Renters' Rights Bill (First sitting)

Lola McEvoy Excerpts

Committee stage
Tuesday 22nd October 2024 Public Bill Committees

[Claire Hazelgrove (Filton and Bradley Stoke) (Lab)]

I used to work at Shelter, which is giving evidence today.

[Lola McEvoy (Darlington) (Lab)]

My husband works for Shelter, which is giving evidence today.

[The Chair]

I welcome both our witnesses to our session to answer questions following their evidence to the Committee on the Renters’ Rights Bill. Please introduce yourself briefly. Members will then ask questions about your evidence.

Ben Beadle: I am Ben Beadle, the chief executive of the National Residential Landlords Association. We have 110,000 members, who provide for nearly a million homes in the private rented sector.

Theresa Wallace: My name is Theresa Wallace and I am chair of the Lettings Industry Council. I think it is the only group that is made up of stakeholders across the property redress scheme, including tenant groups, landlord groups, professional bodies, government bodies and agents large and small.

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[The Chair]

A large number of Members want to come in, so brevity would be helpful.

[Lola McEvoy]

Q It is really interesting to hear your evidence. Thank you for raising Ayesha’s story, because it makes a real difference to us as Committee members. Good landlords and good tenants are welcome in this. What do you see as an opportunity for the people you represent to support the work of the landlord database? What is the best way that we can ensure it affects people such as Ayesha?

Ben Twomey: Relating the database to rent repayment orders would be useful. If there is a way in which tenants or tenant groups can access the database to make sure that landlords are compliant with the database, it would be helpful. Adding the actual rents to that database would be useful, because we would finally get an honest and clear picture of what people are paying in rent. That would start to change the inflated idea that a landlord can stick their finger in the air and charge whatever they like just because it is a new tenancy. We would start to see the patterns appear for when people are in tenancies.

We should also have certain restrictions for evictions. We think eviction notices should be logged on the database. That would give a clearer picture of why people are being evicted, so that measures later down the line can be taken to reduce the number of evictions. It is helpful that in the Bill they will now have to have a reason for eviction, because currently we do not know why landlords are evicting. We know that it coincides far too often with complaints made by a tenant, but we could continue to track that through the database. We think that landlords should be restricted from making evictions or even rent hikes if they have not registered with the database and the redress scheme.

Tom Darling: I would agree with all that. I know that the Government intend to set out what will be on the database in secondary legislation, but I think it would be helpful to have a steer from Ministers throughout this process on what they intend to be on the database.

[Sam Carling (North West Cambridgeshire) (Lab)]

Q I have a couple of things to ask. First, I would like to hear your views on the arguments that the first panel of witnesses made that assured shorthold tenancy abolitions would remove some security from tenants, particularly students but also people who have longer tenancies.

On your point about the idea of limiting rent increases to wage growth or inflation, how would you respond to the counter-argument that it might lead to landlords setting a much higher baseline rent between tenancies, knowing that they would not necessarily be able to increase the rent as much within a tenancy?

Tom Darling: To take the first point about the lessening of security, similar reforms in Scotland led to an increase in average tenancy length. The idea that abolishing fixed-term tenancies will lead to Airbnb-lite, as we heard earlier, is ridiculous. Clearly, the people proposing that have not been through joining a tenancy recently, because it is an incredibly stressful experience. That is the last thing people would think of to do to go on holiday or to stay for only two months. There has been no evidence of that in Scotland, despite similar reforms in place there, so I would dismiss the idea.

The ability to leave the tenancy to be used in very rare circumstances—for example, where you realise there is some black mould that you did not see, which was being hidden from you when you viewed the property, or you have a serious change in personal circumstances—is an essential protection. It is to be used by tenants in very rare circumstances. Actually, the arguments about that are more about landlords: they would prefer to have the certainty of six months’ rent up front—I am sure they would. We think the Government have the balance right on that particular point at the moment.

Ben Twomey: To add to that quickly, the point made by the letting agents about someone on a two-year fixed-term contract who might find themselves at risk of a form of no-fault eviction by the end of one year is a valid concern. We would welcome support in calling for a longer protective period from no-fault evictions in that case. At the moment, one year is in the Bill, which we welcome as security for renters, but doubling that to two years would be very welcome to make sure that people on such contracts do not find themselves disadvantaged.

To address the point about rent-stabilisation measures, it is important that the vast benefit to potentially millions of private renters is weighed against any potential disadvantages. Millions of renters finding themselves better protected from arbitrary evictions through a rent hike, and from being driven into debt, poverty or homelessness, is an enormous success.

In Scotland, which introduced such measures recently, there has not been an enormous increase in market rents disproportionate to what has happened in England, Wales or indeed Northern Ireland. It was similar tracking of rent inflation with new tenancies. While doing that, we have protected all those people, yet what is happening in the market is similar. One of the ways to solve part of that market problem and to begin to drive down rents is, as has already been said, to build lots of homes at the same time. Some of the most successful rent-cap regimes across Europe are in places with lots of social housing, which takes some of the pressure off the private rented sector.

Renters' Rights Bill (Second sitting)

Lola McEvoy Excerpts

Committee stage
Tuesday 22nd October 2024 Public Bill Committees

[David Simmonds]

Q What I am hearing from constituents affected by it is that rent in advance is the method by which they get around this, as well as guarantors potentially, but if the Bill removes that scope, then the one route they have to negotiate—because of their bad credit history—is effectively removed and they are potentially excluded from that market. I am just trying to understand whether this is genuinely a problem.

Liz Davies KC: So it is the rent-in-advance point. We would have to look at what the Bill says about guarantors. I am sure the Minister knows, but that would be the answer—something around advance rent or guarantors. It negates the point earlier, I accept that. This needs some thought.

[Lola McEvoy (Darlington) (Lab)]

Q I want to interrogate further what opportunities you see the landlord database providing for private renters and good landlords as a result of the Bill. Your area of expertise is vast and it is a joy to listen to you contribute, so I would like you to elaborate on any positive outcomes you think could come from the Bill—we want to make sure those can happen.

Liz Davies KC: The fact that landlords are required to be registered will raise the bar for good landlords. We do not yet know what information should be on the database. I cannot remember whether it is in the Bill or the explanatory notes, but it is assumed that any enforcement action or rent repayment orders they have had to make—anything that affects their quality as a landlord—will be there. That must raise the bar and set a minimum standard for landlords, which we currently do not have. Tenants, frequently those at the bottom of the market, are then subject to the consequences and disadvantages of that, so having that bar is really important.

The other thing is that making the information, when we know what it is, publicly available is extremely important because it holds landlords to account. Finally, it also affects the local authority’s ability to bring the various enforcement measures they have under both the Housing Act 2004 and the Bill.

Justin Bates KC: I did not hear Ben Beadle’s evidence this morning, but if you get the right details on the database—so that it is a publicly searchable database that shows you whether your landlord has done anything in a list of prohibited things and so that it has details about the safety of the building, for example whether the gas safety certificate has been uploaded or not—I would have thought that he and the NRLA would have been crying out for something like the landlord database. It gives them what they have always wanted: a way of differentiating the good landlord from the bad landlord and a simple way for a tenant to identify the good landlord and the bad landlord. If I put your name in and it comes up on the database that you are subject to a banning order, I probably should not rent from you. If I put the property address in and discover a prohibition order—those are registered on the database—I probably should not live there. That is what you should be able to do if you can get the database to work properly.

The way you have done it, for obvious reasons, it is all at the level of principle. The critical information is what you will do in secondary legislation about what is accessible. But if you get the database right, you go a really long way towards helping tenants to make informed decisions and helping good landlords to drive bad landlords out.

[The Chair]

We have time for one quick question, if anyone has one.

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[Jerome Mayhew]

Q You mentioned unintended consequences, a topic that I have come back to repeatedly today. We heard evidence earlier that rents in Scotland have outpaced those in the rest of the United Kingdom quite considerably in, I think, the last five years. You mentioned the 2022 rent control legislation and the impact that that has had on rents. If you can strip that out in your own mind and give us an assessment of what impact rent reform has had on rents over the past seven years, can you give the Committee a flavour of whether rents have gone up as a result, stayed the same, or reduced?

Anna Evans: We show in the report that the rents increased at a similar rate to the rest of the UK until ’22. If you were trying to isolate why there was a more considerable increase since that time, you could probably fairly conclude that it was because of the 2022 legislation, but it is very difficult to isolate out. The range of legislation that has been implemented in Scotland is significant, but there was a tipping point in ’22 when rents in Scotland appear to have increased at a greater rate than in the UK. The key point was the 2022 legislation.

I should also caveat all of that—as we have in our report—by saying that the Scottish rent data is not as good. It is based on advertised rents rather than any survey of in-tenancy rents. The published data on rent levels and the hike in Scotland will be for new tenancies, and therefore, that will naturally be inflated compared with most tenancies, because we know that landlords do not tend to increase rents in tenancy. They prefer to keep them at a level that keeps tenants content and therefore they have a longer rental period. That evidence has to be considered with caution, because it is based on advertised rents.

[Lola McEvoy]

Q Just for the eradication of any doubt, are you under the impression that the introduction of rent controls has led to an increase in rents?

Anna Evans: As I said, I do not think it is possible to absolutely isolate this out, but on advertised rents—new advertised rents—there was an increase post 2022 when that legislation came in. But you must remember that that does not include evidence of in-tenancy rents, which would be lower. So we cannot say that all average rents have increased as a result of that—we cannot say that at all.

[Lola McEvoy]

Q So you cannot say that all average rents have increased because of in-tenancy rents, and you do not have the data on that, but in terms of advertised rents, since the introduction of rent controls, you have seen an increase in Scotland?

Anna Evans: Yes.

[Lola McEvoy]

Thank you.

[The Chair]

Would anybody else like to ask a question, very quickly?

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[Connor Naismith]

Q Helpfully, the question I wanted to ask has been answered, so I will just give you the opportunity to say anything that you have not been able to cover in other answers, but that you would like to see from the Bill.

Anny Cullum: As I said, the five areas that I wanted to cover were illegal evictions, landlord licensing, capping rent up front to one month, withholding rent for disrepair and making renting more affordable. We see even the cap on in-tenancy rent rises as not really about affordability, but mainly about preventing back-door economic evictions or section 21s. We feel that, while this Bill goes far on improving security for renters, it is not going to do enough to address one of the No. 1 problems our tenants and members are coming to us with every day, which is affordability. Rents are outstripping wages all the time. We would like to see the Government set up a commission to look into ways we can bring rents down and keep them affordable once and for all. That is something that we would like to see.

[Lola McEvoy]

Q Do you agree that the fact that renters can challenge rent hikes under this legislation will, as an action, militate against unreasonable rental increases by landlords? Do you agree that the fact that we are going further in this legislation to make sure that renters have more support and that they can challenge any unreasonable rent hikes in the courts will, in and of itself, have an impact on landlord behaviour?

Anny Cullum: It might have a small impact, but I think that the reality is that most landlords will expect most tenants not to make use of that scheme.

[Lola McEvoy]

Q Surely the threat of it, for most reasonable landlords, which we know the majority are, just like the majority of tenants are reasonable—that behavioural change will be seen and will be a positive thing.

Anny Cullum: The problem with this is that it is going to be judged by the market rates—what the going amount for other-sized homes in your local area is for new tenancies—and those are going up all the time. Unless we do something to stop those rates going up all the time, you as my landlord could say, “I want to put your rent up by 50%”, and if I challenge it at the tribunal, if I have been there for three years, for example, I suspect that could be what the going market rent now is in my local area, because the system, as Ben Beadle said earlier today, is absolutely mad and out of control.

We need more drastic action to bring down rents, because it is unreasonable to ask someone to pay 50% more than they are paying at the moment, but in some places—

[The Chair]

Order. Thank you very much. I am afraid I have to interrupt, because otherwise we will not have time to listen to the Minister. Thank you for your evidence.

Examination of Witness