Renters’ Rights Bill

Lord Hacking Excerpts

Thursday 24th April 2025 Lords Chamber

[Lord Carter of Haslemere (CB)]

My Lords, I declare my interest as a landlord of a residential property. I will speak to Amendments 60 and 61 in this group. I am grateful to the National Residential Landlords Association for very helpful discussions. These amendments would benefit both tenants and landlords.

The first amendment would keep the threshold for mandatory repossession by landlords at two months of rent arrears, rather than increasing it to three months, as proposed in the Bill. The second would continue to permit rent arrears arising from non-payment of universal credit to be taken into account as a ground for repossession.

One might think that my motivation behind these amendments is purely to support landlords but, as I said at Second Reading, I am keen to support tenants as much as landlords in improving the current system, since they are two sides of the same coin, and one cannot exist without the other. This is a golden thread running through this entire Bill.

As the noble Baroness, Lady Scott, said on the first day of Committee, there must be “balance” in the Bill. Any weighting of the scales in favour of one—while it might be well motivated—risks being counterproductive and detrimental to both. This is amply demonstrated by the Bill proposing to increase the threshold for rent arrears to three months before enforcement action can be taken.

Tenants in arrears will struggle to recover financially, making it harder for them to access housing in the future. The arrears are likely to mount up well beyond the three-month threshold. For example, if one adds on the one-month notice period, plus the average seven months for a court to process a Section 8 possession application, the tenant could end up having to leave the property with nearly 12 months’ arrears. Is that really a good outcome for tenants?

In addition, responsible landlords will become more risk averse, prioritising tenants who can clearly prove their ability to sustain a tenancy in the long term. This will be particularly damaging for vulnerable tenants, including those in receipt of local housing allowance, especially as support for housing costs has been frozen from April this year. Moreover, allowing rent arrears to climb to three months before enforcement action can be taken risks intimidating good landlords into leaving the sector.

A landlord is not a charity, and some depend entirely on the rent to pay mortgages or for their daily living costs. If good landlords are intimidated into selling up because it is too difficult to enforce rent arrears, tenants will very often have nowhere to live. According to Savills, up to 1 million more homes for private rent will be needed by 2031 to meet growing demand. We must keep good landlords in the sector to avoid making tenants homeless. Again, these are two sides of the same coin, and one cannot exist without the other.

My first amendment would keep the threshold for enforcement action at two months’ rent arrears. I accept that, if we are going to keep the existing threshold, landlords should be required to do more to help their tenants. For example, there could be a duty on landlords, at the first sign of arrears, to seek meaningful engagement with the tenant to prevent further debt, and to show in any subsequent possession proceedings that they had done that, or at least tried to do that. During the Covid-19 pandemic, the National Residential Landlords Association produced some very highly regarded golden rules showing how this and other types of landlord-tenant engagement could work; for example, by the landlord pointing the tenant to a relevant advisory service, such as Citizens Advice and/or the debt charity StepChange. Such measures would improve the status quo while avoiding the damaging effects of moving to a three-month arrears threshold.

I turn to my second amendment. It makes no sense whatever to disregard for enforcement purposes rent arrears arising from the fact that the tenant has not received an award of universal credit under Part 1 of the Welfare Reform Act 2012. This is for two reasons. First, it is unjustifiable to penalise landlords for non-payment of universal credit to the tenant. Why should the landlord suffer if the non-payment of universal credit is the fault of the tenant, or if the universal credit system has broken down in some way?

Secondly, unlike in the social sector, private landlords are not allowed to know, under GDPR rules, whether a tenant is in receipt of universal credit. As such, they have no idea whether rent arrears are due to a non-payment of universal credit, especially if a tenant has multiple sources of income. Disregarding non-payment of universal credit is therefore wholly unworkable since, if the landlord does not know whether rent arrears are due to non-payment of universal credit, the Bill has the effect that they may try to take enforcement action that proves to be pointless, which is surely the last thing that this new system needs.

The upshot is that landlords will be more cautious about taking on tenants on universal credit, contrary to the commendable ethos of the Bill as a whole. I ask the Minister to consider these amendments very carefully and to bear in mind the need for balance and my suggested mitigations so as to keep the status quo, having regard to the need for real evenness of handling on both sides of the landlord/tenant coin.

[Lord Hacking (Lab)]

My Lords, I rise to support Amendment 60 of the noble Lord, Lord Carter of Haslemere, and will speak to my Amendments 165 and 166. But, before I do, I have two apologies to give to the House. The first apology relates to my failure to speak at Second Reading, although I did speak at the Second Reading of the last Government’s Renters (Reform) Bill. The reason I was unable to speak at Second Reading is that I was, unfortunately, in and out of St Thomas’ Hospital, which looked after me very well, but I was unable to come to the House at the time of the Second Reading of the Bill.

My second apology is for my absence on Tuesday of this week, the first day of Committee on the Bill. My wife had booked a short Easter holiday on the Isle of Wight, not expecting the House to be sitting immediately after Easter Monday. Rightly or wrongly, I took the favour of the family rather than the first day of Committee. I think my noble friend the Minister has forgiven me for this—at least I hope she has. Happily, however, my noble friend Lady Warwick of Undercliffe, who sits behind me, agreed to be in the House for the first Committee day and to move any of my amendments should they be called. Even more happily, none was.

I should declare interests which are recorded in the register. My wife and I are the landlords of five sets of tenants in one-bedroom flats in the house next door to our own. While we as landlords and our tenants will be subject to the new provisions contained in this Bill, there is nothing contentious relating to our five tenants—or to ourselves—that I will be raising during the passage of this Bill.

Amendment 60, tabled by the noble Lord, Lord Carter of Haslemere, which I support, has been grouped among a variety of amendments relating to orders for possession. Most of them have little contact one with the other, but they are all grouped together in this same list. That certainly applies to my Amendments 165 and 166.

I shall say a general word before I go on to the specific argument concerning these amendments. This Bill is, most rightly, directed to redress the balance between the landlord and the tenant in the private rented sector. This is very right, because since the Housing Act 1988, the balance has swung far too far towards the landlords—particularly rogue landlords—which has caused great distress to many innocent tenants. However, we must be sure now that we are getting the right balance between landlords and tenants. Yes, there are rogue landlords, but there are also rogue tenants.

Originally, in Schedule 1 to the Housing Act 1988, notices for possession for arrears of rent would not become effective until the rent was overdue for 13 weeks, relating to weekly or fortnightly rentals, or three months, relating to monthly rentals. This was altered in some subsequent legislation, and this Bill now seeks to go back to the provisions of the 1988 Act. What is the reason for this? I would be grateful if my noble friend the Minister could address it. What is the evidence that shorter periods of eight weeks and two months had been causing any problems?

We need to look at the practical side. The maximum deposit that a landlord is now permitted to collect is calculated against five weeks of rent. The effect is that the landlord is covered for the first failure of paying rent but is not covered during the subsequent two months of non-paid rent. More than that, it will take up to two more months before the landlord is able to get a hearing in the county court for possession and unpaid rent. This means that the landlord will be without rent for at least four months. Even if the landlord succeeds in getting an order for possession and an order for the unpaid rent, the chances are that he will never get back the unpaid rent. The question that I put to the House, and indeed to my noble friend the Minister, is whether this is fair and balanced.

I turn to Amendments 165 and 166, which are directed to the time in which the landlord is not permitted to put the property on the market when he has gained possession on the grounds of family need or other need specified in ground 1 or 1A of the Housing Act 1988. I adopt all that the noble Lord, Lord Cromwell, said in his argument that this period under which the landlord is not permitted to put the property on the market—a period of 12 months—is quite excessive and quite wrong. I need not repeat the noble Lord’s arguments.

The Minister was very kind to see many of us in meetings before Committee. I had the privilege of a meeting with her, at which she explained that there is an abuse by some rogue landlords in using the instrument to remove a tenant from the property, let us say, for members of his family or other persons as specified in ground 1A of the 1988 Act. She described the 12 months as a deterrent against this abuse—a means, so my noble friend said, for the rogue landlord to raise the rent. What about the genuine situation of a landlord getting possession of the accommodation, say on family grounds, to accommodate grandparents, and then one of the grandparents has a severe stroke which prevents both of them taking up the accommodation? Why should the landlord then be left with the property when he was genuinely seeking to accommodate members of his own family for 12 months? The question is: is it fair or right that the landlord is prevented for a whole year from letting out his property? That is a matter that I again address to my noble friend the Minister.

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[Lord Hacking (Lab)]

Happily, my noble friend has already sat down, so I need not use that phraseology. She will remember that all my amendments discussed today related to the 12-month provision. Will she agree to my also coming to any further discussions she has on the 12-month issue?

[Baroness Taylor of Stevenage (Lab)]

All noble Lords, including my noble friends, will of course be welcome to any meetings that are held.