Renters (Reform) Bill

Lord Khan of Burnley Excerpts

2nd reading
Wednesday 15th May 2024 Lords Chamber

[Lord Khan of Burnley (Lab)]

My Lords, it is a pleasure to close this Second Reading debate for the Opposition, and I thank all noble Lords who have participated at this stage of the Bill. The expertise, skills and knowledge on this subject in your Lordships’ House have been demonstrated in a most eloquent manner, and I agree with the noble Lord, Lord Cromwell, that it has been a fantastic and diverse debate. I also pay tribute to all the campaign groups and organisations that have campaigned consistently on the Bill. I thank all of them for their very helpful briefings, and I agree with the noble Baroness, Lady Jones of Moulsecoomb, that I have never had this number of briefings on any Bill I have worked on in your Lordships’ House.

On these Benches, we welcome the Bill. As the noble Lord, Lord Best, said, this is an improvement, with steps to redress the landlord and tenant imbalance. As my noble friend Lady Lister rightly said, it achieves a fairer balance between landlord and tenant while increasing tenant security. In fact, I actually welcome much of what the Minister said in her opening remarks. However, the point has to be made that, unfortunately, three Prime Ministers and 10 Housing Ministers later, and five years since committing to abolish Section 21, nearly 85,000 households have been threatened with homelessness by a no-fault eviction. The Government’s dither and delay have had a catastrophic effect on families across the nation.

I want also to turn to a point made by my noble friend Lord Hacking—I apologise that he was not at the top of the list; nevertheless, he made some very important points. There were 225 amendments and 24 new clauses tabled in Committee in the Commons, and 183 amendments and 52 new clauses tabled on Report. The amendments and new clauses were actually lengthier than the Bill when it started out, which I think is cause for concern. We are seeing too many Bills coming here with huge numbers of amendments tabled in Committee and on Report.

Renters are at the sharp edge of the current housing crisis and urgently need the protections and support in the Bill. We will be pleased to finally see the abolition of Section 21, whenever that actually happens—let me repeat, “whenever that abolition actually happens”, a point made by noble Lords across this House. Since October 2023, the Government have stated that they

“will not commence the abolition of section 21 until stronger possession grounds and a new court process is in place”.

The Bill as drafted already provided for a two-stage commencement process for the introduction of the new regime, with precise dates for new and existing tenancies to transition to be determined by the Secretary of State. However, the government amendment on Report in the other place was very widely drawn, with no time limits or obligations on the Secretary of State to enact the ban on no-fault evictions, regardless of the outcome of the Lord Chancellor’s assessment. This would effectively allow the Government to stall on the enactment of the ban indefinitely. As the noble Lord, Lord Thurlow, said, this could happen in a year, in 18 months or not happen at all. Landlords and tenants should be given certainty about precisely when the Government’s manifesto commitment to abolish Section 21 no-fault evictions will be enacted. As my noble friend Lady Taylor of Stevenage said in her opening speech, we will bring forward an amendment to ensure that Section 21 of the Housing Act 1988 will be repealed on the day the Bill receives Royal Assent.

We also welcome the simplification of tenancies, which will give renters more flexibility and more rights. It is right that periodic tenancies should become the norm. For too long, renters have lacked basic power and control over one of the fundamentals of life, their home. Tenants have struggled to challenge unfair treatment without undergoing lengthy and expensive court proceedings, a point made very eloquently by my noble friend Lord Adonis.

Hence, we welcome the creation of a new ombudsman who has the potential to be an essential part of the redress system. I agree with my noble friend Lady Warwick of Undercliffe on the need for the proper steps to ensure that there is a fair process for the procurement of the new private sector ombudsman. If this ombudsman is given the proper teeth and resources, they will have an important role to play in levelling the playing field.

The tragic death of two year-old Awaab Ishak, caused by the damp and mould in his home, shocked the whole nation. With our support, the Government introduced Awaab’s law in the social housing sector, and they were right to do so. But the problem of debilitating damp and mould, and landlords who fail to investigate such hazards and make the necessary repairs, is not confined to social rented homes. A Citizens Advice report published last year made it clear that the private rented sector has

“widespread problems with damp, mould and cold, driven by the poor energy efficiency of privately rented homes”.

The report went on to evidence the fact that 1.6 million children in England currently live in cold, damp or mouldy privately rented homes.

According to the English Housing Survey, 23% of homes in the private rented sector do not meet the decent homes standard. That is around 1 million homes. This compares with 13% of owner-occupied and 10% of social rented homes. In the face of such a pervasive problem, we can think of no justification whatever for restricting Awaab’s law purely to the social housing sector. We hope that the Government will agree and accept the same law for the private rented sector, because we can think of no reason whatever why they would resist doing so.

In the other place, in relation to the issue of safe and decent homes, Minister Jacob Young said it would be dealt with through enforcement by local housing authorities as well as the private rented sector ombudsman, and that the Government considered that this was of no interest to tenants. We are not convinced by the Government’s response. How have the Government determined that there is no interest in Awaab’s law among tenants in the private rented sector? Have the Government consulted with them?

If anything, there is a stronger case for applying Awaab’s law in the private rented sector. Things are worse in the private rented sector, as illustrated by the Citizens Advice statistics I have just read out. We will come back to this at a later stage in the Bill. If the measures are appropriate for the social rented sector, they should be appropriate for the private rented sector. Does the Minister accept that conditions in the private rented sector are far worse than in either the social rented or owner-occupied sectors, with 1.6 million children living in cold, damp or mouldy homes? If so, why does she not support tougher measures to compel landlords to rectify these problems?

I further ask the Minister to tell us what estimates the Government have made of the number of households likely to be threatened with homelessness by a Section 21 notice, from now until the time when the Lord Chancellor completes his assessment of the courts. Is the Minister concerned that the new, more vague definition of anti-social behaviour could lead to victims of domestic abuse being evicted on anti-social behaviour grounds while undergoing the trauma of abuse? This point was made by my noble friend Lady Lister, as well as by the noble Baroness, Lady Thornhill. My noble friend asked for justification for the wording; I look forward to seeing what response the Minister will give.

There have been a number of excellent contributions, but I want to pinpoint the interesting historical significance that the noble Lord, Lord Best, provided us with. The noble Lord outlined that, in the 1980s, the private rented sector was 9% of the nation’s rented homes. In the 2000s, that became 20%. Some 2.3 million private landlords are still looking to this Bill to ensure that their life gets better. The noble Lord talked about the demise of council house building, and how social housing has gone from 34% to 17% of the sector. The noble Lord also reminded the House that there has been a doubling of the private rented sector, and a halving of the social housing sector. At the heart of what he said—the very centrepiece of the Bill—is the lack of housing: there has not been enough housing built.

I was delighted to hear from the noble Lord, Lord Frost, who also made this very important point. In fact, he outlined that the target of 300,000 was last met in 1977. I liked the fact that he talked about reforming planning and building 300,000 houses per year; he sounded like he was reading the Labour Party manifesto for the next general election. I understand the point that we need to create better housing. There is a dysfunctional housing market, as the noble Lord stipulated, and the Government are consistently missing the housing targets.

The Bill is an important step forward. Supporting renters at the sharp edge of the cost of living crisis is very important, so we should all support this. On these Benches, we will work constructively throughout the passage of the Bill. This is a vital piece of legislation, because it seeks to provide greater security and stability for renters. This matters, because housing instability destroys wealth creation, damages life chances, restricts educational prospects and harms health. It is not just about policies; it is about people and their dreams, fears and aspirations. We need to build a system that uplifts everyone, regardless of their housing situation—a point that the right reverend Prelate the Bishop of Chelmsford made in terms of “safe, secure and sustainable”.

On these Benches, we strongly support fundamental reform of the private rented sector and have called for it for many years. Regardless of whether they are a home owner, leaseholder or tenant, everyone has the basic right to a decent, safe, secure and affordable home. Much more needs to be done to decisively level the playing field between landlords and tenants, and a Labour Government will seek to truly strengthen protections for private renters, so that they finally get the long-term security and better rights and conditions that they deserve. We look forward to working with noble Lords across the House to strengthen this much-delayed Bill and commit to a future where renters are empowered and their rights protected, and where housing stability is not a privilege but a fundamental right. We need to build a fairer, more compassionate housing sector that truly serves the people. I look forward to the Minister’s response.

--- Later in debate ---

[Baroness Swinburne (Con)]

I will check that but my notes tell me that it is six months before they can serve their notice.

I reassure the House that we are exploring potential exemptions to this six-month period in extreme circumstances, such as where there are serious health hazards, the death of a tenant, for victims of domestic abuse, and other such important issues. We will bring these forward as the Bill progresses.

With regard to domestic violence, as many noble Lords raised, we recognise that domestic abuse can be interpreted as anti-social behaviour by neighbours—for example, frequent shouting and intolerable noise. It would be wrong to evict victims, which is why it is important that the judicial discretion is used in ground 14 eviction cases. To consider eviction would be a reasonable step in these circumstances.

Many noble Lords raised the issue of a longer notice period for possession grounds, and powerful arguments for that have been made today. However, we believe that the notice periods for the grounds are set at a length which balances the needs of both tenants and landlords. They give tenants time to find a new home while ensuring that landlords can manage their assets when they need to.

Noble Lords have called specifically for tenants to be protected from the moving and selling ground for a longer period at the start of their tenancy, and we are already protecting tenants’ security by ensuring that landlords will not be able to use these grounds in the first six months of a tenancy. We believe that six months strikes the right balance between improving security and, of course, allowing landlords to continue to feel confident in the market.

The Government are committed to preventing homelessness before it occurs. The Bill will help to do that by abolishing Section 21 evictions, giving tenants greater security of tenure and, we hope, reducing the risk of homelessness. We are also providing total support of £108 billion over 2022-25—an average of £3,800 per UK household—to help households with the high cost of living. This includes increasing the local housing allowance to the 30th percentile of market rents from April, which will mean that 1.6 million low-income households will be around £800 a year better off on average in 2024-25, and over 740,000 have been prevented from becoming homeless or supported into settled accommodation since 2018 through the Homelessness Reduction Act. Between 2022 and 2025, we are investing over £1.2 billion into the homelessness prevention grant, which funds local authorities to work with landlords to prevent evictions and offer alternative sources of accommodation.

With regard to Awaab’s law, I am grateful for this being raised. We agree that no tenant should have to live in dangerous housing conditions. We are taking steps to ensure that hazards in rented homes are dealt with, but how we achieve this needs to take into account the differences between the private and social rented sectors.

Awaab’s law was developed for the social housing sector, in which landlords manage large portfolios of usually between 1,000 and 10,000 properties, and have dedicated repairs and maintenance teams. We believe that it is not the right approach for the private rental sector, in which 82% of landlords have fewer than five properties. Instead, we are strengthening enforcement against hazards in private rented homes. Local councils will be able to issue immediate fines of up to £5,000 if a dangerous hazard is present in a privately rented property and the landlord has failed to take reasonably practical steps to address it. We are also introducing the decent homes standard in the private rental sector for the first time, providing local councils with enforcement powers to require landlords to remedy failures to meet requirements.

[Lord Khan of Burnley (Lab)]

We had all these enforcement measures in the social rental sector but we still brought in Awaab’s law. The argument is for enforcement and the decent homes standards, but in the social housing sector we had all the support mechanisms in place—I understand the difference between large social housing and houses for couples or mum-and-dad families—so why the differentiation? Why could we not have Awaab’s law? The Minister says that this is a different situation, but there is still the opportunity to enforce and fine social housing landlords, so why differentiate?

[Baroness Swinburne (Con)]

The difference, as I have just alluded to, is between one person having to get external maintenance people in, and so be at the mercy of their agenda, and maintenance crews that can be sent to those areas that need prioritising. I have a huge number of questions to get through, so I apologise for being abrupt.

Many noble Lords raised concerns about the impact of reforms on the student market. Since introducing the Bill, we have heard from across the sector that, as originally drafted, the Bill would have interrupted the student housing market, reducing the supply of vital properties in university towns and cities. We have listened to these concerns and have introduced a new ground for possession which will allow landlords renting to students to seek possession ahead of each new academic year, facilitating the yearly cycle of short-term student tenancies. The ground has been carefully designed to balance the needs of both landlords and students. It will apply to any property that is let to full-time students, as long as the landlord gives prior notice to tenants at the start of the tenancy that the ground will apply.

Regarding different dates being used rather than the traditional academic year, there is nothing to stop landlords renting properties in January to students starting their studies at that time. Most students will continue to move in line with the traditional academic year. This ground provides a backstop for the majority of students studying from September. The alternative would be to allow the ground to be used at any point in the year, which would give tenants no certainty.