Renters (Reform) Bill (First sitting)

Jacob Young Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[The Chair]

I should say at this stage that it is not necessary for all witnesses to answer all questions. Just answer those questions that you feel particularly interested in.

Dame Clare Moriarty: The thing we really want to underline is the urgency of passing this Bill, introducing it and allowing tenants to benefit from its provisions. We are currently helping nearly 100 people a day with section 21 evictions. The longer the current situation continues, the more problematic it will be. We are seeing a very consistent rise in the number of people coming to us with homelessness issues.

Anything that looks at what needs to be put in place before the provisions can be brought into force, assuming they are enacted, needs to be looked at against that background. There may well be issues with the court system. It is worth remembering that only a minority of section 21 evictions actually go to court, because the majority of tenants leave at the point of getting a notice. It is an important symbolic issue, but it is not the biggest practical issue. Having looked at what is available and at what the Government say they plan to do on court reforms, I do not think it is very precise at this stage, but I am sure that work is going on in the background.

There is, in any case, an implementation timetable that will extend beyond Royal Assent. A reasonable thing to do would be to set that as the timetable for making court reforms, rather than making the provisions’ entry into force conditional on rather imprecise commitments about court reforms.

Polly Neate: This is a once-in-a-generation opportunity and has been years in the making. At Shelter, we support thousands of renters every year face to face and millions digitally. Without question, we are seeing increased homelessness as a result of section 21 evictions, so I really want to stress, first of all, the urgency of ending section 21 evictions—it is the most urgent thing in the Bill. A tenant is served with a no-fault eviction every three minutes. In our view, there really is no need to delay ending no-fault evictions because of the reform to the justice system. We agree that court proceedings could be made more accessible and more efficient, and that that could be beneficial to tenants, but we do not think that the vital reforms in the Bill should be held up.

In fact, we believe that a robust Bill would reduce the number of evictions by increasing security to renters, rather than causing a significant increase in the burden on the courts. It simply is not the case that all evictions that now occur under section 21 will in future be heard in the courts as section 8 evictions. Many tenants—probably most tenants—will continue to leave before the end of their notice period, and therefore before court proceedings. Also, many evictions that now occur under section 21 would not meet the threshold for eviction under the new eviction grounds.

The Government were always going to have to hold their nerve over this Bill. This is a brave and reforming piece of legislation, so there was always going to be lobbying for delays and for watering down. That was always going to be the case; I think the Government always knew that. We urge the Government to hold their nerve and not to hold up the vital provisions in this Bill, which will reduce homelessness, for the sake of much more minor reforms that are massively less urgent.

Darren Baxter: To build on what has been said, it is clear that this delay is unspecified. It is not clear at what point the Government would determine that sufficient reform had taken place in order to enact section 21: whether that is having put in place a process of digitalising the court system, or whether it is more of an “outcomes” measure with respect to caseload or waiting time being reduced. If this is the reason for delaying, there is an urgent need for clarity.

I absolutely back up what has been said so far: there is no need to delay this legislation. For landlords to go through the court process is fairly rare. Most tenants leave at the point at which they are sent a notice. In 2022, about 11,000 or 12,000 repossessions went through the court system in England and Wales. That is less than 1%: it is about 0.3% of all households who are renting privately in England and Wales. I understand why this is an anxiety for landlords, but we have to keep that anxiety proportionate to the great harms that an insecure private rented sector is doing. We have to move quickly to reform, particularly given that the consultation was in 2019. We have already been waiting a long time for reform to take place.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to our witnesses for giving evidence. I have two questions. First, how do you think the blanket bans will work to level the playing field for renters? Secondly, what is your opinion of the impact that these reforms may have on private rented sector supply?

Polly Neate: The connection is not brilliant, but I hope I heard the question correctly.

There are reasons why landlords might be facing difficulties, particularly due to mortgage rates, but we do not believe that there is evidence that these reforms will, in themselves, influence the PRS supply. In fact, the Government’s own work shows that the impact on supply will be minimal. We are not overly concerned about that. The evidence from Scotland is that there was not the promised mass exodus of landlords: data from the Scottish landlord register indicates that there has been no quantitative evidence of an impact on supply of PRS accommodation since the reforms there were introduced.

The most recent English housing survey data tells us that the private rented sector is still increasing in size. Some landlords may well be selling up or retiring, but we do not think that there is evidence that this is happening in the unprecedented numbers that people are suggesting. We just do not believe that is taking place. We certainly do not believe that this Bill will impact it significantly.

Darren Baxter: I would back that. Various forms of data—the English housing survey, a comparison of stamp duty at the higher rate against capital gains tax on people selling properties, and other sources—show that over the past few years the private rented sector has grown. More landlords might be selling up in any given year, but there are still more who are buying. That has been against the backdrop of tax changes and various forms of regulatory reform over time that has tightened up the responsibilities on landlords.

I do not think we can draw a conclusion that that landlords are selling up. It is kind of the opposite. If that has changed—and the data is unclear—it has changed since interest rates increased significantly. That is because the cost of borrowing is a really significant variable for landlords. That should give you, as legislators, more confidence about this reform. It is not going to be this reform that pushes landlords out; it will be the responsibility of the independent Bank of England. That should provide sufficient confidence.

Blanket bans are important but not perfect. If we think of “No DSS”—discrimination against people who claim benefits—there are all sorts of ways in which people who are in receipt of social security benefits might be discriminated against by landlords at the point at which they apply for a house. Income checks, for example, might push them out of the market.

Fundamentally, unless you increase people’s income, they might struggle to rent privately, but it is an important signal to the market that you cannot discriminate against a group of people just because they receive benefits. The same goes for families with children: it is important to say that if you have kids you should be allowed to rent a property, and that if you are putting a property on the market you should be open to who lives in it. These measures will not solve 100% of the problem, but they are really important signalling devices that this legislation can provide.

Dame Clare Moriarty: On the supply question, it is worth looking at the international angle. The Social Market Foundation has done some quite interesting analysis. First, England is an outlier in still having no-fault evictions. Most countries do not, and many of the countries that do not have them have much larger private rented sectors. There are all sorts of different reasons for that, but there does not appear to be a correlation between reduced size of private rented sector and the banning of no-fault evictions. That is just to add to the important points that Darren and Polly have made.

On the point about blanket bans, that is something that we see coming through quite a bit, including with people who would not fail to be able to rent on the grounds of income alone. They are either told that they cannot rent or possible conditions are put on them, including six to 12 months’ rent up front, just because they are in receipt of benefits. Those are really serious points. I know that the Government have made a commitment to table an amendment to deal with that, which we would very much welcome.

[The Chair]

Before we go on, may I reiterate that we will finish at 10.10 am precisely, even if someone is mid-sentence? Questions and answers should both be brief and to the point.

--- Later in debate ---

[Matthew Pennycook]

Q Very specifically, you have had access to No. 10. What are the x, y and z that you are going in and saying need to be in place before chapter 1 of part 1 can be introduced? What are the specific metrics, if you like, of court improvement that you are pressing for?

Ben Beadle: I want timings to be much, much faster, and that needs to be supported by digitalisation. To deal with this, we need significant investment in the support team and additional judges. In London, we have seen evictions not take place because the right sort of stab-proof vests for bailiffs were not procured. That does not give me a great deal of confidence that Government is all over this like a rash, and we need to have confidence. Section 21 was brought in to give landlords the confidence to bring their properties to the market. The vast majority of our members can live without section 21 provided the alternative is fit for purpose, but until we see these things come to fruition, I do not think I can recommend that. That is not to say that section 21 should not be abolished. It is just that the alternative needs to work, because otherwise it will hurt the very people you want to protect: the renters.

Timothy Douglas: First, we have a demand crisis. If we are not looking at supply, we certainly have a demand crisis. Looking at our member data from August 2023, year on year demand is up 32%, based on tenants registering with properties. It is a demand crisis and a housing crisis. It has to be about the tax, social housing, people being able to buy homes and energy efficiency legislation. These are all part of a wider housing strategy. You cannot look at the private rented sector in isolation.

On the courts, bailiffs are an issue; certainly in London, there is an issue around not being able to get personal protection equipment, and that has spread to other parts of the country. It delays proceedings. Should we look at privatising that service—the county courts service—in order to almost remove that funding element from the Ministry of Justice and ensure that we have enough bailiffs? I think we need to provide landlords with an automatic right to a High Court enforcement officer. That is part of the process. Normally, if you cannot get the bailiff, they will have that. We have worked with officials on integrating mandatory notices for possession into the possession claim online. We have also looked at improving the Money Claim Online website and that process, which is important.

I have two final points. There are things in the Government’s antisocial behaviour action plan. The courts need to prioritise dealing with antisocial behaviour; that would help. If that were a directive from the UK Government, that would be helpful. We also need to define low-level antisocial behaviour in statutory guidance, or any guidance, so that courts can see that, deal with the behaviour and get evidence of it.

Theresa Wallace: I agree with a lot of what Timothy and Ben have said. They have covered a lot of the points that I would have made. There is no question but that we have a shortage of stock. We are experiencing that on a daily basis. More than a million tenants in the private rented sector who are in receipt of income support and benefits to pay their rent should be in social housing. We need to address that to solve the housing crisis.

We need to instil confidence in our landlords. It takes time for trends to feed through, but we are definitely seeing landlords leaving the market. We have a lot more at the moment sitting on the fence, waiting to see what this Bill brings in, before they make their decision. It is crucial that we keep those people in the market. Build to rent fills a gap, but we cannot build in the places where the demand is, because that does not work for the model. We still need the private landlord to provide properties.

There are two recent surveys. A Royal Institution of Chartered Surveyors survey came out last week, which showed that overall there were 43% fewer homes available to tenants to rent in the first 10 months of this year. Research by Hamptons came out yesterday and also showed the 43% reduction. RICS says it is definitely seeing a fall in instructions of minus 18%. We want to find a balance. We want to find more security for tenants; I do not think abolishing section 21 will do that, if I am honest. We still need some fixed-term tenancies for those tenants who really want to stay in a property for three or four years because their children are in school, and where the landlord is happy to grant a tenancy for that length of term.

We could even include a break clause for the tenant, whereby for a month, or throughout the whole time, they could terminate, if their circumstances changed. If the property is not fit for purpose, the local authority should be able to visit quickly and make a decision, and the tenant should be able to get out. That way, we are giving the tenant much more flexibility and security. We still need to let landlords know that they can get their property back if they need it, but many are very happy to commit to a longer term, and I think they should be allowed to.

Timothy Douglas: I think clause 1 should include the option of fixed-term tenancies. We are not saying that it should be one or the other; I totally agree with Theresa on the option of the fixed term. The previous panel talked about the insecurity of tenants who can be evicted after six months. If a tenant has a 12-month fixed-term tenancy, they have that guarantee at the start of the tenancy that they will be in place for 12 months before a decision can be made on eviction from that property. That is vital for guarantors. If you are going to be a guarantor for a rolling periodic tenancy, you are not sure how long you will be a guarantor. How can you have rent in advance if the tenancy is not for a set period?

The fixed term is a vital point, and we need to bring that in as an option. It should not have to be one or the other. There could be the option of a periodic tenancy or a fixed-term tenancy. That will be vitally powerful in the student market as well, for any household with a student—and for non-students. Even if the student leaves after 10 months, the tenancy could stay as a fixed-term tenancy until month 12. It could either be renewed for another 12 months, or roll on to the new periodic. We need that flexibility in the system.

[Jacob Young]

Q Thank you to members of the panel. You heard comments from the previous panel on antisocial behaviour. What do you think of the changes that the Government are introducing to the antisocial behaviour grounds? Do they strike the right balance, and ensure that landlords can evict tenants that cause significant disruption? Timothy, you mentioned students. Do you agree that the new possession ground for student landlords will be effective in supporting the operation of the student market?

Timothy Douglas: I think we need more detail on that ground. I have not seen it, I do not know what it looks like and I do not know how it will work in reality around when it is served at the time of the year. There are myriad student semesters, term times, different types of students and mixed properties. Defining a student let is really difficult. You can do it under an HMO because the licence conditions will be in place, but a lot of students these days rent in a high-rise modern flat. How do we define them as students?

From the point of view of our members, if we retain that fixed term, you have the clarity. A UK student—this is important as well for rent in advance for UK students—can have a letter from the uni. For overseas students, it is the right-to-rent check, the visa and the share code. On the students, we remain sceptical about how that ground works. The simplest and easiest way would be to retain fixed-term tenancies as an option for any household that is either a student or mixed student household, to give that flexibility as a fixed term for 12 months as an option.

On the antisocial behaviour ground 14, I am not sure what the difference between “capable” and “likely” is. That is why I reiterate the point that local partnerships between police and councils will be really important. The guidance, defining antisocial behaviour and prioritising it in the courts will be important for that ground to work.

Ben Beadle: We like the suggestion around antisocial behaviour. The Secretary of State has been very clear that managing antisocial behaviour is important. This is one of the challenges in section 21 being abolished. Like it or loathe it, section 21 allows landlords to deal with antisocial behaviour effectively. What we are trying to do is to not end up with just the perpetrator of antisocial behaviour in the property.

I would take issue with the comments that were made in the previous session. This will be tested by a judge. It is a discretionary ground. Although the wording is wider, I think that is absolutely right. It goes before a judge to assess the merits of it, and it succeeds or fails based on judicial discretion. That sounds like something that we can all support, because it means that antisocial behaviour can be dealt with. No politician wants to write back to constituents in their area to say, “That noise that is waking your kids at night cannot be dealt with because of this, that or the other.” This strikes a balance, to coin a phrase, between protecting those who are at the hands of antisocial behaviour and not making it too easy so that it is a back door to section 21, which I absolutely get.

The second thing came up around domestic violence in the previous session. I see this as quite different. We have ground 14A, which allows social landlords to evict the perpetrators of domestic violence. I suggest that something like that is more clearly made available to the private rented sector. What happens in practice is that the landlord is working closely with the victim and wants to keep—I would say “her”, but it does not have to be—the victim in the home and to deal with the perpetrator. Anything the Government can do to make that clearer would be very helpful.

The third point is on the student market, which is an area we have been campaigning on vigorously. We support the ground, obviously, and think that it can work, but a lot of good things come as a pair—Ant and Dec, strawberries and cream—and what is missing from the ground is that it does not fully protect against the cyclical nature of the market, which Tim spoke about.

We propose an amendment that would deal with a whole range of matters. In the first six months, landlords cannot give a no-fault reason for repossession; we propose that that moratorium be extended across the sector, to deal with issues in three or four areas. First, it would provide for a fixed period, and that would deal adequately —but not fully, granted—with the need to keep the cyclical nature of the student market, because it is not broken, and we want to protect it, in the interests of both renters and landlords.

Secondly, more widely, outside the student sector, it is a possibility that a tenant will give two months’ notice on day one, and set-up costs hurt landlords. In my briefing, which I sent round to you, I gave an example of that.

Thirdly, the amendment protects against the creation of an “Airbnb lite” in the sector. We do not want the private rented sector to become Airbnb by the back door, and there is a real risk of these periodic tenancies creating that.

Fourthly, the Bill is about fairness, and striking the balance between protecting tenants from bad landlords, and landlords from bad tenants, so there is no justification for us not being treated in the same way, through that moratorium.

There is a fifth thing: this is quite easy to do through an amendment. For those five reasons, I think that we can make this work.

[Lloyd Russell-Moyle]

Q Ben, you propose six months on both sides, but you seem to be suggesting that a student or someone would maliciously come in for a month, and then say, “I’m off.” Is it not the case that people look at the house and say, “This isn’t working for me. The house isn’t quite what I thought it was, or what I thought was advertised.” Perhaps it is very cold at night and expensive to heat. I am not saying that these are enforcement matters for the local authority; they are just things that would lead normal people to say, “I want out of this.” Also, people’s circumstances may change. Why should they, or their guarantor, be stuck with having to pay the bill for six months, when the accommodation might not be appropriate? Surely the best way of getting the market to improve its standards is to have the ability for someone to walk in, realise it is not a very good property, and walk out again.

Ben Beadle: To turn that on its head, why have the clause one way in the first place? Why not let the market talk for itself? If a landlord wants to sell, why not let them?

--- Later in debate ---

[Matthew Pennycook]

Q Richard, on the landlord redress scheme, we have just had a discussion about whether the Bill is prescriptive enough on how the ombudsman would operate. I am taking it as a given that there will be one ombudsman, of whatever form—I know you have views on that. The Bill gives the Secretary of State the power to create an ombudsman, but it does not commit them to—it is a “may”, not a “must” power. If the ombudsman is set up, do you think the Bill needs to be more prescriptive about what the Government believe that ombudsman should do?

Specifically, in clause 29, there is a requirement to set out guidance on how the ombudsman redress scheme would work alongside local authorities, so that they have complementary but separate roles. What do you think that memorandum of understanding, as I suspect it will be, needs to look like? How do those roles not overlap in a way that duplicates duties?

Richard Blakeway: I think that is a very important question. This is a thoughtful Bill, but to fulfil the ambitions set out in the Bill means real operational challenges. The first challenge speaks to the first part of your question about how you design a system where the ombudsman has sufficient teeth to be effective. That is one of the reasons why we have said that creating, or enabling, an ombudsman through the Bill does not necessarily mean that people will access redress. That in itself can be a real barrier for people when navigating a system where they may be passed from pillar to post. That is exactly the reason why the Cabinet Office guidance on the creation of ombudsman redress is explicit that you should build on existing schemes.

At the moment, we are the only approved scheme that does landlord and tenant dispute resolution. I heard some of the evidence in the previous session and think we need to really distinguish between agent and landlord redress, where the responsibilities of agents are very different from the landlord’s. The Landlord and Tenant Act sets out clear obligations that rest with the landlord and cannot be delegated to the agent.

What we are seeing is a convergence in policy, which I think is welcome. You already have some of those building blocks in place. The Landlord and Tenant Act is universal; it does not distinguish between social and private. The decent homes standard potentially extends that. The health and safety rating system is, again, universal. What we need is to bring that together into a single scheme. Otherwise, regardless of the powers of the ombudsman, people are going to struggle to access the system.

In so far as the powers of the ombudsman are concerned, overall, the Bill is quite effective at setting out role of an ombudsman without being overly prescriptive. You have to avoid compromising the independence of the ombudsman to make independent decisions and to have integrity, and also agility, by being independent. The Bill is responding to a private rented market which was not envisaged 30 years ago, so you need to enable the ombudsman to be able to produce guidance and codes of practice that can respond to a changing market and changing circumstances, without being overly prescriptive in the legislation.

On clause 29, that is a really important point, because there is a risk of duplication between the role of a council and the role of an ombudsman. Again, there is a lack of clarity for residents—tenants—about which route to take. An ombudsman does not operate in isolation—it will not operate in a bubble—so the relationship between the ombudsman and the courts will be critical, as well as the ombudsman discharging its own functions.

We currently see cases in which someone has gone through environmental health, and a local authority might even issue an improvement notice, and then someone is coming to us for redress—those are two distinct roles. Any information-sharing agreement needs to be really clear that when an ombudsman sees concerns that may indicate there is a category 1 hazard, for example, that information is provided appropriately to a local authority for potential enforcement. Also, the local authority needs to be able to signpost very early to a resident who has approached it through environmental health that they may have a right to redress.

The crux of this, alongside the memorandum of understanding, is the portal or database. Part of the problem is that there are a large number of landlords and there might not be clarity about which parties are subject to the Bill—subject to enforcement and redress—and then it is about being able to access that information easily so that compliance can be met. I agree with your point: there has to be a framework for operation and a clarity about roles, but both local authorities and the ombudsman will want access to the database so that they can be effective.

[Jacob Young]

Q Thank you to the panellists. Richard, what do you feel is currently working well in social housing redress that we need to ensure we bring over to the PRS?

Richard Blakeway: That is a really good question. An ombudsman is not a surrogate for an effective landlord-tenant relationship and effective dispute resolution at source, done locally by a landlord. One thing that we have sought to introduce through our work on social housing is our complaint handling code, which has set out how to create a positive complaint handling culture and resolve disputes as early as possible without having to escalate them to the ombudsman. We have done a significant amount of work with landlords to implement that code and to avoid a postcode lottery whereby, depending on your landlord, different approaches might be taken, and some of those approaches were not promoting natural justice at a local level.

For me, although an ombudsman might be conceived as the potential stick—there is an element of that, which is important—another part of an ombudsman’s role is to promote effective complaint handling locally and support landlords. There are a lot of landlords who want to get things right—they are not rogue landlords—but sometimes they may not be aware of all their responsibilities, or they may struggle to engage the resident effectively or to discharge their responsibilities. That role is important for the ombudsman. It is something we have done in social housing and, were we to be appointed as the ombudsman, it is something we would certainly seek to do with landlords in the private rented sector.

[Lloyd Russell-Moyle]

Q There is currently a system of selective licensing that some local authorities can do, but they have quite a high threshold of burden to demonstrate it and it requires the sign-off of the Secretary of State. Do you see the potential for allowing local authorities to remove those burdens and introduce selective licensing without Secretary of State sign-off, because of course the information will already be there in the portal?

Paul Dennett: Selective licensing is very interesting for Salford, because I think we were the first local authority in the country to pilot the new legislation at the time. Selective licensing schemes will inevitably continue to be an important tool for councils to manage and improve the private rented sector properties in their area. In our opinion, local areas should have the flexibility to employ selective licensing schemes to meet local need, as we determine that. We are calling on the Government to amend the Housing Act 2004 to remove the requirement for councils to seek approval for larger selective licensing schemes. You will be aware of the 20% threshold—

Renters (Reform) Bill (Second sitting)

Jacob Young Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Q38 Thank you to the witnesses for coming to give evidence to us. I want to start off with possession grounds. We have heard from the Government, and from a number of the witnesses this morning, about the need to strike the right balance between the interests of landlords and the interests of tenants. What are your views on the new and revised possession grounds in that regard, and specifically the ones we have heard some concerns about: grounds 1, 1A, 6, 7, 8A and 14?

Ben Twomey: Thank you, shadow Minister. On the grounds, it is important to think about the question of what actually changes for the renter experience if the Bill passes in its current form. We welcome the Renters (Reform) Bill and think it is an important piece of legislation, but on some key areas not much will change.

The Government promised to abolish no-fault evictions. The Bill does not do that. It removes section 21 no-fault, or no-reason, evictions but introduces new no-fault grounds. Particularly on grounds 1 and 1A, which are where a landlord can move a family member in or may sell the property, it is important that we put ourselves in the renter’s shoes when that happens. A no-fault notice is given. That could happen to me or any renter across England. Right now, I could go home and find one of those notices on my doorstep. I would have to be out of my home within two months. Given the current economic climate, it is going to be difficult for me to find a new home quickly, so the risk of homelessness—no-fault evictions are one of the leading causes of homelessness—is very great.

In the current wording, that situation does not change for renters, and their experience does not change. A renter receives a no-fault notice and is out within two months. We think there should be better protections there. It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live. That saves the Government money because they do not then have to support people who are in temporary accommodation or are otherwise homeless. That is one of the key areas we want to change in respect of the grounds.

Similarly, I currently have a fixed-term contract that will move under the Bill to a rolling tenancy. The minimum fixed term is six months, and as soon as that ends I can receive a no-fault eviction. Within the rolling tenancy, under the wording of the Bill, once the six-month protected period ends, again, a renter can receive a no-fault eviction. It is important that there are better protections so that there is more security for renters. We say that period should move to two years instead.

Finally, on the no-let period, if the grounds are to be introduced, they need to be enforced. It needs to be clear that they cannot be abused by some landlords. At the moment, if someone says that they are moving a family member in or that they are going to sell the property, there are three months during which the property cannot be re-let. We think that should move to one year to make sure we rule out the idea that some landlords could still do retaliatory evictions or abuse the grounds in other ways. By moving that, we make sure that tenants have that greater protection and can enforce where local authorities may not be able to. If we can put that information on the property portal in the Bill, which we welcome, it will be much easier for tenants to play a role in the enforcement and scrutinise what is happening.

As I said, I could go home today and receive a no-fault eviction. The Bill could pass and I could go home and find one and the same thing could happen. I would be out within two months and it could happen after six months of my having a tenancy. That is a big problem. If you want to reduce one of the leading causes of homelessness and save the Government money in doing so, you need to address those factors.

Sue James: What we are talking about today is someone’s home. Over the past 20 years we have seen a huge increase in families who are living in the private rented sector, and we are talking about having enough protection for them. The private rented sector has doubled in size, so we do need to pay attention to it.

At the moment, the new grounds are all mandatory grounds, and we say they should be discretionary grounds. We want the court to make an order that will take into account the circumstances of the tenant and of the landlord. Grounds 1A and 1B, as they are currently written in the Bill, will essentially be a back door for section 21. I agree with what Ben said about improving the notice periods that are outlined in the Bill.

We also have a problem with grounds 1A and 1B in relation to the evidence. At the moment, it does not look like the landlord will have to provide much evidence. We want that to be strengthened so that you would have to have evidence that the landlord required the property for a member of their family or wanted to sell it.

The problem also is that once a landlord takes possession on that basis, or tells the tenant that they are going to seek possession on that basis, you have just a three-month period in which they are not allowed to let. That needs to be much longer—at least a year—in order to protect the tenant from unscrupulous landlords taking back their premises. Three months is not a very long time at all.

The other issue relates to enforcement. Currently, that rests with the local authority and the ombudsman. The tenant must have the right to challenge that and to take action against the landlord, including when the landlord has taken possession in court, because at the moment it is only if the tenant voluntarily leaves. It needs to be a bit more joined up in terms of having that protection.

The biggest problem is ground 8, and ground 8A in particular. I know you heard some evidence on that this morning. It is a particular problem: basing it on three times in three years when someone is at least one day in arrears is going to cause grave hardship. It has a perverse incentive, because the final time that the tenant is in arrears, a possession order will be made and they will not have an incentive to make that payment. That seems really perverse. All of that needs to be discretionary. The court absolutely has to have a look at that.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to the witnesses. You have mentioned aspects of the Bill that need to be strengthened; what aspects do you welcome or think of as helpful? How do you think the private rented sector supply might be impacted by the reforms?

Ben Twomey: We absolutely welcome the end of section 21 no-fault evictions—it could not come soon enough. We were promised it some time ago. For renters, that is one of the biggest insecurities we face. That is why I talk about the experience needing to change for renters. In Generation Rent, we love it when renters are aware of their rights and when they know what the system is like, yet those renters who discover they have received a section 21 suddenly become aware that the rights they have do not mean much at all, because they will be out in no time and there is not much they can do to challenge it.

One of the saddest things I have heard from renters we support is that insecurity follows them into the next home. Even when they are trying to feel settled and comfortable and to build their lives again, they are in constant fear that another no-fault eviction notice could come. It needs to be really clear that the new no-fault grounds do not keep that insecurity in the system.

We welcome the end of section 21 and we welcome the property portal. It will be really good to finally have a register of landlords. We hope to be able to put things into that portal that are not yet in the Bill: we hope that we will be able to track evictions, so that they are enforceable around the no-let grounds, and that we will be able to look at actual rents and properly monitor what goes on. One of the big advantages of ending section 21 will be that finally a reason is given for every eviction, so we can understand when things start to go wrong that lead to homelessness. At the moment, quite a lot of guesswork is happening to prevent that problem.

We also welcome an ombudsman coming into the sector, to have an equivalence with the social housing sector. As much as possible, in any way we can, we think renters should have the same rights across social housing and private renting. When the experience can be very similar, and the risks, insecurity and unaffordability are still factors across the piece, there is no reason to have a two-tier system. In fact, I would go further and say that we will have reached our goal only when homeowners start to kick themselves and say they wished they were renting because there are so many rights available, so much security of tenure and so much flexibility, and because they have organisations such as mine and Sue’s to inform people. We look forward to working with the Government to see how that ambition can happen.

Sue James: I agree. The property portal has such potential if we get the information in there right so that there is transparency around renting. That would be amazing. We absolutely love the fact that this has been brought in. There are some changes that we think need to be made. The fact that you are looking at delaying action on section 21 is something I would love to talk about, if you would like to hear that.

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

Q I will ask two different questions, then. I will ask Sue about the delay that the Government propose with the courts. Earlier, we heard from the housing ombudsperson that he is willing to cover all of this, if the Government agreed, and that he could step in with transitional measures immediately on Royal Assent, so he was unclear about why there would need to be a delay on the abolition of section 21. Perhaps you could tell us why that is the case.

With Ben, I would like to probe no-fault evictions, which are very expensive for the person who is not at fault. They have to pay for removal costs, a new deposit and, very often, a month’s rent up front, which is very difficult for people. Are there any ways that could be ameliorated when it is no fault and the tenancy is being curtailed early, within two months?

Sue James: Shall I go first? You also heard this morning that the Government need to hold their nerve, and I absolutely reiterate that. The Bill has been a long time coming, and we have a crisis out there. Colleagues of mine who are at law centres have queues of people coming to see them because of this, and we absolutely need to get it right.

The county court is not the experience I have been hearing about in some of these conversations. You heard this morning that the county court is pretty much getting it right: it is not one of the courts with a huge backlog of hearings and stuff like that. When you start a possession claim, there are fixed rules around that. The case has to be listed within eight weeks, and it is usually listed in six to eight weeks. You then have a hearing before a judge, so it is not actually taking that long. You have the hearing and the court has to apply strict criteria on whether it is just and proportionate, and whether there is a reasonable defence that can be pursued.

In the court, we have a fantastic duty solicitor regime that has just been improved to include benefits advice beforehand. So you already have judges who are experienced in housing, you have duty advisors who are very experienced in housing, and then you have income officers who are at the same courts all the time. You build these relationships, and as duty solicitor, you are working out a plan where you can get the arrears paid off and get the stuff sorted out. We now have crisis navigators in law centres, and they resolve the benefit issues that are sitting behind it. Of the rent-arrears cases I have ever seen, I would say that probably about 60% to 70% have been a benefit-related problem. I think those issues are different from the issues around the court.

The only thing that you could invest more in—well, obviously if we invested more in the court that is brilliant, but I do not think we need to wait for that—is the bailiffs and the end period. Sometimes, with a bailiff’s work, it can take up to eight weeks to fix a date. That is just about money. If you address that, you do not have these problems. That is why I am saying that discretionary is the way to go, because it provides fairness.

You already have a housing court sitting there. It could do with some tweaking, but you are already there with that. I think we are good to go. Given that section 21 is the biggest cause of homelessness, you would rebalance in the way that you want to, so I would say, “Hold your nerve and go with it.”

Ben Twomey: I have two very quick points on the court reform before I go into your other question, Lloyd. First, in quarter 3, the latest data from the Ministry of Justice shows that the median time it took for a repossession case was about 22 weeks in both section 21 and in section 8. The idea that section 21 is much quicker is not true. With section 21, more people move out beforehand because there are fewer ways in which you can legitimately challenge it. There is a problem if you are setting up the court system to say that we want to basically stop tenants having their rights and a way in which they can challenge an eviction. That is a really important point: it does not actually lengthen the time that will be taken. That is not true.

Secondly, I will talk quickly about Jasmine, a renter who very recently challenged an eviction because she could not move in time. She was given two months to move under a section 21, but she could not move in time, so she challenged it and it took up the court’s time instead. If you extend the notice period to four months, that challenge would potentially never happen, the court never has to see Jasmine, she finds a new place and is comfortable and able to move out in good time. She is happy, and potentially the landlord is happy too.

On the cost of no-fault evictions for renters, we estimate that the average cost to a renter of an unwanted move is £1,700. For a renter to be able to save, it is really important that they are able to find some way in which, when the move is through no fault of their own, they can make those savings quicker in order to be out of the home. We think the best way to do that—rather than, for example, thinking about repayments from the landlord—is just to say that the final two months of renting will have no rent cost attached. The tenant then has time in that space to save in order to find a deposit and the first month’s rent, for example, and they are able to move out with the savings they have made because of the two months’ lack of rent.

It potentially means two months out of pocket for the landlord who has chosen to do a no-fault eviction, but if it is a no-fault eviction for a sale, they are potentially getting a big windfall through that anyway. The two months out of pocket can be balanced against the fact that otherwise it would be two months in which the tenant is likely to find themselves as one of the record number of homeless people we have at the moment. It is an important balance to strike, and that is one of the ways in which you could do it.

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[Mike Amesbury]

Q It does seem very vague. We in this room are all seemingly, according to that definition, capable of “causing anti-social behaviour”. On section 21, the Government are kicking the can down the road at the moment, and are talking about reforming the justice and court system. What is your assessment of that?

Francesca Albanese: We at Crisis recognise that changes do need to be made to the courts. Obviously, that is one of the central themes in this Bill and it is about making sure we get that right. But the problem is that if you bring in the court reforms first and then make the changes around abolishing section 21, you are effectively creating a two-tier system. For us, that does not protect tenants in the right way, so we would argue that both need to be brought in at the same time.

[Jacob Young]

Q I would be grateful for your views on abolishing fixed-term tenancies.

Francesca Albanese: To clarify, are you referring to ASTs, and their length?

[Jacob Young]

Yes.

Francesca Albanese: We would welcome longer-term tenancies. We know through our services—this is increasingly so at the moment—that people come to us who may have had their tenancies shortened for a reason that is not of their making. Being able to have longer-term tenancies in the private rented sector gives more stability for tenants. Equally, if you look at where rent increases can happen, this also manages that part of the market—making sure that there is proportionality in terms of when rent increases are made, as well as stability for tenants through longer-term tenancies.

[Jacob Young]

Q Would you say that the reforms we are making give renters more confidence when looking to take out a new tenancy?

Francesca Albanese: I think they certainly help. If we are looking at longer-term tenancies, I suppose it is about having more emphasis on longer-term tenancies being used more regularly. Going back quite a lot of years of working in this space, I know that there are ways you can do that now, but it is not the norm. Most tenancies that are given are six or 12 months with a rolling period or a fixed term.

I would also go back to the points made at the beginning: this is helpful, but there are other areas that we are concerned about, such as ensuring that people getting served notice on the kind of grounds that were under section 21 and which will now go over to section 8 are protected sufficiently. Even though longer-term tenancies can give tenants more protection, from the perspective of Crisis, which works with people at the lower end of the private rented sector market, where there is often a higher turnover of tenancies, we would want to make sure that those protections are still in place so that we do not end up pushing more people into homelessness as an unintended consequence.

[Lloyd Russell-Moyle]

Q The Government said in the King’s Speech that they wanted to bring forward amendments to prevent what is often called “No DSS” discrimination—“no benefits” discrimination. First, what are your thoughts on how that could be done effectively? Secondly, many people scrabble around to find a rent that is within local housing allowance, only to find that it goes above local housing allowance within a year. Should that be taken into account in the rent tribunal process to ensure that rents that were within local housing allowance remain within local housing allowance, so that people are not economically evicted?

Francesca Albanese: I might make a broader point first and then come back to that. At the moment, as you will all be aware, the local housing allowance does not meet rents. It has not done so for a long time, and it has been frozen since 2019. That decoupling of rents from local housing allowance levels is causing huge problems. We did some research six months ago—I would say the situation has probably got worse since then—that shows that only 4% of the market in England is affordable to people on local housing allowance. In some areas of the country, that drops to 1%, so it is a massive issue. That needs to happen now, and it is something that the Government can do now. They can give broader access to the private rental market. There is obviously a longer-term issue: we need more social housing. Where private rental sits within the broader housing market is really important.

On the point about discrimination, we do not want tenants to be discriminated against because they are in receipt of welfare benefits. Anything that prevents that is welcomed. The problem at the moment is that quite a lot of tenants are not getting anywhere near properties within the private rented sector. We are seeing record levels of people trapped in temporary accommodation and local authorities are very stretched. The point about the private rented sector is that quite a lot of people are not even getting access to it, let alone being discriminated against because of being on welfare benefits.

On the more specific point about tribunals, that is not my area of expertise, so I do not want to comment on something where I would be giving an opinion rather than factual evidence.

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[Matthew Pennycook]

Q Thank you for attending, Mr Fletcher. I want to ask you about build to rent. In terms of supply, build to rent is mainly catering to—let’s say—the top half of the market, rather than meeting mainstream supply. What do you think the impact of this Bill will be on the build-to-rent sector?

Ian Fletcher: Build to rent is something that started over the past 10 years. It is trying to encourage institutional investment into market rented housing. It is not pitched at high-income earners. We do a survey each year that looks at the demographics of the build-to-rent sector, and I would say it is catering for medium earnings—often key workers and people of that nature—and supporting our core cities particularly, as a lot of investment has gone into a number of the core cities across the UK.

In terms of impact, a lot of the things we very much welcome in the Bill have, to some extent, been pre-empted by the build-to-rent sector: a number of my members are already members of an ombudsman voluntarily; the build-to-rent sector has proudly been at the forefront of welcoming pets; and decent homes is not something that will trouble the sector. The portal is something I have been campaigning for since 2007. There is a lot to welcome in the Bill.

Some challenges that are specific to build to rent are things like the Government abolishing rent review clauses and the lack of any minimum tenancy length in the Bill for landlords, which means that there could be a danger, particularly in properties in core cities, of significant churn.

[Jacob Young]

Q You mentioned the decent homes standard. Could you elaborate on your thoughts on that?

Ian Fletcher: As I say, the stock of build to rent has been developed over the past 10 years, so it is unlikely not to be meeting the decent homes standard. Equally, the management of the property is done to a very high standard. That is something the sector is very proud of. I do not see any challenges in introducing decent homes into the sector from a build-to-rent perspective. We have sat around a number of tables with the Department as it has worked through the specifics of how the standard would impact the private rented sector, and I have not heard many dissenting voices in terms of this being introduced into the sector.

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

Q When the Bill was first presented, the British Property Federation indicated some concerns about the relationship between a minimum tenancy period and the growth of the short lets sector and that this might be an additional boost to it, and I just wonder where that came from. What is your evidence for that? Indeed, have you conducted an analysis of the growth of short lets, the factors driving that and the connection between this and the legislative framework?

Ian Fletcher: It is something that we have been continually concerned about. In a London context, the removal of the planning constraints on the short lets market affects property across not only the rental sector but the leasehold sector.

It is a concern, I suppose, in terms of members. At the moment, you obviously have to take a minimum six-month tenancy, but what members often find is that you do not want to restrict subletting, because often that is helping the ultimate tenant, if they have to move for various reasons. You are finding that quite a lot of people are moving into these premises and then subletting to somebody who will take it on a short-let basis, so these are portals and things of that nature that, to some extent, are exploiting that situation.

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[Matthew Pennycook]

Q I think that you implied there that you might send us further evidence, but could you touch briefly on the rent increases point that you made earlier? I think that it was the first of your areas for clarification.

Kate Henderson: Sure. At the moment, the social housing sector is regulated by the Regulator of Social Housing, and the vast majority of our rents are set by Government and set annually. The Bill makes changes that would restrict rent increases to once in 12 months and require landlords to give two months’ notice of rent changes.

As I mentioned in my introduction, our members manage 2.7 million homes. Requiring two months’ notice of a rent increase, and requiring each tenant’s rent to be changed on the anniversary of their tenancy, would place a huge administrative burden, whether it is on a large-volume landlord or even on a smaller landlord with fewer staff.

This would take away from a provider’s ability to deliver those core services. The Bill acknowledges that by including an exemption for social housing in the rent standard—social housing is exempt from those changes. However, some types of social housing, such as intermediate rents, specialist supported housing and some forms of low-cost home ownership, are not included and do not appear to be exempt from the changes. Not exempting some types of social housing would cause complications and administrative burdens. It might mean that neighbours had their rents increased at different times, and it would really affect delivery.

Housing associations are responsible landlords, and we are regulated by the Regulator of Social Housing, so any concerns about unscrupulous rent increases do not apply to us. We are asking that all types of social housing be exempted from the proposed approach to rent increases, whether or not they are included in the rent standard.

[Jacob Young]

Q We spoke to the housing ombudsman earlier. I am interested in your reflections on the social housing ombudsman, the creation of the new private rented sector ombudsman and what lessons can be learned.

Kate Henderson: It is absolutely right that residents in the private rented sector have access to an ombudsman. It is really important that that access is clear and easy to navigate and that there are routes to address where things have gone wrong in the private rented sector.

From a housing association perspective, we want to make sure that there is clarity about the remit of a new ombudsman, because we already have an ombudsman service. However, some housing associations also provide market rent homes. If you were a resident in a market rent home, would you go to the current housing ombudsman or to the new PRS ombudsman? We need real clarity on remits so that there is not confusion either for the landlord or, most importantly, for the tenant.

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[Matthew Pennycook]

Q Thank you for coming to give evidence. Could I ask you about the decent homes standard? In what is, I must say, a very welcome move—we have been very clear about that—the Government have made it clear that they intend to require private rented homes to meet the decent homes standard, and have committed to bringing forward legislation, in their words, “at the earliest opportunity” to see that enacted.

I suppose I would like to probe what you think the consequences are if that legislation takes some years to deliver. How does the delay bear on the other reforms that this Bill enacts? How might we use the Bill to tie into that other legislative process? How does this Bill need to relate, if at all, to that forthcoming legislative decent homes standard for the PRS?

Dr Dawson: Thank you for the question. I have a few thoughts with regard to indications we have had that the decent homes standard might be brought in through the Bill. That is something that the CIEH is very keen to see. At the moment, the decent homes standard provides a fairly simple set of criteria, which are measurable, are fairly easy to understand, and provide the opportunity for both tenants and landlords to have some consistent standards to refer to when considering the condition of the property. Not having that in the private rented sector results in an odd disparity: we have social rented accommodation with the highest standards, and conditions have improved considerably through that standard, and then there is private rented accommodation that does not have that standard.

We find it very difficult for the sector to self-regulate and for landlords to organise their own repairs and maintenance schedules, when they very often have to wait for a local authority inspector to visit their property to carry out an inspection under something like the housing health and safety rating system schemes. It is something we can also get some benefit from through the Housing Act 2004 licensing, which allows us to set some of these conditions, and allows us to tailor them by area. However, bringing in a national standard across the sector would be very advantageous and provide a very clear requirement, although the CIEH would like to see some more clarity and would like to be involved in the consultation on the proposed changes to the decent homes standard.

The standard could be implemented in the sector at a later date, after being included in the Bill in order to get it enacted. That would give us a two-step process, and then we could bring the standard in when the amendments had been made and we had the updated standard to work from.

[Jacob Young]

Q It would be interesting to know your thoughts on the portal, and on how we can make the most use of it to support councils in taking enforcement measures.

Dr Dawson: The CIEH is very happy to see the portal introduced. I am based near Wales, and I sit on the advisory panel for Rent Smart Wales on behalf of the CIEH. We have seen the portal brought in, and it has been very effective. It provides a lot of data on where rental properties are, and who their landlords are. Local authorities have quite a hill to climb in trying to find that out independently. It will be a very useful source of information. It is also a good source to look at when collecting certificates on properties.

However, we find that the portal has limited impact with regard to the condition and contents of properties, and management practices. It is an information-gathering tool. It has the potential to be a central information portal that landlords and tenants can refer to—a sort of single source of truth. On very small landlords registering with landlord bodies, 85% of landlords own one to four properties, and we are finding what an author referred to as a cult of amateurism. These landlords have differing levels of expertise, and of knowledge of a complex legislative environment. The portal can be a central reservoir of information for them, with quite a bit of scrutiny behind it.

As I say, we welcome the portal when it comes to providing data on where the properties are and who the landlords are, though the more unscrupulous operators will still try to avoid the register so as to evade their duties. I would not go so far as to say that it will make a significant impact on the condition and contents of properties, or the management practices of landlords in the sector.

[Ms Buck]

Q Can I go back to the decent homes issue? The repair and maintenance of properties is central to the issue of the security of tenants who are seeking to enforce their rights, and who sometimes have landlords act against them. How do you see the decent homes standard being enforced? How do you see the decent homes standard interacting with other overlapping measures and standards in law, and the tools available to environmental health officers?

May I also ask a question about enforcement, which is central to this issue? As we know, the enforcement record is very patchy in local government. In your view, why is that?

Dr Dawson: With regard to the use of the decent homes standard in the sector, I have found through my personal research on the sector that there is a lot of variation in the licensing conditions and standards set for private landlords in different sub-markets up and down the country. It is only right that local authorities tailor their approach to suit their local market, but there is great need for more consistency between the licensing conditions that they set and what they require in their area.

If we were to bring in the decent homes standard across the sector, licensing standards could be revised to accommodate that new duty and any updates made to the decent homes standard. That would provide a fairly common set of grounds for properties nationally. Then, local authorities need only make small changes to what they require of properties in their area to fit local peculiarities of housing; for example, northern back-to-back houses are something to burden yourself with only if you need to be aware of the issues that they present. You get steel-framed houses in some areas and concrete houses in others. Local authorities need to be able to focus their approach and the standards that they require to fit what they have going on in their area.

We still have the opportunity to use the housing health and safety rating system under the decent homes standard. The updates to the HHSRS will come through fairly shortly; we will welcome their being brought into practice. Use of the HHSRS would remain a common requirement during the inspection of properties, to satisfy the requirement on properties not to have serious hazards.

A whole range of factors influence levels of enforcement in local authorities. At the moment, we have about 2.2 qualified environmental health officers for every 10,000 private rented sector dwellings, so that is already a pretty low rate. Where we have larger authorities and significant political backing, we see more environmental health officers, with better recruitment, better political backing and more funding for those officers, which is key, so you start to see a collection of experience building up and the legal backing behind it. For example, Newham has something like 100 environmental health officers or enforcement staff in its departments, and they can move their way through more than 200 prosecutions in a year. In contrast, a rural authority may have one or two environmental health officers, who must share their duties across all the regulatory functions of environmental health, including food safety, health and safety, environmental protection and public health.

One of the profession’s big problems is ensuring consistency in funding. When funding is renewed annually and you are looking at changes each year, it is very difficult to do succession planning. We have seen a gradual reduction in the number of people coming through university environmental health programmes in order to support the profession and provide a reservoir of expertise for the inspectorate. We are also seeing more of them going off to private sector employers, rather than the public sector.

A range of issues are affecting the sector, and the sustainable and predicable funding such as we get with Housing Act 2004 licensing has been a real lifeline for the sector. Where we have big schemes going, it has managed to keep the nucleus of staff that is required for the expertise and the momentum to move large-scale enforcement forward. My apologies—that was quite a long answer.

[Jacob Young]

Q You touched on your experience in Wales. We are aware that there are similar, but not necessarily identical, reforms in Wales. What lessons can we learn from the reforms implemented there?

Dr Dawson: When Wales first implemented the scheme, about 196 penalty notices were given out in the first couple of years and there were about 13 prosecutions. The main reason, from the Welsh Government’s own analysis, is that they did not set up clear systems and processes for liaison with local authorities ahead of the formation of Rent Smart Wales.

There is a process whereby local authorities are expected to carry out enforcement functions and can then bill Rent Smart Wales, through an agreement—a memorandum of operation—that they have all signed up to. However, because they are trying to account for small amounts in hours and tasks, it is very difficult for local authorities to predict the workload and allocate officer time against it. That has become somewhat of a Cinderella to local authorities’ other duties.

One of the higher impact areas is that, although Rent Smart Wales provides licensing and can therefore enforce conditions, it also has a separate registration function, which is purely information gathering and gives it the ability to send out mailshots to landlords and letting agents about changes to the law and training courses that are available. However, landlords have the opportunity to exempt themselves from those communications, and a very large proportion did so at the point at which they registered. Therefore, they receive no communications and no updates, so they are none the wiser, despite the benefit of having registered and made themselves available to get that information. That was a sad loss, and there is not much you can do about it now.

[Lloyd Russell-Moyle]

Q Can I ask about the proposed property portal? Of course, some of the enforcement must be through local authorities, as you have just been talking about, but earlier we heard about the idea that, by using the property portal, tenants themselves could seek enforcement. The proposal was that, if a landlord has not met certain standards required for registration on the property portal, there would be rent repayment orders, so that the person who has been harmed is the person who benefits. What is your view, first, on the use of a property portal as a repository of all the information and, secondly, on the ability for tenants to take action rather than having to wait for the local authority?

Dr Dawson: I think we could probably do with the portal as an information repository. That is very welcome. Research shows that a lot of landlords tend to deal with the need for information on a reactive basis, when a situation presents itself. As most of them are not members of recognised landlord bodies, they are using things such as internet portals, chatrooms and blogs to get information on what is required of them. Through local authority licensing, local authorities are getting much better penetration and being brought closer to landlords, and that allows them to provide advice, but landlords in general will tend to use online resources to get information. We would like them to use a single portal that we have quality control over.

The same goes for tenants. At the moment, one of the main reasons for tenants’ not complaining is ignorance of their rights; I am sure that Generation Rent will have raised that in its submissions. If we can point to a single, consistent source of information, that will help the sector to regulate itself. Given that so many landlords are small scale—85% of properties in the sector are owned by landlords with portfolios of one to four properties —providing the opportunity for more self-regulation in the sector would be a big help. Local authorities have limited budgets, and because the regulations are so complex and there is such a range of operators—there is a sort of sliding scale from the good to the poor—a more interventionist approach is required. Using rent repayment orders incentivises tenants to keep an eye on landlords.

Things like the three-month period in which you are unable to re-let a property after you have used grounds 1 and 1A will be exceptionally difficult for a local authority to follow up on. We just do not have the resources to react in that sort of time and proactively go out and visit these properties. Six months to a year would be much more sensible.

On incentivising tenants to take action separately from the local authority, the only thing we would say is that we should be able to give them advice. Under the original rent repayment order clauses, we were prevented from giving advice to tenants on cases. If we are taking action, they will often come to the local authority and ask for information. We have not looked at that as an option. We would certainly be open-minded to it, and we would support anything that helps the sector to regulate itself.

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[Matthew Pennycook]

Q Thank you both, and good afternoon. Given your extensive expertise in this area, could I ask a general question about whether the Bill strikes the right balance between the interests of landlords and the interests of tenants? I would like your thoughts specifically on the grounds for possession, linking the abolition of section 21 to “court improvements” unspecified, and other things that might, in your opinion, be missing from the Bill.

Dr Rugg: That is a very big question. I do have concerns about the Bill as it currently stands. We have become quite focused on the abolition of section 21, and I can understand why, but the abolition of section 21 does not deal with the reasons why a landlord might serve a section 21 notice. My feeling is that, if the Bill goes through as it stands, it will give tenants the impression that they have greater security than they in fact have.

One of the biggest concerns with the Bill as it stands relates to possession on the ground of the landlord selling the property. The fact that the landlord is selling is one of the biggest reasons tenants are asked to leave, and a lot of landlords are exiting the market. The Bill does not prevent that, so that will continue. We have to think about how we neutralise the market. At the moment, the market is weaponised for both landlords and tenants in ways that are very unhelpful.

We have to think about how to calm everybody down and start thinking about what the problems are in the market. One of the biggest issues in the market at the moment is the lack of supply. That is quite problematic for tenants, and it is one of the reasons there is a lot of energy around section 21. Abolishing section 21 is not going to deal with supply issues. From the evidence we have at the moment, it is very likely to make supply issues worse.

Professor Gibb: My perspective on this stems to a large extent from the experience we had in Scotland after the introduction of some aspects of the Bill and some of the kinds of measures that you are now proposing. I would echo what Julie says, in that we made these changes, which brought some confidence to tenants—that is what some research tells us—but some fundamental issues remained unchanged.

Despite investing in tribunals—in justice, as it were—there is still a strong sense of asymmetry in access to justice, which is to the detriment of tenants. People supported the changes, which are very similar in terms of the grounds for possession and so on, but none the less we find ourselves with a similar housing rental market in Scotland, which exhibits a great deal of shortage and very high and accelerating rents.

The counterfactual is what it would have been like without the changes. It probably would have been worse, but the changes have not stopped those kinds of things happening. In a sense, they probably are not supposed to do that. It is not enough to do these necessary things to make the rental market work more satisfactorily.

[Jacob Young]

Q Thank you both. First, could you clarify your initial points? What effect do you think the reforms we are proposing would have on supply in the private rented sector? On a different tangent, what are your views on how we should strengthen councils’ enforcement powers to crack down on criminal landlords?

Dr Rugg: On the issue of supply and section 21, counterfactually, a lot of landlords let because of section 21; they do not evict people because of section 21. Section 21 gives them the confidence that, if they run into severe difficulties, they will not have to go through a protracted court process in order to end a tenancy. This is particularly pressing for smaller landlords, who might find themselves paying two or three mortgages at the same time, with tenants that are problematic. You can understand the reasons why risk is hugely important to landlords a lot of the time. Antisocial behaviour is really problematic. If there is a tenant causing lots of problems in the neighbourhood, the landlord wants to get that situation to a close as fast as possible.

Abolishing section 21 would increase landlords’ perception that there is risk in the market. An area that will be problematic is that landlords who come to the sector with property—perhaps they have inherited it or they have started a partnership and there is a spare property—will think very hard about whether to bring that property to the market. I think that is one of the consequences we will see. The market does not look like a very friendly place to landlords at the moment, and that is the big issue we have around supply.

How we help local authorities deal with criminal landlordism is something that I am particularly concerned about at the moment, because it is part of a big project I am working on. Local authorities have very different approaches to dealing with enforcement action in their area. One of the issues is that there is an awful lot of variation in political—i.e. councillor—attachment to the notion that this is something they should be dealing with, so councils invest at different levels in their enforcement activity. That is a democratic issue, and that is something we cannot do anything about, but I agree with the notion that Dr Dawson introduced that we really need some baseline standards that everybody can expect to adhere to.

One thing we have not really mentioned is the use of letting agents. They cover an awful lot of property in the market, but we do not expect them to show responsibility for the quality of the property they are letting. In a sense, I think that is soft policing, if we think that letting agents should have greater responsibility for ensuring that the properties they have responsibility for meet the standards that we set for the sector. In some ways, that would relieve local authorities of some of the burden of inspecting all properties. At the moment, local authorities are obliged to inspect only a certain proportion of properties that sit under licensing regimes. An awful lot of the sector sits outside that and is covered by letting agents. I think we are missing an opportunity to think about how we skill up different parts of the market to improve property quality.

Professor Gibb: I think one of the reasons I am here is that yesterday my colleagues and I published an evidence review for the Department for Levelling Up on the question, “Is there evidence that increasing non-price regulation has led to disinvestment in the private rented sector?” That is clearly a very important question for the kinds of policies being proposed here. In producing the review—it is an international evidence review over the last 20-odd years—we found that it is very hard to answer that question, because there is very little research that directly speaks to it, but you can infer from some of the peer-reviewed literature, and there is actually very little evidence that that is the case.

In other words, we believe that there is probably a constellation of factors that drive disinvestment in the sector, and it is very hard to identify whether increasing regulation, per se, is behind that. The fact of the matter is that in England, there was increasing regulation in the last 20 years, while the sector was growing. There is also evidence internationally that where regulation has increased in the short-term lets market, there might have been a short period of disinvestment, but there has not been disinvestment in the longer term. In the longer term, investment tends to have stabilised and continued to grow.

So we have been quite struck that there is very little evidence to that effect. That is not to say that there is not disinvestment going on, but it is a much more complicated thing. Another problem is that often we have several regulations being introduced at the same time, and it is quite hard to unpick the causal forces of individual things. The bottom line is that we found it quite hard to identify that increased regulation was causing disinvestment or was correlated with it.

[Ms Buck]

Q Julie, your report from a few years ago was helpful in encouraging people to think about the private rented sector not as a homogeneous whole, but as having different markets within it. Given what you said, and with the Government—rightly, in my view—going ahead with abolishing section 21, I wonder what you think the impact will be on the different markets. What are the warnings there that you have just given us, in particular on the most vulnerable, at the lower end of the market? What safeguards could be introduced to ensure an adequate supply of decent accommodation for people entering the different layers of the market?

Dr Rugg: I am better able to speak about the lower end of the market, because that is the area that I specialise in. We had some comments earlier about build to rent, and there are some concerns about the build-to-rent sector, but I will not go into those here.

Thinking about the lower end of the market, the proposed regulation seeks an end to “No DSS”, as a catch-all. I do not think that that will necessarily work particularly well. Landlords seek not to let to people in receipt of benefits for two reasons: first, because they might have some prejudiced view about the people who tend to be in receipt of benefits, and that is something that is certainly not right; and the other set of reasons sits around frustration with the benefits administration and the level of benefits being paid.

I have researched landlords and housing benefit for many years—too many to mention. In the past, landlords who routinely let in the housing benefit market enjoyed quite good relations with their local authority and they worked together to deal with problems that their tenants might encounter in the benefits market. The introduction of universal credit has completely taken that link away. A lot of landlords are feeling quite exposed now: they have tenants with quite high needs having problems with their benefits, and they simply cannot do anything about it. That is a problem that we need to think about.

One of the earlier speakers referred to the rent control that sits in the local housing allowance system. That is hugely problematic. It means that tenants who receive local housing allowance simply cannot shop around the market, because the rent levels are far too low for them to act as effective consumers. Essentially, they are having to shop where they can, and some landlords are definitely exploiting that situation, letting very poor-quality property on the understanding that the tenants do not have very much choice.

Professor Gibb: I do not have much to add, except to say that I completely agree on the local housing allowance. We have just been doing some research in Scotland that suggests that the levels are far too low to be effective for the great majority of people. It is really welcome to think about the market rental sector as a series of segmented markets. We should therefore not expect regulation that covers the whole area to have equivalent effects in different parts of that area.

The only other thing I would say is that we also need to think as much as we can about housing as a system, recognising the importance of social and affordable housing alongside the bottom end of the rental market, and thinking about how those things can connect together and about the value that increasing investment in social and affordable housing would bring.

--- Later in debate ---

[Matthew Pennycook]

Q Thank you both for coming to give evidence. As you know, the Government have now explicitly tied the enactment of chapter 1 of part 1 of this Bill to the court reforms, and the concern is that the nature of those reforms is unspecified. To what extent do you think the court system, as it applies to matters in this Bill, needs improving? I ask that because the county court system is working relatively well vis-à-vis other parts of the criminal justice system; the guidelines are being met and the then Minister extolled the significant improvements that have been made in recent years.

To the extent that the system still needs to be improved, what is your understanding of what the metrics are? My reading of the Government’s response to the Select Committee, what is in the White Paper and what was in the King’s Speech briefing notes is that there is a whole set of different metrics—end-to-end digitalisation, new digital processes, bailiffs and so on. How are we to know, because the concern is obviously that the abolition of section 21 could be years away, if we have court improvements that are undefined or are large in scope?

Fiona Rutherford: That is one of the concerns that we have. Looking at the history of the reform project, while there have clearly been some successes, there have also been quite a few delays. And we are also concerned given the implications for the tenants in particular in relation to section 21, and given that a proper argument has not been made as to why that dependency between the two exists.

I am just thinking of the court performance, which you have just raised. Civil court performance, even during the pandemic, was better than that of most of the other jurisdictions and even now section 21 is taking roughly 28 weeks from notice to point of repossession, versus the estimation that the Government have made that section 8—the new approach in the new Bill—would take possibly the same time, maybe even a week less.

We would say, first, that a proper rationale has not been put forward as to why that dependency exists and why section 21 cannot proceed. Secondly, the implications for the tenants themselves are so considerable that it is not at all clear to us why that cannot proceed as fast as possible.

Professor Hodges: I tend to look at things in terms of quite long stages of evolution. Going back a hundred years, we had courts that administered law. One realises, and I speak as a professor of law, that law is not the answer to everything; in fact, in some situations it is not the answer to very much. A lot of colleagues would shoot me for saying that, but I profoundly believe it.

What we have discovered is that human behaviour, and therefore psychology and other forms of dispute resolution and supporting people to work together and restore relationships, is important. The answer to that is usually not law and the process is usually not an adversarial process involving courts or judges, however sympathetic they are.

We then started talking about a technique of mediation and that went into an institution of alternative dispute resolutions, or ADR, and the courts are sort of playing with trying to put these things together at the moment. Actually, that has been leapfrogged by things like ombudsmen, in the private sector as opposed to the public sector—parliamentary or local government ombudsmen. In the private sector, virtually every regulated sector now has an ombudsman—financial services, energy, communications, motor vehicles, lawyers, blah blah blah. It is quite a long list.

There are various reasons why that is true. The first is that the ombudsmen usually deal with codes—codes of behaviour—and not just legal rights. They can and do decide legal issues, but it is usually codes. They are looking at the underlying behaviour of the bank or the rail company or whatever it is, and therefore you need a different process as well. So it is not adversarial and it is usually free to the consumer, because the business is made to pay or pays for the infrastructure of the ombudsman.

However, there is a very considerable advantage of an ombudsman over a redress scheme, and many of the redress schemes are still somewhat old-fashioned because they are basically arbitration and basically adversarial, and therefore the larger party will bowl up with a whole load of expensive lawyers and you just maintain cost—an adversarialism of not bringing people together. And there is an imbalance of power in that situation.

That does not happen with an ombudsman, because it is a question of “Let’s talk to each other.” The mediation technique is automatically in the process—you encourage communication. If it is not going to work, the ombudsman makes a decision.

Another big function of why the ombudsman is really useful is that they collect data. In all the sectors I can think of, and critically in financial services, energy and so on, ombudsmen are the data controller for the sector because they can tell the banks or the regulator what is going on and what consumers are worried about. That is a feedback system within which people can see in real time exactly what is going on and can therefore respond to it. You sometimes then need responses. On the legal side, the responses may be enforcement of law by a court, or by a regulator if you have one—we do not have one in private rented yet, but we are, perhaps, close—and on the other side, you can have decisions by an ombudsman that are then put in place.

It was very interesting listening to Dr Rugg, who knows much more about the sector than I do. She spoke about support for landlords. Every regulatory system I know needs support for all the actors—tenants, landlords, agents, whatever. Ombudsmen can help with that, but I think there is a gap in local boots-on-the-ground support. Enforcers, like local authorities, or a national regulator if there is one, are sometimes able to support and help, but we have a missing piece.

Summing up, therefore, my view is that this Bill is a very important step forward in modernising towards a useful, effective future system. It is taking an ombudsman as being a central institution, as well as the portal where you get data—admittedly, it is a regulatory portal, rather than a disputes portal, but we may evolve; it is fairly easy to evolve once you have it. These are absolutely critical elements of what a really good future system would be.

I would go further, with just a couple of sentences. One point is that one needs to think about boots on the ground, with people supporting people. An ombudsman is national, so one has to fill that gap. Actually, I think tribunal judges, ombudsmen, local authorities and maybe others—I have had discussions with people about this—could fill that gap. It is critical for everyone. The other part is that one should ensure that everyone knows where to go—“Where do I go to get support? Have we got too many people?” On the dispute resolution side, do you go to court, a tribunal or an ADR scheme? How many ombudsmen are there? We already have three in the property and housing sector. Proliferation is never a good idea, and there are other sectors that show that. The objective is to pull things together. The inevitable logic of this means that you squeeze together the courts, the tribunal and the ombudsmen.

At their request, I chair an ad hoc committee involving the president of the tribunal, the various ombudsmen and the property redress scheme, who, in the past year, have worked on working together on service charges. It has been very effective. I am not sure it has actually been announced yet, as such, but it is not secret. They are working on how to work together. From the point of view of the tenant, certainly, but also the landlord, you want a simple pathway: where do you go? The data reason for that is that if you have a pathway where you have one database, you are going to maximise it; the data is all over the place at the moment, and we do not collect it.

I see this as a direction of travel. The answer to your question on when we will be ready to institute it is: do it now. I would be bold and move the county courts into the tribunal. We already know that the tribunal and the ombudsman can work together. You just squeeze people together one way or another. Then, you will have a fantastically good system, which is the basis of a very self-regulating regulatory space.

[Jacob Young]

Q Thank you, Professor Hodges, for your in-depth explanation of the benefits of the ombudsman. I wonder, Fiona, whether you have reflections on the ombudsman, particularly on some of the things that Christopher has just mentioned about how we get people to engage in the process and to engage in mediation and settling early, rather than getting lost in the court system.

Fiona Rutherford: Thank you for the question. I think I am going to quote Dr Rugg again—I am afraid I only joined recently—but I thought the point on supporting the tenancy was really good: it is about neither the landlord nor the tenant, but the relationship. That is key to ensuring that, whatever solutions are put in place, you are looking at that as being your key outcome, as opposed to trying to take sides, as we have seen all too often.

The other thing that we have seen—Professor Hodges has strongly alluded to it—is the disaggregation of the amount of services that exist. To some extent that is great, because it means that there are potentially lots of places to go. However, the reality is that most landlords and tenants do not know that those services exist or how to access them. Whether or not that is through another ombudsman—I have some concerns about creating more and more ombudsman, and whether there is a way to streamline the available services—I think the most important thing is that those services are signposted to individuals, which means landlords and tenants, and also that the services are provided.

JUSTICE alluded to that in the report we published in 2020, where we talk about our long-term vision of adopting a multidisciplinary approach to avoid escalation and address the common underlying features behind tenants going into arrears, such as debt, family issues or employment issues. If there is a way to keep the longer term in mind, while not delaying on things like section 21, but also thinking carefully about addressing the disaggregation of services and including signposting and information, then ultimately, as far as I am concerned, all those things will be ingredients to success.

Professor Hodges: I have a quick comment. Your question was, “How do we get people to engage in mediation?” It is automatic in the pathway. It is not in courts; it is in ombudsman, and to some extent it is now in tribunals. The Ministry of Justice has just introduced a mediation stage for low-value cases, but it is not necessarily automatically in the pathway.

All the consumer ombudsmen have been using this for up to 20 years, automatically. You put in your complaint and the ombudsman then says, “Okay.” It is investigative and collaborative, rather than adversarial. You do not need lawyers; they do not do anything. You just say, “Tell me about it,” because you have a central expert. It is not that you have two lawyers and a judge—who are not there. Rather, you have one ombudsman in the middle, so it is efficient and quick, and they are saying, “Tell me about it.” So you pull all the evidence in, and then you say, “Okay, what do you say? And you?”

That is automatically mediation, and most cases settle at that stage, because they talk to each other. If it is not going to work, you know fairly quickly, in which case you just get more evidence and then make a decision, unless they agree. So it is in the process. The courts are moving toward that but, because of the cost of public provision, they cannot do it as well as the ombudsmen.

[Matthew Pennycook]

Q Your comments there just provoked a thought. It might be too early to tell, but are there any lessons about signposting from the Social Housing (Regulation) Act 2023? We had the issue with that legislation, which we touched on earlier with Richard Blakeway, the ombudsman, about what the regulator can now do, which is to look at systemic things but also dip into cases. You have the ombudsman taking cases but has a view on the systemic side, so there is a potential conflict of interest. I think the Government are trying to get around that by saying to tenants, “Here’s where you go for each particular type of problem,” or “This is when you might go to the courts.” Are there any lessons from that, or anywhere else, where signposting has worked well, so that we can try, on the basis of this Bill, to send tenants to the right place in the first instance?

Professor Hodges: The signposting is to have a single ombudsman.

--- Later in debate ---

[Jacob Young]

Q Thank you, James; it is great credit to you for sticking through a lot of this. I thank the other witnesses who stayed and listened to some of the other responses. Obviously, a lot of these changes aim to professionalise the sector. I am keen to understand from your perspective what you see as the opportunities presented by the portal and how they can support landlords to better understand their responsibilities.

James Prestwich: Again, as other witnesses have said, there is an awful lot to like about the landlord portal. We have talked quite a lot about the benefits that the portal will have for tenants, but it is right that there are significant advantages for landlords as well. This point might not have been made yet, but the overwhelming majority of landlords, regardless of the number of homes they own, are thoroughly decent people doing a decent job. We know there are examples of poor quality and poor practice, as there are in all professions, but any tool that enables landlords to get a better understanding of the responsibilities expected of them is to be welcomed. The point about how we get the portal to work both ways is really important. There is something about the sort of information that local authorities will be able to access from the portal, although they do not at the moment. That should enable local authorities, providing they have got the capacity and resources, to be able to take a harder line when people fall below the standards that we all want to expect from landlords.

[Lloyd Russell-Moyle]

Q You said that the two-month period seemed quite short, and four months might be preferable. We heard earlier about the cost of moving, as well as the difficulty. Where there are no-fault grounds, is there an argument that there should be some payment to the tenant? Alternatively, as Generation Rent suggested, once the no-fault eviction has been ordered, should no rent effectively be paid for those two months so that a tenant can leave at any time or can use that time to save up?

James Prestwich: There is a lot that Ben Twomey said that you could agree with. I think the challenge here is about how we try to find that balance. We know that a lot of people in the private rented sector are accidental landlords. Previously, I was an accidental landlord and an accidental tenant, and neither of those things was particularly pleasant, so I have a little experience of that. There is a real challenge around all of that that we have not quite bottomed out yet.

Renters (Reform) Bill (Third sitting)

Jacob Young Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to our witness. You mentioned wanting to get a property back in case there is a problem with the tenancy. Do you welcome the changes that we are making to abolish fixed-term tenancies?

You further mentioned the CLA’s opinion on section 21. In terms of reforming the court system, what changes would you want to see before the CLA would be happy to see the abolition of section 21?

Judicaelle Hammond: If you do not mind, I will take your last question first. I think there is a need to reduce the time between making a court application and getting a property back. It can be a very lengthy process, particularly if you have to resort to bailiffs. There should be a success trigger on the face of the Bill, if at all possible, so that it is measurable. If you are going to abolish section 21, it should not be on any arbitrary date; you need to have a number of weeks. At the moment, the Ministry of Justice measures the average time it takes as 28 weeks, which is quite long. We need something much shorter, at which point you could say, “Yes, the court system, as reformed, is working.”

On the reforms themselves, digitisation will no doubt help. The question in our mind—given what analysis by the National Residential Landlords Association suggests as the cause of the delay—is whether that will be enough. There is a tremendous problem with the resourcing of the court system. To go back to my rural brief, we have lost 74 county courts since 2010, which has meant that the rest of the work has had to go elsewhere. It has also meant that landlords, and indeed tenants, in rural areas have to go further to go to a hearing. There is a question about resourcing as well as about making the process and system easier. Of course, there is the question of what happens after the court order has been given, so there is more to it than what is in the Bill at the moment.

[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?

--- Later in debate ---

[Matthew Pennycook]

Q Would you accept that if the private rented sector is overhauled and improved, for example if we drive up standards, there should hopefully be a trend towards tenants not needing to move out after that minimum period, and we should have a system in which people have security and have less reason to stay in a property for only a short time?

Helen Gordon: I think that that is absolutely the intent, and it is the business model. I want to talk about the fact that there is a lot of bad practice. If you go now to Rightmove’s website, or wherever, you will pay significantly more for a short-term tenancy than you would for a six-month or 12-month tenancy. People will abuse that. Searches of Rightmove’s data will give you only a certain amount of data, but we have data showing that in London up to 10% of the people wishing to rent only want to rent for a couple of months. Not having a minimum term greater than a couple of months will lead to a lot of Airbnb and transient renting. That is why, in planning, Westminster City Council and many other councils insist on a minimum term for rental property. The two months approach in the Bill seems to fly in the face of that.

[Jacob Young]

Q Thank you to our witness. You are proposing that tenants should not be allowed to give notice to end the contract for the first six months. What would you say to someone who says that it is unfair for a landlord to be able to end a tenancy early, after less than six months, when a tenant is not able to end it early?

Helen Gordon: Just to clarify, I think a minimum term of six months would work. That could be four months with two months’ notice. There is a balance between the two. Most landlords will work with a tenant if they make that decision. What I am trying to stop is the abuse of sub-letting and the unintended consequences of financing. Obviously, there is all the protection, so if it does not meet the minimum home standard, it is in breach or it was misrepresented to the tenant, they have all of those grounds, in any event, to leave. But if their circumstances change, I think most landlords would work with the tenant on that.

[Jacob Young]

Q On Tuesday, we discussed the antisocial behaviour grounds. Do you have any thoughts on that?

Helen Gordon: Absolutely. We have real live examples that I am happy to share with the Committee. We do differ. A minimum build to rent is usually at least 50 homes. The majority of Grainger’s properties are around 250 in a cluster. If you get antisocial behaviour, that can have a very detrimental effect on the whole of the community—we build communities.

Evidencing antisocial behaviour often requires you to get neighbours to make complaints and witness statements, at times when they have been personally intimidated. I have a very live example where we literally had to empty the six properties adjacent to the property causing a problem, and it took something like 15 months to get the ground for possession through the courts.

So we would really welcome lowering the bar on antisocial behaviour. I would particularly like it to reference sub-letting and party flats. There is quite an industry, which, fortunately, Grainger does protect itself from, where people take a property and then sub-let it as a party flat at weekends, causing disruption to the whole block.

[Lloyd Russell-Moyle]

Q I have two quick questions. First, the Government are proposing a registration scheme for party flats and Airbnbs, and they are consulting on it at the moment. I understand your concerns, but how does the registration scheme fail to address them? Secondly, I am aware that Grainger has talked in the past about how it uses the consumer prices index and wage inflation to increase its rents, particularly for the build-to-rent market. Could you expand on whether it is still Grainger’s view that it is possible to use some sort of maximum capping clause on rent?

Helen Gordon: Can I take your first question first? There is a difference in terms of what we would generally say is a party flat. Grainger forbids these things in its lease, and the prospect of anybody who is already in contravention of the lease—probably not paying rent and making a profit rent out of the party flat—going through a registration scheme is pretty unlikely. I am talking about illegal sub-letting as far as the lease is concerned, and illegal party flats.

--- Later in debate ---

[Matthew Pennycook]

Q Just to be clear, do you agree with Mr Miller that we should introduce the new system and then look to improve the courts, or do you think that it would be fair to instead specify metrics for what we mean by improvement and then put a time period in place for it to happen?

Nimrod Ben-Cnaan: Our opinion is that, as I think Polly Neate said on Tuesday, the Government should hold its nerve and not wait at all. We can do this without that. There will be a surge; there are other ways to address that surge. That is our opinion.

[Jacob Young]

Q Thank you to both our witnesses. This question is specifically for Mr Miller. I am a little confused by your argument, because you seem to be suggesting that we should implement the changes to section 21 before court reform, but you then say that the courts are currently overwhelmed and that there would be more contested cases, therefore overwhelming the courts even further, if we were to abolish section 21 straight away. Could you clarify the points that you are making about that? What could we do to improve the court system today, before we bring in the changes to section 21?

Then, on Nimrod’s point about resolving cases before they even get to court, which I think is really relevant, I would be keen to know how you think the ombudsman could be used in such dispute resolution.

Richard Miller: In response to the issue of digitisation, our view is that digitisation is one part of the picture only, and it is a part of the picture that will take a long time and involve quite a bit of investment. Fundamentally, the issue is that we do not know exactly what functionality will be required of the system until we have implemented the process.

Let us suppose that the digitisation programme did not exist. We would be saying, “As long as the courts have the resources to handle the cases, that is fine.” That is what we are saying should happen here: digitisation should be on the cards—it should be something that we intend to do over the coming years—but the starting point is to make sure that the courts are resourced to handle the cases as they are conducted at the moment. That does mean more judges, more court staff to process applications and more investment in legal aid, but the digitisation is not a necessary prerequisite to get the courts into a state where they can handle this workload.

[Jacob Young]

Q Your point is specifically around digitisation, so it is not necessarily about court reform as a whole. Specifically on digitisation, do you think that we could do section 21 before that?

Richard Miller: That’s right, yes. Digitisation is absolutely necessary. It is disappointing, but we understand the reasons why it has not happened already. It is a major project and we need to have the system that will be in place for the foreseeable future before we start building the digital systems to cope with that system.

Nimrod Ben-Cnaan: On your point about the ombudsman, Minister, there is little to comment on in the Bill. The shape outlined in the Bill is just that: an outline of an idea that has been suggested by various parties. You have heard some of them in previous sessions, and that might be useful in their own terms. Our concern has always been that the ombudsman would be used to displace, specifically, tenants’ access to the courts when they need it, and through that to displace the provision of legal advice that would otherwise be available for them. We would like to ensure that tenants have a good, reliable source of information and advice about their rights, what they can act on, how they can act on it and the support to do so. On the ombudsman, well, let us see that idea get fleshed out in detail.

I was heartened to hear from the Department’s officials that the intention is not to have the ombudsman somehow displace access to courts, for example, with disrepair claims, which would be so important to us. The court still does, and can do very well, the kinds of things that the ombudsman cannot do at all—be that through things such as establishing fact, applying the law, interpreting the law and sometimes being able to issue injunctions when there is, for example, an unlawful eviction. A law centre would normally be able to step in and stop that right there and then, in a way that the ombudsman would not even have the power to do so. Actually, we have a lot going on with the courts at present, and we should resource them and resource the allied measures to make the most of them.

[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.

--- Later in debate ---

[The Chair]

Can I move on to the Minister?

Jacky Peacock: Well, that outlines it; I can give more detail about how it works if you like.

[Jacob Young]

Q Thank you very much for giving up your time. I understand what you have already said, but what are your views on applying the decent homes standard to the private sector? We could pass this Bill tomorrow, and a tenant would not necessarily know how their rights had changed. Do you agree that the simple act of abolishing section 21 is likely to give tenants more confidence when applying for tenancies?

Jacky Peacock: I think it will in a number of cases, yes, but neither section 21 nor the Bill as a whole will make a dramatic difference to the landlord-tenant balance or relationship. I know the most robust, feisty tenants, but the idea of going to court and defending themselves is terrifying. In the vast majority of cases, if a landlord tells a tenant to go, they will go; they are not going to question whether they have a right to remain or what process has been followed—they will go. We still refer to the land “lord”—a direct descendant from a feudal stage—and we have not changed that relationship very much. We need to protect tenants by making sure that, without the tenant’s having to exercise the rights, even if they have them, the property is safe and competently managed.

[Lloyd Russell-Moyle]

Q Most of the grounds at the moment are non-discretionary or mandatory, and a few are discretionary. Is that balance correct, or should tenants be able to make specific hardship claims around financial issues, for example, or delay an eviction based on selling the house? For instance, if the tenant were receiving cancer treatment, they might seek a delay for a few months. Could you tell me about that distinction? Would that create more work or less?

Jacky Peacock: We think that all the grounds should be discretionary. There is no more draconian decision that a civil court could make than to deprive someone of their home. The thought that they will be prevented from looking at all the circumstances before making a decision seems, in principle, unfair. Judges are not soft. If they have discretion, they will still grant possession in the majority of cases where the evidence is there and it is the fairest thing to do. But to deprive them of being able to look at every single circumstance in any of those cases before taking someone’s home away is not justice. It does not deliver justice. I have seen many cases of possession orders being issued against the tenant that have been grossly unfair for all sorts of reasons but, technically, the decision was mandatory.

--- Later in debate ---

[Matthew Pennycook]

Q Do you think that there is a risk of discrimination, with landlords attempting to filter out pet owners so that they do not have to encounter the unreasonable refusal provision?

Jen Berezai: Research that we have done, along with research undertaken by the likes of Battersea Dogs & Cats Home and Cats Protection, seems to indicate that a large number of landlords would be willing to consider pets provided that they are able to protect their own interests. That is why we proposed an amendment to the Tenant Fees Bill to add pet damage insurance to the list of permitted payments. Having said that, the rental market is very hot at the moment. I believe that there are something like 20 to 25 applications per property in London. In the east midlands, I think there are about 11 applications per property, and viewings are usually closed off at about 30. That means that landlords are able to cherry-pick tenants. A lot will take the course of least resistance and choose what they perceive to be the lowest risk.

[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.

Renters (Reform) Bill (Fourth sitting)

Jacob Young Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[Matthew Pennycook]

Q Briefly, to follow up on clause 6, which revolves around challenging the amount or increase of rent, we have concerns that even with the expanded right to challenge, the tribunal system will not provide sufficient protection. Do you have any thoughts on how, leaving aside other options, that process might be tightened? For example, should the tribunal’s ability to award rents higher than what the landlord specifies be taken out of the Bill? Should there be other protections that allow renters to leave if they are served with that higher notice? Should they have another section 13 notice? I am keen to hear your views on how we might tighten clause 6.

Simon Mullings: A simple amendment to do exactly what you are saying, which is so that the tribunal does not set a higher rent than the landlord is asking for, would be extremely welcome. The reason for that is that if somebody comes to me asking whether they should challenge the rent that has been set by their landlord, I am bound to advise them that, unlikely as it is, the tribunal could set a higher rent. That has a real chilling effect on somebody’s willingness to then challenge a rent. It has been in section 14 of the Housing Act 1988 since it came into force in 1989, but this is a real opportunity to cure what seems to be a rather bizarre anomaly. I am not really sure why it was there in the first place, but it has this chilling effect. Also, section 13 challenges will become much more important when the Bill passes.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to our panel of witnesses. We have spoken a few times about ground 8A. What would you say to someone who said that it is unfair for landlords to suffer multiple breaches of rent arrears? And on a completely separate thing from ground 8A, we are introducing a new ombudsman to the private rented sector. How do you think that ombudsman can work? Would you say that it can help to reduce the pressure on the court system?

Liz Davies: I will start with the point about multiple breaches of rent arrears. I think that the answer to that is to trust the wisdom of the courts. The courts have the mandatory ground at the moment under ground 8—again, the concern is gaming and you have heard Simon’s answer on that—and they have discretionary grounds for possession under grounds 10 and 11. A well-advised landlord who wants to ensure that they can get a possession order from the type of tenant you have just described will ensure that they plead all the rent arrears grounds available to them, including ground 8A, if you put that through.

When you get to the court hearing, courts are perfectly capable of identifying somebody who has got into arrears in the past but has made them up or is in a position to pay current rent and to pay off the arrears within a reasonable period. Courts deal with people in financial hardship day in, day out; they are very good at scrutinising budgets and knowing whether or not an offer to pay is realistic. They are equally good at looking at a rent arrears history, no doubt prodded by the landlord, and saying, “Hang on a minute. You’ve just told us when your payslips were and you were not paying rent at that time. You really have been abusing the system.” And they will make an outright possession order.

Case law on suspended possession orders on the basis of rent arrears requires that a suspended possession order, as an alternative to an outright order, can be made only where the court is satisfied, first, that the current rent will be met in the future, and secondly, that if there are arrears at the date of hearing, those arrears will be paid off over a reasonable period. There is some case law, depending on a landlord’s circumstances, about what a reasonable period is. Courts are very sympathetic to the point that private landlords in particular need that money paid back to them, so they are not going to approve an unrealistic repayment offer. I think that all the appropriate safeguards are there in the courts now. Of course, they are not currently used by private landlords because of section 21, which means that they do not need to. I think that those safeguards are there against the scenario that you have just suggested.

On the ombudsman, I will leave Simon and Giles to develop that point. All I would say is that an ombudsman is a very good thing. Access to justice through the courts is also a good thing. It would be wrong if some of the matters that courts deal with on behalf of tenants are then solely dealt with by the ombudsman. You have to have two opportunities.

Giles Peaker: Briefly on the ombudsman, in principle it is a very good thing, but it generally tends to depend on the ombudsman. It really is a question of somebody actually being able and willing to take a serious and proactive approach. I think that there has been quite a market change in the social housing ombudsman over the last five or six years, and performances have really turned around. An ombudsman is not necessarily an answer in and of itself, but it can be a very good thing and, in the right hands, it can be extremely useful.

Simon Mullings: We heard Mr Blakeway’s land grab earlier in the week—he fancies a crack at it. As Giles said, Mr Blakeway has done extremely well in the social housing sector, and, as Liz said, the ombudsman will do well in the jobs that it can do. It is not fair for landlords to face that situation, but it is also not fair for landlords to face a ground for possession that, whether they use it or not, will incentivise tenants to stop paying rent. I really believe that that is what 8A will do in certain circumstances.

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

Q Currently, the tribunal on rents is to make a determination of whether the rent could be reasonably expected to be made in the open market, and it therefore looks at new rents and not necessarily existing rents and other factors. There are some things that are disregarded and some things that the courts must have regard for. Is that enough, or should the courts have a stronger regard for other factors, in terms of a reasonable rent?

Liz Davies: Entering into a new tenancy at market rent is one thing, but there is a real worry about rent increases to market rent. Although it initially plausible sounds—why should rent not go up to the same level as elsewhere, if it was a new tenancy?—the problem is that you may then end up with an unaffordable rent for the tenant, who had entered into the tenancy on the slightly slower rent, and they then leave voluntarily, but as a result of economic pressure; and when I say voluntarily, I do not mean entirely voluntarily, but it is not due to a notice served or a court order. The Renters’ Reform Coalition is certainly suggesting that the tribunal’s power should be limited to inflation or local median wages to increase rents, along, of course, with the prohibition on increasing them more than the landlord has proposed. I think that must be right. I understand that landlords are conducting a business, but they have let the tenancy initially at rent x; it is not that unfair for both landlord and tenant to have certainty that rent x will increase only by inflation or median wages, rather than out there in the open market.

--- Later in debate ---

[Ms Buck]

Short answers are fine.

Simon Mullings: We are lucky because we have had very recent statistics. The timescales for the various stages of possession and litigation are exactly as they were in 2019, when this Bill started its slow journey to where we are today. There is no doubt that there is a need to improve processes through the courts. What we have at the moment is an extremely good network of county courts, with a very evolved set of civil procedure rules that deal with possession claims very well. What we lack is resources for the county courts for both the physical estate and the personnel in the court to be there to provide the sort of first-class service that you would like to see in possession cases.

HLPA members have been campaigning on court reform and improvements to the court system since around 2015 or 2016, so we are all for it. I echo what Shelter’s director said earlier in the week: it is so important that we move forward with the Bill and the abolition of section 21, which is a key driver of homelessness and of misery, particularly for families with children in schools, who want the stability of knowing that the children can go to the local schools. Section 21 is also a driver of rent increases in various ways—I am telling you things you all know. I do not think there should be any further delay whatsoever.

Giles Peaker: I do not think it is necessary. I am reluctant to think that the process of legislation should be based on whether the courts are functioning as they should be. I agree with Simon: the actual process of possession proceedings is probably one of the quicker processes within the county courts at the moment and is fairly well honed. I would add that the current time from issue to a possession order under the accelerated possession proceedings—an “on the papers” process, without a hearing—is roughly the same as under the section 8 process with an initial hearing. There is no great time lag for the section 8 process as opposed to accelerated possession proceedings. Most possession claims will go no further than first hearing—if there is no defence, that is it. There would not be such a significant impact on the courts’ functioning to make this a concern that should cause further delay.

[Jacob Young]

Q We heard evidence this morning that suggested that the courts are currently overwhelmed and that the abolition of section 21 would increase contested cases. That is not your assessment?

Giles Peaker: I do not see that it would necessarily increase contested cases. It would inevitably involve the process that leads to an initial hearing—those are 10-minute hearings on a list day. I really do not see why it would increase the number of contested hearings, because unless there is a defence, the possession order is highly likely to be made at the first hearing. On at least some of these new grounds, if the ground is made out, there is no defence. So I am unsure of the amount of additional burden.

Liz Davies: I think that is the point. Currently, under section 21, landlords can get possession on the papers. There is no court hearing: the papers go in; the tenant has the right to respond; the district judge considers on the papers whether or not there is a defence. If there is no defence, the possession order is made; if there is a defence, it is put over to a hearing. Once section 21 is abolished, the starting point is that there will be a five or 10-minute hearing, which is usually about eight weeks after issue. That is about the same period of time as for the paperwork procedure I just described. At that hearing, the question for the court is, “Is the case genuinely disputed on grounds that appear to be substantial?” That is set out in the rules.

The great thing about that hearing is that there are housing duty solicitors at court. If a tenant does not have legal advice or advice from a citizens advice bureau beforehand, they turn up and talk to a duty solicitor—I am sitting next to one of them. Duty solicitors give realistic advice. If there is a defence—if the landlord has got it wrong—the duty solicitor will go in front of the court and say, “Actually, there is a defence,” and it gets adjourned for a trial, and that is right and proper. But if there is not a defence, the duty solicitor will say, “I’m sorry, there is absolutely nothing that can be said legally to the court,” and a possession order will be made.

One of the important things about advice, and indeed early advice, is that tenants get realistic advice, so they know whether they have any realistic chance of prolonging the proceedings, and so forth. In many ways, a hearing with a duty solicitor will be beneficial to landlords, and, as Giles says, it takes about the same length of time. There is lots to be said about county courts’ efficiencies and inefficiencies, but I do not think that is the problem.

[Matthew Pennycook]

Q The Government dropped 111 pages of amendments on us on Tuesday evening, which is not particularly good practice—I will put that on the record—so you may not have had a chance to look through them, but if you have, do you have any thoughts about whether they address some of the deficiencies in the Bill that we and others have highlighted? My reading of the decent homes standard amendment is that it does most of what we want it to do; my reading of the “No DSS” amendment is that it does not. I wonder if you could flesh out a couple of the amendments that have been introduced and whether they do what is needed.

Simon Mullings: Two of us were involved in Rakusen v. Jepsen, and we were very happy about amendment 21—thank you very much for that; Christmas has come early. I understand that Shelter is looking very carefully at the “No DSS” amendment. I do not want to try to drive a tank on its lawn; I suspect that it will write in with any concerns it has about that. The principle, though, is extremely welcome. Forgive me, Mr Pennycook, but you mentioned another one.

Liz Davies: The decent homes standard amendment.

Simon Mullings: There was too much to read overnight, I am afraid, so I do not have anything particular to say on that.

Liz Davies: I was very pleased to see it, in principle. I am reserving my position on the wording. I am sorry; I am in the same position you are in, Mr Pennycook, from Tuesday night.

--- Later in debate ---

[Ms Buck]

Q I want to ask your views on the amendment to ground 14 on antisocial behaviour. What safeguards do you think would need to be incorporated to ensure that, for example, that does not lead to vulnerable people—people with mental health problems, or those experiencing domestic violence and so forth—being at risk?

Liz Davies: The change from “likely” to “capable” is a worry. Ground 14 remains discretionary; I made the point about the wisdom of the courts, and one would hope that, where it is a case of domestic abuse, or a case of mental health, and so forth, the courts would have the wisdom to see that that person was not at fault. However, I do not see any need to reduce the threshold. If antisocial behaviour is such that a private landlord needs to get their tenant out because of the effect that that behaviour is having—usually on the neighbours but sometimes on the landlord themselves—then it is going to cross the threshold of “likely to cause”. I do not see the point in lowering it.

[Jacob Young]

Q Thanks for that, Liz. We heard evidence this morning to suggest the contrary, as some build-to-let landlords were having to evict six or seven properties because of one that was causing antisocial behaviour. I guess that the whole thread through this Bill is about creating a system that is fair and balanced. Do you think that it is fair that a landlord would have to put up with a tenant creating antisocial behaviour and would potentially have to move other tenants on because they could not get that tenant out through the court process?

Liz Davies: No, clearly that is not fair, but the current ground 14 allows for a possession order when the tenant or somebody residing in or visiting the tenant’s property

“has been guilty of conduct causing or likely to cause a nuisance or annoyance”

to other people residing, living nearby or next door, visiting, and so on. So, that test is there. There is an antisocial behaviour ground for possession. It is discretionary, but the Bill will continue it as a discretionary ground; it simply lowers the threshold by a small amount from “likely to cause a nuisance” to “capable of causing a nuisance”. I really cannot see the circumstances in which a very difficult tenant who has been causing the sort of antisocial behaviour that you have just talked about will not meet the threshold of “likely to cause” but will meet the threshold of “capable of causing”. It is a very narrow distinction.

The point is that antisocial behaviour grounds are there—they really are—and courts use them. At the moment, they are used only by social landlords because of section 21, but we can all tell you that courts are very heavy on antisocial behaviour, and it is impossible for a tenant to remain in possession unless the court is satisfied that that behaviour has stopped and will continue to stop. Courts do not allow tenants to remain in possession under the current test.

[The Chair]

I thank our three witnesses: Simon Mullings, co-chair of the Housing Law Practitioners Association, Giles Peaker of Anthony Gold solicitors, and Liz Taylor KC of Garden Court chambers. Thank you all very much for giving us the benefit of your wisdom.

Examination of Witness

Ben Leonard gave evidence.

--- Later in debate ---

[Matthew Pennycook]

Q As a tenants’ union, you are in a unique position to give us some insight into the broad question of whether the Bill strikes the right balance between the interests of landlords and tenants. Can we open with that?

Ben Leonard: What my experience working with tenants and addressing their issues has taught me is that there is a massive imbalance of power between landlords and tenants, which leads to tenants being too afraid to speak up about repairs or harassment. The issue of no-fault evictions is central to that imbalance of power. If people know that a landlord can turf them out of their property and potentially make them homeless with just a couple of months’ notice, they will not speak up about things that need to be addressed, such as repairs. I am sure you are all familiar with the terrible condition of a lot of private housing in this country. In the case of harassment, including sexual harassment, we see tenants just grin and bear it because the stress of having to find a new property within two months is too much.

The Bill could be transformative for tenants. It could offer dignity and security to millions of renters who up until now have been denied that. But I am sorry to say that in its current form the Bill fails to address the fundamental problems that renters face. If a landlord can effectively pretend to need to sell or move into their property and turf out the tenants, we will still have no-fault evictions. If landlords can raise rents past what their tenants can afford, in practice we will still have no-fault evictions. If a landlord can send a tenant an eviction notice as little as four months into their tenancy, with just two months to find somewhere new, unfortunately the Bill will fail to give tenants the secure housing that they desperately need.

[Jacob Young]

Q Thank you for your evidence. How do you think the Bill will improve the experience for tenants? We have discussed section 21. Do you think that abolishing section 21 will give tenants more confidence in going for new rental agreements?

Ben Leonard: As long as the loopholes that I have mentioned are ironed out and the Bill is strengthened in that way, it will massively shift that balance of power and give renters the confidence that they need to come forward. We are a tenants’ union, so we use our strength in numbers to put pressure on a landlord to make repairs and things like that, but it should not have to be that way. A tenant should be able to complain about repairs and get them dealt with in a reasonable timeframe. Often they are just too afraid to complain. I am not saying that every single landlord is a demon, but, as things are at the moment, the system allows bad landlords to treat people horrendously, with very little recourse for tenants. If the changes that I have outlined are made in the Bill, it could be really transformative for tenants.

[Jacob Young]

Q That is what the Bill is trying to do. It is trying to prevent bad landlords, but bad tenants as well. One thing we are planning to introduce is a decent homes standard in the private rented sector. Is that something that you would welcome?

Ben Leonard: Absolutely. It needs to be robust, free of loopholes and properly enforced. There are two key ways to do that. The first is properly funding local authorities. It would be no use granting the powers to local authorities to enforce a decent homes standard—we all know the state of local authorities and their finances at the moment—if they do not have the resources or a duty to enforce. It just will not happen, with the best will in the world.

The other thing, which has been discussed already, is incentivising tenants to do it: creating an army of enforcers who are properly incentivised to report landlords who are not up to scratch. The property portal can play a big role here. More transparent information inherently gives renters more power to put pressure on and see when their landlord is lying to the authorities. If a landlord says, “We have met these standards” on the property portal, a tenant can look at it and go, “Well, that’s not true, and I can point to all the problems that exist,” and then there is an incentive for them to pursue it. I speak as someone who has pursued a rent repayment order in the past. I won 80% of my rent back, but it was a long, gruelling and difficult process, with no access to legal aid. The financial incentive was quite strong, but there were times when I felt like giving up. There are many ways to solve that problem, but making the process straightforward for tenants and properly incentivising and supporting them in it, alongside local authority enforcement, are important.

[Lloyd Russell-Moyle]

Q I have a few points, if I may. You mentioned that the property portal needs to be available to tenants, but their access to it is not explicit in the Bill. Is it your view that it should be available to tenants or to the wider public?

Ben Leonard: Ideally, it should be publicly available information. You should not have to move into a property to discover that there are issues with it or that there are issues with the landlord; you should be able to check up a property on the portal before you move in. You should be able to see what it has been rented at in the past and compare that to the rent today. Has the landlord just done a massive rent increase, with no real improvement to the property? Do they have a history of improvement notices from the council? I would like to see that on there as well. In fact, any disciplinary action against the landlord should be available there. Nobody, whether they are a family, an elderly person or a student, should have to move into somewhere to find that they have a rogue landlord and a house that is falling to pieces.

[Lloyd Russell-Moyle]

Q The second part was about whether there should be some sort of recompense for tenants who are moving out, even if it is legitimate that they are moving out, through no fault of their own.

Ben Leonard: Definitely. That could take a lot of forms. It could be a simple payment, like a rent repayment, to help with that transition, or it could be that, from the moment the notice is issued, it is illegitimate to collect rent on that property and no further rent needs to be paid. That would go some way to, first, put off rogue landlords from abusing the power and, secondly, make the circumstances of the tenant’s life more liveable. Moving house is a massive hassle, especially if you have dependants, so if that is being foisted on you by an outside force, there is no reason why that outside force should not support you in some way.

[Jacob Young]

Q To explore that final point you made about not charging rent having issued a notice to vacate, when someone has gone through that process, for a landlord that would mean two months of not getting rent from the property plus three months when the property could not be let again through one of the section 8 grounds. In the event that the landlord was intending to sell the property, but was unable to sell it and had to go back to market to re-let it, they will have gone five months without rent. Do you think that is fair? I appreciate that we would both agree that we want to stop bad landlords, but for a good landlord who wanted to sell their property but was unable to, is that fair, to be in the situation where they have five months’ rent withheld?

Ben Leonard: I think it is fair to place a reasonable barrier to the abuse of those grounds. These things are always a balancing act. Would it be fair for someone to have to continue paying rent while having to uproot their life and sort things out? They are not really getting what they are paying for in those two months, because those two months are spent preparing to leave, moving their children’s schools or saving for a deposit. They need to pay for all those sorts of things.

For the landlord, it comes down to the cost of doing business. Landlords make a hell of a lot of money on those properties, and I think it is reasonable that sometimes there are times when the amount of money they are getting in will dip because of such things. If it is a choice between landlords’ profits coming down for a series of months and tenants potentially being impoverished, I would choose the former.

[Ms Buck]

Q I want to ask you about the decision not to proceed with the proposal in the “A fairer private rented sector” White Paper on limiting the amount of rent that the landlord can ask for in advance. Is that an experience you found with the people you work with? You talked about frequent moves being very inconvenient, as well as extremely expensive.

Ben Leonard: Yes, absolutely. The limit on deposits was a huge step forward, but they are going by the back door, so not much has changed, because people ask for rent in advance. I can speak from my own experience: I had to pay six months’ rent in advance before moving to my current flat. A lot of the people I know and work with do, and often they are borrowing money to do it, because not a lot of people have that kind of money lying around. In a way, it is often discrimination—it is a way of saying, “Well, you might be able to afford the rent, but we don’t like the look of you. Let’s see if you can stump up this much cash up front.” It is totally unjust, basically. If you are earning enough income to pay the rent, the property should be available to you. That is the bottom line; extra barriers should not be put in the way, such as rent up front.

Bidding wars are a big thing as well. Something should be done about landlords pitting tenants against each other to drive up rents. If a landlord wants more rent for a property than it is on the market for, they should have listed it as that in the first place, because again tenants end up chasing properties for months at a time, because everything they think they can afford suddenly goes up £300 or £400 a month by the time they can actually let something. It is an absolute nightmare. Imagine you have been evicted, then you are put in a situation of rent in advance and all that. It just doesn’t work. It is a broken system.

[The Chair]

Very quickly, Minister.

[Jacob Young]

Q I appreciate the evidence that you have given today. Do you have any concerns that some of the measures that you are talking about could potentially reduce the supply of homes? Therefore, the very people you want to protect, whom we all want to protect, tenants, would not be able to rent their homes.

Ben Leonard: Are you talking about landlords exiting the market?

[Jacob Young]

Yes, if the Bill is too punitive.

Ben Leonard: The first point to make is that these reforms are reasonable, and if a landlord is not willing to deal with reasonable reforms, they have no business renting to someone in the first place—it shows that you are not of good enough character to supply someone’s home.

Secondly, the evidence does not show an exodus from the market. The reforms were announced four years ago, and there are more landlords now than there were then. From the evidence that I have seen, it seems that mainly smaller landlords are selling up to bigger landlords, which from the point of view of the tenant can be a step forward. Many tenants have a better experience dealing with corporate landlords than with one-man bands, who do not know the regulations, cut corners and will take advantage of vulnerable people. Generally, you do not get that with corporates. From the point of view of tenants, it is better to deal with larger, more professional organisations.

The other thing is that that provides an opportunity for first-time buyers to get in the property market. We would like to see a situation in which most people in private renting are either in council or social housing, or are homeowners. If landlords were selling up, first, first-time buyers could get on the property market—

[The Chair]

Order. I am sorry. I feel I have to interrupt you, it being three o’clock. As Big Ben strikes, you have to stop speaking. I apologise for that. Mr Leonard, thank you very much for your evidence, which has been useful to the Committee and will be useful in the discussions that lie ahead.

Examination of Witness

Chloe Field gave evidence.

--- Later in debate ---

[The Chair]

I think we have moved on. Let’s crack on with the Minister.

[Jacob Young]

Q Thank you, everyone, for your evidence so far.

Roz, do you think the portal addresses the problems that you see in the shadow rented sector, in so far as it brings it into the light by making people aware of where those landlords are, highlighting their bad practices?

Samantha, I am very interested in the assessments that the foundation has done in Scotland. What big lessons have been learned from them which could inform how we shape this Bill?

Roz Spencer: I think the devil is in the detail. You need a well-designed portal, and there are many seasoned professionals in the licensing and enforcement field who can tell you exactly what needs to be in that portal. Provided that it is well designed, I think it would be enormously helpful—both to hard-stretched enforcement teams and to people like me in the third sector, who are trying to advocate for tenants in the shadow sector who do not understand their rights—in empowering people to access that information to support themselves.

Samantha Stewart: Are you wanting to understand the more general lessons that we have learned from Scotland around the PRS reform?

[Jacob Young]

Q Yes, I think so, but also where this Bill is lacking and how we could strengthen it, based on your evidence from Scotland.

Samantha Stewart: There is lots of evidence. The research commenced in 2019; it is a five-year piece of research. From the perspective of this Bill, it gives us key evidence on how English reform might and will impact vulnerable tenants. That is important, because we know that vulnerable tenants are the most at risk of being harmed by a poorly functioning PRS: they do not have the same consumer power, confidence or voice as their better-off peers. We know that vulnerable tenants have not benefited in the same way as their better-off peers from the reforms in Scotland.

There are two main things we know are happening. The first is about enforcement, as I have already said. Even if the law changes, it has limited effect without proper enforcement. Tenants living in poor housing still struggle to access local authority enforcement, leaving them with no resource at all to address their problems. The second relates to the new mandatory grounds. When the Scotland equivalent of section 21 evictions was removed, some landlords found that they could continue to carry out revenge evictions by abusing the new grounds on sales and on landlords moving in.

I will give you an example. Take Luke, a renter who lived in a property with rats and maggots falling out of his ceiling. The landlord refused to address these issues for months after Luke asked, but was forced to do so by the Scottish tribunal—great. However, shortly afterwards Luke was evicted from his home by his landlords, using the new possession grounds, and soon after he moved out, the property was re-let—not so great. That is just one example of how an unscrupulous landlord can abuse the new grounds if there are not sufficient safeguards.

We know that it is vulnerable tenants who will suffer most, for reasons that I have already mentioned. Based on that evidence, in order for the Bill to benefit vulnerable tenants, it needs amending to provide additional protections for them. First, landlords using grounds 1 and 1A—moving in and selling—should be required to provide adequate and appropriate evidence that they are selling or moving back in. Secondly, landlords who evict tenants using the new grounds should be prohibited from re-letting for a year, not three months. Three months is just not good enough—it is not a meaningful deterrent to landlords—but we believe a year would be. Thirdly, the Bill should be amended to provide a clear legal mechanism for tenants to seek redress, such as through a rent repayment order. Those are the three areas that we feel would really strengthen those mandatory positions.

I will finish by saying again that we really, truly believe that good landlords doing the right thing, who are the majority, would not be affected by changes along these lines, because they truly believe that they are providing homes.

[Jacob Young]

Q Is there anything in the Scotland reforms that you are pleased that we are not replicating?

Samantha Stewart: That is a really good question.

[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.

--- Later in debate ---

[Ms Buck]

Q Can we go back to the issue of illegal evictions? Roz, you said that there is a lack of data in that area, which is absolutely right. Your organisation, probably more than almost any other, has a wealth of anecdotal information about what is happening. What can you tell us about the trends and characteristics? Is there any sense that some people pursue that route because of the problems in the court system? We have had quite a lot of discussion—other witnesses may have a view on this—about the proposed delay because of the problems in the court system, and some witnesses were very clear that there are no justifications for delay. What does your experience tell us about that, and what have you picked up about the reasons for such evictions?

Roz Spencer: Thank you for asking. You heard it here first: the safer renting count, which was first established in 19—sorry, 2021; I am showing my age—established a methodology that looked at five different sources of data that could be collected on an established, reliable basis, and did not involve any significant overlap between the data points, and we have just updated those figures from 2021 to 2022. The trend between those two years is an 18% increase in reported offending under the Protection from Eviction Act 1977—so, those are illegal evictions and cases of extreme harassment likely to give rise to the loss of a home. That 18% uptick is of significant concern. I have no evidence to suggest that the performance in courts has had any bearing on that, and I would be surprised if it had.

There is another figure that is interesting—I think it is buried in the Government’s H-CLIC data. All local authorities report on trends in Protection from Eviction Act offences leading to homelessness. That is a very big, stable and reliable time series for the data. Interestingly, during the pandemic, when there was a ban on section 21 and a subsequent inability to use bailiffs to enforce lawful evictions, there was a substantial drop in lawful evictions between 2020 and 2021. There was no such drop in the number of unlawful evictions. In fact, those numbers held up, sadly, at more or less the same level. As a proportion of evictions leading to homelessness, the figure came close to doubling.

The interesting suggestion buried in that statistic is that it is so important, when you are quite rightly considering replacing section 21 with new grounds for possession, that you avoid the unintended consequences of those changes in access to lawful eviction increasing the number of landlords who feel that they can get away with just doing it anyway.

I have another statistic to offer you. If you look at our count of what we think is a very conservative estimate of the number of unlawful evictions and the Ministry of Justice statistics for the number of convictions in a year, the figures show that in more than 99 out of 100 offences, the person who commits the offence, the landlord who undertakes the unlawful eviction, walks away scot-free, so it is little surprise that people do not regard the enforcement of the law as adequate.

Your clause 58 in the Bill is so important because it corrects one of the major defects in what is a 46-year-old piece of legislation, the Protection from Eviction Act, which does not do what it says on the tin. It has not been preventing evictions because nobody has a duty to enforce it. That is a very long answer to your question, but there is a lot of support for what I am saying in those data.

[Jacob Young]

Q We have spoken a lot about data and the portal in this session. How do you think we can use that data to judge the effectiveness of the reforms? Going back to our discussion about lessons learnt, in 10 years’ time we will need look back on this and are, “Where were the improvements that we could have made differently?” How do you think we can use the data to help to shape that thinking?

Roz Spencer: Our count report is in the House of Commons Library. It argues strongly that the Government need to start counting the data. I would not have thought it would be problematic for the Government to introduce their own mechanism for counting, and we talk about the methodology at some length in the report. I would advocate that you start showing, as Government, not only that the law and enforcement matter, but that you understand that the impact assessment needs to be based on data that you simply do not have at the moment.

Samantha Stewart: I am not saying that we are going to fund this, but we should all think about something similar to what we are doing with funding in Scotland. If you want to really understand how impactful the legislation is, we should start tracking it pretty soon, using the data and everything else at our fingertips.

[The Chair]

As there are no further questions from colleagues, I thank our three witnesses for their evidence: Samantha Stewart, chief executive of Nationwide; Linda Cobb, services manager for DASH; and Roz Spencer, director of Safer Renting.

Examination of Witness

James Munro gave evidence.

--- Later in debate ---

[Matthew Pennycook]

Q I have two quick questions. The National Residential Landlords Association has called for the selective licensing of landlords to be abolished. Do you think it falls away if the portal operates in a particular way, or will elements of selective licensing still need to be in place to augment the portal if the local area in question chooses that? I am thinking of space standards and other things that the portal might not necessarily cater to.

Secondly, is the Bill missing something by not incorporating any regulation of property agents? Are we missing an opportunity to incorporate the recommendations set out by Lord Best’s working group in or alongside this legislation in some form?

James Munro: The first part of the question is a very good one, and I am not sure I am going to be able to give you an answer. I think the answer is probably yes and no, or somewhere in between. It is very difficult. It is one of those things where time will tell. Selective licensing schemes can bring benefits, but they are also a rather blunt tool in some respects, so I think it is a mixed bag. Possibly yes, that could happen.

Again, to be transparent, I sat on the working group with Lord Best where the regulation of property agents was debated. I think regulating property agents would be a good thing. When the public deal with professional people responsible for significant assets or significant issues in their life, they are, generally speaking, licensed or regulated in some way. As things stand, there is quite a mixed bag of regulation that applies to estate and letting agents—collectively, property agents. For example, the regulatory regime applying to estate agents is completely different from the regulatory regime that applies to letting agents, and I think bringing them together would be a good thing. Obviously, it would be expensive and would probably require another public body to be set up. There are issues about who would take on that role, but in theory I think that is a good thing.

[Jacob Young]

Q I am interested in your view on the principle of blanket bans and the measures we are taking in the Bill to stop them.

James Munro: Blanket bans are a good thing on paper, but in practice they can be very difficult to enforce. Obviously, the enforcement is where I am coming from with this. That is what we do with estate and letting agents at the moment, and with landlords in respect of the Tenant Fees Act 2019. We are the leading enforcement authority under the Estate Agents Act 1979 and the Tenant Fees Act. It is very tricky when you start putting blanket bans on things—for example, on saying, “No pets”, “No children”, or “No DSS”—because ultimately it is up to the landlord to decide who he or she wants in the property. It is very difficult to prove that that decision has been taken to directly discriminate against somebody with a pet, with children or in receipt of benefits.

While I am on that subject, I think the legislation would benefit from always including the words “prospective tenant” when dealing with issues around discrimination. Clearly, at the point at which someone is being discriminated against, they are not normally a tenant—they might well be a tenant at some stage, but at that point they would be a prospective tenant. It is important to have consistency throughout the legislation in that respect.

[Lloyd Russell-Moyle]

Q It seems difficult to enforce blanket bans. Is there any way forward in which these bits of information are not disclosed and cannot be asked about in any form, directly or indirectly, until after a tenancy has been verbally agreed?

James Munro: That could be a way forward. It just goes back to the fact that it is very tricky to work out, because discrimination can be written, verbal or non-verbal. It can be incredibly difficult to prove, unless it is recorded in some way, and then it is down to the investigatory powers, the sanctions available and, ultimately, the impact of that discrimination on someone, because it will be considered in line with all the other local authority priorities.

Renters (Reform) Bill (Fifth sitting)

Jacob Young Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[The Chair]

With this it will be convenient to discuss the following:

Government new clause 2—Repayment of rent paid in advance.

Government new clause 6—Liability of tenants under assured tenancies for council tax.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

May I join you, Mr Gray, in thanking members of the Committee for their engagement with the Bill so far?

My view is that the Bill delivers a better deal for renters and for landlords. As hon. Members are aware, however, we must tread lightly. This is a fine balancing act. Go too far one way, and good landlords will find it harder to operate and exit the market; go too far the other way, and the Bill will not give renters the protections we all seek against bad actors in the private rented sector. As we delve into the Bill, I ask all hon. Members to consider the impact of proposed amendments on that delicate balance.

Everyone has the right to a secure and decent home, whether they own it or are among the 11 million people living in the private rented sector; that is the guiding principle of the entire Bill. Clause 1 will remove fixed terms. It provides that tenancies will be periodic in future: under the clause, the tenancy will roll from period to period. Any term in a contract that includes a fixed term will not be enforceable.

The clause also has limits on how long a rental period can be. That is to prevent unscrupulous landlords from emulating fixed terms by introducing longer periods to contracts. Fixed terms lock tenants into contracts, meaning that they may not be able to end their tenancy before the end of the term and move to another property when they need to, for example to take a new job or when a landlord fails to maintain basic standards or repair a property. The changes will also give landlords more flexibility: they may end the tenancy when they need to, under specified grounds that are covered in later clauses, rather than waiting for the end of the fixed term.

Government new clause 2 will require landlords to refund rent in advance where the tenancy has ended earlier than the duration already paid for. That applies regardless of how the tenancy came to an end. It will ensure that rogue landlords do not try to lock tenants in with large up-front payments.

Government new clause 6 will deliver a technical change to council tax rules in the light of the abolition of fixed-term assured tenancies. It will ensure that tenants who hold assured tenancies are liable for council tax until the end of their tenancy agreement. In particular, tenants will remain liable for council tax when they have served notice to end their tenancy but leave the property before the notice period has ended. That will ensure that liability for council tax does not pass back to the landlord until the tenancy has formally ended. I commend the clause to the Committee.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a real pleasure to begin our line-by-line consideration with you in the Chair, Mr Gray. It is a genuine privilege to serve on a Committee with such evident expertise in the subject matter. It is my sincere hope that we can draw constructively on it all in the days ahead to improve this long-overdue but welcome piece of legislation.

As the Opposition argued on Second Reading, the case for fundamentally reforming the private rented sector—including by making all assured tenancies periodic in future, as clause 1 seeks to do—is watertight. As the Minister implied, regardless of whether someone is a homeowner, a leaseholder or a tenant, everyone has a basic right to a decent, safe, secure and affordable home. However, millions of people presently renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal justification, if any. The lack of certainty and security inherent in renting privately today results not only in an ever-present anxiety about the prospect of losing one’s home and often one’s community, but—for those at the lower end of the private rented market, who have little or no purchasing power and who all the evidence suggests are increasingly concentrated geographically—in a willingness to put up with often appalling conditions for fear that a complaint will lead to an instant retaliatory eviction.

This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old. The Minister may have been even younger.

[Jacob Young]

I wasn’t born!

[Matthew Pennycook]

Well, that just makes my point that the sector should have been overhauled a long time ago. The fact that it has changed beyond recognition over recent decades and now houses not just the young and the mobile, but many older people and families with children, for whom having greater security and certainty is essential to a flourishing life, renders urgent the need to transform how it is regulated and to level decisively the playing field between landlords and tenants.

This Bill is a good starting point to that end. We are glad that after a very long wait, it is finally progressing. However, we are determined to see it strengthened in a number of areas so that it truly delivers for tenants. In this Committee and the remaining stages, we will seek to work constructively with the Government to see this legislation enacted, but we also expect Ministers to give serious and thoughtful consideration to the arguments we intend to make about how its defects and deficiencies might be addressed.

Part 1 of the Bill seeks to amend the assured tenancy regime introduced by the Housing Act 1988. In the nearly 35 years since that Act came into force in January 1989, with some limited exceptions, all new private sector tenancies in England and Wales have been either assured or assured shorthold tenancies, with the latter becoming the default PRS tenancy following the implementation of the Housing Act 1996. As the Committee will know, assured tenancies can be either periodic or fixed, but the vast majority of ASTs are fixed.

Clause 1 will insert a new section 4A before section 5 of the 1988 Act, thereby providing, as the Minister made clear, that all future assured tenancies will be periodic and open-ended, and that they can no longer have fixed terms. That change will empower tenants by giving them more flexibility to end tenancies where and when they want or need to, including when landlords are not meeting their responsibilities and obligations or in instances in which the property that they have moved into is not as advertised. We support it.

We take no issue with Government new clause 2. Although we are not convinced that it is strictly necessary, given how the Apportionment Act 1870 applies to rent paid in advance, we believe that it is a worthwhile amendment none the less, to the extent that it makes express provision for that.

We believe that Government new clause 6 is a necessary change to how council tax works, given that the Bill abolishes fixed-term tenancies. However, in the sense that its effect will be to render a tenancy that

“is or was previously an assured tenancy within the meaning of the Housing Act 1988”

a “material interest” for the purposes of this Bill, we would be grateful if the Minister provided some clarification. Could he tell us the effect of the proposed change in circumstances in which a tenant used to have an assured tenancy but, after this part of the Bill comes into force, now does not because of circumstances that are out of their control? Let us say, to take an extreme example, that a tenant died prior to the end of their assured tenancy, and the relevant provisions came into force. Would their estate be forced to pay the council tax liability as a consequence of the new clause?

We understand the Government’s intention with regard to the new clause, which is to manage the transition between the two tenancy regimes when it comes to council tax. However, we are a little concerned that, as drafted, the new clause may be unnecessarily broad and may create some problematic outcomes. The explanatory statement accompanying the new clause suggests that it may have another purpose altogether—namely, to make people liable if they leave a tenancy without giving notice—but that raises the obvious question of how the Valuation Office Agency and the relevant local authority are meant to know that, and how the local authority might ever hope to find the tenant who is liable. Could the Minister tell us whether the Government have discussed the matter at all with either the Valuation Office Agency or the Local Government Association?

Lastly in connection with this new clause, is there not a risk that unscrupulous landlords may game this provision by claiming that there is still a tenant in situ who should settle the council tax liability, rather than the landlord doing so? Our concern is that the provision could be abused along those lines and that local authority revenue would suffer as a result. I would appreciate some reassurance and clarification on those points in the Minister’s response.

With or without the incorporation of Government new clause 2 and new clause 6—after clause 6 and before clause 20 respectively—huge uncertainty now surrounds the implementation of clause 1, and the rest of chapter 1 of part 1, as a result of the Government’s recent decision to tie implementation of the new system directly to court improvements. Whatever the motivation behind that—renters will no doubt have reached their own conclusions—the decision has significant implications for when clause 1 and the other clauses in this chapter become operational. We need answers today, so that those whose lives stand to be affected are clear as to what they are.

Clause 67, “Commencement and application”, gives the Secretary of State the power by regulations to appoint a day when chapter 1 of part 1, including clause 1, comes into force. In other words, the Bill has always given Ministers discretion as to precisely when the new system becomes operational—a matter that we will debate more extensively in a future sitting when we come to clause 67 itself and our amendment 169 to it.

The Government were previously clear that there would be a two-stage transition to the new tenancy system, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, and that a package of wide-ranging court reforms was to accompany the legislation, but at no point prior to the response issued on 20 October this year to the Select Committee on Levelling Up, Housing and Communities did the Government indicate that the new system’s implementation was directly dependent on such reforms. As things stand, because of the Government’s last-minute change of approach, not only do tenants have no idea when the new tenancy system will come into force, but they do not even know what constitutes the requisite progress in respect of court reform that Ministers now deem is necessary before it does.

There are three distinct questions to which the Government have so far failed to provide adequate answers. First, is the county court system for resolving most disputes between landlords and tenants performing so badly that reform is a necessary precondition of bringing this clause and others in this chapter into force?

--- Later in debate ---

[The Chair]

Before I ask the Minister to reply to the debate, may I make it plain that I have been relatively flexible in this first debate? I will not be so flexible and open-minded subsequently.

[Jacob Young]

I am grateful to you, Mr Gray, and to the Committee for their consideration. As you and members of the Committee have identified, we plan to debate further a lot of the things that have been discussed already.

I say to concerned hon. Members that the Government are committed to the abolition of section 21. In fact, I am sure the Committee is committed to the abolition of section 21. I invite any hon. Member who is not to speak now or forever hold their peace. That is exactly what we are debating today. No one could expect that the implementation of a brand-new tenancy system would not require reform. Surely all hon. Members agree that we need to get this reform right.

--- Later in debate ---

[Matthew Pennycook]

Can the Minister tell us clearly why the two-stage transition process set out in clause 67 does not afford the Government enough time to make the necessary improvements?

[Jacob Young]

We will come on to that point when we discuss clause 67. I want to address some of the points that have been raised, particularly the question about bailiffs. HMCTS has already begun making improvements at the bailiff stage, including automated payments for debtors, to reduce the need for doorstep visits in those cases. We are also improving guidance to increase awareness of each party’s rights and responsibilities.

The hon. Member for North Shropshire spoke about the concern raised in evidence about longer fixed-term tenancies. I completely understand the hon. Lady’s position. I understand the genuine concern that she and the people giving evidence have. Our fear, which was rightly identified by the hon. Member for Brighton, Kemptown, is that to include any fixed-term tenancies creates a loophole. We are certain about abolishing section 21, so we do not believe that having a fixed-term tenancy will provide any security to the tenant. It could, in fact, lock a tenant into a property that they would be unable to get out of, even if the property was of poor quality, because the term of their tenancy was fixed. I hope that the hon. Member for North Shropshire can accept that.

I will write to the hon. Member for Brighton, Kemptown other Committee members specifically on the points raised by the Opposition on new clause 6. I am pleased that there is a consensus on clause 1. We all want to see this measure implemented. I commend it to the Committee.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Abolition of assured shorthold tenancies

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to consider Government new clause 18—Abandoned premises under assured shorthold tenancies.

[Jacob Young]

Clause 2 removes the assured shorthold tenancy regime entirely, including section 21 evictions, meaning that in future all tenancies will be assured. Ending these section 21 no-fault evictions will provide tenants with more security and the knowledge that their home is theirs until they choose to leave, or the landlord has a valid reason for possession. It will allow tenants and their families to put down roots, providing them with the stability that we know is a prerequisite for achievement.

Government new clause 18 deals with property abandonment. The Housing and Planning Act 2016 introduced provisions that would allow a landlord of an assured shorthold tenancy to recover possession without a court order if the tenant had abandoned the property, owes more than two months’ rent and the landlord has served three warning notices. Those provisions were never brought into force and we consider they are inconsistent with the intentions of the Bill to provide greater security. Removal of the provisions will help prevent landlords from ending a tenancy without a court order where a property appears to have been empty for a long period. It is possible that, on occasion, a property may appear to have been abandoned, but the tenant is in hospital or caring for relatives. Instead, landlords will need to use one of the specified grounds.

[Matthew Pennycook]

Let me start by making it clear that the Opposition welcome Government new clause 18. Although I have not been in Parliament long compared with other Members, I have been here long enough to remember sitting on the Bill Committee for the Housing and Planning Act 2016. Part 3 of that Act, which this new clause repeals, was always a foolish provision, and has rightly never been brought into force. We believe it is right that we rid ourselves of what might be termed statutory dead wood.

Clause 2 will remove section 21 of the Housing Act 1988 and, as the Minister made clear, will abolish assured shorthold tenancies and remove mechanisms by which assured social housing tenants can currently be offered ASTs—for example, as starter tenancies—or be downgraded to an AST as a result of antisocial behaviour. The provisions in this clause, as well as those in clause 1, will be brought into force on a date specified by regulations made by the Secretary of State under clause 67. It is appropriate to raise a very specific issue on this clause. We have just discussed court improvements at length. I know that is not the Minister’s brief, and that this is his first Bill, but I have to say to him that his answers on court reform were not adequate. At some point, the Government will have to explain specifically what improvements they wish to see enacted and on what timeline they will be brought into force. Leaving that aside, can the Minister provide further details on precisely how the Government intend to phase in the provisions in this clause? What consideration, if any, has been given to preventing unintended consequences arising from the proposed staged implementation?

The guidance on tenancy reform that the Government published alongside the Bill on 17 May said:

“We will provide at least six months’ notice of our first implementation date after which all new tenancies will be periodic and governed by the new rules”—

that is when they will introduce Part 1, Chapter 1. It continued:

“The date of this will be dependent on when Royal Assent is received”.

I take that to mean that, at some point in the future, a Government Minister will hopefully determine that the court system is, in the their eyes, finally ready to implement the new system—although there is nothing in the Bill to ensure that will happen. He or she would then presumably announce that the first implementation date—that is, the date when all new periodic tenancies come into force—will be six months hence.

I would like the Minister to confirm whether my understanding of how the Government expect the process to develop is correct. If so, can he respond to the concern—the flip side of my hon. Friend the Member for Mitcham and Morden’s point on a rush to section 21 evictions—that this may create a clear incentive for landlords to offer new tenants a lengthy fixed-term assured tenancy before the new system comes into effect?

If the safeguard in the Government’s mind is that all existing tenancies will transition to the new system on the second implementation date, can the Minister provide any reassurance that the period between the first and second implementation dates will not be overly long? I raise the point because the guidance makes explicit reference to a minimum period between the first and second dates, but does not specify a maximum period after which the second date would have to come into effect. As the Bill stands, it could enable a scenario where all new tenancies become periodic, but there is an extensive period of time where all existing fixed tenancies remain as such. It could be an indefinite period, there is nothing in this Bill to put any time limit on it at all. I look forward to hearing whether the Minister can provide any reassurances in relation to that concern. If he cannot, we may look to table another amendment to account for this loophole, whether it is intended or unintended.

[Jacob Young]

I thank the hon. Member for his support. He asked about the first and second dates. He is entirely right on the first date—it is six months. The second date is 12 months. I hope that gives him reassurance.

[Matthew Pennycook]

Just to clarify: as I understand it, 12 months is the minimum. Is the Minister saying that there is a maximum? If not, will the Government consider introducing a maximum? I see the officials shaking their heads. There is no maximum in the Bill. We could have a system where, six months after Royal Assent, all new tenancies become periodic and all existing tenancies could remain fixed indefinitely. What is there in the Bill to prevent an incentive for landlords to rush before the first implementation date to hand out fixed tenancies across the board for very extended periods of time to circumvent the measures in the law?

[Jacob Young]

Ultimately, we want to bring in these measures as quickly as we can. The system will be in place soon. What I will do to give the hon. Gentleman the assurances he desires is to write to him further. We can agree on that principle and if changes are needed to the Bill, I am happy to consider them.

[Lloyd Russell-Moyle]

I want us to give the Minister an opportunity to elaborate on court reform, because it is also relevant to this clause, in terms of when it will be implemented and the indicators as to when it will be implemented. Will he be able to write to us, or publish after the Bill receives Royal Assent, what those clear indicator thresholds are regarding when court reform will be completed, so that it will be clear for everyone? It does not need to be set out in the Bill, but a commitment that the Government will do that, so that everyone will know when that threshold has been met, would be useful.

[Jacob Young]

I appreciate the hon. Gentleman’s concern about this point. As I mentioned earlier, I think we will discuss this issue when we debate clause 67, so we can have that debate then.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Changes to grounds for possession

[Matthew Pennycook]

I beg to move amendment 145, in clause 3, page 2, line 32, at end insert—

“(aa) after subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 1 if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”

This amendment would extend the greater hardship provisions to new Ground 1 (occupation by landlord or family).

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[Lloyd Russell-Moyle]

Thank you, Mr Gray.

We have a problem here. It is important that the court is able to weigh up where the greater hardship is. Is it a greater hardship to evict a tenant who has complained to the council so that the property can be fixed? Or is the ground being used to get rid of a tenant who is constantly complaining about enforcement action? Without an element of discretion—other amendments would afford wider discretion—and without this particular measure on greater hardship, there is a danger that ground 6A could be misused. That is why it would be good to hear reassurance from the Minister, particularly on amendment 150, that advice and guidance will be provided to the courts to ensure that the ground is not manipulated or abused, and that the Government are considering other changes to prevent that.

[Jacob Young]

I thank hon. Members for their contributions. I thank the hon. Member for Greenwich and Woolwich for his amendments 145, 146 and 150. As has been discussed, the amendments look to make grounds 1, 1A and 6A discretionary.

[Matthew Pennycook]

To clarify, the amendments do not seek to make those grounds discretionary in any case. We accept that they are mandatory. We believe that the amendments would allow those mandatory grounds to be used in almost every case, unless great hardship would result from them. They do not make those three possession grounds discretionary.

[Jacob Young]

However, judges would be required to assess whether possession would cause greater hardship than not. We think that would count as making the grounds discretionary.

The changes would add significant uncertainty to the system. It is right that landlords should have confidence in the process, and can manage their properties, including when they want to move into or sell a property. The uncertainty that the amendments would cause means that landlords may simply choose not to rent their properties in the first place if they know that they may want to move into or sell a property in future. That would reduce the vital supply of homes in the private rented sector. In the case of ground 6A, on enforcement compliance, if possession is not granted, the landlord would continue to be in breach of their obligations, and could face fines and other penalties. Given the adverse consequences that the amendments would cause, I hope that the hon. Member will withdraw them.

[Matthew Pennycook]

I am disappointed by the Minister’s response. I welcome the clarification he gave. The amendments would introduce a limited amount of discretion. We would argue that they do not make the grounds discretionary—it is a point of debate—but introduce a limited amount of discretion into the system. However, we trust judges in county courts to make these decisions in most cases. The amendments would put the burden on the tenant to prove great hardship, and make the presumption that the mandatory ground award will be issued in most cases.

I will bring the Minister back to some of the hypothetical scenarios I gave. We absolutely agree with the Government that landlords need robust possession grounds to take their properties back. In one of my hypothetical examples, the Bill would allow a terminally ill cancer patient to be evicted and put at risk of homelessness, just because the landlord wished to sell. They may have no need to sell; they might own eight properties and wish to sell one or two of them. In limited circumstances and cases, we should give the judges a bit of discretion. Otherwise, some very vulnerable and in-need tenants will evicted through these means.

I am disappointed that the Government have not accepted the amendments. I hope that they go away and think about them, but I will not push them to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Lloyd Russell-Moyle]

Following on from the debate on the last group of amendments, I want to add my concern about ground 6A. Where there are issues with fire or flood, landlords are often expected to find alternative accommodation before a house is vacated, but there is no such provision when enforcement action has to be taken. There is a real worry that a landlord who has multiple properties that are perfectly fit for habitation might seek to punish tenants who have pushed for enforcement, rather than moving them into those properties. That seems wrong, so it is important to require the courts to go through a checklist of other options that the landlord has to consider before they get to ground 6A.

The amendment also provides a checklist for landlords. They can go down it and say, “Okay, I need to comply with enforcement action. Have I considered these things?” It also allows the local authority to consider other courses that they could pursue, such as management orders. We do not want tenants punished. Although revenge evictions are illegal, we know that they happen time and again, because there are loopholes in the law. Closing those loopholes is important, and a statement from the Minister on the matter might suffice.

[Jacob Young]

I thank hon. Members for their comments. Amendment 149 would require judges to consider whether there are suitable alternative courses of action available before granting possession under ground 6A, which permits a landlord to evict if evicting a tenant is the only way that they can comply with enforcement action taken by a local authority. That includes cases in which, disgracefully, a landlord has received a banning order, meaning they are unable to continue operating as a landlord. It also includes situations in which a prohibition order is incompatible with the tenant’s continuing to occupy the property. The ground is mandatory, so there is certainty that possession will be granted to the landlord and they can comply with enforcement action taken against them. That means that tenants will not be left living in unsafe situations and gives local authorities confidence that their enforcement action demands can be adhered to.

--- Later in debate ---

[Lloyd Russell-Moyle]

Will the Minister clarify that when courts grant possession under ground 6A, they will have to take into consideration whether that is the only option, and whether other options might be on the table? Confirmation of that would help courts’ deliberations in future.

[Jacob Young]

I should be clear that the landlords who are subject to enforcement action are the rogues; they are the people we are trying to root out of the system through the Bill. They are unlikely to be able to provide the suitable alternative accommodation that the hon. Member mentioned. If things get to this stage, they are that bad. We therefore do not feel that we can accept amendment 149, and I hope that the hon. Member for Greenwich and Woolwich will withdraw it.

[Matthew Pennycook]

I have been on enough Bill Committees to know that the Minister has been sent out with explicit instructions to resist amendments—we all understand that—but the Government will have to grapple with the Bill’s weaknesses regarding how the new possession grounds will affect tenants who are not at fault. They could clearly be affected by a landlord’s using ground 6A—a ground that I find perverse, because it allows for possession where the landlord is at fault.

The Minister gave the game away when he said that 6A can be used only when it is the only way that the landlord can comply with an enforcement order. Well, we could leave it to the court to make that determination under the amendment. If possession is the only way that the landlord can comply with an enforcement order, the court will grant the possession order, but there will be cases in which it is not the only way, and the Minister said that he encourages local authorities to explore those other means. I would say that, in those circumstances, encouragement is not enough. We need some provision to ensure that all alternatives are completely exhausted before this very severe mandatory ground—we are talking about eviction and potential homelessness—is brought into force.

[Jacob Young]

I take the hon. Gentleman’s point on board, but as I have outlined, these are landlords who are subject to enforcement action. Does he accept that such landlords should not be operating in the private rented sector anyway, and that this ground allows us to root out those bad landlords?