Renters’ Rights Bill

Florence Eshalomi Excerpts

Tuesday 14th January 2025 Commons Chamber

[Matthew Pennycook]

I thank the hon. Lady for her question and I agree with the objective that she has in mind, but, as we discussed fairly extensively in Committee, we do not think that the Renters’ Rights Bill and the way that the decent homes standard will apply to assured tenancies in this sector is right for MOD accommodation. The MOD is undertaking its own review, and I shall touch on that issue later in the debate.

As I was saying, the changes around the decent homes standard will guarantee that the appropriate person can always be subject to enforcement action and they close a potential gap that may have been exploited by clarifying the types of accommodation that will be required to meet the standard.

Today, we are proposing a small number of further improvements, most of which are again minor and technical in nature. As I have made clear repeatedly, the Government have long recognised that demands for extortionate amounts of rent in advance put undue financial strain on tenants and can exclude certain groups from renting altogether. I am sure that many of us in the Chamber will have heard powerful stories from our constituents about the impact of such demands. The typical story is all too familiar. Tenants find and view a property which, as advertised, matches their budget only to find that, on application, they are suddenly asked to pay several months’ rent up front to secure it. Tenants in such circumstances often confront an almost impossible choice: do they find a way to make a large rent-in-advance payment, thereby stretching their finances to breaking point, or do they walk away and risk homelessness if they are unable to find an alternative?

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Minister for the work he has been doing. He highlighted the issue of tenants being asked to pay up front. In my constituency and many other London constituencies, that up-front cost amounts in some cases to a deposit to purchase a home. Does he agree that we need to look into that issue and into estate agents effectively getting tenants to bid against each other for private rented accommodation?

[Matthew Pennycook]

My hon. Friend the Chair of the Select Committee is absolutely right and, as I will detail, that is precisely why the Government are moving to prohibit that practice. As she will know, the Government have already moved to ban bidding wars through the Bill, where desperate tenants are often pitted against each other so that a landlord can extract the highest possible rental payment. Demands for large rent-in-advance payments—in many parts of the country, they can be six, nine or even 12 months’ rent in advance—can have a similar effect, with tenants encouraged to offer ever larger sums up front to outdo the competition and secure a home that may or may not be of a good standard, or risk being locked out of renting altogether.

As I stated previously, the interaction of the new rent periods in clause 1, which cannot be longer than a month, and the existing provisions of the Tenant Fees Act 2019 related to prohibited payments, arguably provide a measure of protection against requests for large amounts of advance rent. As I made clear in Committee, however, there is a strong case for putting the matter beyond doubt, and that is what we intend to do.

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[David Simmonds]

There are a number of ways to address that issue. The Minister has talked compensation, and we have tabled amendments on insurance, but clearly there needs to be an effective dispute resolution mechanism in place, so that such situations can be resolved when they arise. We were focused in particular on ensuring that there is sufficient flexibility when, for example, work must be carried out to improve energy efficiency or to address health and safety concerns such as mould, and a tenant needs to leave because the work will render the property uninhabitable.

Although there have been substantial areas of agreement on the Bill, much of which takes forward work that started under the previous Government in their Renters (Reform) Bill, we have concerns that it creates significant new problems for the availability and affordability of accommodation in the private rented sector. That sector, we must not forget, enjoys the highest tenant satisfaction of any private tenure: 82% of private renters say that they are satisfied with their accommodation.

The backdrop is challenging, and has become a lot more so recently. The Chancellor’s Budget has set inflation rising, and borrowing costs are soaring. Markets are responding to the chaos in No. 11, and that is causing a great deal of uncertainty for tenants and landlords alike. Her decisions are stoking inflation, and that is pushing up rent and housing costs of all kinds. The black hole in local government funding, which was unveiled just before Christmas, means that councils facing the twin existential threats of wholesale reorganisation and growing funding shortfalls lack certainty from the Government about the funding to deliver this enormous increase in workload.

[Florence Eshalomi]

I know that the shadow Minister cares passionately about this area, especially in the light of his local government experience. Given that financial pressures on local authorities are added to by the need to provide temporary accommodation to families facing eviction, does he agree that we should have abolished section 21 no-fault evictions sooner?

[David Simmonds]

I say gently to the hon. Lady that had Labour-run Lambeth council not recently rushed to put 200 of its own people on the streets using section 21, because it is concerned about the impact that the Bill will have on its housing situation, that would have more credibility. It is clear that this is a difficult situation in all parts of the country. There is a significant shortfall in emergency accommodation in London in particular, and a rising cost attached to it there, just as other areas of the country have a surplus of accommodation. That is all part of a complex picture. We need to make sure that everything works efficiently and effectively together, and it is absolutely right that we set out our concerns about whether the Bill goes far enough in all areas towards addressing those issues—and about whether, in some cases, it goes too far.

I touched on the impact of the black hole in local government funding. Another area that is driving significant pressure is the Government’s approach to asylum. They are granting refugee status faster, so people are being pushed out of the doors of Home Office asylum dispersal accommodation and on to local housing waiting lists. I am sure that many hon. Members in this Chamber will have been lobbied by their local authority about the impact of that additional pressure—those additional people, who under our laws are perfectly entitled to that housing—on supply in their area. All those things have a huge collective impact on the pool of available housing.

Of course, as we have seen in the news, the declining confidence abroad in our economy is reducing the number of overseas students. That makes it more important than ever to support thriving student accommodation through tenancies that address students’ needs properly—especially the needs of students who are older, have families, or are studying for higher degrees and have a fixed commitment to a location. All those requirements need to be addressed effectively in this legislation.

Does the Bill in its new form rise to those challenges? It is clear that it fails to ensure that landlords can recover their property quickly when they need to. That reduces their incentive to rent it out, especially for small landlords. If the hon. Member for Hampstead and Highgate (Tulip Siddiq) needs to recover some of her property portfolio to return it to another owner, will she have the assurance under this Bill that due process is available to her? The Bill fails to ensure a flexibility and freedom of contract that allows tenants and landlords to agree a deal that suits them both. Students wanting to book accommodation for a guaranteed period of two years—or shorter or longer—and those moving to a new location for a fixed-term work contract require opportunities and flexibility that are taken away by this legislation.

The Bill takes away landlords’ opportunity to make allowances for financially riskier tenants, such as those with a poor credit record, through rent in advance or other safeguarding arrangements that give the landlord confidence that they will not lose out. That locks financially vulnerable people out of the rental market. The Bill also puts enormous obligations on local councils—one of the biggest additional sets of burdens and expectations in generations—and there is no real clarity yet on how it will be resourced, at a time when all the wider uncertainties that I have described add up to a great deal of additional cost. The Bill also fails to provide the necessary assurance that tenants who have pets and need to access insurance as part of their tenancy conditions will be able to find affordable insurance. That is dealt with in our new clause 21. More concerning still, the Bill is a missed opportunity to provide this House with a proper impact assessment, or the assurance of a future review that would give us really good evidence on which to base our decisions. Our new clause 20 would address that shortcoming, and the House will have the opportunity to vote for it shortly.

Let me give an example of where there is significant uncertainty. In some of the political knockabout, the Government have sought to blame their predecessor for court delays, while claiming that there are no delays worthy of regard in the passage of this Bill, which loads more regulation on to the sector. Both of those things cannot be true simultaneously, so let us properly assess the impact of the Bill before we legislate. There is a lot of good will—for example, on the point about tenants with pets being able to access the accommodation that they need. We do not want to find ourselves returning to this issue in the House because the legislation failed to achieve what we had hoped.

Clearly, it is the role of this Chamber to scrutinise and question, and it is the role of the Opposition to oppose when we cannot see that the legislation before us will result in an improvement in the lot of the people of this country. A pattern is emerging. The Government came after the farmers. They came after the pubs. They came after the small businesses. They came after the private schools. They came after our local councillors. Now this Bill, in its new form, comes after our tenants and our landlords. It is very clear from the number of Government amendments, which the Minister referred to, that the points we made in Committee about the many shortcomings of the Bill that need to be addressed were not lost on the Government.

I return to the point that even a Labour council—a bastion such as Lambeth, led by the Labour chair of London Councils—is rushing to use section 21 to evict its own tenants in advance of this Bill because of the impact it will have. A Labour council and a Labour Government are putting their own people out of their homes.

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[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Housing, Communities and Local Government Committee.

[Florence Eshalomi]

I start by paying tribute to Members from across the House who have tabled an amendment at this stage, and to the Minister, who has engaged constructively with Members between Second Reading and Report.

As we debate this Bill today, it is important to remember why it is so badly needed: the dire situation that many tenants across all our constituencies are facing through no fault of their own. We have to ask ourselves how we got to a position where tenants have the threat of eviction held over their head for no good reason. How did we get to a position where tenants can be given only a couple of months to raise thousands of pounds for rent in advance, on top of moving costs and the deposit? How did we get to a position where the average rent went up by 9.1% last year? For far too long tenants have been the innocent victims of an unjust power balance in the rental market. As a result, many of them have been unable to keep a roof over their heads and, sadly, have fallen into homelessness. This cannot continue any longer. We need a fairer deal for renters.

[Jeremy Corbyn]

Has the hon. Member noticed, as I have, an increase in the number of threatened evictions at the present time, as well as no-fault evictions, excessive rent rises and harassment by landlords of private sector tenants? Does she believe that there is any immediate and urgent protection that we can give those tenants?

[Florence Eshalomi]

As a fellow London MP, the right hon. Member will see what I see in my inbox, with many tenants facing that threat on an almost daily basis. They are the same tenants who come to our advice surgeries and are turned away from overstretched council departments, and who cannot apply to social housing waiting lists because those lists are already full. It is important that we get guarantees and protections for those tenants as outlined in the Bill, and hopefully help my constituents and his, and people up and down the country.

This situation cannot be allowed to continue. I am proud that the Bill will be strengthened by some of the welcome amendments that Members have tabled. I extend my support to new clause 3, tabled by my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel), on limiting rent payable in advance. That is a big issue in my constituency of Vauxhall and Camberwell Green, and I have spoken to many tenants who are being asked to stump up six to 12 months’ rent in advance. That leaves many people priced out of the rental market, ending in a race to the bottom where landlords can charge more and more for less in return.

How can someone finally find a place that they want to call home, only to be told that they need to pay out thousands upon thousands of pounds up front? In some cases, because of the rents charged in my constituency, and many others, the money that people are asked to stump up in advance would amount to a deposit if they took it to purchase a home in another part of the country. We are talking in excess of £30,000 if someone is asked to stump up, with an average rent of £2,500 per calendar month in my constituency. The result is that those who do not have significant savings or family wealth end up needing to borrow money just to have somewhere to live. That cycle of exploitation is pushing thousands of people into debt, impacting them for the rest of their lives.

Research from StepChange shows that one in six private renters are relying on credit to make ends meet. Something must change, because the system is broken. We must lower immediate financial pressures on tenants and make private renting fairer for everyone. That is why I welcome the amendments tabled by the Secretary of State, and I urge the House to support measures that will reduce up-front costs for all renters.

My constituency is home to thousands of university students from great universities across London. Students often have the most insecure housing, because landlords know that they can charge a new group higher rents every year. I therefore welcome measures that restrict the time that a landlord can agree a new tenancy, prior to the end of the current tenancy in student housing. Many of us will remember the time when we went to university and looked for accommodation. We signed up to live with friends or someone we knew—perhaps by Christmas we had all fallen out, and there was that frantic search when someone left the property and we had to find a new flatmate. Many social media posts are put on SpareRoom.com or Facebook, and university students need time to bed into their new accommodation. The new clause will help to give students that breathing space, and avoid the problems they face as a result of early sign-up accommodation.

New clause 10 addresses a vital issue, and I pay tribute to my constituency neighbour, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), for tabling it and for her tireless campaigning. The death of a loved one is a difficult and challenging time for anybody, and the one thing people need is the time and space to grieve. Under current rules, guarantors can end up facing a huge bill for the remainder of their loved one’s rent. None of us would want to be placed in that situation. It is right that the Government have acted to prevent guarantors from being faced with that unacceptable scenario, and I urge the House to support the new clause.

I also wish briefly to touch on some other amendments, which I hope the Government will consider during the Bill’s passage in the other place. Although the Bill introduces a rent tribunal for unfair rent rises, there is concern from groups such as the Renters Reform Coalition that measures in the Bill do not go far enough to prevent landlords from evicting a tenant under the guise of a large rent increase. I am particularly concerned that market rent may not be an appropriate benchmark when market data is poor. Renters at the bottom end of the market could end up being told that an unaffordable rent rise is acceptable under this system. We need guarantees that the use of a tribunal will resolve that, and that it is available and accessible to tenants.

In Scotland, only a handful of rent increase cases a year go through the tribunal system to the rent officer, and it would severely undermine the Bill if tenants who were being exploited did not take up the option available to them. I would be grateful if the Minister could explain how the Government will encourage the take-up of such a provision, and whether he will support the alternative measures and safeguards in the Bill, such as amendment 9, tabled by my hon. Friend the Member for Liverpool Wavertree (Paula Barker).

Finally, a number of amendments have touched on the vital issue of home adaptations in the private rental sector. It is not fair that disabled tenants end up with reduced access to their own homes. The Government are rightly looking at making it easier for disabled people to thrive in the workplace, but what is the point of someone thriving if they do not even have an adequate home or housing?

We cannot expect someone to go out and work and contribute to the economy if they have not had a good night’s sleep. Can any of us imagine being unable to have a shower in our own flat because the landlord refuses to make the necessary adaptations, or trying to cook in a kitchen when we cannot even reach the worktops? None of us would want to live in such conditions, yet that is the reality for many disabled people in the private rented sector in 2025 in the UK. People face such issues on a daily basis, with more challenges and blockages when trying to get private landlords to address them.

I urge the Government to ensure that disabled people do not face a private rented sector that is far too often completely inaccessible to them. I look forward to the Government responding to the report by my Committee’s predecessor on disabled people in the housing sector. The House must continue to look at how we fight for a rental sector that works for everyone, regardless of their background.

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

I was privileged to serve on the Bill Committee, and it is good to see many fellow members of the Committee in the House this afternoon. Before I start, I wish to pay tribute to the many excellent landlords across our country. The Bill has been designed to tackle the worst offenders, but it is worth putting on the record that thousands upon thousands of landlords do a good job of providing long-term accommodation for many people in the private rented sector. On Second Reading and in Committee we spoke about the unintended consequences that exist in the Bill, some of which still remain—that was alluded to by my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds).

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[Helen Hayes (Dulwich and West Norwood) (Lab)]

I rise to speak on new clause 10 in my name and Government new clause 15, but before I do so, I would like to make some brief remarks about other aspects of the Bill. In my constituency of Dulwich and West Norwood, housing is overwhelmingly the biggest challenge that my constituents face. Housing costs have spiralled, and the previous Government wasted more than a decade failing to build the homes we need. The effect of this has been that more and more of my constituents are living in privately rented homes, in which they are currently systematically denied the basic stability and security that most of us would agree are essential to being able to function properly in the rest of life.

Private tenants live with the constant fear that their landlord can at any time, without reference to the terms of their tenancy agreement, decide that they want their property back and serve an eviction notice. I have seen this happen time and again. It stops people putting down roots in their community, because they know that they are likely not to be able to stay. It means that parents live with the constant anxiety that they may have to move far away from their children’s school. It means that older people are denied security of tenure in their retirement. In return for extortionate rents, tenants all too often face appalling standards, and find it far too difficult to get basic health and safety issues addressed.

I therefore welcome this Bill, which delivers the biggest package of reforms to private renting for 40 years, redressing the current imbalance between landlords and tenants, strengthening tenants’ rights and providing much-needed additional security. I particularly welcome the scrapping of section 21 evictions—I have been speaking on them in this place since 2016—the strengthening of local authority enforcement powers and the creation of a new private rented sector ombudsman, and the application of Awaab’s law to the private rented sector.

There is a very great challenge about the affordability of private renting, particularly in London, and my constituents experience that every day. I hope the Minister will keep under review the measures in this Bill that are designed to limit the rate of rent increases to ensure they are as effective as they need to be to create a functioning rental market. I trust that the Minister will do that, and will not hesitate to take further action in future if it is needed.

I now turn to my own new clause 10 and Government new clause 15, which would ban the use of guarantor agreements in the event of the death of a tenant. In this place, all of us know that there are sometimes emails that stop us in our tracks. So it was for me when, in 2023, I received an email from a constituent that read as follows:

“Late last year I became a guarantor for my son so that he could secure accommodation with some friends for his second year at university; without me doing so, he would have lost the house. I had no real concerns about my son paying the rent as he had shown he was a hard worker in a variety of jobs he engaged with to supplement his student loan, which would have covered the rent anyway. The tenancy was due to start at the beginning of July. Tragically, two weeks ago he took his own life, leaving myself, my wife and his sister utterly devastated. On top of everything, I now find myself liable to pay the rent for his room for the entire length of his tenancy if a replacement tenant cannot be found…I wonder if there might be scope to look into the practice of expecting bereaved parents to continue in a role of guarantor to a loved one after they have died.”

I do not think anyone could read that email and think that what happened to my constituents who were facing the worst kind of pain was remotely acceptable. I contacted the letting agent who refused to budge, simply stating that they were following the contract that had been signed.

[Florence Eshalomi]

I thank my hon. Friend and neighbour for making such a powerful speech and reading out what must have been a difficult email to receive on behalf of her constituent. Does she agree that, sadly, many other tenants up and down the country might have had to go through that, and suffered in silence because they were grieving?

[Helen Hayes]

I agree with my hon. Friend, and I will speak in a moment about evidence I have received that this issue is more widespread than any of us might have imagined. I raised the issue at Prime Minister’s questions, and after that I was contacted by many people, including families who had experienced exactly that, as well as letting agents who told me that they explicitly did not use such clauses, and that such clauses were not necessary because the loss of rental income in the event of the death of a tenant is an insurable risk for landlords.

I am grateful to Members across the House who have supported my campaign, including 48 Members who signed new clause 10, and those who signed my amendment to the Renters (Reform) Bill in the last Parliament. I engaged extensively with two different housing Ministers in the previous Government, both of whom said that they were sympathetic but declined to take action in that Bill or support my amendment. I am therefore grateful to the Minister for Housing and Planning for his compassionate and rigorous engagement on this issue. He has listened and, more importantly, he has acted where his predecessors did not. Government new clause 15, tabled this week, bans the use of guarantor agreements in the event of the death of a tenant who is a family member. That is what my constituent asked of me, and I am proud that that is what we will achieve today. I hope my constituents will take some small comfort from knowing that by speaking out and contacting their MP, other families faced with the heartbreak of losing a loved one will not be pursued by a greedy landlord or letting agent, adding financial stress and hardship to an already unbearable situation.

New clause 15 does not go as far as new clause 10, extending protection only to bereaved guarantors who are related to the tenant. While that protection would have helped my constituent, and while I agree that institutional guarantors should not automatically be released from their responsibilities on the death of a tenant, the limitations of the new clause mean that there could still be hard cases in future—for example, a close friend who is bereaved. I therefore trust that the Minister will keep the situation under review to ensure that new clause 15 is as effective as he intends. As a consequence of the Minister’s engagement on this matter, I am content to withdraw new clause 10 and support Government new clause 15. I urge all right hon. and hon. Members to do the same, and to support this Bill, which will deliver the step change in regulation of the private rented sector that we have all been needing for far too long.