Renters’ Rights Bill [HL]

Lord Foster of Bath Excerpts

Friday 10th June 2016 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, like others who have spoken, I am delighted to support my noble friend’s Renters’ Rights Bill. It builds on the work done by Liberal Democrats and others during the coalition to improve renters’ rights. Measures at that time included protections for renters against “revenge evictions”, so that landlords could not simply evict a tenant because, for instance, they had asked for an electrical safety check to be carried out. Also introduced was a new model tenancy agreement giving tenants a much clearer guide to what should be included in a rental contract. There was also the £1 billion investment in the Build to Rent fund to provide equity finance for purpose-built private rented accommodation. After all, we all acknowledge that, if we want to reduce rents, the very best thing that we can do is have more properties made available. The measures also included £4.1 million to tackle rogue landlords and £2.6 million to tackle “beds in sheds”. They also introduced something that I thought was very important at the time: new requirements on the energy efficiency standards of private rented accommodation.

That work started to address one of the issues raised in my noble friend’s Bill, which the right reverend Prelate and others referred to: fees. At that time, transparency regulations were brought in for letting agent fees requiring agents to publish their fees on their website and in their main offices so that consumers had an opportunity to complain and seek compensation if agents’ fees were not transparent and they were hit by an unexpected fee.

All these actions were a very good start in giving more rights to renters. I am the first to acknowledge that further improvements have come, not least in relation to rogue landlords, in the Housing and Planning Act, which we recently debated in your Lordships’ House. However, more can be done, and my noble friend’s Bill is a move to achieve just that.

As I said, the Housing and Planning Act has made further improvements in relation to rogue landlords. However, as my noble friend Lady Grender said in her opening remarks, it stops short of giving real powers to renters. That is why, during the passage of the Bill, my noble friends and I argued that the register of rogue landlords should be available to potential renters so that they can identify rogue landlords and letting agents and protect themselves from taking on a new tenancy with a landlord, or through an agency, who, based on past actions, may well cause them problems.

After all—this relates to the questions asked by the right reverend Prelate—it is worth remembering that people who are on that register have already been identified by local authorities as either banned, convicted of housing offences or issued with two civil penalties relating to housing, which are all quite serious reasons to be on the register. These are the very people whom renters need to know about to avoid choosing them and being caused significant misery by them in the future.

Clause 1 empowers renters so that they are better equipped to identify rogues and limit the risk of being exploited. The noble Baroness, Lady Gardner of Parkes, asked the obvious question: what is this going to cost and who is going to pay for it? I remind her that during the passage of the Housing and Planning Bill we agreed to the establishment of a database. I assume—the Minister will perhaps confirm it—that the cost of this will be covered by government funding to local councils through the new burdens principle, so the only additional cost would be the modest one of making the register available to rather more people than is currently planned. I do not think that a significant cost would accrue from that.

There are other very good reasons why the measure should be welcomed. First, the ability of a tenant to discover more about a landlord or letting agent’s history would serve as a deterrent to those who attempt to operate with low standards. Secondly, as my noble friend pointed out, it would right an imbalance, because at present a landlord can obtain a lot of information about a potential tenant and whether to accept them, but the reverse simply does not apply—a prospective tenant cannot get the information about a landlord. Clause 1 would balance the situation.

Clause 3 on electrical safety checks is also important, as is Clause 4, which prevents rogue landlords gaining a house-in-multiple-occupation licence, but I believe that Clause 2 is by far and away the most important. As we have heard, this measure has already been accepted in Scotland, where the charging of fees to tenants by letting agents has been outlawed, and we should do the same in England.

I mentioned earlier the requirement that letting agents publish information—the transparency rule that has already come in. When that measure was introduced in 2015, Liberal Democrats argued with Conservative colleagues in the coalition that we should go further, but the Conservatives argued—and they put a good case—that all we needed was transparency and “the market” would then sort out the problem of sky-high fees. Yet, to date, that “transparency” has not brought about any significant change. My noble friend Lady Grender has already given many examples of rip-off fees being charged. I was particularly taken with the example that she referred to, since it came from near my old constituency of Bath. It was of Cherie, who said, “Just moved into a rented property near Bath. Paid £300 just for a credit check. Ridiculous. You can do a credit check yourself for just £20 online”. There is huge variation in fees around the country and within different localities, which demonstrates just how arbitrary they are. There is not the predictability that the right reverend Prelate referred to, and people simply do not know.

A further point, which has not yet been referred to, is that it appears that the requirements of existing legislation are simply not being adhered to anyway. Some excellent work is being done by the Association of Residential Letting Agents, which constantly reminds its members of the importance of the transparency law. It has even gone so far as to provide some helpful templates for agents to use to make the process easy, yet all the research that has been carried out by various groups indicates that in many cases agents are simply not abiding by the law.

Last October, a campaign group in Brighton and Hove found that 80% of letting agents in its area were in breach of the law, as were 35 agencies in Tower Hamlets. The organisation Generation Rent, which has researched 720 agency websites, has found that 96 have no fees published and that 240 do not list, as they should, which redress scheme they belong to. A Guardian reporter recently looked at highly-respected letting agencies and found that, even where fees appear somewhere, they are often buried within websites and do not meet the requirement of being prominently displayed. I would be interested to hear from the Minister what action the Government are taking in light of the fact that many agencies are not even abiding by the transparency requirements of the 2015 legislation.

More importantly, it is increasingly clear that, because so few properties are available to renters, even if all the data were made clear and transparent, renters would not have much choice. They could not do anything with the data. We simply have a supply-and-demand problem; there is no choice, so very often renters are forced to take the hit of those exorbitant fees, whether they like it or not, simply so that they can have a roof over their head. The market will not fix it, so the Government have to do so. I do not believe, as the then Housing Minister, Kris Hopkins, said in 2015, that the measure would be a gimmick leading to rocketing prices and rocketing rents. As my noble friend said, the evidence in Scotland is clear; even though fees have been abolished, there has been no huge hike in rents. Like my noble friend and others, I accept that there are some legitimate, limited costs—for example, the check-in inventory, which is very important because it gives protection to both landlord and tenant—but it is quite clear that if those costs were added in small amounts to the monthly rent, it would not lead to a huge increase in the rent and for many would be far better than taking a huge hit at a time when they are most vulnerable and trying to get a roof over their head.

This is a small but important Bill that will build on work already done. It will further improve the rights of tenants, and I hope that it will have the support of your Lordships’ House.