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.