Renters’ Rights Bill

Gareth Snell Excerpts

Wednesday 9th October 2024 Commons Chamber

[David Simmonds]

As a constituency Member of Parliament and former councillor, I entirely recognise the hon. Lady’s point, but what the hon. Member for Rugby said was significant because we need to recognise that 76% of tenants in the private rented sector report a high level of satisfaction, a much higher level of satisfaction than is found in other forms of housing tenure. If we are to strike the appropriate balance in this debate in the Parliament of the nation, we have to recognise that the vast majority of landlords provide a good, important and high-quality service, and make sure that the legislation we take through to address the difficulty and challenge that our constituents—citizens—experience is proportionate.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Will the hon. Gentleman give way?

[David Simmonds]

I will make some progress and move on to another area that has been debated. I know that the Minister will wish to have time to sum up on many of these points as well.

A number of Members, including my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), highlighted the need for appropriate measures to support students in the rented sector. A good many landlords’ organisations have made the point that the Government’s intention to change the tenant and landlord’s full freedom of contract will have an impact, especially on students who wish to rent a property for the entire duration of their course. We need to ensure that there is appropriate flexibility in respect of student properties, so that students at university can find the housing that they need and landlords are not discouraged from entering that market, and so that the points raised by my right hon. Friend are addressed. We do not want a situation in which a landlord, wary of a two-month notice period, decides to take the property off the student market and put it somewhere else, in a way that perhaps addresses housing need less, and fails to support the local economy in the way that student housing would have.

That leads me to a point that I know we will explore in Committee: how freedom of contract particularly impacts constituents who struggle to pass the kind of credit checks and landlord insurance checks that are common in the private rented sector. We all have examples of people who have faced bankruptcy proceedings and entered into individual voluntary arrangements to address significant financial difficulty, and who then got themselves back on their feet; but who, when facing eviction, have found it impossible to find a landlord willing to rent to them. Those people are not eligible to access social rented housing, because they have a job and an income, but cannot access the kind of housing that locks them into a regular payment contract. However, they may be able to offer a significant up-front payment of rent—potentially many months’ rent, or even a year’s rent—to secure a property. That gives the landlord the certainty they need, and it also gives the person the guarantee of the home they need. We need to address that issue, because the implementation of a number of financial arrangements by previous Governments has created both an opportunity for people to get back on their feet after financial difficulty, and a challenge in accessing a long-term home in the rented sector.

As we proceed with this Bill, it is clearly important that policy is based on evidence. Having spoken to the Minister and many of his colleagues about the Bill, I know that there will be a high degree of cross-party agreement on some of the points that are discussed. However, I would like to bring this debate back to the key concern that we in the Conservative party have, which has been expressed by a number of Members: we need to ensure an appropriate supply of housing in the private rented sector, so that citizens who need to access those homes can do so.

We remain a party that respects and supports the aspiration of home ownership. Just like all other important life stages, our constituents are reaching that life stage later in life than has been the case historically. We are in a world where people do not typically leave school or university and spend 40 years working in the same business and living in the same town. People moving around and moving home to adapt to changing needs is a key issue that we need to address. Even those wishing to downsize and looking for a smaller property later in life—the last-time buyer market, as the industry likes to describe it—have their equivalent in the rental sector: people looking for accommodation that comes with a package that provides sufficient care and support. The choice to move into high-quality accommodation of that nature in the private rented sector can free up family homes that are in short supply. All these things need to be seen in the round.

Of course, most Members of Parliament are tenants—not all of us; those of us who commute are not—and will have experience of the London rental market. Luckily, Members of Parliament in that situation have the Independent Parliamentary Standards Authority to back them up, but that experience highlights the significant differences we see across the regions and geographies of the United Kingdom. My outer London constituency is dominated by owner-occupiers, but has a vibrant rental sector and a significant number of retirement homes. The population and the need are significantly different from the population and need in a university town full of young people looking to secure student accommodation, or looking for a good-quality private rented home for a short period while they get their first job and get their foot on the property ladder. We need to support that market effectively, and to get it right. We need a balance that avoids over-regulation and the unintended consequences about which my right hon. Friend the Member for North West Essex spoke so eloquently.

Regional variation was highlighted by a good many Members. Places being converted into holiday homes does not tend to be a significant issue in the London suburbs. However, we have heard from colleagues in this House, as we did during the last Parliament, about the massive impact that that has in many of our coastal towns and cities. The impact is not just on those in need of social housing, and those struggling to access, through social rent, accommodation in the private rental sector, but on those in other parts of the country where the local economy has been significantly changed as a result of those issues.

No debate about housing can be allowed to pass without mention of the impact of our Home Office contracts to secure accommodation for those in our asylum system. We know from feedback that many Members of Parliament have provided from around the country that in some areas, that has a significant impact. The initial very good intention behind those Home Office contracts was to disperse asylum seekers awaiting a decision to privately rented accommodation in parts of the United Kingdom where there was accommodation surplus to the needs of the community. That was why those contracts—run now by three private organisations, but run previously by the Home Office, and originated by the now Mayor, Andy Burnham, when he was a Home Office Minister—use that supply of accommodation.

However, we are beginning to hear, as we learned in debates about the use of migrant hotels and so on in the past, that the policy has, in some areas, taken a significant share of accommodation that would otherwise be available to the private rented sector. While it is absolutely right that we seek to reduce the cost to the taxpayer of people staying in hotels, we need to ensure that decision making does not simply tick the “out of hotels” box, and respects the needs and expectations of the community. In particular, given that it is always the lowest-cost accommodation that the Home Office will seek to rent, we need to ensure that the policy does not have an inappropriate impact on those awaiting housing through the local authority, or seeking the least expensive accommodation in the private rented sector.

All these different issues—temporary accommodation, short-term lets for students, accommodation for asylum seekers and owner-occupation—are impacted by this debate. I hope that the Minister will accept that we approach this topic in a constructive spirit, and that our challenge, as we go through the next stages of the Bill, aims at addressing the issues to get the Bill right.

My hon. Friend the Member for Romford (Andrew Rosindell), my right hon. Friend the Member for Witham (Priti Patel) and the hon. Member for Boston and Skegness (Richard Tice) all brought their direct personal experience to this debate, and set out why the points raised at the very start of this debate are so significant.

--- Later in debate ---

[Matthew Pennycook]

I will bring forward further detail as the Bill progresses, but those conversations with Ministry of Justice colleagues are ongoing, and they are constructive. We want to get to a place where the system is ready to take the new tenancy provisions forward. We will not act precipitously, and what we are not prepared to do—this is the most important point on courts—is make the necessary and long-overdue transformation of the private rented sector contingent on an unspecified degree of future court improvements subjectively determined by Ministers, as the last Government proposed in their Bill. We are determined to move quickly to give renters the long-term security, rights and protections they deserve.

A number of hon. Members raised the issue of standards, and many shared horrific stories of tenants trapped in substandard properties. It is essential, in the Government’s view, that we take decisive action to tackle the blight of poor-quality, privately rented housing and to ensure landlords are required to take swift action to respond to serious hazards.

[Gareth Snell]

The Minister is giving an excellent speech. Landlords in Stoke-on-Trent have told me that they welcome any move that drives the rogue landlords out of the system. That is because rogue landlords undercut the market and prey on the vulnerable and those locked into low-income jobs by offering relatively low-rent accommodation, safe in the knowledge that if they complain or seek any form of improvement, they are simply out, to be replaced by somebody else who is desperate. While my hon. Friend is talking about improvements to the landlord system, will he say more about how good landlords welcome the Bill?

[Matthew Pennycook]

My hon. Friend is right. We have engaged constructively and intensively with tenant representative groups and with landlord bodies. Most of them will say that what he describes is part of the problem, because they represent the better end of the market, and that good landlords welcome the new system because it forcefully targets the unscrupulous landlords, mainly at the bottom end of the market, who bring the whole sector into disrepute. That is one reason why the characterisation of this Bill as overly pro-tenant and harmful to, and unwelcomed by, landlords is misplaced. Good landlords should welcome this legislation.

I welcome the support expressed on both sides of the House for the provisions that will see a decent homes standard applied to the private rented sector and Awaab’s law extended to it. It is important that we get the detail right, and I assure the House that we intend to consult on the content of the decent homes standard for both social and privately rented homes, and on how Awaab’s law will apply to the latter, given the obvious differences between the private and social rented sectors.

I want to respond briefly to a question posed by the Liberal Democrat spokesman, the hon. Member for Taunton and Wellington (Mr Amos). I thank him for his kind remarks about me in his speech. The approach we are taking in this Bill to applying and enforcing the decent homes standard to the private rented sector is not, in our view, suitable for the unique and distinct nature of Ministry of Defence accommodation, but I hope he will welcome the fact that the MOD is reviewing its target standards so that we can drive up the quality of that accommodation separately from the Bill.

A large number of hon. Members raised concerns about affordability, and several argued forcefully for rent controls to be incorporated in the Bill. While we recognise the risks posed to tenants by extortionate within-tenancy rent rises, we remain opposed to the introduction of rent controls. We believe they could make life more difficult for private renters, both in incentivising landlords to increase rents routinely up to a cap where they might otherwise not have done, and in pushing many landlords out of the market, thereby making it even harder for renters to find a home they can afford. However, we are introducing a range of measures in the early part of the Bill that will empower renters to challenge unreasonable rent increases and prevent rent hikes from being used as a form of back-door eviction.

Measures in the Bill will prevent unscrupulous landlords from using rent increases in this fashion. All rent increases from private landlords will take place via the existing section 13 process, so the tenant can challenge them if necessary. That will protect landlords’ rights to achieve market rent while preventing abuse. We will also give tenants longer to prepare for rent increases, and allow only one rent increase per year. For too long—this is reflected in the low numbers of tenants going to tribunal —tenants have feared challenging a rent increase at the first-tier tribunal. We will end this situation by ensuring, by contrast to the previous Government’s legislation, that a tenant will not pay more than the landlord asked for in circumstances where a tribunal might determine otherwise.

We are going further: we will end the practice of backdating rent increases, to stop tenants being thrust into debt if they take a case to tribunal. That would have acted as a powerful disincentive for tenants to take such cases to tribunal. Let me be clear: we do not want the tribunal overwhelmed, but we want more tenants to take a challenge against unreasonable rent increases to the tribunal. The tribunal will play an important role in looking at what a reasonable market rent is in their area, and assessing whether a particular rent increase is reasonable. To protect the most vulnerable residents, in cases of undue hardship, the tribunal will be able to delay the start of the rent increase for tenants caught in those particular circumstances.