Renters (Reform) Bill

Helen Morgan Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

Let me first draw Members’ attention to my own entry in the Register of Members’ Financial Interests. I am also half a residential landlord.

The Bill has taken far too long to reach this stage. It is more than four years since the Government’s manifesto pledge, and now, in the dying months of the current Parliament, the Bill has only just reached Second Reading. Broadly, however, my Liberal Democrat colleagues and I support it, and will vote for it this evening. Any legislation that paves the way towards a fairer situation for both renters and landlords must be welcome. Most important is the end of no-fault evictions, and I shall say more about that shortly. We also welcome clauses that will allow renters to keep pets in their homes, and the creation of a housing ombudsman, which will enable decisions to be made more quickly and cheaply for tenants and landlords.

Security for both tenants and landlords is vital, and it is essential that in providing that security for tenants, we do not inadvertently cause an exodus of landlords from the rental market. The Country Land and Business Association has found that 44% of landlords plan to sell or change the use of their rental properties in the next two years, which is cause for concern because at the same time we are seeing an increase in the number of people entering the private rental market. Rightmove estimates that for every property advertised for rent there are 24 applicants, whereas there were just eight in 2019. We need to ensure that we are incentivising landlords to stay in the market and to give renters security once they manage to become that one person in 24 to secure a property to rent.

The length of rental tenancies is an important element in that regard. In its current form, the Bill introduces rolling tenancies without specified end dates. That provides considerable security for tenants, but the six-month protected period is potentially too short. Meanwhile, 43% of landlords do not have a portfolio of properties; they have just one, so the risk of empty months is significant for them. Providing longer-term tenure might alleviate that risk and remove an incentive for landlords to exit the market. The Liberal Democrats’ proposal is to extend the default tenancy from one to three years, and, during that three-year period, only to allow rents to increase by the rate of inflation. That would give both renters and landlords greater stability.

As I mentioned earlier, the Liberal Democrats welcome the banning of section 21 or no-fault evictions. I am sure that Members on both sides of the House have had an enormous amount of casework featuring, for many renters, a sudden and drastic upheaval in their everyday life caused by a section 21 eviction. Such evictions leave people stressed about their security of tenure and worried about not having somewhere to call their home, and can pull the rug from under their feet. They can require people to move to a new area, forcing them to find new schools for their children or new jobs for themselves and try to settle into new communities. That is particularly significant at present, because more families than ever are living in private rented accommodation, and, according to the Renters Reform Coalition, 1.8 million renter households include children.

The Government’s commitment to abolish those types of eviction and legislate for landlords to be able to evict only in “reasonable circumstances” is therefore a welcome step towards ensuring that renters’ rights are protected in law. It will also ensure that tenants living in properties suffering from disrepair or even infestation can report such issues to their landlords without the fear of a “revenge eviction”. It should drive up standards, particularly if coupled with longer tenancies. As always, however, there is a balance to be struck between providing security for tenants and ensuring that the legislation does not cause an exodus of landlords from the sector. It remains important for landlords to be able to remove tenants who are genuinely damaging their property or the surrounding community, but I hope that the Minister will make the definition of what will enable that to happen absolutely clear. It is also important to guard against landlords being able to use flimsy excuses to evict tenants, allowing section 21 evictions to continue in all but name.

I hope that the Minister will elaborate on the reform of the legal system that will be necessary to allow landlords to evict when there is non-payment of rent, unreasonable damage to property or clearly defined antisocial behaviour, or a genuine change in a landlord’s circumstances. A prompt and fair court process is obviously essential to retaining landlord confidence in a reformed system, but delays in that process should not be used as a mechanism to kick this important legislation into the long grass.

The quality of rental housing must also be considered. Black mould, damp, faulty boilers—I am sure we are all aware of the difficult conditions that some rental properties are left in. I say “some” with great seriousness, because not all private landlords leave their properties in disrepair, but we must make the Bill robust enough to challenge those who do. The Government have previously promised to introduce legislation at the earliest opportunity to apply the decent homes standard to the private rented sector. I find it concerning that that legislation has not been introduced, and the Government have instead announced that they will delay the requirements that will force private landlords to meet energy performance certificate standards.

I understand the cautious approach in ensuring stability of supply in the private rented sector, but responsible landlords should not baulk at taking measures over a reasonable timescale that will enhance the value of their asset. I also understand the concern about the usefulness of the EPC, but it should be possible to revisit that and phase in a more effective measure of energy efficiency rather than abandoning it altogether, providing certainty and a fixed timetable that landlords should be able to work to. Without such measures, the Bill risks offering rogue landlords an easy escape route when it comes to improving the quality of the properties.

The Bill is better late than never, but I urge the Government to revisit the issue of length of tenancy, to clarify the circumstances in which, and the legal process through which, a landlord would legitimately be able to evict a problematic tenant or sell the property, and to consider including a decent homes standard so that those renting privately can be sure of a safe and warm home for themselves and their families.

Let me end by calling for a rapid increase in the building of social housing, because a shortage of supply is behind all these issues in the private rented sector, and it leaves far too much power in the hands of landlords.

Renters (Reform) Bill (First sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

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

I declare an interest in that I receive support, in particular as set out in my entry under category 2(a) on the Register of Members’ Financial Interests, from individuals with an interest in this area.

[Helen Morgan (North Shropshire) (LD)]

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

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[The Chair]

I think we all do, in one place or another, but that is probably not an interest to declare: it costs you money, rather than getting you any money.

[Helen Morgan]

I am also a vice-president of the LGA.

[The Chair]

There being no further interests to declare, we will crack on with the evidence. I call the shadow Minister.

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[Mike Amesbury]

Q Given that somebody is being evicted every 23 minutes through a section 21 no-fault eviction, should there be a timescale to abolish no-fault evictions? Would a clear timescale be helpful, particularly to the people concerned?

My second point is about prevention. What more needs to happen regarding the duties of local authorities and councils to people who are not evicted, given some of the current holes in the Bill?

Polly Neate: Yes, it would be very beneficial to have a clear timetable. I cannot stress clearly enough my previous point: this was always going to be subject to lobbying for delays and it is really important that the Government hold their nerve. We need clarity about when this will happen, because we also have a commitment to reducing homelessness and this is a really important way of doing that. When people get the eviction notice, for whatever reason, it is really important that they still have the right to access homelessness assistance from their local authority. It is really important that that right is not watered down as a result of the Bill.

[Helen Morgan]

Q Building on the point about local authorities and their responsibilities to people who have been evicted, they are currently reporting intense pressure on their budgets because of the escalating number of people who have been evicted and made homeless. Could you build on what you would like to see in the Bill to protect those people? Do you think that ending no-fault evictions more rapidly would assist local authorities in managing the financial pressures of those homeless people?

Darren Baxter: We know from the data that local authorities capture why households come to them reporting homelessness, and why they then have a duty to house them, and section 21 no-fault evictions are a really significant part of that. Anything that reduces that flow will inevitably take some pressure off local authorities, so the more quickly you do this, the more quickly you stop one of the really significant drivers of homelessness.

Dame Clare Moriarty: We need to recognise that there is a whole range of problems with the housing market, including the extent to which rents are simply not affordable for many people. The local housing allowance is now seriously out of kilter with what people are paying for rent. That means that if you are on benefit in the private rented sector, a big chunk of your living costs go just on paying rent.

There are lots of broader questions playing into the pressures landing on local authorities. Having said that, section 21 evictions are definitely part of the problem, but they can be addressed, and the Government are committed to addressing them. As Darren was saying, this Bill has been a very long time in the making, and addressing the issue of insecurity for tenants, and the number of evictions that that is driving, has to be helpful. We should not kid ourselves that it solves the whole housing market problem, but it would make a real difference to people.

Polly Neate: I agree with all that. The Government have decided to remove the prevention duty and not replicate it for section 8 evictions, leaving it to the discretion of local authorities to decide when a duty is owed to tenants. Given the resource constraints and the issues in local authorities, there is a real risk that people just will not get the homelessness support that they need, so we urge that that be changed in the Bill.

It is absolutely right to say that no-fault evictions are not the only reason local authorities are overwhelmed by homelessness. The freezing of housing benefit and of local housing allowance is another major reason, and of course the really serious lack of social housing stock is at the root of this. This is not a magic bullet to resolve these issues, but the Government can remove a really significant factor contributing to the overwhelming pressure on local authorities.

[Matthew Pennycook]

Q Returning to possession grounds, concerns have been raised about new grounds 1, 1A and 6A and the changes to existing ground 14. I want to ask the witnesses a question about the new ground for possession 8A, which concerns repeated rent arrears. Do you think that that new ground is needed in any form, or should it be removed from the Bill? If it is to stay in the Bill, what changes might strengthen it to better protect tenants?

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[Mike Amesbury]

I did ask about housing courts.

Ben Beadle: Let me deal with that. We like the principle of a housing court, and the Select Committee obviously likes it as well. Given where we are, I guess there is a realism in terms of what we can do with the existing system to improve it rather than carving out a new housing court. We support the concept, but I think we might be able to do a number of things that end up meaning we see change more quickly. That includes playing with the civil procedure rules, for example. Those are things that can be done and timed so that we can assess improvements. Rather than having one measure of an element of a possession case, there ought to be different measures. Everybody ought to know what the measures and targets are. Otherwise, how do we know what reform looks like and whether it has worked?

So there are things that we would—not necessarily substitute—for a housing court, but there is not a lot of money to go around. Although we love the idea, we are pragmatists in the sense of asking, “What would a housing court do differently that we could not do with the existing regime?” That is where we are focused.

Timothy Douglas: I would certainly agree with that and would also perhaps move towards a tribunal structure, which is less intimidating, less informal and does not necessarily have to use court buildings—any public building can be used across the country. But essentially, in an ideal world, this needs to incorporate the powers of the county court and the first-tier tribunal. You would then be able to appoint specialist judges, surveyors and so on. In an ideal world, yes, we totally need to get there, but I agree with Ben that it is about perhaps looking at a dispute resolution and those sorts of issues within the existing system before we get to the ideal. But that certainly would be welcome in the long run.

[Helen Morgan]

Q Theresa floated the idea of longer-term tenancies, which would provide security for landlords because they would know how long their tenant would be in there. Do you think that there would be significant uptake on those from renters given that the proposed solution—periodic tenancies—would give them as long as they wanted provided that there was not a reason for the landlord to evict them? Do you think that would provide the extra security that they need?

Theresa Wallace: I think so, because I do not think we are giving them any security with the current proposals because a landlord can serve a notice either to sell their property or move back into it. The majority of section 21s are served for rent arrears, or because the landlord is selling or they want to move back in, or for antisocial behaviour. You do not have to give a reason but those are the main reasons that section 21s are used.

We will still continue to have those reasons, and by starting off with periodic tenancies with no fixed term at all, okay, the landlord cannot serve a notice for six months, but that is the most that tenants are being told that they will be secure for. Last week, I had tenants saying to me, “I want to be able to secure a long-term tenancy. My children are in the local school. I don’t want my landlord to suddenly say that he is going to sell the property or move back into it.” There are definitely tenants who want longer secure terms and there are landlords who want to do that for their own security. As I said earlier, I still think that they would be happy to include the two months’ notice for the tenant from six months in case the tenant’s circumstances changed. That gives the tenant the flexibility of knowing that they can have the tenancy for however long they agree to it, but if their circumstances change after six months, they can also move out.

[Helen Morgan]

Q Just to clarify, would you not allow the landlord to serve any of those types of no-fault evictions after six months?

Theresa Wallace: No, they would be committed for the entire term.

Timothy Douglas: I totally agree with that, and I think it is not an either/or, as has been stated. Let us have the option. The beauty of the private rented sector is that it is built on that flexibility. Without the flexibility of that option, we are closing that down. Of course, you can have a fixed term for up to three years—otherwise, it then becomes a deed, as we understand it. You can have it for longer. So in theory, it is already there and that 12-month fixed term, or longer, with break clauses could offer lots more flexibility and the security that certain tenants want, and we know that agents are hearing that.

[Lloyd Russell-Moyle]

Q I am interested in this. Are you saying that in the fixed period, the landlord would not be able to execute any eviction grounds, or just not grounds 1, 1A and 1B?

Theresa Wallace: If it were rent arrears, that would be different. Landlords cannot afford to keep properties when they are not receiving the rent. For rent arrears, I am saying that the landlord would not be able to serve the notice to either sell the property or move back into it.

Renters (Reform) Bill (Second sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[The Chair]

I call Helen Morgan. This will have to be the last question, I am afraid.

[Helen Morgan (North Shropshire) (LD)]

Q Briefly, you mentioned the possibility of the attractiveness of longer-term tenancies without the six-month break point at which you can be evicted. Will you expand on that?

Ben Twomey: It is really important, if you are thinking about a private rented sector that is attractive to tenants, rather than something that we feel trapped in. It needs to be something that recognises that there are 11 million private renters across England, and that, for many of us, we are here to stay in the private rented sector. It is no longer just a quick in and out—a temporary thing—while we save enough money to buy our own home. The protection is important, knowing that you can be in your home for a certain period of time—unless, of course, you do something seriously wrong, in which case there are protections in the grounds for landlords to act on that. At the moment, there is only a six-month protected period in which you are safe from a no-fault eviction, within the Bill’s wording. As I said, that does not really change the situation we are currently in, so it is not actually ambitious towards a fairer private rented sector.

We believe that the period should be two years. That would mean the landlord—if they are taking housing seriously and recognising that homes are the foundation of our lives—would be comfortable knowing that they can hold off selling the property and moving a family member in for two years. If they need to do some of those things afterwards—which would be a great shame, because the tenants are probably enjoying the property—they can still do that after that period. Six months feels far too short; it treats it like temporary accommodation—

[The Chair]

Order. I am afraid that brings us to the end of the time allotted to the Committee to ask questions. I thank the witnesses, on behalf of the Committee.

Examination of Witness

Francesca Albanese gave evidence.

Renters (Reform) Bill (Third sitting)

Helen Morgan Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I receive income support for my office to operate the all-party parliamentary group for renters and rental reform, and from renters’ organisations. I receive rent from a tenant in my personal home and am on the legal working group of a housing co-operative federation.

[Helen Morgan (North Shropshire) (LD)]

I am the joint owner of a house that is rented out for residential lets, and I am a vice-president of the Local Government Association.

[Craig Tracey (North Warwickshire) (Con)]

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

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[The Chair]

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

[Helen Morgan]

Q Could you expand a little on your concern about the way agricultural property can be repossessed to house an agricultural worker?

Judicaelle Hammond: I think that what is in the Bill at the moment would fit for agricultural workers. The issue is that actually 85% of rural businesses have nothing to do with agriculture, and some of them still need employees to be there, either because their shift starts early or because there is a need for them to be on the grounds as a matter of urgency. That includes workers who are not within the ambit of what is agriculture; care workers are an obvious example. If you are in a remote community, you still need to house them. If you are an employer and you have a small business—a maintenance business or a heat pump installation business, for example—you would not necessarily want to have your employees very far away. How can you recruit and retain anyone if they cannot find anywhere to live? We are hearing from a lot of members, particularly on the tourism side, who are saying, “If I want people of the right calibre to do my marketing or some of my managerial duties, I have to be able to provide accommodation as part of the deal. Otherwise, they don’t come.”

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[Nickie Aiken]

Q That is what the Government are doing under the Levelling-up and Regeneration Act 2023.

Helen Gordon: But under the Bill, the ability to serve notice on day one will inadvertently allow short-term letting through the back door.

[Helen Morgan]

Q On Tuesday, we heard from a number of representatives of renters and landlord associations that a minimum term would be helpful in some circumstances, whether or not that is a two-year minimum term to try to provide the security and build the communities you have described. Do you think that that would be a good idea? How might it work in practice, in terms of some of the notice periods people might be able to give and allowing flexibility for people whose circumstances change?

Helen Gordon: The business practice on build to rent was quite often to give a one-year, three-year or five-year lease to offer that, with the CPI uplifts within it. Most landlords are happy to give a minimum of 12 months or two or three years. In our case, because we are a longer-term landlord and we know that we will not require the property back for us to live in it, we have offered longer leases. I suppose the in-perpetuity tenancy does away with that need, but linked to that is giving tenants certainty on where their rent would go. Within that, if we had for example put CPI—and we had a very high level of CPI at the end of 2022—our customers could still give two months’ notice; they can leave within that minimum term as well.

[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?

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[Ms Karen Buck (Westminster North) (Lab)]

Q Could I just go back to the issue of advice and representation? You both made the point that there are strong arguments for tenants being represented. Will you tell us what those arguments are? In practical terms, what are the consequences at different levels—within the courts, and also going back to issues such as homelessness—of people not being represented and having advice? Can you give us an indication of how the level of service is spread out across the country? Are there particular places and areas where there are difficulties for tenants in getting representation?

Richard Miller: The Law Society has published a number of maps showing the availability of legally aided housing advice across the country. Those have shown, over time, that the picture is getting worse. The number of law firms and law centres delivering these services is reducing. We now have something like 42% of the population without a housing provider on legal aid in their local authority area. By definition, the sort of people we are talking about—those who are financially eligible for legal aid, where very often the issue is that they are unable to pay their rent—cannot afford public transport to travel significant distances to get the advice they need. Local provision of advice is vital.

The problem we have—there may well be many people around the table who are not experts in the legal aid system—is that the last time the remuneration rates for legal aid were increased in cash terms was in the 1990s. That is what the profession is up against, and that is why more and more firms have decided that it is not economically possible to carry on delivering these services. We are seeing an absolute crisis in the state of legal aid provision across the country, and that needs to be addressed. I will pass over to Nimrod to deal with the consequences of people not being represented.

Nimrod Ben-Cnaan: Things have got so bad that even delivering the duty desk at court—the scheme that we are so reliant on to make possession work well for all parties—is difficult. In the last procurement round, the Legal Aid Agency had such problems sourcing providers in the greater Liverpool area—Merseyside, if you like—that there was a reliance on transitional arrangements. If you have a large urban centre where a legal aid firm should be able to make a sustainable business but is not able to do so, we have a real problem.

In terms of the kind of impact that legal aid services could offer us, I would say that the current scope of legal aid needs to be addressed, not just the remuneration. Ten years ago, in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the scope cut to legal aid was such that a lot of early intervention to help people was taken out of scope, so you are basically incentivised to let problems escalate. It is the wrong way round, and even the Government are realising that in their current review of civil legal aid. If you get in early, you are able to divert people from the court wherever possible. You get to represent tenants wherever possible, lightening the load of the court, and you get to give assistance for as long as it is needed, rather than by adhering to whatever original parcels you were apportioned by legal aid. There is an opportunity here to make a secondary provision to legal aid that would help to prop up the system through this transition.

Richard Miller: To build on that, some unrepresented tenants do not bring cases that they could and should bring and do not enforce their rights; others bring cases that are misconceived, and that has an impact on the landlord, who has to defend the misconceived case, and on the courts, which have to put in resources to hear it. When these cases go to court, whether they are validly brought or misconceived, unrepresented tenants very often do not understand the processes and what is required of them, so they do things wrong and have to have things explained to them. That means that the courts have to put a lot more resources into managing the case than they would if the tenant was represented, so there is a whole range of ways that landlords and courts—and therefore the taxpayer—are adversely impacted by tenants being unrepresented.

[Helen Morgan]

Q You mentioned the problem that 42% of the population cannot access a legal aid provider in their area, and we heard earlier from another witness that there is a shortage of courts in parts of rural Britain. You have just described Merseyside, and I am not sure there is an obvious geographical disparity there, but do you see a geographical disparity between rural and urban areas, or in specific parts of the country where it is much harder to obtain legal aid?

Richard Miller: Certainly what we have seen in the data is that it was the rural areas that were the first to be impacted. We are now seeing a lot of market towns up and down the country where there is no provision, and the position in the cities is getting ever worse and ever tighter. It was definitely the rural areas that were the first impacted, but this is now a nationwide problem.

[Helen Morgan]

Q Do you think that both tenants and landlords are adversely impacted by that, or is it more the tenants or more the landlords?

Nimrod Ben-Cnaan: Landlords are beyond my remit—I only represent the other side—but yes, tenants are very much impacted by it. This is something we see, anecdotally, in support of the quantitative evidence that the Law Society has generated. The closure and consolidation of the courts over the last 13 years has been so significant that whenever a court closes, the remaining possession lists in nearby courts get lengthened, so there is an added burden on the remaining courts.

Another big problem in possession cases is that tenants defending possession of their home just do not show up, because they have not been advised early, so they do not know if they should. It could possibly improve their prospects. There is a whole gap in the structure of support for renters that has been missing for several years, and it would be quite simple to replace. You would see the beneficial difference in the medium term.

Richard Miller: Just to reflect on the position of landlords, for the reasons I have explained, landlords have a disadvantage where they are up against an unrepresented tenant. Some landlords are just individuals renting out properties on their own. They may also struggle to find accessible housing advice. They are not generally dependent on the legal aid system, so that aspect is not a problem for them. But some housing firms act for both tenants and landlords, so if they are closing down their housing departments, that may make it more difficult for some smaller landlords to get the advice that they need. The bigger and more commercial landlords will generally have solicitors that they are instructing all the time, so it is less of an issue for them—apart from, as I say, the impact on them of tenants being unrepresented.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Q Can I just say to Nimrod that I am greatly helped by South West London Law Centres in my constituency? I am very grateful for the work they do, particularly at the emergency and routine desk at Croydon county court. I can only imagine what that is like on a daily basis. Lots of very vulnerable tenants turn up with absolutely no advice, and the best advice I give to them is to get there really early and get to the front of the queue. I imagine all sorts of things happen to tenants and landlords in those courts that are not fair or reasonable, but because nobody is represented, or it is very difficult to get representation, it is difficult to avoid that.

On reforming the whole county court system, what can be done other than to resource it better and provide better advice to people? I can only imagine the amount of time-wasting going on because people are desperately in search of help. Currently, at Croydon county court, it takes 16 weeks on average to get a bailiff’s warrant after a possession order is secured. On the other end, we have the local authorities that are desperate to delay for as long as they can, because they do not have anywhere to put people. What is the resolution to that?

Nimrod Ben-Cnaan: It is a tough one, for two reasons. First—this has been mentioned in previous sessions—a separate housing court should probably not be set up. That is partly because if you already have a system that is starved of relevant—mainly judicial—staff and has had its budget starved, creating a separate jurisdiction that would need to have its own of everything makes no sense. The Government are right not to create a separate one. In effect, we have a housing court that works—when resourced—fairly well in the county court. This is something that I have heard Richard talk about before, and certainly we are very strong about that.

Our understanding of where justice begins for people needs to go well beyond the court doors. That is why we keep mentioning the advice sector, legal aid and other measures. I would also include in that public legal education and helping people understand their rights as tenants, which we are not doing nearly enough. Those kinds of support would not necessarily, in themselves, create a more efficient justice system, but they would create the kind of solutions that many people seek in it, rightly or wrongly, and which they could reach elsewhere. I am sure Richard has more on that.

Richard Miller: This is one of the ultimate challenges. If we are being asked how you can improve the situation without quite a bit of significant investment, my answer would be that you cannot. The point—this is so often overlooked—is that if you take that step back, you are still spending the money. You made the point that local authorities have to pick up the burden of homeless families. A bit of early advice to sort out the housing benefit might have meant that the family was never homeless in the first place, with huge savings to the public purse and in relation to pressures on the system. Early advice can stop cases getting to court at all and make sure that cases are better dealt with when they do go to court.

All that investment saves substantial sums. That is even before we get on to housing disrepair, where there is an impact on people’s health and the stress that is caused, which has an impact on the health service as well. There are substantial savings for the health budget in getting these things right early as well. It is penny wise and pound foolish to think we save the money here and to not look at the broader costs that we incur as a result of those tiny savings.

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[Jacob Young]

Q What are your concerns around the Bill?

Jen Berezai: My concern is that it is an excellent step in the right direction, but it is probably going to benefit those who rent houses more than those who rent flats. That is because of the head lease issue. I know that leasehold reform is going through; it would be nice if the two things could work hand in hand. Giving landlords the ability to say either “You must hold pet damage insurance” or “I am going to charge you for pet damage insurance” will make a difference to a lot of landlords who are currently on the fence about allowing pets.

[Helen Morgan]

Q My tenant has a dog, and I was not aware that pet damage insurance was available. How widely available is it? Is there a market for people to choose a reasonably priced pet damage insurance product? Notwithstanding the fact that presumably it will mature if there is a lot of demand for it, is it there now?

Jen Berezai: It is there now. There are only a handful of companies, to be fair, but it is there now. We at AdvoCATS tend to deal with one company called One Broker, which has been providing a product for quite a few years. Premiums start from about £15 per month, which gets a landlord £4,000-worth of cover. We are aware of people developing other products, because when the Bill goes through we foresee a lot more of them coming to market. In the course of preparing the “Heads for Tails!” report, we spoke to insurance companies, including the Alan Boswell Group. It developed and launched a pet damage policy for tenants, backed by SAGIC—the Salvation Army General Insurance Corporation—specifically as a result of our campaign and what we were calling for.

[Helen Morgan]

Q One of the discretionary grounds for possession is deterioration of the property or its furnishings. Do you find that landlords use that ground where the pet has not been as well behaved as anticipated?

Jen Berezai: Yes. There is probably a bit of a grey area there. I understand that there are accepted industry standards for how long carpets should last, which are different for a couple and for a couple with children. Perhaps it is important to build in a couple, or a couple with children and/or pets, so that if a tenant is leaving a property with a 15-year-old carpet and the landlord says, “Look at the carpet—I’m going to claim on the deposit or ask you to claim on your insurance,” that could be seen as unreasonable because of the age of the carpet.

[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.

Renters (Reform) Bill (Fourth sitting)

Helen Morgan Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[Helen Morgan (North Shropshire) (LD)]

Q I want to pick up on the point about delays in the court process. We heard this morning that the president of the Law Society is concerned about the lack of access to legal aid and the fact that, because so many people are unable to access it, they will be disadvantaged in the court process. My first question is, what are your thoughts on that?

My second question is about clause 18 and local authorities no longer having a duty to help people when they have been made homeless. Shelter has said that the Bill does not specify when help to prevent homelessness should be available to private renters. Do you have a view on that and how it could be addressed?

Liz Davies: First, housing legal aid is absolutely in crisis. The number of housing legal aid providers is diminishing each year. The Law Society has an amazing and heartbreaking interactive map where you can press on a county and discover that there are no housing legal aid providers or one of them in the area. Obviously, London is slightly better served. That is letting down everybody who cannot afford to pay for housing legal advice.

That needs fixing, and it needs an injection of resources—there is no doubt about that—but that is not a reason why there would be difficulties for landlords in obtaining possession under these new proceedings, not least because the Government have put this money into the duty solicitor scheme. Where there are no housing legal aid providers and a tenant turns up at court having been unable to find advice in advance, they will see the duty solicitor. While Richard Miller is absolutely right to be concerned about the sustainability of the housing legal aid sector—we all think it could collapse in a few years—this particular area of getting advice about possession is covered by the duty solicitor scheme. That is the first thing.

Homelessness is covered partly in clause 18 and partly in schedule 1, but this is one of the unintended consequences that the Committee should look at. The current position is that somebody is threatened with homelessness if they are likely to be homeless within 56 days. If they have a valid section 21 notice, which is two months or 56 days, they are threatened with homelessness. It is deemed. All that a local authority has to do is look at the notice and say, “Yes, that’s valid,” and that means that it owes the tenant what is called a prevention duty—a duty to help them to prevent the homelessness—and spends the next two months trying to help them to find somewhere else to live. That is a good thing, because if it works, it averts the crisis of homelessness. It means that someone can move from their previous tenancy into their new one.

As a result of the abolition of section 21, this Bill retains the definition of threatened with homelessness within 56 days, but takes away the deeming provision whereby if you have a notice of possession within 56 days, you are deemed to be threatened with homelessness. If that was reinserted, if a tenant received what would be a section 8 notice requiring them to leave within two months, you would be back in the straightforward position that they go along to a local authority, the local authority would say, “Yes, you are threatened with homelessness. We don’t need to make further inquiries or think about it any more. We accept that we owe you a prevention duty and we will help you to find somewhere else to live.”

That is absolutely the best thing, because it front-loads all the looking for somewhere else to live while a tenant still has a roof over their head, rather than waiting for the crisis moment when they have to go into interim accommodation or end up on the streets. I urge the Committee to think about an amendment that requires that section 8 notices count as deemed homelessness. I know there have been some drafts flying around, so the work has been done.

[Matthew Pennycook]

Q I have three questions, if we can squeeze them in—I will get in as many as I can. Do tenants have enough power to enforce the measures in this Bill via rent repayment orders, and if not, where might we seek to reasonably apply them where they do not apply as the Bill is currently drafted?

Simon Mullings: Rent repayment orders create, as I have said before to officials in DLUHC, an army of motivated enforcers, because you have tenants who are motivated to enforce housing standards to do with houses in multiple occupancy, conditions and all sorts of things. There are clearly opportunities to expand the rent repayment order scheme, perhaps to sit alongside existing enforcement measures to do with offences. I am sorry that I do not have really specific references for you, but certainly expanding the rent repayment order scheme could in principle take some burden off local authorities in terms of their obligations, which would be an extremely important measure.

Giles Peaker: Was the question about enforcement of RROs or about the use of RROs in enforcing?

--- Later in debate ---

[Jacob Young]

Also, forgive me—I cannot remember which panellist mentioned Jacky Peacock earlier on, but she talked about this idea of an MOT in order to access the portal. Each of the panellists has mentioned that local authorities have struggled for resource. How would an MOT help? Who would verify such an MOT? I suppose, if we were to go down that route, it would mean local authorities facing even more burdens.

Samantha Stewart: In answer to your first question, there will probably be some. I will definitely make sure that we cover that in our written evidence, because I am sure there will be something we can contribute that we are pleased not to see. Forgive me—I do not know that answer right at this moment in time.

On the MOT, we all know that it is not an easy thing to do, but there is certainly a lot of detail in the Rugg and Rhodes report about how we could go about that. Again, I would be really happy to put that in our written evidence.

Linda Cobb: I manage a large landlord accreditation scheme across lots of different local authority borders, and obviously landlords then register on to a portal, so I am aware of the complexities of managing such an unwieldy beast, so to speak. As part of our landlord accreditation scheme, we have a property check—similar to what Jacky was saying with the property MOT. We do a sample compliance check. DASH and Unipol looked at about 2,000 properties that we had inspected; we assessed those inspections, and we had actually helped our landlords to remove or reduce almost 1,500 hazards that simply would not have been removed or reduced by simply registering on a portal and just self-declaring. Those were good landlords; they were landlords who were willing to make the change, and they made it quickly. But there is an argument that with just self-declaring, we have to be careful about the digital policing of a portal and giving false assurances. We can learn from landlord accreditation schemes and from schemes that are already going on. We really need to do that with the portal as well.

Samantha Stewart: It’s true. It is about taking the best in class as well, isn’t it?

Linda Cobb: Yes. We also have to be careful about avoiding duplication. From my landlord accreditation scheme, I know that landlords do get a little bit confused—they have licensing, accreditation, deposit registration and so on. If we are going to add an ombudsman, we will have to be very careful about avoiding duplication.

[Helen Morgan]

Q The market is fragmented. Lots of rented property is owned by people who only have between one and four properties. Those people are essentially unprofessional, even if they are willing. I am worried about how they might slip through the gaps because, if they are not using a letting agent or a management service, they may be unaware of changes to the law or of how to register. How do you think we should address that so that landlords know what they need to do? How can we ensure that tenants know that they have access to this information and the right to challenge? I doubt some of those people are following what is going on in this Committee.

Linda Cobb: I will take the landlord bit. I think that to call smaller landlords unprofessional is not quite right. The majority of landlords in our landlord accreditation scheme have between one and four properties; most have just one. We see very professional behaviour.

[Helen Morgan]

To clarify, I do not mean that they are deliberately unprofessional. I just mean that they may not be on top of all the legislative changes.

Linda Cobb: Yes. I think we need to change the way we communicate with landlords. We need to get information out there, because what we found through trying to drive up numbers in our accreditation scheme was that a landlord could be anywhere. Marketing was very difficult. Where do you go to advertise this information? It has to be very mainstream. Look at gas safety certificates: the campaign when they came in was very effective because it was a mass campaign. Safe Suffolk Renters is doing something very similar and we can learn from its work. Going back to what Sam was saying, we should learn from what has been good in the market at getting messages out there.

Roz Spencer: From a renter’s perspective, there is the obvious problem of renters’ knowledge about their rights. I think there are three reasons why renters’ understanding of their rights is poor: landlord and tenant law is so complicated; tenant rights are so slim; and the expectation of enforcement is at a low ebb. Renters have challenging lives and other things to think about. Their bandwidth to pay attention to something complicated, thin and unlikely to deliver for them is quite limited. If you get things right around renters reform, raising renters’ awareness of their rights will be much easier.

Linda Cobb: I am a big fan of going back into schools and doing work at that very early level. The majority will go into rented accommodation at some point, and we need to get into schools to show young people what a good tenancy is like and what their rights are from a very young age.

Samantha Stewart: That is a really good point. Let’s face it: renters are going to be renting for a long time, so getting them to understand things early, right from the start, is a fabulous opportunity.

Linda Cobb: Yes. They should understand what their responsibilities and rights are.

[Nickie Aiken (Cities of London and Westminster) (Con)]

Q Sam, I was interested in what you were saying about maggots falling out of cracked ceilings. I was a councillor for a long time and a cabinet member responsible for public protection. That included environmental health. I was regularly shocked by how often tenants lived in such dreadful conditions until someone said, “You should report that to environmental health,” and then there would be a notice to improve. Surely there are protections now, but tenants do not know about the Environmental Protection Act 1990 or the Housing Act. This Bill will strengthen things like that, but what can we do to improve people’s knowledge of the fact that they can still go to environmental health to get their housing sorted?

Samantha Stewart: I think we just have covered some of the ways that we can do that. We just have to repeat the message consistently: there are fabulous organisations out there that advocate for and help tenants, and there are fabulous local authorities that can do the same. I can speak more from a vulnerable tenant perspective, because that is our focus. Even if they know where to go, they do not go, because they do not feel they have the power and they fear eviction if they tell anyone.

--- Later in debate ---

[Lloyd Russell-Moyle]

Q Some of us push very hard for citizenship lessons and wider lessons like that in schools, but that is another debate. You might not know about this, but when the deposit protection scheme was rolled out, there was a big information campaign with local authorities and with charities and non-governmental organisations to inform tenants about their ability to get rent repayment orders if deposits were not secured. That seems to me to work very well. Do you have any views on and learnings from that process?

James Munro: Yes, that process has worked well, but I think that is because it is a process that benefits all parties. It is very strictly controlled. The sanctions and penalties are clearly set out. I think it is something that works very effectively. Redress scheme membership, for example, works very effectively. The Government obviously issue the “How to rent”, “How to buy” and “How to lease” guides—all the different how-to guides—and I think they could play a very useful part, but obviously you have to get them into the hands of the tenants. Again, it comes down to the point that was discussed earlier, especially with students. Students just want to get their hands on the property—they will sign anything just to get their hands on it. They do not necessarily understand, realise or appreciate any rights or obligations that they may have under that agreement.

[Helen Morgan]

Q I just want to go back to that point. Earlier, I used the word “unprofessional”. What I meant was amateur rather than negligent or wilfully reckless. There are a lot of accidental landlords out there—I am talking about people who do not use a letting agent. They will need to be aware of their responsibilities under this legislation. Who do you think is the right person to manage the information campaign to ensure that they are aware? Is that the local authority? Is it the charitable sector? Who should be ensuring that landlords are aware of their responsibilities under this new legislation?

James Munro: I think it is a combination. You have the National Residential Landlords Association; you have various trade bodies and various professional bodies that represent landlords. They are the first port of call. I also think local authorities and charities—all those third sector organisations—could get that information out there. The challenge is that the landlords who have perhaps one property are, for all intents and purposes, treated almost like private individuals. For tax purposes, they are virtually treated as private individuals, so there is no real avenue to find out where they are. That is going to be the challenge—to reach out to them but also to get them to comply with the requirements.

[The Chair]

As colleagues have no further questions, I would like to thank you very much indeed, Mr Munro, for giving evidence to the Committee. Your words will stay with us as we consider the Bill line by line, starting from next week.

Ordered, That further consideration be now adjourned. —(Mr Mohindra.)

Renters (Reform) Bill (Fifth sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[Helen Morgan (North Shropshire) (LD)]

In the interests of avoiding repetition, I will keep my remarks fairly brief. As I outlined on Second Reading, Liberal Democrats welcome the Bill. We welcome the objective of achieving a balance between landlords and tenants, increasing the supply in the private rented sector and enhancing the ability of tenants to enjoy a secure and safe home. To that end, we welcome the introduction of periodic tenancies.

I would like to touch on some of the evidence that we heard last week around the absence of any longer-term tenancy option. We heard from both tenant and landlord groups that in certain situations they would like a long-term tenancy option to be introduced. As things stand, periodic tenancies guarantee a tenant only six months’ security before a no-fault ground for eviction can be introduced. For a landlord, that period of certainty is effectively only two months, because of the notice period that the tenant has available to them. Some landlords might therefore feel that they are not secure in that market, given that they cannot guarantee their income. Equally, tenants might feel that they are unable to commit to a local school, for example, or a job, because they do not know whether they will be in that property for longer than six months.

I have not tabled an amendment, because clause 1 does away with fixed-term tenancies and is a fundamental part of the Bill, and also because we are not opposing the introduction of periodic tenancies, but will the Minister give some indication of whether a long-term alternative, where neither the landlord nor the tenant could break those terms, could be considered? That would mean that some people will have the security that they need.

I was particularly concerned about the evidence from Grainger plc that some financing is dependent on the availability of a longer-term period for the landlord. We would all hate to see withdrawal from the housing market because of a lack of financing for landlords, given that the issue of supply underpins this whole housing crisis—not just in the private rented sector, but in social housing, as the hon. Member for Mitcham and Morden has already pointed out.

That is my key concern about clause 1. I do not want to repeat the concerns about the delays in implementing clause 1, except to echo them. Landlords are running a business and need certainty about when these reforms will take place, so that they can plan for them. Uncertainty is the worst thing for a business. Even if they do not particularly like the idea that is coming in, planning for it enables them to get over the hurdles, but if there is uncertainty, that is the worst thing for any business to plan for. The Minister needs to be clear about the timescale of reform, when exactly the clause will be implemented and what the finished reform will look like. I echo the concerns around that.

--- Later in debate ---

Let me turn to the importance of not having tenancies that end at a fixed date. We will have slight disagreements about the student market, but we heard that one of its problems is that student tenancies last a year: by the time a student gets to any enforcement mechanism, they are on their way out, so the student housing ends up in a very poor condition. Well, that is the reality of the whole private rented sector at the moment. Many people think, “I am only here for a year, so there is no need to go to my local authority, because it will take too long for enforcement to come around.” That is particularly the case when people have minor issues, such as a little bit of mould but not a lot—most people unfortunately consider that a minor issue, although we should reconsider that thinking. It might be that they have minor issues about the behaviour of their landlord or issues with their neighbours. Those things need to be dealt with, but the problem with a fixed term is that rather than sorting out the problems, tenants hold off because they think, “I will be moving in a year.” The danger with the delay in the implementation of the clause is that more people will not enforce all the other standards that the Bill is meant to provide, such as the decent homes standard.

[Helen Morgan]

The hon. Gentleman is making an excellent point about short fixed terms, and I absolutely agree with him. To be clear, my proposal was for a long fixed term of at least three years.

[Lloyd Russell-Moyle]

I totally take that point. I am talking specifically about the short-term problem.

On the all-party parliamentary group for renters and rental reform, we heard from Gemma Marshall, who every year has to look for a new house and has had to change her children’s school three times. She lives not in London, which is even worse, but in north Devon. This problem affects all parts of our country. We also heard from Amy Donovan, who does live in London, and equally has had to move numerous times, which has meant that she cannot commute to her job effectively and has had to move job.

This issue causes problems for the very foundations of society. On the Opposition Benches—and, I genuinely believe, on both sides of the House—we believe that strong societies are built with strong, stable families and communities from the ground up. To some extent, communities are built with bricks and mortar—with people being safe and secure where they are. That is why the clause is so important, but also why it is so important that it is implemented right now, because any delay will mean more mould on the walls for the Amys of the world and more new schools for the Gemmas and their children. Whether the wait is a year, two years or whenever the Minister has the whim to act—he has not laid out the conditions in which he will enact the clause—it is not acceptable for anyone.

Renters (Reform) Bill (Sixth sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[Helen Morgan (North Shropshire) (LD)]

I should have referred this morning to my entry in the Register of Members’ Financial Interests. I apologise for that oversight and refer Members to it now.

I rise to support the amendment and the new clause. We have had a lot of discussion, in good faith, about the unintended consequences for the private rented sector and the impact on tenants, but much of this has been guesswork. It would be extremely sensible to have a requirement to look at this a couple of years down the line and to ask, “Have we driven landlords from the market unintentionally? Have we put tenants in an insecure position unintentionally?” It would be remiss of any Government to fail to assess the impact of their legislation.

[Ms Buck]

I really do hope that the Minister will concede on this point. One of the striking themes that emerged in the evidence sessions was just how little we know about what is happening in the private rented sector. It is to the shame of the Government, and probably even the previous Government, that this massive transformation in the life of the country and throughout the housing stock, which is affecting millions of people, has happened without us having accurate data to assess the impact. We are struggling to catch up in so many respects.

We will no doubt be talking more about the changing grounds for possession in the context of antisocial behaviour and rent arrears but as has been reinforced—we just need to keep saying this—the people in the private rented sector who we have the most concern about are those whose equivalents were not in the private rented sector 20 or 25 years ago. Their patterns of need, the patterns of demand they place on the sector and the risks they have to face are also quite different.

Families with children, families experiencing domestic violence and those with all kinds of vulnerabilities, including serious mental health problems, addictions or learning disabilities, would for the most part not have been in this situation before, but they are now having to be accommodated. It is not only that they are in the private rented sector in a way that they were not before, and are at risk, but that they are disproportionately impacted by harsh decisions that cause them to lose their homes. They face a higher risk and are worst affected.

I do not know whether all Members have experience of this, but any Member of Parliament with a larger private rented sector will be experiencing the consequences and will have traumatised families coming to them with problems who will perhaps be facing eviction and be in distress. That is often for completely trivial reasons or because of circumstances that arise simply out of misunderstandings or the failure of the bureaucratic and social security systems to catch up.

It is the most basic and sensible thing to do to ensure that there is a proper data review and that we make up for the fact that we have spent several decades now trying to understand a system about which we have too little information. The Minister has a chance to put that right.

Renters (Reform) Bill (Seventh sitting)

Helen Morgan Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

Division 7

Ayes: 7

---

Labour: 6
Liberal Democrat: 1

Noes: 8

---

Conservative: 8

[Helen Morgan (North Shropshire) (LD)]

I beg to move amendment 130, in schedule 1, page 75, line 4, leave out paragraph 23.

This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 131, in schedule 1, page 75, line 5, at end insert—

“23A In Ground 14, after ‘residing in’ insert ‘regularly’”.

This amendment would clarify that visitors to a property displaying anti-social behaviour must be regular visitors, so that Ground 14 cannot be used to penalise tenants for the behaviour of a one-off visitor.

Amendment 158, in schedule 1, page 75, line 5, at end insert—

“23A In Ground 14, at start of line 1 insert—‘Where the landlord seeking possession has had regard to any relevant guidance made by the Secretary of State and’”.

This amendment would require landlords seeking possession on Ground 14 to have regard to any guidance produced by the government on what constitutes anti-social behaviour.

Government new clause 1—Factors for court considering granting possession order for anti-social behaviour.

New clause 55—Duty to publish guidance on what constitutes anti-social behaviour—

“(1) The Secretary of State must, within 180 days of the day on which this Act is passed, publish guidance defining anti-social behaviour for the purposes of Ground 14 in Schedule 2 to the Housing Act 1988.

(2) Guidance under subsection (1) must define how anti-social behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crises, and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties.”

This new clause would place a duty on the Government to produce guidance on what constitutes anti-social behaviour for the purpose of assisting landlords to determine when Ground 14 conditions have been fulfilled.

[Helen Morgan]

It is a pleasure to see you in the Chair, Mr Paisley. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

I tabled these amendments to reflect my general concerns about the potential for abuse of ground 14, the discretionary ground for eviction on the basis of antisocial behaviour. We heard, both on Second Reading and in last week’s evidence sessions, about concerns that ground 14 could be used to evict a tenant who is a victim of domestic abuse or is suffering with mental ill health or a physical condition that could cause annoyance to surrounding neighbours.

We also heard last week from Liz Davies KC, in our fourth sitting, that the threshold is being lowered by a very small margin. She said that it was difficult to see circumstances in which behaviour would not meet the threshold of “likely to cause”, but would meet the threshold of “capable of causing”. She outlined that, in her experience, courts use the existing discretionary ground wisely, to rightly allow possession where there is a flagrant problem with antisocial behaviour. We have no reason to believe that courts will not continue to do so. I am therefore a bit perplexed as to why the Government have tried to slightly lower the bar for eviction. Further to our recent discussions of other amendments, I am concerned that it is to allow landlords to exploit the clause as a route to an easier eviction.

Amendment 130 would maintain the existing definition, which, as we heard last week, should be sufficient for landlords to evict where antisocial behaviour is a genuine problem. Unless the Minister can provide some reassurance that the changed terms will not lead to an increased number of evictions, I intend to press amendment 130 to a vote.

Amendment 131 reinforces that point. Literally interpreted, the legislation does not specify whether or not a visitor exhibiting antisocial behaviour is regularly attending the property. Clearly tenants should be protected from eviction where there has been a single or very intermittent problem. Indeed, a regular antisocial visitor may not be welcome at the property; they may be regularly attending to intimidate or cause distress to the tenant.

I have a piece of casework in which the tenants of a property, through no fault of their own, have been subjected to intimidation and verbal abuse by a member of the community who lives elsewhere. I do not doubt that that causes nuisance and annoyance for other residents, but it would be grossly unfair to evict those tenants. In all likelihood, it would not resolve the problem in the long term either; it would just shift it to a different place in the same town.

I will not press amendment 131 to a vote, because ground 14 is discretionary and we should trust the judgment of the court as to whether an eviction is appropriate in each individual case. However, as we have heard of instances where unreasonable evictions have taken place, I would welcome an assurance from the Government that there will be safeguards and guidance in place to prevent the innocent from being evicted by an unscrupulous landlord under ground 14.

[Matthew Pennycook]

I rise to speak to amendment 158 and new clause 55, which stand in my name and in the name of my hon. Friends.

It is a pleasure to follow the hon. Member for North Shropshire. Both her amendments to schedule 1, in relation to the proposed revision of existing ground 14, are welcome. Indeed, we tabled an identical amendment to her amendment 130, but it was not selected, on the basis that it was an exact duplicate—that is a lesson for the whole Committee on the importance of tabling amendments in a timely fashion. If the hon. Lady presses her amendment 130 to a vote, we will certainly support it.

As the hon. Lady set out, paragraph 23 of schedule 1 to the Bill will widen ground 14 of schedule 2 to the Housing Act 1988 to include behaviours

“capable of causing nuisance or annoyance”,

as opposed to the existing language, which merely refers to

“likely to cause nuisance or annoyance”.

We are pleased that the Government are not proposing to make existing ground 14 mandatory, as some had feared prior to the publication of the Bill earlier this year. The court will therefore still have discretion to judge whether it is reasonable and proportionate to evict a tenant for the behaviour in question.

--- Later in debate ---

[Matthew Pennycook]

The Minister must have been listening to a different balance of the totality of the evidence from what I heard. I heard significant criticism of this proposed change by the Government. He still has not given me an example of the types of behaviour that would not fall under the existing definition, but that would be covered by the expanded one. I think that is because the change is driven more by the politics of what is required to get the Bill through than by any empirical evidence that such a change is required to deal with instances in which landlords cannot recover their properties from tenants who cause antisocial behaviour.

[Helen Morgan]

We heard extensively from the representative of Grainger plc about antisocial behaviour. I felt that her evidence demonstrated clearly that the existing grounds were adequate for tenants to be evicted under such circumstances. Does the hon. Gentleman agree?

[Matthew Pennycook]

I think that is a worthwhile intervention. I heard the evidence from Grainger and others highlighting concerns about this ground, so the Government are just wrong if their position is that expert opinion out in the country is that there is no problem whatever with the proposed change to ground 14.

We agree with the hon. Member for North Shropshire that the Government should remove paragraph 23 of schedule 1 and leave ground 14 with the current “likely to cause” wording. However, if they resist doing so, we urge the Minister to at least consider clarifying, as I have asked him to, what kind of behaviour is and is not capable of causing nuisance or annoyance so that county courts can better exercise their discretion about whether eviction is reasonable and proportionate in any given circumstance once the Bill has come into force. Let us be clear: the Government’s eleventh-hour new clause 1 does not do that. Indeed, it is not clear what on earth they are trying to achieve with it. As with so much of what the Government have tabled fairly late, we suspect it is more a product of rushed thinking than anything else.

New clause 1 would make it a requirement for the court to consider, in particular, the effects of antisocial behaviour on other tenants of the same house in multiple occupation, but that is already the case. Judges already have to consider the impact of behaviours that could be categorised as antisocial on others, so why do the Government feel the need to specify that they are required to do so via this amendment, purely in relation to HMOs? I would be grateful if the Minister could provide us with a reason. Will he also explain why the Government do not believe this provision needs to cover, say, a house under part 3 of the Housing Act 2004 or a rented property that is not covered by parts 2 or 3 of that Act?

The new clause also provides for the court to take into account as a factor in its determination

“whether the person against whom the order is sought has co-operated with any attempt by the landlord to encourage the conduct to cease.”

Again, when considering antisocial behaviour, the courts can already consider, and frequently do, what efforts the tenant has made to co-operate—for example, what the tenant’s response has been when a landlord has tried to contact them to press them to bring the offending behaviour to an end.

Of course, that presumes that the landlord has tried to contact the tenant, but that highlights a more fundamental problem with the new clause. At present, there is no duty on landlords to prevent or take steps to stop antisocial behaviour on the part of their tenants. I am thinking of the extensive case law reviewed in the recent Poole Borough Council v. GN judgment. Is the new clause an attempt to impose such a requirement surreptitiously? If it is, I wonder what the National Residential Landlords Association and other landlord organisations will have to say about it. The problem is that it is not clear at all, and we fear that fact exposes the Government to the possibility of litigation.

If the new clause is not an attempt to impose a requirement for landlords to take steps to stop antisocial behaviour on the part of their tenants, should we instead take it to imply that landlords now have to at least reasonably co-operate with a tenant to limit antisocial behaviour? If it does not imply that, what is the point of it? If landlords do not have to do anything to encourage antisocial behaviour to cease or do anything about it, whether a tenant can “co-operate” is reliant on the whim of the landlord in question and whether they decide to ask the tenant to stop.

Put simply, we question whether the new clause will have any practical effect, and we would appreciate it if the Minister could explain the thinking behind it, particularly because, like the many other last-minute Government amendments to the Bill, there is no detail about it in the explanatory notes. Even if the Minister just reads his box notes into the record, I would welcome the clarification. That would at least give us a sense of the Government’s thinking.

Leaving aside the deficiencies of new clause 1, we remain of the view that if the Government are intent on widening ground 14 to cover behaviour likely to cause nuisance or annoyance, they must at least clarify what kind of behaviours they believe will be included in that definition. New clause 55 would place a duty on the Government to produce detailed guidance on precisely what constitutes antisocial behaviour for the purpose of assisting landlords and the courts to determine when ground 14 conditions have been fulfilled under the revised terms that the Government are proposing. Specifically, it requires the said guidance to define how antisocial behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crisis and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties. Amendment 158 would, in turn, require landlords seeking possession on the basis of amended ground 14 to have regard to the guidance that the Government would be obliged to produce.

Taken together, we believe that new clause 55 and amendment 158 would at least provide the extremely vulnerable tenants we fear might fall foul of amended ground 14 with a further degree of protection beyond the discretion that the courts will still be able to apply. I look forward to the Minister’s response.

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[Matthew Pennycook]

I will say two things to the Minister, because I think that was a helpful answer, although his officials are going to be doing a lot of writing over the coming days and weeks. It was helpful in two ways: it is welcome to hear an assurance that we expect guidance before these measures come into force, and that the working group has been set up to that end.

This is where the private rented sector is very different from the social rented sector, where registered providers operate. Registered providers often have trained antisocial behaviour teams who are equipped and trained with the tools—injunction powers and others—to remedy antisocial behaviour before eviction action has to take place. They are trained to distinguish between antisocial behaviour and things such as the domestic violence instances that we are worried about, and to take safeguarding action to protect tenants from either eviction or criminalisation. The private rented sector has none of that. I do very much think we need guidance in this area, so I welcome the Minister’s clarification in that regard. On that basis, I am happy to not to push new clause 55 to a vote.

However, what I am still concerned about, and why we will support the hon. Member for North Shropshire if she pushes her amendment to a vote, is that in some ways it does not matter what the guidance says if the definition of what constitutes antisocial behaviour is very broad and the change from “likely” to “capable” is made. That still concerns us a great deal. The Minister has not given me an example—I only want one—of a kind of behaviour that would be “capable of causing” antisocial behaviour without falling under the existing “likely to”. I do not think he has any such behaviour in mind; I do not think the officials have any idea, either.

I think the Minister gave the game away, intentionally or otherwise, that this power is to be used to make it easier for landlords to threaten tenants in the first instance, and most will not go to court, and then to be able to evict tenants. As he said, the behaviour in question does not have to have caused or be likely to have caused antisocial behaviour in any given instance. It will enable an argument on the basis that there is a pattern of behaviour that now meets the reduced threshold.

None of the evidence I listened to last week suggested that that was necessary. I remember—one good example—that Timothy Douglas from Propertymark could not understand the difference between “likely” to cause and “capable” of causing, and the need for the change in this instance. He did call for guidance—absolutely. However, none of the evidence I heard supported the change, apart from evidence from some landlords, who, of course, are going to say that they welcome a widened power. They do not have to deal with the consequences. It is local authorities and society that will have to do that.

I know this is not the Minister’s brief, but he really should know whether tenants, if evicted under these grounds, will be made intentionally homeless. I suggest that it is almost certain that they will be. We are talking about an easier way to make people homeless, and we will all pick up the costs in various ways. This will impact some incredibly vulnerable tenants. We therefore think that this measure needs to be removed from the Bill. Again, we will certainly return to the issue at a later stage.

[Helen Morgan]

I welcome the support from Opposition Members, who, I think, have summed up the issue very well. There is an increased threat of eviction even if these cases are not taken to court, because the threat of having notice served in the first place is very frightening for people who do not necessarily have the legal ability to follow that through and oppose it.

[Jacob Young]

I take the hon. Lady’s point fully on board. I inadvertently forgot to mention during my speech that tenants will be given full information on their rights when notice is served. I hope that addresses her concerns about the threat being enough to push someone out. People will know their rights and whether or not they can challenge this in a court.

[Helen Morgan]

I welcome the Minister’s intervention. It is sometimes hard for us to put ourselves in the position of the tenant who may not have the professional skills of some of us in this room. The threat of being taken to court is a very serious one, even if someone has been advised of their rights. It is an intimidating place, and an intimidating process to go through.

[Lloyd Russell-Moyle]

The timetable referred to is two weeks. We all know about the crisis in people being able to get a lawyer, seek advice or even get an appointment at a citizens advice bureau: it can often take longer than two weeks. By the time a person has got advice or legal support, they will be out, will they not? Is that not a key problem with the provision?

[Helen Morgan]

I thank the hon. Gentleman for his well-made point. In Shropshire, citizens advice bureaux sometimes refer people to their MP’s office because they do not have the capacity to deal with the number of issues that are brought to them. The point about the threat is an extremely important one that we need to bear in mind: it will have a strong adverse effect on tenants who are put in that position. The hon. Member for Westminster North made the excellent point that we are dealing with people who would otherwise be in social housing, but they are not in social housing because we do not have an adequate social housing stock. With the best will in the world, a lot of landlords in the private sector—particularly when it is not their main business or primary job, but they happen to rent out a property—do not have the skills or capacity to deal with these things.

I welcome the Minister’s explanation that a working group will come up with detailed guidance. That is a positive step forward and is the reason why I will not press amendment 131 to a vote. However, I am concerned about his comment that the point of the expansion of the definition is to reduce the evidential level at which a landlord is allowed to serve notice. For that reason, I will press amendment 130 to a vote.

Question put, That the amendment be made.

--- Later in debate ---

I am allowing the courts to consider what the local housing allowance increases might be. If a house was marketed at local housing allowance, and it was given particularly to people in receipt of universal credit or housing benefits, the courts could consider what a fair increase in local housing allowance would be for that tenant and property, bearing in mind that the landlord was happy for that property to be rented at local housing allowance initially.

[Helen Morgan]

I am interested in what the hon. Gentleman suggests, and I am broadly supportive of it. If we get this right, we should see a stable private rented sector where rents do not go up very much each year; they might fall in some local areas, depending on local circumstances. Does he envisage allowing rents to drop, or does he envisage them always going up by some kind of consumer price inflation-linked level?

[Lloyd Russell-Moyle]

That is an interesting question. In amendments 200 and 201, they would be linked to CPI or median local rents. Where that has been introduced in Belgium, two-thirds of landlords declined to increase rent at the rate of inflation, so it has not particularly caused a constant push to always increase.

In amendment 197, I am talking about a negotiation between the tenant and the landlord. If they do not agree, the tribunal can consider not just what the current market rate would be if the property were to be put on the market brand-new, but a number of other indicators, and come to a conclusion. It might well be that if market rents have decreased in an area, the tribunal would be able to come to that consideration; I am not forcing the tribunal, but allowing it to come to that consideration. Some of these amendments allow more flexibility, and I always think that flexibility in these issues is probably right. Amendment 197 also allows the tribunal to consider CPI and median income growth.

However, amendment 198 says that the tribunal might consider all those things, but even then it can never increase rent above CPI or median wages. It might well be that the tribunal wants it to go down, and it might find a different place, but there is a ceiling. Amendment 197 allows the tribunal to consider; amendment 198 puts a cap on what the tribunal can impose. Amendment 199 and new clause 66 give the Secretary of State the power, from time to time, to lay before Parliament statutory guidance or a statement outlining the consideration that courts should take into account in their rent deliberations the maximum amount by which they can increase it. I think that is the most flexible. It allows the Secretary of State, from time to time, to look at the wider market and be able to say, “It needs to be locally driven,” or, “It needs to be national indicator-driven.”

As I have already discussed, the market is changing, and there is not just one market throughout the UK. We would not necessarily have to find a single indicator that would work for everyone. We have development areas, areas where house prices have slumped and areas that are going through gentrification. We have properties that are increasing in value because of infrastructure inputs. If High Speed 2 was ever to happen, property prices might increase in parts of the north. If Labour gets in, perhaps we will see some actual improvements in rail and other infrastructure in the north of England, and that will help the market. Of course, we have had many promises that have never been delivered so far.

Renters (Reform) Bill (Eighth sitting)

Helen Morgan Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

[Jacob Young]

I shall write to the hon. Gentleman on that point and on the other questions that he raised.

Question put and negatived.

Clause 9 accordingly disagreed to.

Clause 10

Other duties of landlords and former landlords

[Helen Morgan (North Shropshire) (LD)]

I beg to move amendment 132, in clause 10, page 13, line 11, leave out “three” and insert “six”.

This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 140, in clause 10, page 13, line 11, leave out “three” and insert “12”.

Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.

Amendment 134, in clause 10, page 13, line 13, after “tenancy” insert

“or on a short-term let or holiday let”.

This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.

Amendment 135, in clause 10, page 13, line 14, at end insert

“or on a short-term let or holiday let”.

This amendment would clarify that a landlord cannot market a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.

Amendment 133, in clause 10, page 13, line 19, leave out “three” and insert “six”.

This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and the landlord authorising a letting agent to make the property available to rent from three months to six months.

Amendment 141, in clause 10, page 13, line 19, leave out “three” and insert “12”.

Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.

Amendment 142, in clause 10, page 13, line 27, leave out paragraph (b) and insert—

“(b) the tenant either surrenders the tenancy without an order for possession being made or delivers up possession of the dwelling house under the terms of an order for possession.”

This amendment would extend the prohibitions on a landlord reletting or remarketing a property, and from authorising a letting agent to market the property, for which possession has been obtained on the Ground for occupation or selling by court order.

Clause stand part.

Government new clause 4—Other duties.

Government new clause 5—Landlords acting through others.

[Helen Morgan]

Once again, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests, on which there are two jointly owned properties: a residential property and a holiday let.

During our evidence sessions, we heard that experience in Scotland has shown that grounds 1 and 1A are open to abuse by landlords who are simply looking to re-market their property either at a higher rent or to a different tenant who will not complain about serious defects in the property. We heard about a pretty horrifying case in which a rat and maggot-infested property was simply re-marketed three months later. Clearly, the time in which the property could not be re-marketed was not enough of a deterrent to prevent abuse of such a clause. Amendments 132 and 133 therefore seek to extend from three to six months the period before which a property can be re-marketed.

In our debates over the past couple of days, I have spoken at length about the need to ensure the maintenance of balance between tenants and landlords, so that landlords are not driven from the market, which would exacerbate the chronic shortage of rental property in the whole UK and the decline in the size of the private rented sector in rural parts. I do not think that these amendments would have an impact on that balance. Any landlord who is seeking repossession under ground 1 or 1A and is acting in good faith has no intention of re-marketing the property at the point at which they seek repossession. Extending the period beyond which it can be re-marketed should not influence their decision in any way.

We understand that people’s circumstances can change, sometimes very suddenly. I think six months is a reasonable length of time both to provide a deterrent to abuse of grounds 1 and 1A and to provide fairness for landlords who have acted in good faith but have suffered an unexpected change in circumstances. I would be grateful if the Minister commented on the steps needed to prevent the recurrence of the situation in Scotland that we heard about and, ultimately, to support the lengthening of the period.

Amendments 134 and 135 seek to address the problem facing many tourist areas that properties for private rent are being flipped into holiday lets or Airbnb-style holiday homes. Members of all parties who represent tourist hotspots have raised the issue in the main Chamber, and there is broad consensus that the over-supply of holiday accommodation is having a hugely detrimental effect on those areas.

There needs to be some holiday accommodation, but the balance of holiday and private rented sector accommodation is very important for those areas, because over-supply of holiday accommodation hollows out communities. It has led to a situation in which the workers needed for the tourist industry to thrive have nowhere to live, so hotels and restaurants are unable to operate at full capacity. That is bad for the local economy, as well as for people who cannot find anywhere to live in the area.

Meanwhile, in rural areas, the private rented sector is shrinking rapidly. Local families and people working in essential services, such as care workers, teachers and nurses, are being driven away. The sector is completely out of balance. My understanding of the legislation is that landlords seeking repossession under ground 1 or 1A must not re-market the property as a residential let within a three-month period; I would prefer six months. There is no provision for holiday let-style marketing, because those properties do not require tenancy agreements.

My amendments recognise that problem by adding holiday letting to the three-month, or ideally six-month, moratorium on re-marketing once ground 1 or 1A has been used to regain possession. I think that that is a pretty uncontroversial addition to the Bill; I very much hope that Government Members support me when I press amendments 134 and 135 to a vote.

[Matthew Pennycook]

I rise to speak to amendments 140 to 142. It is a pleasure to follow the hon. Member for North Shropshire. We agree fully with the spirit behind amendments 132 to amendments 135, and we will support the hon. Lady when she presses either amendment 134 or amendment 135, regarding short-term lets, to a vote. They highlight a valid concern.

As we made clear during an earlier debate on mandatory possession grounds 1 and 1A when considering clause 3, we believe that there is a clear risk that these de facto no-fault grounds for eviction could be abused in several ways by unscrupulous landlords. As a result, we are convinced of the need to amend the Bill to provide tenants with greater protection against their misuse. However, we do not believe that the hon. Lady’s proposal to extend the no-let provisions in clause 10 from three to six months for both standard periodic and short-term lets is sufficient, for reasons I will go on to explain.

We are once again considering mandatory possession grounds 1 and 1A because clause 10 would insert proposed new section 16E into the 1988 Act, prohibiting certain actions by landlords or former landlords, including re-letting or re-marketing a property or authorising an agent to market the property within three months of obtaining possession on those grounds.

We take no issue with the prohibitions that the clause provides for. It is obviously right that the Bill seeks to prevent landlords letting a fixed-term tenancy; serving an incorrect form of possession notice; failing to give prior notice where required; specifying a ground for possession that the landlord is not entitled to use; and issuing a notice for possession proceedings within the proposed six-month protected period that applies to grounds 1, 1A and 6. We also welcome the clause’s explicit prohibition of the re-letting or re-marketing of a property obtained by means of issuing a ground 1 or 1A notice, and the fact that clause 11 provides for financial penalties and offences for a breach of that prohibition.

As I remarked to the Minister in a previous debate, the fact that the Government have introduced that prohibition highlights that they clearly accept that amended ground 1 and new ground 1A could be used as a form of section 21 by the back door. However, we are absolutely convinced that a three-month no-let period is simply not sufficient to deter and prevent abuse of the kind we fear will occur if the two possession grounds in question remain unchanged. We take that view because of our understanding of the English rental market.

Three months of lost income, which is what any unscrupulous landlord who deliberately abuses mandatory possession grounds 1 and 1A in order to evict a tenant will incur, may act as a significant disincentive for some buy-to-let landlords, particularly those with highly geared large portfolios who have seen their rental yields reduced by rising interest rates and the restriction of mortgage interest tax relief as a result of tax changes under section 24 of the Finance Act 2015.

However, a significant proportion of landlords do not have a mortgage; they own their property outright. A recent survey carried out by Shelter suggested that well over half of all landlords come under that category. For landlords who are mortgage-free or have a mortgage but can absorb extended void periods, a three-month no-let prohibition, which could ultimately see them losing only one month of rental income if the tenant serves out the two-month minimum notice period that applies to grounds 1 and 1A, is not a particularly strong deterrent against abuse.

We believe that the no-let prohibition provided for by clause 10 in respect of mandatory possession grounds 1 and 1A must increase from three months to 12 months. That would ensure, taking into account the full minimum notice period, that any landlord not legitimately using the landlord circumstances grounds to occupy or sell the property would lose 10 months of rent—a financial penalty that we think would be sufficient to deter and prevent such misuse. Amendments 140 and 141 would provide for that 12-month no-let period. I urge the Minister to reflect further on the issue and to accept the amendments.

Amendment 142 seeks to address a distinct but related issue with the no-let prohibitions provided for by clause 10 in relation to grounds 1 and 1A. Proposed new section 16E(5) provides that the prohibition is applicable only if the tenant surrenders the property as a result of a notice having been served, without an order for possession being made. To put it another way, the proposed three-month no-let ban will be applicable only in instances where a tenant has left a property voluntarily without court proceedings, not where a court has issued an order. That is genuinely inexplicable, from our point of view.

Is it the Government’s view that where a ground 1 or 1A notice is served and the tenant wishes to contest it, the no-let prohibited period would, in effect, run throughout the possession proceedings, so that if they take three months or more, the period will have been deemed to have already expired prior to any order being issued? Is that the reason? If so, we would welcome clarification. Otherwise, we cannot understand why the prohibition does not apply where a court has issued an order. The Minister must provide a detailed explanation of the rationale behind the Government’s decision, because we cannot understand why it is equitable to apply the prohibition only to instances where a tenant has left a property without court proceedings, vis-à-vis having challenged them by taking the matter to court.

We are also concerned that the decision to do so will prevent tenants themselves from seeking redress in instances where they have good reason to believe that grounds 1 and 1A have been misused. It stands to reason that tenants who have challenged their eviction in court are inherently more likely to suspect that they are being wrongfully evicted and to be willing and able to pursue their landlord if they are abusing the grounds subsequent to losing their home.

To reiterate a point I made in an earlier debate, it is almost certain that a minority of unscrupulous landlords will abuse grounds 1 and 1A to unfairly evict tenants they perceive as problematic, and will then proceed to re-let those properties in short order. As things stand, if and when they do so the courts will be able to do nothing. Indeed, how will they even know what happened subsequent to a ground 1 or 1A possession case? The obvious mechanism to ensure that grounds 1 and 1A are used legitimately in each instance is to require landlords to evidence and verify prior and subsequent to a notice being issued, but the Government rejected our amendments 138 and 139 out of hand.

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[Matthew Pennycook]

No, I genuinely do not. In a case where a tenant has felt so strongly that they are potentially being evicted unlawfully that they have taken the matter all the way to the court, it is right that the no-let period should apply from the point that the award is granted. Again, that may be a point of genuine disagreement, but we will press amendment 142 to a vote.

[Helen Morgan]

I thank the hon. Member for Greenwich and Woolwich for his comments. I am in general agreement with his point about needing to extend the period beyond which a property can be re-marketed, although my view is that 12 months is excessive. If a landlord’s circumstances have changed—for example, if they repossess their house to sell it because they are facing financial hardship but are unable to sell and need to re-let it—12 months is punitive.