Renters’ Rights Bill

John McDonnell Excerpts

Tuesday 14th January 2025 Commons Chamber

[Neil Duncan-Jordan (Poole) (Lab)]

I would like to echo the comments of my neighbour, my hon. Friend the Member for Bournemouth West (Jessica Toale), and the references that she made to the housing problems in our area. Today marks a once-in-a-generation moment, with the biggest change to private renting since the Conservatives’ Housing Act 1988. The Thatcher reforms aimed to rejuvenate private renting by making it more attractive to landlords, but instead they helped to sow the seeds of the housing crisis we see today.

England’s 12 million private renters face some of the worst-quality housing in the developed world, with shocking levels of damp and mould and low rates of insulation resulting in health problems and unaffordable energy bills. Instead of producing competitive and affordable housing, decades of tipping the scale towards landlords has resulted in homes that are insecure, eye-wateringly expensive and often short term in nature. While renters in countries such as Germany enjoy secure, long-lasting tenancies with rights to redress when things go wrong, tenants in England can be put out on the street by a no-fault eviction if they complain about a leaky roof or a broken boiler.

I rise to speak in support of new clause 3, which would limit rent in advance of tenancy; new clause 7, which would limit proposed rent levels; and new clause 9, which covers the right to have home adaptations made to a property. We know that this legislation will end the exploitative bidding wars that drive up rental prices, stamp out discrimination on renting to families with children or those on benefits, and give renters the right to request pets in their home.

With section 21 finally consigned to history, tenants will also benefit from longer notice periods, giving them more security in their homes, and we will hold landlords accountable for health hazards in their properties. No longer should tenants and their families suffer damage to their health because a landlord refuses to act. However, to truly deliver a more secure future for renters in England, the Bill needs to close a loophole that would allow no-fault evictions to continue via rent hikes. Amendment 9, tabled by my hon. Friend the Member for Liverpool Wavertree (Paula Barker), would cap in-tenancy rent rises. It would introduce a cap on the amount a landlord can raise the rent of a sitting tenant, so that no one has to face a rent hike higher than wage growth or inflation.

Everyone deserves to have basic security in their home, whether they rent or own. People with mortgages tend to have relatively predictable costs. Tenants have no such peace of mind. Today, there is nothing to protect tenants from extortionate, unjust rent hikes. The Renters’ Rights Bill does not do enough to change that. Last year, a Government survey of landlords found that rent increases of 15% or more when renewing or extending a contract are common. Despite the Bill’s passage, renters who cannot afford extortionate rent hikes will continue to have no alternative but to move, fall into debt or face eviction. There is a real danger that landlords will continue to evict tenants or threaten them with eviction at will, with unfair rent increases taking the place of section 21 evictions.

The Bill’s provisions to allow renters the right to appeal to a tribunal that can determine a market rate increase are insufficient. By definition, market rates are already unaffordable for many renters. Only capping rent increases will give renters genuine security in their home and stop landlords threatening vulnerable people with unaffordable rent hikes or homelessness.

Beyond security, the biggest issue most renters face is the fast-growing cost of having a home to live in. The amount of income that families in this country are losing to rent is rapidly becoming unsustainable. Nearly two thirds of working renters in England struggle to afford their rent, according to recent research by Shelter. Rent produces almost zero social benefit. It takes money away from working-class people who could otherwise spend it in their community, and it passes that money to property owners. What simpler, more effective way could there be to ease the cost of living crisis for millions of people and put money back in their pockets than by limiting their largest outgoing?

Rent stabilisation measures are common across Europe. In France, the annual increase is limited to 3.5%. Meanwhile, in England, rent has been rising faster than wages for well over a year, and the average annual increase reported in December was 9.3%. A cap on rent increases has the support of housing charities, renters’ organisations and major unions. It also has strong public support. When it comes to the housing crisis, we must keep all options on the table, and I hope the Government will back these changes to the Bill.

Ultimately, we need to increase the supply of council housing at affordable rents. In my constituency of Poole, we have some of the highest rents relative to wages in the country. Change, therefore, cannot come soon enough for those renters, and this Bill is a welcome first step.

[John McDonnell (Hayes and Harlington) (Ind)]

I will address new clauses 5 to 7 and amendments 9, 5 and 6, which deal with rent controls.

Before I do so, I should say that I take a particular interest in new clause 9, tabled by the hon. Member for Bristol Central (Carla Denyer), which I have signed. I chair an unpaid carers group, and there is a real concern that even where renters have an assessment done for aids and adaptations, they cannot enforce it on their landlord, which leaves them vulnerable. They then have no choice but to move, with all the disruption that involves, particularly if they are caring for someone with significant disabilities.

I did not think that this was a contentious issue, and I hope the Minister will assure the hon. Member for Bristol Central that there can be further dialogue as the Bill goes to the House of Lords. If we have that dialogue, I think we can find something that will satisfy all concerned, to give strength to those with disabilities and those caring for them, while satisfying the Government about the ramifications of an amendment of this nature. If we can get that form of words, I would urge the hon. Member not to press her amendment to a vote. If it were voted down, it would send a message to the Lords that the Commons does not support it, whereas I think there is support in this House, but not necessarily for this form of words. Sometimes it is best not to snatch defeat from the jaws of victory. I think we might have something here, but I will leave that to the hon. Member’s judgment.

Briefly, on rent controls, my hon. Friend the Member for Ealing Southall (Deirdre Costigan) mentioned her constituency. Mine is next door, and I represent a working-class, multicultural community, where we have been going through a housing crisis for at least the last decade. I have lived there for 50 years and the crisis is on a scale that we have never seen before, caused, as others have said, by the selling off of our council houses. The irony here is that the same council houses that have been put into the hands of private landlords are now being rented back at very high rents to house the homeless people the council is placing in them.

With the Government’s policy of increasing housing supply and the 1.5 million new homes we are about to build, I hope that a large number of those homes will be social or council housing. As a result, we can start to tackle the housing crisis in my constituency. In the meantime, however, we will be dependent on the private rented sector.

The only reason I am speaking is the representations I have had from constituents, knowing that the Bill was coming up. I have also worked with Acorn, the Renters’ Reform Coalition and various other agencies. Those constituents have said, “Can you try to at least get across the plight we are facing at the moment?” That plight is dependent, to be honest, on landlords who are ripping them off. The concept of price gouging is emerging in all our discussions about the economy; well, here is an element of price gouging. With private rented landlords, particularly in London, we have seen profit ratios of anything between 5% and 20%. The argument is made that we can have a tribunal system. People can go to the tribunal, which will determine things on the basis of the market rent. In fact, the market rent is determined by what is almost an oligopoly of landlords in a particular area, who maintain high rents because they want to maximise profits.

The housing conditions in the private rented sector in my constituency are, in some instances, absolutely appalling. If a tenant complains, that is when the section 21 comes in. Indeed, tenants are terrified of complaining because if they get evicted, they probably face higher rent elsewhere. That is why we need a comprehensive system of rent controls. I do not see any other solution and I hope that, although the Government will not accept the amendments today, we can have a dialogue. That way, maybe between now and the Bill’s passage through the Lords or in future legislation, we can address the issue of rent controls.

The argument is very simple: we just want a system where rents are linked to wages or inflation. That way, people cannot be ripped off by higher rent increases. That is not rocket science. I am old enough to remember when we had rent controls, with a local rent officer who the local authority would send round. They would determine a fair rent and also what was fair in terms of wages and income for any future rental levels. Rent controls operate across Europe and it has not had an impact on the supply of private rented housing elsewhere. It is a system that could be readily introduced.

I worry that if we do not do that now, we will be back here in a couple of years’ time with the same problems. Although we want to build new homes at speed, we will still be dependent on the private rented sector and on some, but not all, landlords—we have good landlords as well—who are basically profiteering at the expense of homeless people.

Turning to my final point, the issue of developing a tribunal system was raised by the right hon. Member for Islington North (Jeremy Corbyn). The tribunal system needs to ensure that people are properly represented and have time to take on the system. Most of us with a trade union background will have dealt with employment tribunals over the years. They can be effective, but the only reason for that is that we have the might and organisation of the trade union movement. We do not have that in the rental sector to represent tenants.

Although I welcome the idea that we will have a thorough tribunal system that is effective in dealing with hard cases, it is not realistic to expect tenants in my constituency to utilise that without the resources to do so, particularly as we have lost a lot of our advice agencies as a result of austerity. That is why we will need to come back and discuss again the solution of rent controls, which my hon. Friend the Member for Liverpool Wavertree (Paula Barker) brought forward.

[Amanda Martin]

Good-quality, secure and decent rentals should not be too much to ask, and I thank those landlords who do provide that in my city and beyond. I welcome the Government amendments to this detailed Bill, which will help residents in Portsmouth North to rent homes that are both secure and decent.