Renters’ Rights Bill

Lord Truscott Excerpts

Monday 28th April 2025 Lords Chamber

The question that my noble friend the Minister has to answer is this: what the hell is the purpose of this, if I may put it strongly? Why should not the landlord be able to say, “You are not coming into the property until you pay the first month’s rent”?

[Lord Truscott (Non-Afl)]

My Lords, before I speak to my Amendment 111, I declare an interest as a landlord of over two decades and a former renter in the private rented sector for some 16 years.

As I mentioned before in Committee, the Bill before us has much to commend it. I support ending arbitrary evictions under Section 21, the imposition of a decent homes standard and the imposition of Awaab’s law in the PRS. Renters should not be exploited by the minority of rogue landlords. However, the fact remains that over 80% of tenants have a satisfactory experience in the PRS, and, despite HMG’s unduly negative impact assessment, it is the most popular form of rental tenancy—more popular than council housing or other forms of social housing. Remember, Awaab’s law came about because of the shocking state of some of the social rented housing, and will now rightly be applied to the PRS.

We should not blame the PRS for the failure of housing policy over previous decades and under Governments of all hues. There is a chronic shortage of affordable rental stock, and, where demand exceeds supply, rents inevitably go up, as mentioned by the noble Lord, Lord Thurlow, in a previous group.

More rental homes are needed in the PRS—some estimates say another 50,000 a year, on top of an extra 90,000 social homes, are required, as was outlined previously by the noble Lord, Lord Best. Ministers should ask themselves whether there is anything in this Bill which will increase the supply of affordable rental homes, or whether the best we can hope for is treading water.

It is often quoted that the PRS has doubled in size since the early 2000s, yet it is also a fact that the PRS stopped growing in 2016 when tax changes shifted the business model, and has since been stuck at 5.5 million homes, with the number of landlords buying offset by the number of landlords selling. Now that half of the PRS is owned by 20% of the landlords with the largest portfolios, this trend is accelerating. Many of these larger corporates tend not to house families; they impose the highest rent increases in an inflexible manner and, because they tend to own large, purpose-built flats, are distinct from local communities and smaller properties.

It is the smaller landlord who often has more interest in their tenant and property, embedded in the local community—I think the noble Lord, Lord Hacking, is probably one of them. This may be their only investment, and so they look after it well. Many are known to subsidise or help out their tenants in difficult times—which would be unlikely from a large corporate.

Forget for a moment whether there will be a mass exodus from the PRS because of this Bill, as the effects bed down; according to the ONS, by 2050 there will be 78 million people in this country—some 8 million more than now. Are we ready for that? If we think we have a housing crisis now, in 25 years it could become a major catastrophe. Against that background, anything which makes the current housing crisis worse should be avoided at all costs.

My amendment provides for tenants to pay up to 12 months’ rent in advance, if mutually agreed with the landlord. It provides security for both the tenant and the landlord. As has been said before in your Lordships’ House, thousands of people will be deprived of the opportunity to rent a home if advance payments are banned. As the noble Lord, Lord Jamieson, mentioned just a few moments ago, that includes students—particularly foreign students, on whom our educational institutions rely—who have no credit or banking history in this country. It also includes self-employed people and downsizers, who may have cash but no proof of income. It includes vulnerable people with poor credit histories and county court judgments against them. All these groups often offer rent in advance to prove they can afford to stay in their homes.

If the option of rent in advance is denied, literally thousands of people will be excluded from the rental market, as landlords will feel unable to take the risk of accepting tenants with no apparent source of paying their rent. Guarantors will be unable to give unlimited guarantees under rolling periodic tenancies. Once again, Ministers have a line. The line is that advance rent payments will discriminate against those with limited means. First, most tenants are never asked for advance payments. Landlords frankly prefer longer-term, stable tenants who can prove they have enough to pay the monthly rent. Students, for example, are not always the first choice of landlords, advance payment or not. Secondly, I hate to say it, but we live in a capitalist society. Banning advance payments was also not mentioned in Labour’s election manifesto, so it is within the conventions of this House to ask the Government to think again.

We should allow rental payments in advance because, at the end of the day, this measure will help more tenants than it will hinder.

[Lord de Clifford (CB)]

I support Amendment 111 and thank the noble Lord, Lord Truscott, for leading on this amendment. I also agree with a lot that was in the speech of the noble Lord, Lord Jamieson. The removal of the right to payment of advance rent will cause more tenants with problems accessing housing to find it even more difficult to get access to their choice as tenants. Currently, 7% of tenants pay advance rent, according to several letting agencies and credit reference agencies. I thank the Minister for her time meeting me on this matter. We have not heard what percentage of landlords are asking for or demanding advance rent.

The Bill targets these rogue, or possibly bad, landlords who are looking for secure rental income from tenants in this high-demand rental market. During our meeting, the Minister suggested that the answer for tenants who currently need to pay advance rent was to seek out a guarantor. Most tenants would prefer not to pay in advance if a guarantor was available or could be found. In my personal experience of being a guarantor for student accommodation for both my children, guarantors are asked for not only rent but other liabilities. Therefore, finding guarantors who will be willing to cover both rent and other liabilities is difficult. Also, guarantors need to prove their income and their assets. For foreign tenants, it will be very difficult to find a guarantor with UK income or assets, and that is one reason that advance rent is needed.

For students who do not have a guarantor, so they need to pay in advance, the suggestion was that universities could provide guarantee services. This would add further burdens to many universities, which are financially under pressure. The final suggestion was to approach a local authority, to ask it to act as a guarantor. I certainly will not challenge the Minister on her knowledge of local authorities, as her service to Stevenage and Herefordshire Councils is outstanding. Sadly, from the comments made in this Chamber and the press, it would seem that local authority services are under severe pressure, so surely the addition of increased requests would be a further burden and demand on limited resources.

Therefore, if you allow advance rent, you will not add further burdens to both local authorities or universities. There are products and companies providing guaranteed services. These services are costly to tenants and a significant percentage of tenants paying in advance have a low income or a poor credit rating, as previously stated. Again, this is not a logical move. Individuals who cannot provide an income source for some reason or are unemployed, who have the funds to pay rent but do not want to access a guarantor, will be disadvantaged in the tenant selection process.

The removal of the payment of advanced rent has great merits, as it addresses a very unwelcome trend in the marketplace for the demanding of large amounts of money, which restricts the number of tenants who can access certain properties. With the Bill as it stands, more tenants will be affected and denied access to a full range of properties. This amendment keeps flexibility for tenants on how their rent is paid. Therefore, I ask the Government to consider this amendment, or have further discussions, before Report.