombudsman’s jurisdiction might go beyond what is envisaged, albeit in a way that is trying to bring coherence to the system. Rents might be another area to look at. As an ombudsman, we currently look at aspects of rents and charges, and there will be other aspects for the tribunals, given some of the potential reforms to rents. You could consider the ombudsman’s role in considering what are often quite technical aspects, rather than things going to the courts.

If I may briefly answer on the context of the question and our being ready and willing, given the complexities of the system, which benefit neither the landlord, the provider, nor the resident—nor indeed the other bodies involved in this jigsaw—what the housing ombudsman can provide is one front door, one back office and one coherent approach to dispute resolution in the rental market. Given the policy convergence and the clear evidence that the more fragmented the process is, the more people will fall between the gaps and the more duplication and confusion there will be, building on our scheme would be the most effective way to deliver the ambitions of this Bill.

However, we should also do so at pace, because there is no one who can move faster than us to implement this. Therefore, you could implement the redress scheme before the removal of section 21, before some of the courts reforms that have been talked about. To enable that, we need a clear and unambiguous statement from Ministers during the passage of the Bill, and ideally in Committee, that they will appoint the housing ombudsman on Royal Assent to deliver the redress scheme.

Renters (Reform) Bill (Second sitting)

Eddie Hughes Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Ms Buck]

Sorry to gently push you, but I ask again: is your view based on an actual report or evidence base, or is this anecdotal?

Ian Fletcher: It is anecdotal; there is no empirical evidence that I can give you.

[Eddie Hughes (Walsall North) (Con)]

Q I have visited probably only four build-to-rent sites, but it feels to me that you are pitching slightly above the median. It also feels to me that, exactly as you described, the quality of the product is pretty good and therefore the opportunity for there being any mis-selling of what you are getting feels more limited than in the rest of the market, where I have seen egregious cases of people being mis-sold something.

It feels to me that it is likely that your tenants will stay and all the people who I have spoken to who provide this type of accommodation give me the feeling that the type of people that you are attracting and the type of property you are offering means that people do not walk in and walk back out again very quickly. I would imagine that lots of your tenancies last considerably—when I say “lots”, I mean that a very significant percentage of your tenancies last over a year.

Ian Fletcher: You were very welcome when you visited a build-to-rent building in Newcastle.

[Eddie Hughes]

I loved it.

Ian Fletcher: There are things to encourage the sector to provide long-term tenancies at the moment as well. As you will know, national planning guidance suggests that build to rent should be providing at least a minimum of a three-year tenancy.

I suppose the concern is that these are, as you found out from the site in Newcastle, very metropolitan and very popular areas.

[Eddie Hughes]

Very.

Ian Fletcher: You could end up in a situation where somebody has taken a two-month tenancy and is just using that as an opportunity to earn some money for themselves by renting it out at weekends for hen parties or things of that nature; it is almost sort of hotel accommodation in some respects. That is the concern of the sector—that you end up with a lot of churn in that respect.

I think there is also another concern. We have heard, quite rightly, from Ben and other evidence givers about the costs of moving from the tenant’s perspective. There are also significant costs from a landlord’s perspective where you are setting up a tenancy and then that is churned very quickly.

[Lloyd Russell-Moyle]

Q In some of the evidence to the Levelling Up, Housing and Communities Committee, Grainger, a buy-to-let house builder, suggested that the triple-lock approach should be applied, whereby landlords are restricted so that they cannot raise rents by more than the lower of consumer price inflation or CPI, wage inflation or 5%. That was Grainger’s official position at the time.

I wonder whether you would support an idea that there should be some sort of matrix that prevents landlords from increasing rents above a certain level—that was nationally known, as it were, and that could be published by the Secretary of State, so that everyone had some security about what that ceiling is.

Ian Fletcher: Those remarks are specific to a particular context.

Renters (Reform) Bill (Third sitting)

Eddie Hughes Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[Craig Tracey (North Warwickshire) (Con)]

I am the joint owner of a commercially let property that is held in a pension fund.

[Eddie Hughes (Walsall North) (Con)]

I am the joint owner of a property that is let out.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

May I take your advice, Ms Fovargue? My understanding was that we only have to make our main declarations at our first meeting. Do we have to reiterate them each time?

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[The Chair]

I am afraid that this will probably be the last question to the witness, so can we have a short question and answer please?

[Eddie Hughes]

Q Very briefly, then, can you tell us the current typical length of a tenancy in one of your properties? Has this Bill affected the pipeline for properties that you will develop in future?

Helen Gordon: The average stay, excluding our regulated tenancies—many of them have been with us for 40 years—is 32 months. We offer six and 12-month tenancies, but most people like to take a 12-month tenancy.

Has the Bill affected us? We are probably unique in the fact that we have a very good central treasury team, but I know that, for peers in the industry, it is curtailing their ability to invest in the sector until we can sort out that minimum two months, which will affect their financing. I know that others have actually rowed back from investment. The statistics are out there: you can see a drop in the number of schemes coming forward.

[The Chair]

I call Mike Amesbury, very briefly.

--- Later in debate ---

[Helen Morgan]

It is discretionary, but that is helpful. Thank you.

[Eddie Hughes]

Q Jen, can I just say that I am a big fan of your work? I am delighted that this was included in the Bill. I appreciate that the Bill does not apply UK-wide, but we have about 35 million pets in the UK. We are a nation of animal lovers. Do landlords have a particular grievance with dogs as opposed to other pets? I occasionally babysit my daughter’s house rabbits, and they eat everything: the carpet, electric cables, anything they can get their hands on. Generally speaking, do landlords have an aversion to dogs?

Jen Berezai: The first time I heard my father swear was when my rabbit ate through the telephone cable for the third time.

It tends to be split about 50:50 down the middle. Some landlords will say, “Dogs are fine, but I’m not having cats,” whereas other landlords adopt the opposite position. Each can bring their own range of risk behaviour, but there is also a problem with perception versus reality. For example, Cats Protection did some research when it ran its Purrfect Landlords scheme. One thing struck me as particularly interesting: for 63% of landlords who did not allow pets, their major concern was a flea infestation, whereas only 2% who did allow cats had ever experienced any problem like that. A horror story will get more traction than a good luck story, so there is a lot of education to be done. Vet referencing should definitely be used to demonstrate responsible pet ownership. Microchipping is becoming compulsory for cats next June. If an animal is microchipped, vaccinated, neutered, and flea and worm-treated, that rules out the majority of antisocial behaviours.

[Mike Amesbury]

Q I have a quick question about insurance, which you touched on briefly. Who should pick up the tab: the landlords or the tenants? Should there be something on that in the Bill?

Jen Berezai: I think it is good that there is the option for either. We ran a survey with the NRLA and Propertymark called “What’s the Damage?” because we wanted to drill down a bit deeper into the landlord’s experience. Those who saw insurance as the way forward were pretty evenly split between the landlord paying for the insurance, or the tenant paying the landlord, or the tenant actually buying the insurance policy. That seems to be determined by portfolio size and, to a degree, average rent. I think it is good that there is the balance, because some landlords want one thing and some want the other.

At the moment, if you find a pet-friendly landlord, the likelihood is that they are going to charge you pet rent, which they can do under the terms of the Tenant Fees Act; it is only the deposit that is capped. The average is about £25 per pet per month, which means that you are paying £300 extra rent per pet per year. That is just per pet, whereas an insurance policy covers an address, so you can have a cat and a dog or a couple of cats—whatever it might be—and your premium is less than pet rent and the cover is greater.

Renters (Reform) Bill (Sixth sitting)

Eddie Hughes Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

Given how threadbare the case for new mandatory ground 8A is, one is forced to conclude—the Minister will know that I have not bandied this charge around casually—that the Government have chosen to incorporate it in the Bill purely at the behest of those voices in the landlord lobby who have been forced to accept, but are by no means happy about, the wider reforms contained in this legislation. We are extremely concerned about the implications of leaving new ground 8A in the Bill.

[Eddie Hughes (Walsall North) (Con)]

I am interested in the argument that the hon. Gentleman is making, although I am slightly confused by some elements of it. Given the fact that he suggested that the likelihood of its occurrence were vanishingly small, why does he think that any landlord would lobby the Government to include something that, based on the statistics he has quoted, they have never had experience of? I can only say that in my experience, anecdotally—I do not have anything that I can reference for it—a number of people have adopted this approach previously, and it is frustrating for both the courts and landlords. However, I follow the argument that the hon. Gentleman is making; it is very interesting.

[The Chair]

Order. Interventions must be brief.

Renters (Reform) Bill (Seventh sitting)

Eddie Hughes Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

[Matthew Pennycook]

I welcome the Minister’s response and his commitment to look further at this matter. Although the mandatory duty is welcome, we have real concerns about the ability of local authorities to properly investigate and enforce. We will come back to those concerns, because they relate to a number of areas in the Bill. I therefore hope that the Minister goes away and thinks about every—

[Eddie Hughes (Walsall North) (Con)]

There is form in this area: a landlord cannot evict their tenants if the property does not have an energy performance certificate. It seems like an interesting proposal.

[Matthew Pennycook]

I very much welcome the hon. Gentleman’s intervention. I have covered all bases in our set of amendments. We will come to the preconditions and requirements that have developed around section 21 that fall away under the Bill; they are a concern. The hon. Gentleman is right: to serve a section 21 notice, a number of regulatory obligations must be met.