Renters (Reform) Bill

Marcus Fysh Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Michael Gove]

Please forgive me; I am just responding to the right hon. Gentleman. It is the case that our effective system of tribunals ensures that excessive rents that are way out of kilter with the market can be dealt with. However, one of the challenges of rent controls of the kind that I believe he is advocating, and that have been advocated by others on the Labour Front Bench, is that they are proven to reduce supply overall, and a reduction of supply on the scale that an intervention of the kind that he puts forward would only increase rents and reduce the capacity of people to be able to live in the private rented sector.

[Mr Marcus Fysh (Yeovil) (Con)]

Does my right hon. Friend not agree that the Bill would do exactly what he has just been saying is the problem with rent control, which is to drive private landlords out of the market? Is that not entirely contrary to the Government’s main aim right now, which is to bring down inflation? Private rents are the key cause of core inflation, and this is a disastrous Bill for every renter in the country who wants to see a well-supplied housing market.

[Michael Gove]

I am very fond of my hon. Friend, but that is just not true. We have seen an increase in the number of homes in the private rented sector recently, not a reduction. [Interruption.] As we say in Scotland,

“facts are chiels that winna ding.”

There is no evidence at all that the abolition of section 21, and at the same time the enhancement of section 8, will lead to any reduction in the number of homes in the private rented sector. However, let me say to him, and to the whole House, that what we need is not so much an arbitrage between the private rented sector and the number of homes available for private ownership, or indeed the social rented sector, but more homes overall. It is that which is at the root of our challenge, and we will solve it with our long-term plan for housing, which was outlined in July of this year.

--- Later in debate ---

[Craig Whittaker (Calder Valley) (Con)]

Everybody agrees that people deserve to live in rented homes that are safe, warm, free from damp and mould, and in which they can feel secure. Nobody doubts that intention, or the fact that rogue landlords should be clamped down on and be made responsible. However, rogue landlords are the minority—the Secretary of State has said that on the Floor of the House—yet despite that, the Government seem to be tarring every landlord with the same brush with the Bill. The ironic fact is that there is already a plethora of legislation that allows local authorities to clamp down on every housing issue, including the scourge of the rogue landlord. One issue is that councils themselves are often the rogues, citing resources as an excuse for inaction, and with private landlords they already take action, or at least have the powers to take action if they so wish.

Without wishing to pinch the TV advertising slogan, this Bill does not do what it says on the tin. It should be renamed the “rogue landlord and nightmare tenants Bill”, because all it does is force good landlords to take action that they would not normally take. To highlight what I mean, this is what has happened in the past. The Government forced landlords to put deposits into a Government-approved scheme, which landlords did. Any landlord who has tried to get money back from that scheme when tenants have caused damage will know that it is nigh-on impossible. So instead of putting money into deposit schemes, many landlords now do not take deposits. Instead, they have increased rents in order to cover the cost.

The Government do not treat private landlords as sole traders, but instead treat the whole income from rents as taxable, whether someone has a mortgage on the property or not. The result of that is increased rents. The Government stopped paying landlords directly when tenants on benefits are in arrears, instead saying that the contract is with the tenant and not the Government. As a result, good landlords are now forced to take rent in advance—in the old days they used to take it in arrears as those tenants on benefits were paid by universal credit—and they have increased the rents because of the higher risk. Many, many landlords do not take people on benefits as a result of that. The Government say that they will legislate to make it illegal for landlords to discriminate against those on benefits, but when landlords have between 20 and 50 applicants for each house, all the legislation in the world will not make a ha’porth of difference, because the landlord will always take the most risk-free option.

One key component of the Bill is the removal of section 21 “no fault” evictions—because of the time limit I have had to strip loads out of this speech, Madam Deputy Speaker. Leaders Romans Group is one of the UK’s largest property maintenance companies. Indeed, it has a landlord client base of more than 65,000. It took a sample survey from those landlords and found that section 21 of the Housing Act 1988 is rarely used, rarely overused, and even more rarely misused. Of all those who responded to the survey, 80% had never used section 21. Of those who had, a significant majority—over 60%—did so because the tenant was in breach of the lease. The English Housing Survey 2021-22 found that only 6% of tenancies ended at the landlord’s volition. Both figures demonstrate the fact that the vast majority of landlords do not evict tenants on a whim. To end no-fault evictions through the abolition of section 21 is extreme, unnecessary and damaging to both landlords and tenants.

Let me give a couple of examples about using section 8 evictions to replace section 21. Ground eight is currently the most heavily relied on ground for landlords trying to gain repossession, and it currently provides a two-week notice period. It applies where the tenant is two months in rent arrears at the date of the section 8 notice and the date of the possession hearing. In the Bill, the notice period has been extended to four weeks. Also, any outstanding universal credit payments that the tenant is due to receive are not to be included when calculating the arrears, if the universal credit payment would reduce arrears below the two-month threshold. The Government cannot say to landlords on one hand that the contract for UC is between the landlord and the tenant, but in the Bill say that the landlord has to take off the pending UC payments for rent. It is a nonsense.

I am short of time, so I will briefly mention expanding the powers for antisocial behaviour under section 8 of the Housing Act 1988. It is unlikely to change the effect of ground 14, which—I think this question was asked earlier—is not mandatory but discretionary. That means that the judge has to consider whether it is reasonable to make a possession order, even if a tenant is guilty of the alleged conduct. It is very unlikely that any court would consider some trivial conduct to justify a possession order.

As has been mentioned several times, the real issue is the inaction in building more houses for people to live in—that is not just this Government but successive Governments. The market will not change until a Government grasp the nettle and literally put spades in the ground, as Macmillan did in the 1950s. There is a reason why we have the Homes for Ukraine scheme: it is because we do not have any houses to put people in. There is a reason why over 100,000 young men are staying in hotels in this country: it is because we have no homes to put them in. The Bill will do absolutely nothing to improve the rental market. It will drive more landlords from the system. The Secretary of State said earlier that the number of landlords in this country has stayed static since 2016, but I would like to know exactly where he gets that information from as it is not the information coming from the market.

[Mr Fysh]

Is my hon. Friend aware that just five days ago Jones Lang LaSalle, one of the biggest property consultants in the world, published a report that analysed Rightmove evidence of rental market availability? It shows that in the south-east and south-west of England, rental availability is down by 32% on 2019. Is that caused by some of the things my hon. Friend has been talking about?

[Craig Whittaker]

My hon. Friend is absolutely right. This is a problem right throughout the country, not just the south-east. It is happening in the north in Calder Valley—wherever people are, there is an absolute shortage of homes, whether socially or privately rented. The Bill will do nothing to improve the rental market. It will drive more landlords from the system, and because of those shortages of homes to rent, where dozens of people apply for any homes that are available, the Bill will also do nothing to curb the rogue landlord element.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

As the hon. Member for Strangford (Jim Shannon) and I know, always being called last means that we have the enjoyment of listening to the whole debate. Today’s debate has been extremely valuable across the House, going into forensic detail on the Bill.

I want to make a plea for urgency, that is all. I welcomed the inclusion of this issue in the Conservative manifesto. In fact, I congratulated my then constituency neighbour, the right hon. Member for Uxbridge, on bringing it forward. I also accused him of plagiarism, because it was in our last two Labour manifestos. I congratulated him because, as many have reported today, my constituents are in a housing crisis. Most of the council housing has been sold off. To go on the housing waiting list, they must have lived in the area for 10 years, and they have to prove that with documentation, which many people cannot. Once on the housing waiting list, they will wait between three and five, maybe seven, years. Their children will have grown up by then.

Four thousand new properties are being built in the middle of my constituency, but there are barely any that my constituents will be able to afford, because the prices are so high and the wages in my constituency—despite high employment levels—are relatively low. Since 2010, rents have gone up on average by three times the rate of wage increases. In London alone, rents over the last year are up 15% on average. In some areas, they are up 20% to 25%. Basically, that means that people struggle to get a roof over their heads, whether from the council or rented, and certainly struggle for owner occupation. I do not know any firefighter, teacher or NHS worker in my constituency who lives there any more—they commute for miles because they cannot afford accommodation in the constituency.

People live in my constituency in slum conditions: damp, cold, unsafe and mouldy, as we heard from my hon. Friend the Member for Putney (Fleur Anderson). I have the phenomenon of beds in sheds. In my office, we have a moral dilemma about whether we tell the council that someone is living in a shed, because we know that if we do, enforcement comes in and that person is then homeless, with nowhere to go whatsoever.

As has been said throughout the debate, as soon as people complain about the conditions or rents, the landlords bring in section 21. That is why it was right for the Conservatives to include the Bill in their last manifesto, and I welcomed it. Landlords always use the excuse that they are moving in a relative. We would need genetic link mapping to identify the relationship between some of the tenants who move in and the family. Landlords might say that they are selling the property but, as has been said, when we tour around, we see that in fact they have not: within days, the “To let” board goes up. They scam us all the time.

My constituents live in fear of complaining at all because they know that if they do, many of them will lose their properties. It is correct that the majority of landlords are good, but it is the rogue landlords that I fear the Bill does not address.

[Mr Fysh]

Does the right hon. Gentleman accept that, in London, part of the problem is that the amount of rental property available for new renters on the market is 20% down? It is important to encourage good landlords, as he talked about, to have longer rental periods. Should we incentivise them to do that through things such as tax breaks?

[John McDonnell]

Look, the major problem is that we are not building enough council houses. On the Conservative Benches a couple of Members referred to Harold Macmillan. Harold Macmillan took on from Clem Attlee a huge housing programme and built council houses. My family was a beneficiary of that. We moved out of a slum and into a council house. We just need to build more council houses. We cannot rely on the private market, because it profiteers. In my constituency, landlords can make a profit by leaving the property empty because the price will always go up, and sometimes they do not want to be encumbered by a tenancy. When tenants complain, they get kicked out and are made homeless. In my constituency, people have been pushed all around the country. I have people living in a Travelodge in Slough. They have to bring their children into Hayes each day, which takes an hour and a half. Then there is temporary accommodation with poor conditions and hostels. We have children being brought up in temporary accommodation. I looked at the figures: 131,000 children are now living in temporary accommodation.

I fully support the Bill’s getting rid of section 21, but the problem is exactly as my hon. Friend the Member for Blaydon (Liz Twist) said. The sanctions and conditions will render it totally ineffective. Landlords will simply take a three-month hit and then rent it out straight after that. And to rely on the court system! We have to be honest with one another. The Government have closed 300 county courts. There was a cut of 35% in the Justice budget over the last period. In addition, if we are looking to local authorities to enforce, nearly 20 local authorities are under section 114 notices. In other words, they are bankrupt and do not have the staff to do the enforcement. To be frank, in many areas now the lack of access to basic legal advice—not legal aid, but basic legal advice—from local law centres is non-existent. My citizens advice bureau, bless it, works so hard, but it is rushed off its feet so it cannot provide sufficient advice on the scale that is needed.

My plea is for urgency. We have had a really good debate, a forensic analysis of the Bill: the detail and the beneficial elements, but also the gaps and the need for change and amendment. I hope the Committee will, on Report, bring back a significantly amended Bill that will scrap section 21—that is what both parties promised in our manifestos at the last election, and I believe that other political parties did exactly the same. There is unanimity in this House to scrap section 21, but we must do it with a sense of urgency and we must do it effectively.

--- Later in debate ---

[Rachel Maclean]

I thank my hon. Friend very much. I can absolutely give him that assurance.

[Mr Fysh]

Does the Minister accept that if the Country Land and Business Association’s estimate is correct that the Bill may reduce the available private rentals by 40% in rural areas, that could have a completely deleterious effect on the Prime Minister’s main pledge, which is to get inflation down? Core inflation is driven by rentals. Will the Minister work with me to fix the Bill and ensure that that does not eventuate?

[Rachel Maclean]

I am very happy to work with my hon. Friend on this and many other issues, but it is important that I say that we have done considerable analysis. There is no evidence, such as the estimate that he has just pointed to, that the Bill will lead to landlords leaving the sector, but it is right that any policy that the Government bring in is based on evidence. That will always be our approach.