Renters’ Rights Bill

Lord Willetts Excerpts

Tuesday 4th February 2025 Lords Chamber

[Lord Willetts (Con)]

My Lords, I congratulate the noble Lord, Lord Wilson of Sedgefield, on his excellent maiden speech, its eloquence and his extraordinary personal story. This afternoon, behind the Bench of Bishops, we may have seen another constitutional function emerge in this House: the Bench of Blairites. I welcome the noble Lord and appreciate what he said about his predecessor as Member of Parliament. He also spoke eloquently about opportunity, and that is a test against which the measures in the Bill should be assessed.

I thank the Minister for her willingness to engage in discussions with all of us across the House. In her opening speech, she referred to genuine problems with the private rented sector, the difficulties for people in employment if they lose their accommodation and the incredible difficulties for parents with a child at school if they face the uncertainty of losing the place where they live. She ended by saying that she hoped this legislation would help tenants put down deeper roots in the community.

That was all very eloquent, but it revealed a way of thinking that simply does not reflect the reality of student accommodation, for which these concerns do not apply. There are over 1 million students in the private rented sector and a long-standing problem, preceding this Government, is that, although access to private rented accommodation has been crucial to the growth of higher education in this country, the housing department has never really understood higher education and the education department has never understood the importance of private housing. I fear that this legislation is an example of that phenomenon.

For example, students receive maintenance loans in three separate payments during the year. Many rents historically have been structured around the payment of maintenance loans. There is now an assumption of a monthly rental payment model and no scope for landlords to offer tenancies structured around maintenance loans. Have there been any conversations with the education department about changing arrangements for the payment of maintenance loans so that they match the envisaged new payments of rents? Those are the kinds of practical issues that matter and are acute if there is no understanding of the problems facing students.

Students have genuine grievances. At the All-Party Group for Students last week, all of us from both Houses were left in no doubt about their unhappiness, which was sometimes about the quality of student accommodation and sometimes about the role of guarantors, for example. But few believe that the Government’s proposals, as they stand, will make these problems significantly better. Indeed, there is a danger of landlords exiting the system.

The Government have already made some welcome concessions. First, there is the exemption for purpose-built student accommodation. This is estimated to cover about half a million students out of the 1.2 million in private rented accommodation. It is the most expensive and is heavily regulated—quite rightly. There are significant constraints on its supply and on its further provision.

We have recently had the famous ground 4A exemption, which means that landlords can repossess a rented property in advance of the new academic year. This applies to landlords of HMOs with three or more bedrooms. As the noble Baroness, Lady Warwick, said, this does not cover the many smaller landlords of smaller student accommodation with one or two bedrooms.

It is estimated that, of the 1.2 million students in the private rented sector, half a million or so are in purpose-built accommodation. There may be another 300,000 or 400,000 in the larger HMOs, and there could well be 200,000 to 300,000 in the smaller private landlord arrangements for which there is currently no special recognition. Will the Minister consider, for example, extending this exemption beyond large HMOs to all private landlords?

More radically, will the Minister consider the case for continuing to allow 12-month academic year tenancies —a system which has worked well overall? Does she recognise that there are other risks with some of the provisions in the Bill? For example, upfront payments may now be much harder to require. However, there will be the increased use of guarantors. Requiring a guarantor for a student from a low-income background is very tough, as is requiring a UK guarantor for an overseas student.

Perhaps the housing department is fed up with special pleading on behalf of students, but I think the crucial criterion is one of opportunity, as we heard in that excellent maiden speech. In the purpose-built accommodation—PBA—the rents for students average about £190 a week, in contrast with about £130 a week charged by small private landlords. We could end up with a system where the more expensive accommodation sector grows and is exempt. By and large, this is more expensive and occupied by the affluent students. In future, low-income students might find it harder to access the diminishing amount of lower-rent accommodation. Maybe they are supposed to stay at home and become commuter students. Some people want to see that. A very good social rule of thumb is that the more affluent someone’s family and the higher their social class, the greater the distance they go away to university. The low-income students will be staying at home and commuting, while the students from affluent backgrounds will pay high rents in high-quality, purpose-built accommodation a long way from home. If we end up with this, it will not be meeting the opportunity challenge. I very much hope the Minister will accept that her proposals need to be assessed as to whether or not they promote educational opportunity in our country.