Renters (Reform) Bill (Seventh sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 153, in schedule 1, page 74, line 20, leave out paragraph 22.

This amendment would remove the new ground for possession for repeated rent arrears.

Amendment 154, in schedule 1, page 74, line 22, leave out “three” and insert “one”.

This amendment would limit the period to demonstrate repeated serious rent arrears to one year.

Amendment 155, in schedule 1, page 74, line 25, leave out “a day” and insert “two weeks”.

This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.

Amendment 156, in schedule 1, page 74, line 28, leave out “a day” and insert “two weeks”.

This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to continue our line-by-line consideration of the Bill with you in the Chair, Mr Paisley. As you said, we adjourned on Tuesday with the Minister having responded to amendments 180, 153, 154, 155 and 156. That response, which you did not have the pleasure of hearing, was deeply unsatisfactory. It amounted to little more, I have to say, than an unsubstantiated assertion of the Government’s position that new mandatory ground 8A is required to support landlords in all instances of a tenant falling into serious arrears, and to prevent tenants from repeatedly paying down a small amount of arrears to frustrate existing ground 8 possession proceedings.

In moving amendment 180 and speaking to the other amendments in the group, I advanced three arguments as to why the Government’s position is flawed. First, there are already robust mechanisms in place, namely discretionary grounds 10 and 11, to deal with the very small minority of problem tenants who attempt to game ground 8, and courts use them. Secondly, new ground 8A can be gamed in much the same way as the Government believe existing ground 8 is being gamed, and ground 8A will have the added flaw of actively discouraging tenants from paying off a third set of arrears because they know that they will inevitably lose their home. Thirdly, all the evidence suggests that the number of people seeking to game ground 8 is vanishingly small, if not non-existent.

The Minister did not provide a rebuttal to any of those arguments. There was no response from him to our argument that new ground 8A can be gamed in much the same way as ground 8, and that it will have an impact on landlords as a result of incentivising tenants to avoid paying their third set of arrears. There was no response to the point that all the evidence suggests that the number of tenants gaming ground 8 is vanishingly small. After we heard extensive expert testimony last week supporting our arguments, the Government essentially said on Tuesday, “We dismiss the evidence. We think we know better.” To say that their position is unconvincing would be a gross understatement. I say to the Minister that he is going to have to do better on some of these very controversial clauses on Report.

We are extremely concerned about the implications of leaving new ground 8A in the Bill. We believe that it will lead to a great many vulnerable tenants being evicted unfairly. These are tenants who, I remind the Committee, will be struggling financially. Many will be in crisis and will desperately require debt advice and support, but we know they will have been trying to do the right thing because they will have made previous attempts to pay off their arrears in full. As I argued in our last sitting, the idea that we are talking about a bunch of people familiar enough with ground 8 in schedule 2 of the Housing Act 1988 to sit down and work out how they can game it is frankly insulting.

This is a punitive and draconian measure that will cause great hardship without providing the additional certainty that the Minister claimed it would. It is not necessary to tackle the genuine instances of persistent arrears or the rare instance of a problem tenant seeking to deliberately avoid ground 8 action. On that basis, we intend to press to a vote both amendment 153, which seeks to remove new ground 8A from the Bill entirely, and, if that fails, amendment 180, which seeks to make the ground discretionary. We will certainly be returning to the issue at a later stage.

[The Chair]

Just to clarify, I will put the Question on amendment 180 first.

Question put, That the amendment be made.

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[Helen Morgan]

It is a pleasure to see you in the Chair, Mr Paisley. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

I tabled these amendments to reflect my general concerns about the potential for abuse of ground 14, the discretionary ground for eviction on the basis of antisocial behaviour. We heard, both on Second Reading and in last week’s evidence sessions, about concerns that ground 14 could be used to evict a tenant who is a victim of domestic abuse or is suffering with mental ill health or a physical condition that could cause annoyance to surrounding neighbours.

We also heard last week from Liz Davies KC, in our fourth sitting, that the threshold is being lowered by a very small margin. She said that it was difficult to see circumstances in which behaviour would not meet the threshold of “likely to cause”, but would meet the threshold of “capable of causing”. She outlined that, in her experience, courts use the existing discretionary ground wisely, to rightly allow possession where there is a flagrant problem with antisocial behaviour. We have no reason to believe that courts will not continue to do so. I am therefore a bit perplexed as to why the Government have tried to slightly lower the bar for eviction. Further to our recent discussions of other amendments, I am concerned that it is to allow landlords to exploit the clause as a route to an easier eviction.

Amendment 130 would maintain the existing definition, which, as we heard last week, should be sufficient for landlords to evict where antisocial behaviour is a genuine problem. Unless the Minister can provide some reassurance that the changed terms will not lead to an increased number of evictions, I intend to press amendment 130 to a vote.

Amendment 131 reinforces that point. Literally interpreted, the legislation does not specify whether or not a visitor exhibiting antisocial behaviour is regularly attending the property. Clearly tenants should be protected from eviction where there has been a single or very intermittent problem. Indeed, a regular antisocial visitor may not be welcome at the property; they may be regularly attending to intimidate or cause distress to the tenant.

I have a piece of casework in which the tenants of a property, through no fault of their own, have been subjected to intimidation and verbal abuse by a member of the community who lives elsewhere. I do not doubt that that causes nuisance and annoyance for other residents, but it would be grossly unfair to evict those tenants. In all likelihood, it would not resolve the problem in the long term either; it would just shift it to a different place in the same town.

I will not press amendment 131 to a vote, because ground 14 is discretionary and we should trust the judgment of the court as to whether an eviction is appropriate in each individual case. However, as we have heard of instances where unreasonable evictions have taken place, I would welcome an assurance from the Government that there will be safeguards and guidance in place to prevent the innocent from being evicted by an unscrupulous landlord under ground 14.

[Matthew Pennycook]

I rise to speak to amendment 158 and new clause 55, which stand in my name and in the name of my hon. Friends.

It is a pleasure to follow the hon. Member for North Shropshire. Both her amendments to schedule 1, in relation to the proposed revision of existing ground 14, are welcome. Indeed, we tabled an identical amendment to her amendment 130, but it was not selected, on the basis that it was an exact duplicate—that is a lesson for the whole Committee on the importance of tabling amendments in a timely fashion. If the hon. Lady presses her amendment 130 to a vote, we will certainly support it.

As the hon. Lady set out, paragraph 23 of schedule 1 to the Bill will widen ground 14 of schedule 2 to the Housing Act 1988 to include behaviours

“capable of causing nuisance or annoyance”,

as opposed to the existing language, which merely refers to

“likely to cause nuisance or annoyance”.

We are pleased that the Government are not proposing to make existing ground 14 mandatory, as some had feared prior to the publication of the Bill earlier this year. The court will therefore still have discretion to judge whether it is reasonable and proportionate to evict a tenant for the behaviour in question.

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[Matthew Pennycook]

The Minister must have been listening to a different balance of the totality of the evidence from what I heard. I heard significant criticism of this proposed change by the Government. He still has not given me an example of the types of behaviour that would not fall under the existing definition, but that would be covered by the expanded one. I think that is because the change is driven more by the politics of what is required to get the Bill through than by any empirical evidence that such a change is required to deal with instances in which landlords cannot recover their properties from tenants who cause antisocial behaviour.

[Helen Morgan]

We heard extensively from the representative of Grainger plc about antisocial behaviour. I felt that her evidence demonstrated clearly that the existing grounds were adequate for tenants to be evicted under such circumstances. Does the hon. Gentleman agree?

[Matthew Pennycook]

I think that is a worthwhile intervention. I heard the evidence from Grainger and others highlighting concerns about this ground, so the Government are just wrong if their position is that expert opinion out in the country is that there is no problem whatever with the proposed change to ground 14.

We agree with the hon. Member for North Shropshire that the Government should remove paragraph 23 of schedule 1 and leave ground 14 with the current “likely to cause” wording. However, if they resist doing so, we urge the Minister to at least consider clarifying, as I have asked him to, what kind of behaviour is and is not capable of causing nuisance or annoyance so that county courts can better exercise their discretion about whether eviction is reasonable and proportionate in any given circumstance once the Bill has come into force. Let us be clear: the Government’s eleventh-hour new clause 1 does not do that. Indeed, it is not clear what on earth they are trying to achieve with it. As with so much of what the Government have tabled fairly late, we suspect it is more a product of rushed thinking than anything else.

New clause 1 would make it a requirement for the court to consider, in particular, the effects of antisocial behaviour on other tenants of the same house in multiple occupation, but that is already the case. Judges already have to consider the impact of behaviours that could be categorised as antisocial on others, so why do the Government feel the need to specify that they are required to do so via this amendment, purely in relation to HMOs? I would be grateful if the Minister could provide us with a reason. Will he also explain why the Government do not believe this provision needs to cover, say, a house under part 3 of the Housing Act 2004 or a rented property that is not covered by parts 2 or 3 of that Act?

The new clause also provides for the court to take into account as a factor in its determination

“whether the person against whom the order is sought has co-operated with any attempt by the landlord to encourage the conduct to cease.”

Again, when considering antisocial behaviour, the courts can already consider, and frequently do, what efforts the tenant has made to co-operate—for example, what the tenant’s response has been when a landlord has tried to contact them to press them to bring the offending behaviour to an end.

Of course, that presumes that the landlord has tried to contact the tenant, but that highlights a more fundamental problem with the new clause. At present, there is no duty on landlords to prevent or take steps to stop antisocial behaviour on the part of their tenants. I am thinking of the extensive case law reviewed in the recent Poole Borough Council v. GN judgment. Is the new clause an attempt to impose such a requirement surreptitiously? If it is, I wonder what the National Residential Landlords Association and other landlord organisations will have to say about it. The problem is that it is not clear at all, and we fear that fact exposes the Government to the possibility of litigation.

If the new clause is not an attempt to impose a requirement for landlords to take steps to stop antisocial behaviour on the part of their tenants, should we instead take it to imply that landlords now have to at least reasonably co-operate with a tenant to limit antisocial behaviour? If it does not imply that, what is the point of it? If landlords do not have to do anything to encourage antisocial behaviour to cease or do anything about it, whether a tenant can “co-operate” is reliant on the whim of the landlord in question and whether they decide to ask the tenant to stop.

Put simply, we question whether the new clause will have any practical effect, and we would appreciate it if the Minister could explain the thinking behind it, particularly because, like the many other last-minute Government amendments to the Bill, there is no detail about it in the explanatory notes. Even if the Minister just reads his box notes into the record, I would welcome the clarification. That would at least give us a sense of the Government’s thinking.

Leaving aside the deficiencies of new clause 1, we remain of the view that if the Government are intent on widening ground 14 to cover behaviour likely to cause nuisance or annoyance, they must at least clarify what kind of behaviours they believe will be included in that definition. New clause 55 would place a duty on the Government to produce detailed guidance on precisely what constitutes antisocial behaviour for the purpose of assisting landlords and the courts to determine when ground 14 conditions have been fulfilled under the revised terms that the Government are proposing. Specifically, it requires the said guidance to define how antisocial behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crisis and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties. Amendment 158 would, in turn, require landlords seeking possession on the basis of amended ground 14 to have regard to the guidance that the Government would be obliged to produce.

Taken together, we believe that new clause 55 and amendment 158 would at least provide the extremely vulnerable tenants we fear might fall foul of amended ground 14 with a further degree of protection beyond the discretion that the courts will still be able to apply. I look forward to the Minister’s response.

[Ms Karen Buck (Westminster North) (Lab)]

I want to press the Minister on his thinking and on the motivations for widening ground 14 in respect of antisocial behaviour. I support the hon. Member for North Shropshire and my hon. Friend the Member for Greenwich and Woolwich.

There is a continuing theme of the Government looking at this world as they want it to be, rather than at the rather messier reality. In respect of private tenancies, it is a world that they have quite deliberately created. No one likes being exposed to any form of antisocial behaviour or inconvenience. Some antisocial behaviour can literally ruin lives. Many of us will have dealt with casework relating to harassment; stalking; deliberate making of noise at antisocial hours; people running small businesses in flats, which can create noise; behaviour arising from the often illegal use of accommodation for short lets; people stealing post; and abuse, including homophobic and racist abuse. All those things can occur, and they can be extremely damaging to people’s lives.

One of the problems, which my hon. Friend addressed, is that these things are often not dealt with not because the threshold is too high for such cases, but because, in many instances, it is extremely difficult to gather the evidence. People are often extremely reluctant to act as witnesses and support evidence, and a lot of evidence is one-on-one and, to some extent, highly subjective.

Managing antisocial behaviour requires landlords to be part of the solution, and it is completely right that we are encouraging the consideration of that. Social landlords spend considerable time and resource trying to do that, with varying degrees of effectiveness, but in the private rented sector—with honourable exceptions—that often simply does not happen. The reduction in the threshold that the Government are proposing will make it even easier for landlords to choose to go down an eviction route or to hold the threat of eviction over the heads of households, in such a way that they themselves do not have to take a great deal of responsibility.

The Government must anticipate consequences from their change to the definition, or one would like to think that they would not have done it, but we need the Minister to spell those consequences out. Obviously, we must expect that more people will risk eviction for behaviour that is below the current threshold; that is a consequence almost by definition. In how many instances do the Government think that is likely to apply? Who might be affected by it, and under what circumstances not currently covered by legislation? What will happen to people who are at risk of eviction with a lower threshold?

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The proposed change will affect people with children, as my hon. Friend the Member for Greenwich and Woolwich mentioned. A woman wrote to me recently saying, “My neighbours are complaining about the noise of the kids—too much noise, running around. I am in a block with no other children, so my neighbours are now complaining and the landlord is complaining, but what can I do about it? They are 20-month-old twins. I should not have to deal with complaints about children making noise.” Under the Minister’s proposals, just having little babies running around could be enough to trigger—

[Matthew Pennycook]

My hon. Friend makes a good point, which we have made in connection with other grounds for possession, and I think it is worth putting on the record again. Lots of these notices that will be given will not go to court. We cannot rely on the courts’ discretion in all these instances. The tenant that my hon. Friend mentioned could be served with a notice, might not know the recourse that she has and might feel she has to go. The threat of the expanded ground will be enough in most instances.

[Ms Buck]

I absolutely agree. The sword of Damocles is hanging over the heads of lots of people just living a fairly ordinary life. Families with special needs children are a particularly high-risk category. A woman and her representative came to me recently to say that her current property is unsuitable. She lives with her non-verbal autistic 19-year-old son, and they have occupied the property for over 20 years. As her son has grown older, he has displayed more challenging behaviours, in line with those often associated with autism. The family has been subject to several complaints from neighbours in relation to the noise being made, but the mum states that it is near-impossible to have full control over her son, due to his increasing support needs.

There is one other category the Minister needs to address, which is what we do about families who have already been evicted from social housing. Clearly, families cannot be on the street. Getting landlords to provide accommodation to households in those cases is essential, but already extremely difficult.

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[Jacob Young]

With respect to the hon. Gentleman’s question, he mentioned whether a victim of domestic abuse would fall short of these grounds. I would say to him that that is exactly what a judge is there to determine—whether it is reasonable to grant possession to the landlord in those circumstances. I think that I have addressed that in my remarks. I hope that this provides some reassurance and that hon. Members will withdraw their amendments.

To further bolster landlords’ confidence in being able to regain their properties in cases of antisocial behaviour, Government new clause 1 expands the matters a judge must consider, as I outlined previously, when making a discretionary antisocial behaviour eviction. It ensures that the court must also consider specific issues that have been of concern to the sector. First, the new clause asks judges to give regard to whether the perpetrator has engaged with measures to resolve their antisocial behaviour, making it easier for landlords to evict non-compliant tenants.

[Matthew Pennycook]

I asked the Minister a very specific question about this new clause, to which I would be really grateful for an answer. Does new clause 1 in any way imply or direct landlords, by a new requirement, to proactively engage with their tenants to resolve the behaviour, rather than just putting the onus on tenants to do so, and therefore, in instances where the landlord will not engage, leave that tenant in an impossible situation, one might say?

[Jacob Young]

I do not believe that it does, but I will write to the hon. Gentleman to clarify. Turning back to what I was saying, it asks judges to give particular regard to the effect of antisocial behaviour on other tenants within houses of multiple occupation, which the hon. Gentleman had mentioned.

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[Jacob Young]

We are not discussing 5A right now, but I will write to the hon. Gentleman to clarify that point.

As I was saying on houses in multiple occupation, this measure will make it easier to evict perpetrators who are having a severe impact on those living in close proximity with them day to day. I therefore commend Government new clause 1 to the Committee.

[Matthew Pennycook]

I will say two things to the Minister, because I think that was a helpful answer, although his officials are going to be doing a lot of writing over the coming days and weeks. It was helpful in two ways: it is welcome to hear an assurance that we expect guidance before these measures come into force, and that the working group has been set up to that end.

This is where the private rented sector is very different from the social rented sector, where registered providers operate. Registered providers often have trained antisocial behaviour teams who are equipped and trained with the tools—injunction powers and others—to remedy antisocial behaviour before eviction action has to take place. They are trained to distinguish between antisocial behaviour and things such as the domestic violence instances that we are worried about, and to take safeguarding action to protect tenants from either eviction or criminalisation. The private rented sector has none of that. I do very much think we need guidance in this area, so I welcome the Minister’s clarification in that regard. On that basis, I am happy to not to push new clause 55 to a vote.

However, what I am still concerned about, and why we will support the hon. Member for North Shropshire if she pushes her amendment to a vote, is that in some ways it does not matter what the guidance says if the definition of what constitutes antisocial behaviour is very broad and the change from “likely” to “capable” is made. That still concerns us a great deal. The Minister has not given me an example—I only want one—of a kind of behaviour that would be “capable of causing” antisocial behaviour without falling under the existing “likely to”. I do not think he has any such behaviour in mind; I do not think the officials have any idea, either.

I think the Minister gave the game away, intentionally or otherwise, that this power is to be used to make it easier for landlords to threaten tenants in the first instance, and most will not go to court, and then to be able to evict tenants. As he said, the behaviour in question does not have to have caused or be likely to have caused antisocial behaviour in any given instance. It will enable an argument on the basis that there is a pattern of behaviour that now meets the reduced threshold.

None of the evidence I listened to last week suggested that that was necessary. I remember—one good example—that Timothy Douglas from Propertymark could not understand the difference between “likely” to cause and “capable” of causing, and the need for the change in this instance. He did call for guidance—absolutely. However, none of the evidence I heard supported the change, apart from evidence from some landlords, who, of course, are going to say that they welcome a widened power. They do not have to deal with the consequences. It is local authorities and society that will have to do that.

I know this is not the Minister’s brief, but he really should know whether tenants, if evicted under these grounds, will be made intentionally homeless. I suggest that it is almost certain that they will be. We are talking about an easier way to make people homeless, and we will all pick up the costs in various ways. This will impact some incredibly vulnerable tenants. We therefore think that this measure needs to be removed from the Bill. Again, we will certainly return to the issue at a later stage.

[Helen Morgan]

I welcome the support from Opposition Members, who, I think, have summed up the issue very well. There is an increased threat of eviction even if these cases are not taken to court, because the threat of having notice served in the first place is very frightening for people who do not necessarily have the legal ability to follow that through and oppose it.

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Form of notice of proceedings for possession

[Matthew Pennycook]

I beg to move amendment 177, in clause 4, page 3, line 34, at the beginning insert—

“(1) In section 8 of the 1988 Act, after subsection (2) insert—

‘(2A) A notice under this section must include reference to the unique identifiers allocated to each person and dwelling-house with an entry on the database in accordance with section 41 of the Renters (Reform) Act 2023 (Allocation of unique identifiers).’”

This amendment would require landlords to be registered on the database to serve grounds for possession notices.

We will debate at some length the provisions in the Bill that will establish a private rented sector database when we consider chapter 3 of part 2 in detail, so I do not intend to dwell on our view of the Bill’s database provisions more generally, or how they might be improved. We will have sufficient time to do so in due course. Suffice it to say that we take it as given that the Government wish to see, as we do, as many existing and prospective residential landlords registering themselves and their properties on the property portal that the database will support.

We acknowledge that the Bill already contains provisions designed to ensure that registration rates are high. These include the financial penalties that local authorities can impose, assuming that they have the capacity and capability to do so, on people who, for example, do not meet the requirements in relation to marketing, advertising and letting set out in clause 39. However, we believe that the Government should seek to make it virtually impossible for a residential landlord to operate without registering themselves and their property on the database by ensuring that every single process that the Bill covers bites on them in that regard.

Amendment 177 seeks to contribute to that objective by inserting into section 8 of the Housing Act 1988 a new subsection that would compel landlords to be registered on the database in order to serve grounds for possession notices by requiring them to add to any possession notice served the unique identifier that they will be allocated on registering. Requiring landlords to append a unique identifier to a possession notice, and thus denying landlords not registered with the database the opportunity for a court to make an award of possession, would be an important means of ensuring maximum compliance with the proposed portal and properly regulating the new system to the benefit of both landlords and tenants. For those reasons, I hope the Minister will look favourably on the amendment.

[Jacob Young]

I thank the hon. Gentleman for moving amendment 177, which would require landlords to have registered on the property portal before serving a tenant with a valid notice for possession under section 8 of the Housing Act 1988. The property portal will play a crucial role in helping landlords to understand their legal obligations and will give tenants the information they need to make informed choices before starting a tenancy. Our view is that the enforcement mechanisms in the Bill, including the mandatory duty on landlords to be on the portal and the ability of local authorities to find those, will prevent abuse. However, I note the hon. Member’s concerns, and if there are further measures we can take to ensure that all landlords are on the portal, we will explore them further.

[Matthew Pennycook]

I welcome the Minister’s response and his commitment to look further at this matter. Although the mandatory duty is welcome, we have real concerns about the ability of local authorities to properly investigate and enforce. We will come back to those concerns, because they relate to a number of areas in the Bill. I therefore hope that the Minister goes away and thinks about every—

[Eddie Hughes (Walsall North) (Con)]

There is form in this area: a landlord cannot evict their tenants if the property does not have an energy performance certificate. It seems like an interesting proposal.

[Matthew Pennycook]

I very much welcome the hon. Gentleman’s intervention. I have covered all bases in our set of amendments. We will come to the preconditions and requirements that have developed around section 21 that fall away under the Bill; they are a concern. The hon. Gentleman is right: to serve a section 21 notice, a number of regulatory obligations must be met.

[Lloyd Russell-Moyle]

Another advantage of doing it through the property portal is that it helps to speed up the digitalisation process that the Government are so keen on with the courts. The portal would retain the information that the courts need.

[Matthew Pennycook]

Absolutely, and it is one of several ways that we think that, with some reasonable, common-sense amendments, we can strengthen the Bill so that every part of it works together. I hope that the Government will go away and think about the other ways in which we can ensure maximum landlord compliance with the portal. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clause 5

Statutory procedure for increases of rent

[Lloyd Russell-Moyle]

I beg to move amendment 200, in clause 5, page 5, line 17, at end insert—

“(4F) It shall be an implied term of every assured tenancy to which this section applies that percentage increase between the existing rent and any new rent specified in a notice given under subsection (2) shall not exceed whichever is the lesser of—

(a) the percentage increase in the rate of inflation (calculated by reference to the Consumer Prices Index) since the date on which the existing rent took effect; or

(b) the percentage increase in median wages in the local authority area in which the dwelling-house is situated, calculated over a three-year period ending on the date on which the notice was served.”

This amendment specifies that the annual increase in rent requested by a landlord may not exceed the lesser of either the Consumer Prices Index or wage growth in the relevant local authority area.

Renters (Reform) Bill (Sixth sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[Jacob Young]

Again, I understand the hon. Gentleman’s point. We are trying to strike the right balance in these reforms. That is all I can say on that.

Government amendments 2 to 5 deliver technical changes that will ensure that grounds for possession work as intended, allowing the selling ground to apply to both freeholders and leaseholders who wish to sell their interest in their property. The changes to possession ground 1A are slight, and ensure that the selling ground for private landlords applies to all circumstances where it would be reasonable to consider the landlord to be selling their property, and ensuring that their valid desire to manage their property as they see fit is not unintentionally thwarted. These small changes will ensure that the selling ground works as intended.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

We are disappointed with the Minister’s response, for the following reasons.

We will, no doubt, hear ad nauseam about the Government’s intention and the obvious need, with which we all agree, to get the balance right between the interests of landlords and tenants. We do not think the Government have got that balance quite right in this and many other areas of the Bill.

It is, of course, reasonable that landlords who legitimately want to use grounds 1 and 1A either to take back a property for themselves or a family member, or to sell it, should be able to. We take no issue with the mandatory grounds. However, the Minister has failed to address Labour Members’ arguments about the clear risk of those mandatory grounds being abused in several ways. We know that they are being abused in Scotland, where they have already been introduced—that is the proof point here—and there are several other layers of protection in Scotland that this Bill does not provide.

The Government know that there is a risk of these grounds being abused; they would not otherwise have the three-month no-let period. We have clearly identified the loopholes that exist as a result of there being no evidential requirement, unlike in Scotland. Evidence suggests that the Scottish provisions are still open to abuse, but Scotland at least has the Private Housing (Tenancies) (Scotland) Act 2016, which requires the landlord to provide specific evidence. That is not the case here. The Minister makes the point that it is for judges to make a determination, but grounds 1 and 1A are mandatory grounds. The judge literally just has to determine whether the landlord has proved that ground 1 or 1A applies. The judge does not assess the merits of the case, as they would if these were discretionary grounds. Judges do not have the freedom to say that they do not think the landlord is legitimately taking back the property. As we have argued, at the end of four months of the protected period, any landlord can, under these grounds, serve notice or evict on the pretence that they will use the property for themselves or sell it, but they can then not sell it; nothing prevents that.

[Jacob Young]

On the hon. Gentleman’s point about providing evidence to a court, a judge would have to determine whether the intention to sell the property is valid.

[Matthew Pennycook]

I will happily give way to the Minister again if he can say how the judge would prove an intent to sell or occupy the property without evidential requirements. The judge does not have to ask the landlord for any evidence that they will use those grounds.

[Jacob Young]

It is our position that the types of evidence that can be used do not need to be in the Bill, but as I have already set out, they will be in guidance.

[Matthew Pennycook]

That is some progress. If we have a commitment from the Minister that we will get detailed guidance that landlords need to submit—

[Jacob Young]

I did say that.

[Matthew Pennycook]

That is welcome, but I think the concern is still there, because what does the guidance say? We do not know. What proof does it ask for? We have a clear set of evidential requirements in amendment 138.

We feel strongly about the point of protected periods. In amending ground 1, the Government have removed the requirement for prior notice of the use of the ground. If a landlord wants to take back a property for their own use, they must tell the tenant when the tenancy agreement is made that they may wish to engage the provision for prior notice. There is no prior notice under the amended ground 1. Any tenant could find themselves evicted with six months’ notice, and they would have no clue when they agreed the tenancy with the landlord that they could face that scenario. We very much support the legitimate use of these grounds, but it is essential to strengthen the Bill and the guidance that may come forward to prevent and deter abuse.

For that reason, we will press amendments 138, 139 and 143 to a vote. We also support amendment 194, in the name of my hon. Friend the Member for Brighton, Kemptown. It is completely reasonable for landlords to have to offer the sitting tenant first refusal on purchase of a property. To be frank, I do not really understand what the Minister says about the alternative scenario of a landlord having a buyer in mind who is not the tenant. That does not sound like a particularly fair ground. The tenant is in the property; they should have first refusal at the market price that the landlord asks for. If they cannot meet that price, the landlord can sell to any other buyers.

[Lloyd Russell-Moyle]

My hon. Friend will note that such provisions exist in other areas, where the first right of refusal is given. Surely if this legislation is passed, the landlord will always first have the tenant in mind when looking for a buyer. The scenarios suggested by the Minister would not occur, because the landlord would go to the tenant before other buyers.

[Matthew Pennycook]

That is a reasonable point. Landlords will adapt to the system. They will have it in mind that they must automatically make an offer to the sitting tenant. If they determine that the market price is more than the tenant can afford, they can go to the second buyer that they have in mind. We are not quibbling about them selling at market rate, obviously, but it is important to help renters on to the home ownership ladder if possible.

[Jacob Young]

I understand the hon. Member’s point, but consider a landlord who wanted to sell a property to a family member. That is perfectly legitimate. They might want to sell to their child. If there was a duty on the landlord to offer the tenant first refusal, surely they could not do what they wanted with their property. [Interruption.]

[Matthew Pennycook]

My colleagues behind me are making the case for me. In that scenario, I respectfully say that the landlord could legitimately exercise ground 1 and, within six months, take the property back for that family member. They could then sell it freely. However, evicting a tenant to do so is, we think, questionable, because it is reasonable to give the tenant first refusal. If I have understood the Minister’s point correctly, if I am a landlord and I want to sell to my son, I can take back the property under mandatory ground 1. My son could live in it, and I could then sell it to him at any point. I do not see why a sitting tenant would need to be evicted for that to happen.

[Jacob Young]

Under the hon. Gentleman’s argument, the landlord would have to charge rent to the family member. Say the landlord wanted to sell to a close friend; they would not be covered by ground 1. There is a difference on a point of principle between the two sides here. We think that landlords should be able to sell their property to whomever they want. The Opposition seem to take a different view.

[Matthew Pennycook]

We do take a different view, because, as I have said, it is reasonable that landlords should offer first refusal to tenants. I do not know how many landlords out there are desperately planning to sell to a close friend and would not be able to. That scenario might arise, but in the majority of cases, landlords will sell a property on the open market, and they could give tenants first refusal, at the price that they seek. As I said, we support amendment 194, and will press our amendments in this group to a vote.

Question put, That the amendment be made.

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Division 2

Ayes: 6

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Labour: 5
Liberal Democrat: 1

Noes: 8

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Conservative: 8

[Matthew Pennycook]

I beg to move amendment 136, in clause 3, page 3, leave out lines 21 and 22 and insert—

[Lloyd Russell-Moyle]

I rise to support the amendment —no surprise there. We have a crisis not only in our private rented sector, but with the burdens that local authorities are having placed on them, with people coming to them at short notice because they are losing their homes. Many Members will know that two months is just not long enough for many local authorities to assist the constituent or, in this case, tenant to find a home in time. They are put into emergency accommodation at great cost to the council and the public purse. As a result of section 21s and the short period people have to find homes, last year 24,000 households were threatened with homelessness and had to resort to their local council. That is a huge number, and our local councils are suffering. The emergency accommodation spending of Hastings Borough Council, just down the road from me, has gone from £500,000 to £5 million this year. How can a council find that amount of money in three years? Almost exclusively, the cause is the ending of private tenancies.

We all think that private tenancies will need to end sometimes. No one thinks they should not when there are legitimate reasons. The Conservative party manifesto said that the Government would end no-fault evictions. It did not say that they would end just section 21s: it said they would end no-fault evictions. Clearly, that has not happened. We all agree that there are some reasons why a no-fault eviction might be needed, but serving those no-fault evictions with the same terms and time limit as section 21 evictions seems to breach the spirit, if not the letter, of not only the governing party’s manifesto but the point that we are meant to be rebalancing and giving time for tenants to find properties.

We could choose any number and say it was suitable, but let us think about the cycle through which people find houses. It will often take a number of weeks just to look for a house. Then someone will have to raise the money to pay for a deposit in advance, which might require one or two pay cheques. The Minister has already dismissed my amendment on rent-free periods, so people will have to raise that amount from the money they are earning at the time, and that may take a number of months. For a lot of private renters, 60% of their salary goes toward rent, so the idea of having to raise a month’s rent in advance in two months is almost impossible.

There is then the need to ensure that contracts are signed and references are done. To go through all that process in two months, someone would effectively need to have found a property on day one of getting the order. Four months is a much more reasonable period for someone to be able to do all that, when there is no fault of their own. It is incumbent on the Minister to at least consider that idea, and if not, to ask what additional protections and support will be given to tenants and local authorities to aid that transition, which is currently not aided.

All that is without me even touching on children and the fact that they will need to move schools. Four months would also mean that a child can make a move between schools within term-time and half-term periods. That allows a parent to say to their child, if they are having to move, “At half-term you will be starting at a new school.” These are important things for raising families, and the cycles are not unrealistic.

Of course, there will always be need for quicker evictions. There will be fault evictions. There will be pre-notice evictions. My Front-Bench team is not proposing to change any of them; I think that that is a reasonable balance for everyone. I urge the Minister to accept the amendment.

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[Jacob Young]

I thank the hon. Member for Greenwich and Woolwich for tabling amendment 136, which seeks to lengthen the notice period that landlords must give for some grounds of possession. The notice period in the Bill balances the needs of both tenants and landlords. We have not reached our decisions without a lot of thought and careful consideration over many years and in collaboration with the sector.

It is important to give tenants sufficient time to find a new home. However, notice periods must also balance that aim with ensuring that landlords can manage their assets. For example, they may need to sell or move into the property, which might also be their long-term family home. Landlords must also be able to comply with enforcement measures or contractual requirements, such as superior leases, in a timely manner. Setting a longer notice period would undermine landlords’ confidence in dealing with such reasonable scenarios. We encourage landlords to work flexibly with their tenants and notify them of their intentions as far in advance as possible, but we also recognise that that is not always possible.

As Members have indicated, we think our approach strikes the right balance, so I ask the shadow Minister to withdraw the amendment.

[Matthew Pennycook]

I will not withdraw the amendment; I am going to press it to a vote because, again, I do not think the Government have got the balance right. I do not think that two months’ notice is sufficient for a whole cohort of tenants, and I think my hon. Friend the Member for Weaver Vale is absolutely right. There is a basic issue of fairness here in terms of the profile of the private rented sector, as it now is. We can all look at the minimum notice period in the explanatory notes and think that it seems very reasonable: “Two months. Who could not make two months?” But we all look at that as highly paid professionals who could move in that period of time. Older people, disabled renters, or renters with a family simply cannot do that.

I put the Shelter figure to the Minister again. He may question the figure, but it seems like it comes from a very detailed study. What are the Government saying to the 34% of renters who could not move within that two-month period when they last moved? The Government are effectively saying to those renters, “You’re at risk of homelessness,” and we do not think that is fair. On the de facto no-fault grounds—which, just to be very clear, are mandatory; we are not talking about every ground—the Government should think again.

[Jacob Young]

The hon. Member refers to fairness, but the situation is not fair for the landlord either. A landlord who wants to move into their property for whatever reason—we do not know the reasons, but it could be a reasonable ground—or sell it would have to wait an additional two months. We are talking about two months’ notice to provide grounds for possession, so in reality it could be much longer than that because it could be two months plus whatever court proceedings come afterwards.

The hon. Member is saying that we should extend the period to four months. On the basis that a typical court hearing would take 22 weeks, as we have heard elsewhere, we are talking about a period of nine months between when a landlord might want to move into their property and when they can actually do so. I do not think that that is fair either. As I say, we believe that we are striking the right balance.

[Matthew Pennycook]

I say two things to the Minister. First, the minimum notice periods are from the date of service of the notice. I take the point about court reform, but this is at the point of service of the notice, not the point of the possession award; they are the minimum periods that apply. Secondly, what is his answer to the 34%? There is evidence out there from organisations with expertise in this area. What the Minister is saying is that the Government are content to see a third of tenants given a minimum notice period in which they cannot possibly reasonably find a new property.

There is a fairness point and also a cost point, which the Government should, from their own perspective, be more concerned about. The cost of those renters not being able to find properties will be borne by local authorities. As Parliamentary Under-Secretary of State for Levelling Up—I think I have his title correct—the Minister will know what is happening with Liverpool City Council. Its spend on temporary accommodation increased by 7,660% by the end of the fiscal year compared to 2019. Several London councils, including my own, are in financial difficulty because of temporary accommodation costs. This is not sustainable. If the Government are going to allow this broad swathe of new mandatory de facto grounds to be in place with a two-month notice period, that situation will persist.

The last thing I would say goes to a point made by my hon. Friend the Member for Brighton, Kemptown earlier. Lots of tenants served with these notices are going to find somewhere and move out before the date. We are talking about the hard cases where people cannot move out. I think the Government have a tin ear on this—they have a mindset issue when it comes to grappling with what the PRS looks like now. By refusing the amendment, the Government are effectively saying, “That’s their problem.” We think the Government should think again, so we intend to press the amendment to a vote.

Question put, That the amendment be made.

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[Lloyd Russell-Moyle]

I am sceptical about the need for a special student carve-out. The National Union of Students is sceptical as well, but it did acknowledge that if worded correctly it could provide some relief to support a special dedicated market.

I think the Government’s amendment is too broad: it attacks the market that students might be bidding in rather than specifying student markets. There are three markets for the students to bid in. One is purpose-built student accommodation, which already has an exemption and a ground in the Bill—no problem. The second is the student-only houses in multiple occupation market, which is usually advertised via universities or organisations such as Unipol, and focuses only on students. Then there are the HMOs available for young professionals and young people.

Most of the HMOs on the seafront in my constituency are not occupied by students; they are occupied by young professionals looking to eventually get a house to themselves, but they are sharing. There might be people who share accommodation for cost-saving purposes. The measure gives an exemption to that market if the landlord lets to students only. It sucks away a market that is already overstretched—the HMO market—and pushes it into the student market. Already there is pressure because the student market pays more than the general HMO market. The measure will exacerbate that and make things far worse. I am deeply worried about that unintended consequence.

We could stop that unintended consequence. If a property is only for the student market, of course we recognise that, but it should be advertised only via student letting agencies—at the university or via a registered provider. That is largely done, anyway. Universities often pair up with local letting agents and assign letting agents that are trusted providers. My amendment allows that, but it treats the exemption much more like the purpose-built student accommodation exemption. In the long run, universities should have a duty to provide housing—purpose-built or HMO—via the university for all students who want it. That would relieve a lot of the tensions that we get in communities where people are fighting over HMOs—young professionals versus students.

There are measures via article 4 directives under the planning regulations, but they are blunt tools. What we really need is a duty given to universities to ensure that any student who so wishes can be provided with accommodation. That would be a long-term solution. It would solve the madness in Manchester this year—students having to live in Liverpool because not enough accommodation is provided for them in Manchester. But that will not be solved by the Government’s amendment. In my view, it could be made worse.

Providing that all student accommodation needed to be advertised via the university would also allow the university to have a better appraisal of what accommodation was available for their students. It would allow the university to liaise with landlords. When there are problems in communities with student houses—I do not want to be unfair to students, but they are sometimes known to enjoy a party here or there—the universities would be involved in that process, rather than students just being out in the wild, as it were. Good universities already do that. Most universities already have that process.

My other fear is that the measure will make it harder for students who actively choose to live in mixed households, because landlords will not want mixed households. Students who at the moment want to enter the general HMO market and live in a mixed household will now be discouraged. The landlord will say, “No, even though I am advertising this on the general market, I would quite like to rent to an exclusive student household.” The measure also underestimates the flexibility of the student experience: students will drop out, want to stay or want to go into work.

Finally, the danger of the Government amendment, without my amendment, is that it will embed the very problem with the student market. Anyone whose children have gone to university or who has recently been to university themselves will know that, by January, students already have to decide what accommodation they will have next year. Preserving that function of the market is not a positive thing. Students have not developed deep friendships—they only arrived in October—and often have not actually worked out what course they want to do. If they are on a course that has vocational or work placement elements, they do not know where those placements will be. It is impossible for those students to properly plan. Young people who come through clearing are often scrabbling around; by that point, purpose-built accommodation is already taken, and private rented properties are already snatched up.

We could push back the point at which a landlord would know whether that property was vacant. If the students want to stay, there is no problem: the landlord is still going to get the rent, and for the landlord there is no argument there. But if the landlord knew only a few months beforehand—perhaps a two-month or four-month notice period—then students would be deciding in July or August about what accommodation they would be living in. That would give students who had gone through clearing or were going into work placements much better options in the private rented sector.

I worry that, without my amendment, we are locking in many of the problems of the student market. I would struggle to withdraw my amendment, because I think it improves the Minister’s amendment: it does what he is trying to do, but without the unintended consequences.

[Matthew Pennycook]

I thank the Minister for his explanation, but it lacked detail; I am still not particularly clear on the Government’s rationale for drafting and tabling the amendment as it stands. I will come to the reasons why, but I want first to thank my hon. Friend the Member for Brighton, Kemptown for raising an important issue in relation to student lettings. I fully agree that we need to do much more to improve the student lettings market and drive up professionalism in it.

[Lloyd Russell-Moyle]

I should have declared at the beginning that I am a trustee at the University of Bradford Union of Students, which has a board member place on Unipol, the student lettings agency.

[Matthew Pennycook]

The Committee will have noted that. I have no doubt that lettings services run by universities and student unions have an important and effective part to play in driving up professionalism and improving the functioning of the market.

As we have heard, Government amendments 1 and 9 make provision for new possession ground 4A, which would allow a student HMO to be recovered by a landlord for further occupation by students. On the Opposition Front Bench, we take a slightly different view from my hon. Friend the Member for Brighton, Kemptown: we welcome the fact that the Government have recognised that the student market is distinct in particular ways from the rest of the private rented sector and that its protection requires a bespoke approach of some kind. We appreciate the arguments advanced by some landlords operating in the sector about the fact that much of the student market—not all of it; I will come to that—is cyclical and that landlords need a means of guaranteeing possession each year for a new set of tenants. However, we are equally cognisant of the concerns put forward by bodies and organisations representing students and their interests about the potential implications of treating student renters differently from other private tenants—the precedent that might set and the problems that might arise as a result of specific exemptions for certain types of purpose-built dwelling.

In determining whether the Government have struck the right balance as it relates to this measure, we need to grapple with the fact—my hon. Friend the Member for Brighton, Kemptown referred to this—that defining what constitutes a student dwelling is deeply challenging, given the diversity of individuals engaged in higher education and how varied their educational circumstances can be. There is also the fact that some private dwellings will be shared between students and people in employment, whether because the people working have chosen to remain in the area following completion of study or because it made sense for the student in question to move in with an individual of working age who was already at work when they signed their tenancy agreement.

Paragraph (a) of the proposed new ground 4A makes clear that it may be used for houses in multiple occupation and where each tenant is a student at the beginning of the tenancy. Is the implication of the paragraph that, to make use of the ground, a landlord would have to verify at the point the tenancy was signed that every individual who would occupy the property was in fact a student? If a landlord let a house, for example, to two students and one person working full-time, would they not be able to make use of new ground 4A? If it is the case that landlords cannot use new ground 4A to gain possession of a household of, say, part-time students sharing with full-time workers, can the Minister explain whether the Government have undertaken any assessment of the impact of the new possession ground on the availability of rental housing, particularly in towns and cities with large student populations where, as my hon. Friend said, the supply of student housing is already under enormous pressure? I know that, too, from my own constituency.

A further complication is added into the mix by sub-paragraph (a)(ii), which provides for use of the ground where

“the landlord reasonably believed that the tenant would become a full-time student during the tenancy”.

That strikes us as an incredibly low evidential threshold to have to meet. Can the Minister explain how on earth landlords will be expected to prove that such a belief is legitimate? Who will they need to satisfy, if anyone, that there are reasonable grounds to assume that a non-student tenant will become a student during the lifetime of the tenancy?

We are genuinely concerned that Government amendment 9 as drafted could be abused by unscrupulous landlords following the enactment of chapter 1 of part 1 of the Bill. Relying on paragraph (a)(ii), one could easily imagine landlords evicting groups of, say, young working tenants sharing a property using the justification that they believed they intended to become full-time students before the tenancy agreement expired. We would venture that the courts themselves will struggle to ascertain whether a landlord has proved the new ground by relying on sub-paragraph (ii) and that most evictions under 4A, like other mandatory possession grounds, will probably not even arrive before a judge—the tenants will simply leave, the threat having been made. We would welcome further clarification from the Minister about why sub-paragraph (ii) has been included in the proposed new clause and would like some robust assurances that it cannot be abused to facilitate section 21 no-fault evictions by the back door.

Another complication arising from the wording of the new clause concerns paragraph (c) on lines 11 and 12 of the amendment paper. That states that new ground 4A can be used to gain possession only between 1 June and 30 September in any year. However, as hon. Members with student populations in their constituencies will know, a large number of UK universities now also accommodate a winter intake in January. They do so not only for postgraduate students; it is now also the main secondary intake for some undergraduate courses. Given that the proposed new possession ground is available for use only during June and September, we are concerned it could have the unintended consequence of impacting detrimentally on the availability of other properties for students to let at other times of the year, given that under the proposed new ground there is an inherent incentive for landlords to let only on the primary summer-to-summer cycle.

If it is the Government’s intention to ensure that there is a cyclical availability of student accommodation, we suspect that they may need to think again about how it is achieved for students whose academic year starts and finishes at times other than those specified in the amendment. Moreover, even for those students who finish their courses in the summer, there is a wide degree of variation between undergraduates, who will usually finish earlier; postgraduates, who may be working on research projects until a much later date; or undergraduates undertaking placements.

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[Jacob Young]

I completely take the hon. Gentleman’s point. Obviously, on the back of the conversations we have had today, we will consider these measures further. The ground has been carefully designed in consultation with stakeholders—landlords, universities and so on—to facilitate the annual cycle of short-term student tenancies. That is why we specifically created that gap in the change in the academic year.

[Matthew Pennycook]

If I have understood the Minister correctly, he has made a commitment to go away and think further about this. As it stands, is there anything in the Bill that would protect students whose courses are not on that summer-to-summer cycle from being evicted through the use of the new mandatory ground? We do not think there is, which is why we think the Government need to think again. Is anything forthcoming or in the Bill that is designed to protect against the problem I spoke about—postgrads or others who go beyond the summer cycle? It may be a minority of students, but it is still a significant minority.

[Jacob Young]

I undertake to write to the hon. Gentleman with the assurances he seeks. We have designed the ground carefully with landlords, because we have listened to their concerns, particularly about the student market. None of us in Committee today would want to end up in a situation where, on Royal Assent, we were not able to facilitate student accommodation.

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[Lloyd Russell-Moyle]

I am not inclined to press my amendment, because the Minister has given assurances that he will go away and rethink the clause. I am still not happy about the clause, and we will see what we do on the substantive issue, but there are problems with paragraph (d). The provisions do not work with the universities; they set things in Westminster, rather than saying that the property should be protected because it has been let via an approved university letting agent or the university itself. That seems like a solution the Minister could grab. It would solve his term dates problem, his “Is it going to be let to students?” problem and his “Is it being let to students?” problem. In fact, every single question we have would be solved by my amendment. The Minister has said, and I will take it in good faith, that he will go away, look at this and see how things could be amended, and I will push him on Third Reading on what ideas he has come up with.

Amendment 1 agreed to.

[Matthew Pennycook]

I beg to move amendment 137, in clause 3, page 3, line 32, at end insert—

“(4) The Secretary of State must lay before Parliament a review of the changes to grounds for possession made under this Act within two years of the date of Royal Assent.”

This amendment would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.

[The Chair]

With this it will be convenient to discuss new clause 54—Review of changes to grounds for possession—

“(1) The Secretary of State must, within two years of the date of Royal Assent to this Act, conduct and lay before Parliament a review of the grounds for possession in Schedule 2 of the Housing Act 1988, as amended by this Act.

(2) The review must include—

(a) an assessment of the effectiveness of the new or amended grounds for possession set out in Schedule 1 of this Act in securing evictions from properties;

(b) an assessment of the impact on the security of tenure of tenants as a result of the use of the new or amended grounds for possession set out in Schedule 1 of this Act;

(c) a report on the use of enforcement action in relation to the new or amended grounds for possession set out in Schedule 1 of this Act;

(d) an assessment of the effectiveness of the grounds for possession listed in Schedule 2 of the Housing Act 1988 in securing evictions from properties that remain unamended by Schedule 1 of this Act.

(3) The review under subsection (1) must make such recommendations as, in the opinion of the Secretary of State, are necessary in the light of the findings of the review.”

This new clause would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.

[Matthew Pennycook]

Clause 3, as we have discussed, amends the grounds for possession in schedule 2 to the Housing Act 1988. Once section 21 has finally been removed from that Act through the provisions in clause 2 and the commencement dates in clause 67, the only means by which a landlord will be able to regain possession of a property by evicting a tenant will be by securing a court judgment under the revised section 8 grounds set out in schedule 2 to the 1988 Act, whether they be mandatory or discretionary. We have already debated concerns relating to several of those grounds, and we will debate more in due course when we get to schedule 1. However, we believe it is important to also take a view on the proposed replacement possession regime as a whole, given that it is the most comprehensive reform of the grounds in that regime in the 35 years since the 1988 Act came into force.

Labour recognises, and has repeatedly said since the White Paper was published, that following the abolition of section 21 no-fault evictions, landlords will need recourse to robust and effective grounds for possession in circumstances where there are valid reasons for taking a property back, such as flagrant antisocial or criminal behaviour. However, we have also made it clear that the Bill must ensure that such grounds cannot be abused to unfairly evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland in the wake of the major private renting reforms introduced there in 2017.

The revised set of section 8 possession grounds must reflect the fact that evictions, which are inherently disruptive and often incredibly damaging to tenants’ lives, should be only ever a measure of last resort where no alternative course of action exists. The grounds must be proportionate, secure against abuse from landlords seeking to carry out unfair or retaliatory evictions, and designed effectively so that properties are recovered only when a tenant is genuinely at fault, and they must not cause tenants undue hardship.

Amendment 137 and new clause 54 would require the Government to publish a review of the impact of the amended grounds for possession regime within two years of the Act coming into force. With that requirement, whether individual grounds for possession are further amended, as we hope, or the Government resist our efforts and the grounds remain as drafted, we will at least be able to judge the efficacy and impact of the new arrangements both for landlords seeking to recover their properties when a tenant is genuinely at fault and for tenants who are not at fault but who may suffer as a result of flaws in the regime. We think the amendment is entirely reasonable, and I am interested to hear how the Minister will, no doubt, resist it.

[Lloyd Russell-Moyle]

I rise to support the amendment. The Minister has already indicated that there is work still to do and that he will go away and see how this will work in practice. Clearly, some of these issues will come out when the Bill receives Royal Assent.

These are sensible measures with which nobody—landlords or tenants—could really disagree. We can no longer have a set of grounds that have been stuck in time for 30 years, and Bills that only add things on from time to time, without stepping back and looking at the changes that have occurred, whether those relate to students—the Minister is pushing for the measures on students to be included in the Bill, rather than in regulations—or any of the other clauses. Consider antisocial behaviour in particular, and the concern that many campaign groups have expressed around potential domestic violence falling foul of the new “likely” or “able to” provisions.

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[Jacob Young]

I appreciate the hon. Gentleman’s point, but it is not usual for us to include such a review on the face of the Bill.

[Matthew Pennycook]

I thank the Minister for his response, but it is a little disappointing, and I want briefly to say why.

The point that my hon. Friend the Member for Westminster North made is absolutely right. Unlike in other sectors, we really have no idea of the composition of the private rented sector. That is one reason why the portal is so important: it is such a potential game changer that we can start to get that information, but we do not have it at the moment, so we do not know what the impact of these reforms will be, nor do we know the impact of the changes to the grounds for possession.

I want to bring it home to the Committee that the changes to the grounds for possession are not small. We have new grounds that could potentially work in ways that the Government do not intend; we also have significantly amended grounds. We really need a more formalised review than the Department’s ongoing review process that the Minister has set out.

I urge the Minister to think about that point. If the two years set out in amendment 137 is the wrong deadline or, as he sees it, an arbitrary deadline, we would welcome the Government coming forward with some more formalised means of reviewing the impact not only on tenants, who might find themselves at the sharp end of abuse on some of the grounds, but on landlords, for whom the new grounds simply may not work in the way the Government want. I will not press the amendment to a vote, but I encourage the Government to think about whether we can have something beyond the usual departmental processes. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3, as amended, ordered to stand part of the Bill.

Schedule 1

Changes to grounds for possession

Amendment proposed: 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.—(Matthew Pennycook.)

Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.

Question put, That the amendment be made.

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[Jacob Young]

Government amendments 6 and 7 will apply to ground 1B, which ensures that private registered providers of social housing can gain possession if they want to sell, dispose of a lease on or grant a lease on a rent-to-buy property, having first given the sitting tenant the opportunity to buy it. Many private registered providers will sell their rent-to-buy homes to the existing tenants on shared ownership terms, but where they do not, they will be able to sell the home to another buyer on the same terms as those on which they had intended to sell to the sitting tenant. The amendments are technical changes to ensure that ground 1B works as intended; they will simply ensure that there is no ambiguity about what selling means. They will support the operation of rent to buy.

I thank the hon. Member for Greenwich and Woolwich for tabling amendment 147, which would expand ground 1B. As I have set out, the Bill already takes steps to allow rent to buy to continue to operate in the new system. We are aware that stakeholders are concerned about the issue of providers selling to a different tenant from the sitting one; I will carefully consider that issue further.

I commend Government amendments 6 and 7 to the Committee, and I ask the hon. Gentleman kindly not to press his amendment.

[Matthew Pennycook]

I rise to speak to amendment 147, which stands in my name and the names of my hon. Friends the Members for Weaver Vale, for North Tyneside and for Brighton, Kemptown.

As we have discussed, schedule 1 specifies the reasons that landlords will be able to seek possession once the new tenancy system has come into force. As the Minister has explained, paragraph 4 of schedule 1 provides for a new mandatory ground 1B, which will require a court to award possession when private registered providers of social housing are selling a property under a rent-to-buy or London living rent arrangement. Social landlords will be able to use the new ground only where the defined period stated in the rent-to-buy agreement has expired, and to do so they will have to have complied with any terms in the relevant agreement that require them to offer the sitting tenant the opportunity to purchase the property.

The Bill is concerned primarily with the private rented sector, but it has implications for social housing providers in a number of different areas. New mandatory ground 1B relates to one of those, namely affordable products, offered by registered providers, that are designed to enable tenants to use the savings accrued by sub-market rents to save up for a deposit and ultimately purchase the property at a price no more than market value before it is offered for general sale. New ground 1B will ensure that rent-to-buy schemes, including London living rent, will remain viable in the new tenancy system by providing a mechanism for possession to be gained to sell the property at the end of the scheme in line with the terms of agreement.

Although the new ground is absolutely necessary, the proposed drafting would prevent it from being used when a rent-to-buy property is not being sold but when a new tenant is moving into it. A hypothetical example was given by the chief executive of the National Housing Federation, Kate Henderson, in Tuesday’s evidence session:

“you have somebody who is in a rent-to-buy property, has been there for five years and has decided that they do not want to buy it or they cannot buy it; we would like the ground available so that that property could be given to another tenant who would like to use the property as it was intended and designed to be used—as a rent to buy.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 52, Q63.]

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[Jacob Young]

The points that the hon. Gentleman raises are fairly technical in nature, so I will endeavour to write to him as soon as possible; I will copy in members of the Committee. As I have already outlined, I will consider his amendment 147 carefully in the further steps of the Bill.

[Matthew Pennycook]

I think that that is about as positive a response as will come, so I look forward to what may be forthcoming from the Government.

Amendment 6 agreed to.

Amendment made: 7, in schedule 1, page 66, line 29, after “dwelling-house” insert

“or to grant a lease of the dwelling-house for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord”.—(Jacob Young.)

This amendment makes the ground of possession for when a landlord is selling the dwelling-house after a rent-to-buy agreement (Ground 1B) also available to a landlord who is granting a lease of over 21 years.

[Matthew Pennycook]

I beg to move amendment 188, in schedule 1, page 67, line 23, after “terminate that tenancy”, insert

“(including any tenancy at will or other tenancy arising on expiry of a fixed-term lease)”.

This amendment would extend Ground 2ZA to apply in a situation where a tenancy at will may arise.

[The Chair]

With this it will be convenient to discuss amendment 189, in schedule 1, page 67, line 40, at end insert—

“(c) where the intermediate landlord serves notice under this Ground, the intermediate landlord shall be deemed to continue to hold sufficient interest in the dwelling-house to maintain a continuing right to possession until conclusion of any possession proceedings.”

This amendment would ensure that an intermediate landlord retains possession of the property and remains as the landlord of the occupying tenant until the conclusion of possession proceedings.

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[Matthew Pennycook]

In her evidence to the Committee last week, in addition to the request that she made on behalf of housing associations in respect of new ground 1B, the NHF chief executive Kate Henderson also made the case for greater clarity in the Bill on new mandatory ground 2ZA. As is set out in the explanatory notes accompanying the Bill, new ground 2ZA will require a court to award possession when a social or other specified intermediate landlord

“has a superior lease and that superior lease is coming to an end”,

thus enabling them to comply with the terms of the superior lease to which they were subject. The clarification for which Ms Henderson argued related to if new ground 2ZA could be used on a tenancy at will—in other words, a tenancy that arises when a tenant occupies a property with landlord consent indefinitely on the basis that either party can end the arrangement by giving immediate notice at any time.

Amendment 188 would ensure that new ground 2ZA would apply in a situation in which a tenancy at will may arise. That is particularly important for social landlords who use superior and intermediate leases to provide specialist supported accommodation.

Amendment 189 would ensure that social or specified intermediate landlords obtain possession of a property when serving notice under the ground. That would see those landlords remain the landlord of the occupational tenant until the conclusion of possession proceedings, rather than running the risk of the superior landlord becoming the landlord for the occupational tenant. We believe that these are both common-sense amendments, and we hope that the Government will accept them either today or at some future point.

[Jacob Young]

I thank the hon. Gentleman for tabling amendments 188 and 189, which seek to amend new ground 2ZA. I know he said they were a concern to the National Housing Federation. We have had similar conversations with the federation. The amendments would change the ground so that it would continue to apply where the superior lease should have ended but is carrying on in some capacity, either as a tenancy at will or in another form. The ground is already drafted to cover those circumstances, so the amendments are unnecessary.

The amendments would also seek to make a much broader change that would allow the intermediate landlord to retain an interest in the property after the superior lease has come to an end. That would be where the intermediate landlord has commenced possession proceedings, presumably to enable them to conclude them. It is already the case that superior leases can make contractual provision for exactly that scenario, and the Bill does not interfere with that. Where there is not contractual provision in the superior lease, ground 2ZB in the Bill allows a superior landlord to continue the same possession proceedings. That will ensure that possession proceedings can continue.

I therefore ask the hon. Member kindly to withdraw his amendment.

[Matthew Pennycook]

Those were two very helpful explanations of why these amendments are necessary. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Jacob Young]

These amendments will make technical changes to remove separate definitions of “local housing authority” and create a single definition to be used throughout the Bill, to ensure alignment and greater simplification as far as possible. For example, Government amendment 11 excludes Welsh local authorities and includes county councils in England where there is no district council, in new possession ground 5G. I commend the amendments to the Committee.

[Matthew Pennycook]

I will be very brief. The Minister and I discussed this subject outside the Committee earlier. As he knows, the Levelling-up and Regeneration Act 2023 has created a new kind of authority for England: combined county authorities. However, CCAs are not referred to in these amendments, which are otherwise completely uncontroversial and whose inclusion we welcome. I just wonder whether the Minister could give us a reason, on the record, for their omission. Is it because a county council cannot ordinarily be a local housing authority, or is there another reason?

[Jacob Young]

I am grateful to the hon. Gentleman for allowing me to clarify. A combined county authority can exercise the functions of a district council, which will be a local housing authority, if the regulations made under the Levelling-up and Regeneration Act provide for the conferral of those functions on a case-by-case basis. As a result, the Government do not believe that there is any need to include combined county authorities in the general definition of a local housing authority at present.

Amendment 11 agreed to.

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[Matthew Pennycook]

I rise to speak to amendment 148 in my name and that of my hon. Friend the Member for Weaver Vale. Paragraph 18 of schedule 1 amends ground 6 in schedule 2 to the 1988 Act. As the Minister has set out, the revised ground, which remains mandatory, would require a court to award possession if a relevant landlord wishes to undertake substantial redevelopment of a property, or a part of a building in which the property is located. The landlord must demonstrate that the changes cannot be accomplished with the tenant living there.

Paragraph 18(3) of schedule 1 inserts proposed new paragraph (aa) into ground 6 in schedule 2 to the 1988 Act. New paragraph (aa) specifies that the ground cannot be used unless the landlord was authorised to acquire the property by a compulsory purchase order, or the tenancy had existed for at least six months at the date specified in the notice. The circumstances in which the amended ground is likely to be used are quite limited. However, we believe, as in the case of other mandatory no-fault grounds, that tenants deserve more security than is proposed.

I go back to a point that we have made several times today. The impact on tenants of frequent, short-notice, unexpected moves cannot be over-stated. Such instability takes a mental and physical toll. It prevents tenants from putting down roots in communities; puts them under financial strain, given the high cost of moving, which was mentioned earlier; and prevents them from saving for a deposit to buy their own home. For the millions of families with children now living in the private rented sector, it has a direct and tangible negative impact, including on children’s education as a result of constant school moves.

It is not right that a tenant should continue to be exposed to the risk of a de facto no-fault eviction only six months after starting a tenancy. Any landlord who wishes to undertake substantial redevelopment—it must be substantial—that cannot be accomplished with the tenant in situ should plan for it over the long term. We therefore think it is reasonable to extend the protected period for ground 6 from six months to two years, and amendment 148 would do that.

I finish by tackling head-on the argument that the Minister continues to use: that our changes create a risk that landlords will not use their properties, which would impact supply. What is the evidence for that risk? The Government keep using the defence that landlords will exit the sector. Of course, if they exit the sector, the property is not then used for nothing; it is either sold or taken back into local authority ownership. What evidence do the Government have that measures that we propose, including this amendment, would cause landlords not to use their properties, and would therefore further exacerbate supply problems in the sector?

[Jacob Young]

On the hon. Gentleman’s questions around security, tenants will have much more security under the new system; under it, landlords will always need a reason to evict a tenant, and must be prepared to evidence that reason in court. That is unlike what happens under section 21. He referred to my comments about properties sitting empty before redevelopment. Obviously, a landlord who was looking to redevelop a property in the near future, but was not yet able to, would not be minded to put a tenant in there unless they had reasonable means of taking back control of that property.

[Matthew Pennycook]

That scenario raises an interesting question that takes us back to the debate we had on ground 1. As the Minister has just argued, landlords who wish to substantially redevelop their property probably have some prior awareness of the likelihood that they will do that. If he will not accept our amendment, will he at least consider having some form of prior notice mechanism, as there used to be for ground 1 before the Government amended it, so that tenants signing up to a tenancy at least have some indication, when signing their agreement, that a landlord may seek to use this ground in the future? Then, at least, the tenant would enter the agreement fully aware that they may be evicted, with six months’ notice, on that ground.

[Jacob Young]

The challenge in going down the route of prior notice is that there is a unique circumstance in which prior notice might be used. If we were to apply prior notice across all types of tenancies, it could be argued that it would be less obvious to tenants that they were in a unique circumstance in which prior notice was relevant. I therefore do not accept the arguments on prior notice.

Amendment 12 agreed to.

Amendments made: 13, in schedule 1, page 72, line 10, at end insert—

“(ab) if the landlord seeking possession is a relevant social landlord and is the person intending to carry out the work, the landlord gave the tenant, before the beginning of the tenancy or on the day on which it began, a written statement of the landlord’s wish to be able to recover possession on the basis of an intention to carry out work mentioned in this ground, and”.

This amendment provides that a “relevant social landlord” as defined in Amendment 15 may only regain possession on the basis of their intention to carry out redevelopment work if they have given a statement to the tenant of their wish to do so before the beginning of the tenancy or on the day on which it began.

Amendment 14, in schedule 1, page 72, line 14, for lines 14 to 33 substitute—

Table

[Matthew Pennycook]

I beg to move amendment 152, in schedule 1, page 74, leave out line 7.

This amendment would retain the existing 12-month period within which the landlord can initiate proceedings on this ground for possession.

[The Chair]

With this it will be convenient to discuss amendment 151, in schedule 1, page 74, line 8, at end insert—

“(c) at the end of the last unnumbered paragraph insert—

‘This ground applies only where the landlord is a private registered provider of social housing.’”

This amendment would limit the use of Ground 7 of Schedule 2 of the 1988 Act to social rented housing.

[Matthew Pennycook]

Paragraph 20 of schedule 1 amends ground 7 in schedule 2 to the Housing Act 1988. Ground 7 requires a court to award possession if a tenancy has been passed to someone by will or intestacy after the death of the previous tenant. The landlord has 12 months in which to initiate proceedings using this ground, or 12 months from the point when the landlord learns of the tenant’s death, if the court agrees. The Government propose amending the ground to give landlords 24, rather than 12, months to initiate proceedings.

There are two issues here. The first is whether ground 7, even in its current form, is reasonable, and we are not convinced that it is any more. Why should a private tenant who is complying fully with all the terms and conditions in the tenancy agreement be put at risk of eviction purely because of the death of someone they live with? As the UK Commission on Bereavement has detailed, in the aftermath of a bereavement, renters face not only a significant and immediate loss of income in many cases, but additional costs; they have to prepare funerals and memorials for loved ones, and so on.

In those uniquely distressing circumstances, the threat of eviction should not hang over a tenant for up to a year, as it presently does. Nor should landlords, in our view, be able to use this ground for reasons that the Bill seeks to prohibit—for example, to avoid letting their property to a bereaved family who might find themselves reliant on universal credit, tax credits or housing benefit as a result of the family member’s death. The UK Commission on Bereavement found evidence of that in the sector. The situation is different when it comes to social rented housing, given that stock is much reduced and there is tight rationing; that might require a council or housing association to regain possession of an under-occupied property, but we do not think the same circumstances apply to the private rented sector. Amendment 151 would limit the use of ground 7 to social rented housing, thereby abolishing its use in the private rented sector.

The second issue relates to the change to ground 7 that the Government propose. Assuming that the Minister resists our amendment 151, as I fully expect him to, we still hope that the Government will reconsider extending the period in which a landlord can initiate proceedings on this ground from 12 to 24 months. We recognise that it can often take some time to investigate, and to find evidence confirming whether a person left behind in a property after a tenant’s death is a successor or inherits the tenancy. As a point of principle, however, we do not believe that private tenants who lived with someone who died should face the risk of eviction with just two months’ notice for up to two years after their loss. In fact, I would go so far as to argue that seeking to double the period in which a bereaved tenant has to live with such a risk hanging over their head strikes us as a particularly callous decision. If the Government are adamant that ground 7 needs to remain in force, they should at least retain the existing 12-month timescale for applying for possession on that ground. Amendment 152 would achieve that, and I hope that the Minister will give it serious consideration.

[Lloyd Russell-Moyle]

I rise to support amendment 152, and particularly its spirit. I could not agree more that if a tenant is in good standing, paying their rent and not breaching any other clauses of the contract, why should they be kicked out because the named person on the tenancy has died? There are also implications for HMOs if a joint tenant dies, or where the tenancy has been passed on via will or intestacy. Where it is passed on, that will almost always be to children or partners. Very often, a lease will be in the name of only one of the family members—maybe the breadwinning family member, who will have gone through all the financial checks.

A landlord will almost invariably know that they are renting out to a group of people, but for legal and financial reasons, one name will be on that tenancy. It does not seem right that those other people would, over such a long period, possibly face eviction. My preference is for the period to last two or three months after the landlord finds out about the death, but 12 months seems a reasonable compromise that us sceptics could live with, because that is the law at the moment. I have not heard any reasons—I look forward to hearing some from the Minister—why the period needs to be extended, or why the Government think hanging the sword of Damocles over a grieving family is positive. This is bearing in mind that any other grounds can be used if the tenants are not in good standing or not behaving well.

In the social sector, there will be a duty to house a family, maybe in alternative accommodation, if they have a housing need. That duty does not exist in the private sector, so the danger is that all we are doing is putting the burden on local authorities. That family will go very quickly to the local authority, and they will be accommodated in emergency or temporary accommodation. Putting that additional burden on the local authority does not seem reasonable. It is also difficult for the authority, because effectively there is now a two-year period of potential eviction and homelessness for that family. That does not seem a good situation for either the local authority or the family. Can the Minister give some rationale for the proposal? I am particularly interested in why he thinks the period should exist at all.

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[Jacob Young]

I understand the hon. Member’s concerns. I will write to him to clarify that point.

Amendment 152, tabled by the hon. Member for Greenwich and Woolwich, would reduce the time in which landlords can initiate proceedings back down to 12 months. We have been told by a number of social housing providers that it can often take longer to establish whether succession has occurred. Indeed, the hon. Member for Brighton, Kemptown, mentioned that as well. That can hinder providers’ ability to regain possession from someone who is not entitled to social housing, and therefore prevent the property from being occupied by someone who is.

It is right that private tenants cannot name anyone they want to succeed their tenancy, as that would leave the landlord with no control over who lives in their property. Therefore, it is vital that ground 7 remains available to both private and social landlords. The ground will not be used frequently, and provides the right balances in those instances when it is used. I therefore hope that the hon. Member for Greenwich and Woolwich will withdraw his amendment.

[Matthew Pennycook]

I take on board what the Minister says about the rationale for the 24-month period for social rented landlords. The situation he mentioned would not arise if he accepted amendment 151 and confined the use of the ground to the social rented sector. I will not press the amendment to a vote, but I am not convinced by the Minister’s argument for why ground 7 should continue to be used in this way. I do not think it would bind the landlord unnecessarily if we said that someone who lives with a person whose name is on the tenancy, but is not their legal partner—the Minister did not refute the point made by my hon. Friend the Member for Brighton, Kemptown—should not be at risk of eviction simply because the person on the tenancy died. I worry about the implications of the threat of eviction hanging over their head for 24 months. However, as we may return to the issue at a later stage, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 180, in schedule 1, page 74, line 20, leave out “After Ground 8” and insert “Before Ground 9”.

This amendment would move new Ground 8A from the list of mandatory grounds for possession (in Part I of Schedule 2 to the Housing Act 1988) to the list of discretionary grounds for possession (in Part II of Schedule 2 to the Housing Act 1988).

[The Chair]

With this it will be convenient to discuss the following:

Amendment 153, in schedule 1, page 74, line 20, leave out paragraph 22.

This amendment would remove the new ground for possession for repeated rent arrears.

Amendment 154, in schedule 1, page 74, line 22, leave out “three” and insert “one”.

This amendment would limit the period to demonstrate repeated serious rent arrears to one year.

Amendment 155 in schedule 1, page 74, line 25, leave out “a day” and insert “two weeks”.

This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.

Amendment 156 in schedule 1, page 74, line 28, leave out “a day” and insert “two weeks”.

This amendment would extend the period during which at least two months’ rent was unpaid from a day to two weeks.

[Matthew Pennycook]

The amendments, which stand in my name and the names of my hon. Friends, concern the proposed new mandatory ground 8A that is inserted into the 1988 Act by paragraph 22 of schedule 1. For the purposes of debating this new mandatory possession ground, it is important that the Committee understands precisely what is proposed. The new ground would require a court to award possession if, over a period of three years, a tenant fails to pay at least two months of rent for a day or more on three separate occasions or, in instances where rent is required by the tenancy agreement in instalments of less than a month, at least eight weeks’ rent goes unpaid for a day or more, again, on at least three separate occasions.

There is an existing ground 8 that covers serious rent arrears. That existing ground requires the court to award possession where a tenant is at least two months in arrears at the time that a notice is served and at the point of the court hearing, with an exemption provided for benefit entitlements that have not been paid. That exemption is expanded to explicitly cover universal credit payments by paragraph 21 of schedule 1.

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[The Chair]

Order. Interventions must be brief.

[Matthew Pennycook]

I am glad that the hon. Gentleman has decided to contribute, because he has a huge amount of experience in this area. I hope that I was as clear as possible when making the case that ground 8A can be gamed; that there are already mechanisms to deal with it under existing ground 8; and that the numbers are likely to be incredibly small. I suggest that the reason the Government included it is that tenants will collectively feel the force of the new mandatory grounds for possession, and many of them will leave their tenancy under threat of it being served, rather than it being practically served. It is a deterrent to challenging and asserting one’s rights, and, as I will explain, we do not think it is necessary. We are extremely concerned about how the ground might operate and the fact that it could lead to a great many vulnerable tenants being evicted. It is a punitive and draconian measure that will cause great hardship. It is not necessary—this is the important point, in answer to the hon. Gentleman’s question—to tackle genuine instances of persistent arrears or the occasional instance when a problem tenant seeks to deliberately avoid ground 8A action.

These are not tenants who might simply refuse to pay their rent. By implication, those tenants will still be dealt with under the serious rent arrears ground 8. To be evicted under ground 8A, a tenant will need to have fallen into arrears and then worked them off twice in a period of three years. Many will have paid the two periods of arrears off in full, and between them could have been fully up to date with their rent. The new ground will cover many tenants who, for whatever reason, are waiting to receive a lump sum in order to clear their arrears—people who are self-employed or struggling with late payments and those in similar circumstances. To be clear, these are people who are trying to do the right thing and doing precisely what we would expect them to do—namely, trying to put the situation right. As Darren Baxter from the Joseph Rowntree Foundation put it in the evidence he provided to the Committee,

“it is punishing people for doing the right thing.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 15, Q13.]

We agree with the chief executive of Citizens Advice, Dame Clare Moriarty, who argued last week that the measure targets a group of people, many of whom “are probably in crisis”. We are talking about people who are almost certainly struggling to keep afloat, people in insecure employment, or people whose lives and finances may have suffered multiple adverse shocks.

There is also a real concern that the measure will encompass particularly vulnerable groups of tenants. For example, the Domestic Abuse Housing Alliance-led National Housing and Domestic Abuse Policy and Practice Group—that is a mouthful, Mr Gray—has suggested that the new ground presents a significant risk to victims of domestic abuse, who are more likely to accumulate rent arrears due to economic abuse and the economic impact of feeling domestic abuse.

The common denominator will be that the tenants are likely to be doing everything they possibly can to retain their tenancy and their home. As Dame Clare Moriarty rightly put it last week:

“These are people who are either suffering multiple adverse life events or possibly trying to avoid losing the roof over their head by borrowing in insecure ways, but they need help and advice, not to be evicted.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 15, Q13.]

The idea that we are instead talking about a bunch of people familiar enough with ground 8A of schedule 2 to the Housing Act 1988 to sit down and work out how they can game it is frankly insulting. So troubled are we by the proposed new mandatory ground 8A that, unlike with any of the other new possession grounds that the Bill seeks to introduce, we believe it should be removed from the legislation altogether. By leaving out paragraph 22, amendment 153 would achieve that, and we intend to press it to a vote.

If, as we fully expect, the Government resist the removal of new mandatory ground 8A from the Bill, we will press the Government to consider at least making it a discretionary rather than a mandatory ground. Then at least the court would have to consider whether the tenant had inadvertently fallen into arrears three times over the specified period and whether they could reasonably be expected to make up the arrears and pay their rent on time and in full going forward—an outcome that would obviously be advantageous for the landlord, who would not lose income during the void period. If the court believed that the tenant could not do so or was likely to fail to pay their rent again in the future, they could still make an outright possession order under a discretionary ground. As Liz Davies KC argued in her evidence last week, a discretionary 8A ground would not be

“a ‘get out of jail free’ card for the tenant, by any means.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 106, Q135.]

Amendment 180 would have the effect of moving ground 8A from part 1 of schedule 2 to the 1988 Act to part 2, thus rendering it discretionary. We urge the Minister to give that serious consideration. The county courts, as we have heard, are extremely good at looking at rent arrears histories and judging whether an outright possession order is warranted.

Lastly, if the Government will not countenance removing new ground 8A entirely or making it discretionary rather than mandatory, we urge the Minister to at least tighten it in ways that will make it far less punitive. Amendments 154 to 156 seek to achieve that by reducing the period in which repeated serious rent arrears must take place from the proposed three years to one, and by extending the period during which at least two months of rent arrears were unpaid from a single day to two weeks. Those three amendments, if accepted, would at least ensure that ground 8A is utilised only in instances where a tenant is almost continuously falling into arrears for extended periods of time. As I have said, we feel very strongly about this group of amendments. I look forward to hearing the Minister’s response to each.

[Lloyd Russell-Moyle]

I rise to support the amendments. I think this clause is particularly pernicious. I do not know whether other Members do this, but I have a tendency in the evening, when my staff have all gone home, to sit at the telephone lines, see who rings in and pick up the calls. I probably should not do that, but I like to get a feeling for who is ringing. They are usually the people who are in crisis. I do not do it every evening, so if constituents try and ring, they will not always get me, but on a Friday afternoon or evening, I will pick up the phone. Invariably, one of those people will be in crisis.

It will be the tradesperson who has again not been paid for the job that he has been working on for the past month, or perhaps the payment has been delayed—we know that there are huge problems with people paying small businesses. Or it will be the person who has been trying to scrimp and save, and has not yet gone to universal credit or any of the support agencies, despite probably being eligible, out of pride or a belief that they could get out of it. They have borrowed money from friends and family, and over a period of time repeatedly dipped down, but they always managed to get themselves back up, usually on their own terms, but this time it has just been a bit too much.

The problem is that, by the time that those people have rung my office, it is too late, because they will have dipped up and down a number of times over the past year—or three years, potentially—and the reason for their holding off getting help is because, every time before, they have managed to build back up. However, now, for the third time, we will move to a non-discretionary, mandatory ground. They will phone up their local citizen’s advice bureau or their MP’s office, or go round to the council, but we will be able to say only one thing: “I’m sorry, there’s nothing we can do because it’s a mandatory ground.”

I think that that is particularly pernicious and nasty, because these are people who we know are good for it in the long term. They will often be people who can raise the money eventually but have cash-flow problems, perhaps through no fault of their own. As I said, a lot of tradespeople will suffer some of these problems. They are having to pay out money for supplies to continue their work; the money does not come in in some months, and two months’ arrears can quite easily build up.

That feeling—that they might have to spend the rent to be able to buy the materials to build the building that they can get the money for—is a choice that they have to make all the time. While that is of course not encouraged, it surely is better that we encourage them to make good in the end and build themselves up, so that that does not happen repeatedly, rather than push them out. Of course, an eviction makes them more likely to spiral into further difficulties, which is why making this a mandatory measure is so unpleasant. The reality is that a payment plan, in many situations—or a deferred order in most situations—would suffice, and the courts can implement that at the moment.

The idea that we need this as a mandatory ground is also dangerous, as we have heard, because, what would my advice or an advice centre’s advice be, on that third occasion? “Well, you’re going to get the eviction notice anyway. Prioritise the other debts that you need to pay off, or making sure that your family have food on the table, rather than considering the rent a priority.” That is not good for the landlord either. Having to reclaim money through the courts from those groups of people in a speedy manner is nigh on impossible, and eviction is not what most landlords want. They want a payment and to be able to ensure that that support is there.

It would be much better either to not have this clause or to have a discretionary ground that requires engagement with debt advice and advisers. There is also much that can be done through court processes, as we saw during covid. As I have mentioned, for section 21s and other forms of evictions, the landlord—when permitted—had to demonstrate that they had taken covid into account and had sought to advise the tenant of the support offered under the covid regime. Aspects like that need to be incorporated here. Again, it does not always need to be on the face of the Bill, but there need to be reassurances that it is incorporated in a binding way, to be able to process these elements. The Minister needs to relent on this.

Renters (Reform) Bill (Fifth sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

May I join you, Mr Gray, in thanking members of the Committee for their engagement with the Bill so far?

My view is that the Bill delivers a better deal for renters and for landlords. As hon. Members are aware, however, we must tread lightly. This is a fine balancing act. Go too far one way, and good landlords will find it harder to operate and exit the market; go too far the other way, and the Bill will not give renters the protections we all seek against bad actors in the private rented sector. As we delve into the Bill, I ask all hon. Members to consider the impact of proposed amendments on that delicate balance.

Everyone has the right to a secure and decent home, whether they own it or are among the 11 million people living in the private rented sector; that is the guiding principle of the entire Bill. Clause 1 will remove fixed terms. It provides that tenancies will be periodic in future: under the clause, the tenancy will roll from period to period. Any term in a contract that includes a fixed term will not be enforceable.

The clause also has limits on how long a rental period can be. That is to prevent unscrupulous landlords from emulating fixed terms by introducing longer periods to contracts. Fixed terms lock tenants into contracts, meaning that they may not be able to end their tenancy before the end of the term and move to another property when they need to, for example to take a new job or when a landlord fails to maintain basic standards or repair a property. The changes will also give landlords more flexibility: they may end the tenancy when they need to, under specified grounds that are covered in later clauses, rather than waiting for the end of the fixed term.

Government new clause 2 will require landlords to refund rent in advance where the tenancy has ended earlier than the duration already paid for. That applies regardless of how the tenancy came to an end. It will ensure that rogue landlords do not try to lock tenants in with large up-front payments.

Government new clause 6 will deliver a technical change to council tax rules in the light of the abolition of fixed-term assured tenancies. It will ensure that tenants who hold assured tenancies are liable for council tax until the end of their tenancy agreement. In particular, tenants will remain liable for council tax when they have served notice to end their tenancy but leave the property before the notice period has ended. That will ensure that liability for council tax does not pass back to the landlord until the tenancy has formally ended. I commend the clause to the Committee.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a real pleasure to begin our line-by-line consideration with you in the Chair, Mr Gray. It is a genuine privilege to serve on a Committee with such evident expertise in the subject matter. It is my sincere hope that we can draw constructively on it all in the days ahead to improve this long-overdue but welcome piece of legislation.

As the Opposition argued on Second Reading, the case for fundamentally reforming the private rented sector—including by making all assured tenancies periodic in future, as clause 1 seeks to do—is watertight. As the Minister implied, regardless of whether someone is a homeowner, a leaseholder or a tenant, everyone has a basic right to a decent, safe, secure and affordable home. However, millions of people presently renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal justification, if any. The lack of certainty and security inherent in renting privately today results not only in an ever-present anxiety about the prospect of losing one’s home and often one’s community, but—for those at the lower end of the private rented market, who have little or no purchasing power and who all the evidence suggests are increasingly concentrated geographically—in a willingness to put up with often appalling conditions for fear that a complaint will lead to an instant retaliatory eviction.

This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old. The Minister may have been even younger.

[Jacob Young]

I wasn’t born!

[Matthew Pennycook]

Well, that just makes my point that the sector should have been overhauled a long time ago. The fact that it has changed beyond recognition over recent decades and now houses not just the young and the mobile, but many older people and families with children, for whom having greater security and certainty is essential to a flourishing life, renders urgent the need to transform how it is regulated and to level decisively the playing field between landlords and tenants.

This Bill is a good starting point to that end. We are glad that after a very long wait, it is finally progressing. However, we are determined to see it strengthened in a number of areas so that it truly delivers for tenants. In this Committee and the remaining stages, we will seek to work constructively with the Government to see this legislation enacted, but we also expect Ministers to give serious and thoughtful consideration to the arguments we intend to make about how its defects and deficiencies might be addressed.

Part 1 of the Bill seeks to amend the assured tenancy regime introduced by the Housing Act 1988. In the nearly 35 years since that Act came into force in January 1989, with some limited exceptions, all new private sector tenancies in England and Wales have been either assured or assured shorthold tenancies, with the latter becoming the default PRS tenancy following the implementation of the Housing Act 1996. As the Committee will know, assured tenancies can be either periodic or fixed, but the vast majority of ASTs are fixed.

Clause 1 will insert a new section 4A before section 5 of the 1988 Act, thereby providing, as the Minister made clear, that all future assured tenancies will be periodic and open-ended, and that they can no longer have fixed terms. That change will empower tenants by giving them more flexibility to end tenancies where and when they want or need to, including when landlords are not meeting their responsibilities and obligations or in instances in which the property that they have moved into is not as advertised. We support it.

We take no issue with Government new clause 2. Although we are not convinced that it is strictly necessary, given how the Apportionment Act 1870 applies to rent paid in advance, we believe that it is a worthwhile amendment none the less, to the extent that it makes express provision for that.

We believe that Government new clause 6 is a necessary change to how council tax works, given that the Bill abolishes fixed-term tenancies. However, in the sense that its effect will be to render a tenancy that

“is or was previously an assured tenancy within the meaning of the Housing Act 1988”

a “material interest” for the purposes of this Bill, we would be grateful if the Minister provided some clarification. Could he tell us the effect of the proposed change in circumstances in which a tenant used to have an assured tenancy but, after this part of the Bill comes into force, now does not because of circumstances that are out of their control? Let us say, to take an extreme example, that a tenant died prior to the end of their assured tenancy, and the relevant provisions came into force. Would their estate be forced to pay the council tax liability as a consequence of the new clause?

We understand the Government’s intention with regard to the new clause, which is to manage the transition between the two tenancy regimes when it comes to council tax. However, we are a little concerned that, as drafted, the new clause may be unnecessarily broad and may create some problematic outcomes. The explanatory statement accompanying the new clause suggests that it may have another purpose altogether—namely, to make people liable if they leave a tenancy without giving notice—but that raises the obvious question of how the Valuation Office Agency and the relevant local authority are meant to know that, and how the local authority might ever hope to find the tenant who is liable. Could the Minister tell us whether the Government have discussed the matter at all with either the Valuation Office Agency or the Local Government Association?

Lastly in connection with this new clause, is there not a risk that unscrupulous landlords may game this provision by claiming that there is still a tenant in situ who should settle the council tax liability, rather than the landlord doing so? Our concern is that the provision could be abused along those lines and that local authority revenue would suffer as a result. I would appreciate some reassurance and clarification on those points in the Minister’s response.

With or without the incorporation of Government new clause 2 and new clause 6—after clause 6 and before clause 20 respectively—huge uncertainty now surrounds the implementation of clause 1, and the rest of chapter 1 of part 1, as a result of the Government’s recent decision to tie implementation of the new system directly to court improvements. Whatever the motivation behind that—renters will no doubt have reached their own conclusions—the decision has significant implications for when clause 1 and the other clauses in this chapter become operational. We need answers today, so that those whose lives stand to be affected are clear as to what they are.

Clause 67, “Commencement and application”, gives the Secretary of State the power by regulations to appoint a day when chapter 1 of part 1, including clause 1, comes into force. In other words, the Bill has always given Ministers discretion as to precisely when the new system becomes operational—a matter that we will debate more extensively in a future sitting when we come to clause 67 itself and our amendment 169 to it.

The Government were previously clear that there would be a two-stage transition to the new tenancy system, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, and that a package of wide-ranging court reforms was to accompany the legislation, but at no point prior to the response issued on 20 October this year to the Select Committee on Levelling Up, Housing and Communities did the Government indicate that the new system’s implementation was directly dependent on such reforms. As things stand, because of the Government’s last-minute change of approach, not only do tenants have no idea when the new tenancy system will come into force, but they do not even know what constitutes the requisite progress in respect of court reform that Ministers now deem is necessary before it does.

There are three distinct questions to which the Government have so far failed to provide adequate answers. First, is the county court system for resolving most disputes between landlords and tenants performing so badly that reform is a necessary precondition of bringing this clause and others in this chapter into force?

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

We heard from many representations on the county court part of the process that the county court system was performing adequately. Does that not make one suspicious that there are other motivations for kicking this into the long grass?

[Matthew Pennycook]

I will come on to our view of precisely how the county court system is operating, but I think it would be fair to say that we do not necessarily buy the Government’s argument that it is performing so badly that we need to tie implementation of this clause and others in this chapter to it. It could certainly do with improvement, but if it needs improvement, we need to know what that improvement is. That is an argument that I will come on to make in due course.

The second of my three questions to the Government relates to the point that my hon. Friend has just raised: if the court system requires improvement to ensure that landlords can quickly regain possession of their property if a tenant refuses to move out, what is the precise nature of the improvements that are required? Thirdly, how can we measure progress on delivering those improvements so that tenants have certainty about when the new system might come into force?

I will start with my first question. With apologies, Mr Gray, I intend to spend some considerable time on this point, because it is central to when the clause and the rest of the chapter come into force.

If one examines the evidence, it is clear that the possession claims system is one of the faster and better-administered parts of the civil justice system. As housing expert Giles Peaker put it when giving evidence to the Committee on Thursday, it is “well honed”. As Simon Mullings, co-chair of the Housing Law Practitioners Association, stated in the same session:

“What we have at the moment is an extremely good network of county courts, with a very evolved set of civil procedure rules that deal with possession claims very well.” ––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]

The data seems to bear that out. It makes it clear that the various stages of possession and litigation are back to where they were pre-pandemic, and that non-accelerated possessions are not taking significantly longer than the relevant guidelines stipulate. As Giles Peaker argued,

“the current time from issue to a possession order under the accelerated possession proceedings—an ‘on the papers’ process, without a hearing—is roughly the same as under the section 8 process with an initial hearing. There is no great time lag for the section 8 process as opposed to accelerated possession proceedings.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]

One of the more robust defences of the adequacies of the present system that I have heard came from the sixth of the seven housing and planning Ministers that I have shadowed in my two years in this role. On Second Reading, the hon. Member for Redditch (Rachel Maclean) argued:

“It is important to note at this point that the vast majority of possession claims do not end up in the courts—only something like 1% of claims go through the courts... The courts have already made huge improvements. It is worth saying that over 95% of hearings are listed within four to eight weeks of receipt, and of course the ombudsman will encourage the early dispute resolution process, taking a lot of claims out of the courts and freeing up court time for more complex processes.”—[Official Report, 23 October 2023; Vol. 738, c. 695.]

We also heard expert testimony last week that called into question the suggested impact of the Bill on the courts. For example, it was disputed whether the reforms in the Bill would increase the number of contested cases. Giles Peaker persuasively argued that there was likely to be an increase in the number of initial hearings, but that we are unlikely to see an increase in the number of contested hearings.

To the extent that concern was raised about capacity within the system, several witnesses argued that it still did not justify postponing the enactment of chapter 1 of part 1. Indeed, the head of justice at the Law Society, Richard Miller, argued in relation to plans for digitisation that it would be sensible to see the new tenancy system put in place first so that we can properly understand what a new digital system needs to achieve in respect of the Bill.

Every part of the civil justice system would benefit from improvement, but we would argue that, to date, the Government have failed to demonstrate that the county court system for resolving landlord and tenant disputes is failing to the degree that it is imperative to further delay the long-overdue reforms to tenancies in the Bill. I would be grateful if the Minister set out very clearly why the Government believe the possession of claims system is so woefully inadequate that the enactment of clause 1 and the other clauses in chapter 1 must be postponed.

I turn to the second of my questions. If we accept that the county court system as it relates to housing cases could be improved—probably no one here would dispute that, even if we might debate the extent of the improvement required—how are the Government defining improvement? To put it another way, what is the precise nature of the improvements that Ministers believe are required before we finally abolish section 21 of the 1988 Act and reform the tenancy system, as clause 1 and other clauses in chapter 1 will do?

Let us examine and interrogate what the Government have said about this. Their 20 October response to the Select Committee stated:

“We will align the abolition of section 21 and new possession grounds with court improvements, including end-to-end digitisation of the process.”

Will the Minister tell us precisely what is meant by end-to-end digitisation of the process? Precisely what process did that statement refer to? Was it a reference to just the court possession action process, or to civil and family court and tribunal processes more generally? Further detail was seemingly provided in the briefing notes that accompanied the King’s Speech on 7 November:

“We will align the abolition of section 21 with reform of the courts. We are starting work on this now, with an initial commitment of £1.2 million to begin designing a new digital system for possessions. As work progresses, we will engage landlords and tenants to ensure the new system supports an efficient and straightforward possession system for all parties.”

[Lloyd Russell-Moyle]

Did we not hear in evidence that the key for this to work was the property portal? Delaying the implementation of these measures until after court reform would therefore seem to be the wrong way around. Surely the property portal and ombudsman need to be up and running, and then we can see what pressure is on the courts, and we can also integrate the property portal into the digitalisation of the process.

[Matthew Pennycook]

I thank my hon. Friend for that intervention. It is a point well made, and I think the same point was made by Richard Miller of the Law Society. If this Bill works as intended, there are a number of provisions in it that should relieve the burden on the courts. We all want to see that happen. However, to the extent that the courts do need to act in possession cases, we need to know precisely what the Government mean by the “improvements” that they have been referring to over recent months.

That King’s Speech briefing note would suggest that the required improvements relate only to the court possession action process. However, it is not clear whether the proposed new digital system for possessions is the only improvement that Ministers believe needs to be delivered before the new tenancy system can be introduced, and if so—this is crucial—by what date that new system will be operational.

Can the Minister tell us more about the new digital system for possessions that the King’s Speech briefing note referred to? Specifically, can he tell us whether its introduction is the sole determinant of when the new tenancy system can come into force? Can he also outline when the Government expect work on that new digital system to be completed by the Government and rolled out for use by landlords, given that it appears—on the basis of the King’s Speech briefing note—to have only just commenced?

The White Paper “A fairer private rented sector”, which the Government published in June 2022, set out the Government’s intention, working in partnership with the Ministry of Justice and HM Courts and Tribunals Service, to

“introduce a package of wide-ranging court reforms”.

Those went beyond purely the court possession action process that I have just been speaking to. It was suggested in the White Paper that the package would include steps to address county court bailiff capacity, a lack of adequate advice about court and tribunal processes, a lack of prioritisation of cases and the strengthening and embedding of mediation services for landlords and renters—issues that many of our witnesses in last week’s evidence sessions referred to.

Many of those issues were also identified in the Government’s response to the Select Committee as “target areas for improvement”. What is not clear is whether the implementation of the new tenancy system, and this clause, is dependent on Ministers judging that sufficient progress has been made in relation to each of those target areas for improvement, or whether it is dependent, as I have suggested, solely on improvements in the court possession process.

Can the Minister tell us clearly which one it is? Will the new tenancy system be introduced only when improvements have been made in all the target areas specified, or is the implementation date linked solely to improvements in the court possession process? If it is the former, what are the criteria by which the Government will determine when sufficient improvements have been made in each of the listed target areas for improvement? Those of us on the Opposition side of the Committee, and many of the millions of tenants following our proceedings, need answers to those questions. As we debate the Bill today, we do not know precisely what reform of the courts is required for the new tenancy system to be enacted.

I turn to my third question. Because we have no real sense of precisely what the Government mean by court improvements, and therefore no metrics by which they might be measured, we have no idea whether and when they might be achieved. The concern in that regard should be obvious. Having been assured repeatedly by Ministers that the passage of this Bill will see a new tenancy system introduced and the threat of section 21 evictions finally removed, tenants have no assurances, let alone a guarantee, that the Government have not, in effect, given themselves the means to defer—perhaps indefinitely—the implementation of these long-promised changes.

As I referenced in my response to my hon. Friend the Member for Brighton, Kemptown, we accept that the court system needs to be improved so that, when landlords or tenants escalate a dispute, they can have confidence that it will be determined in an efficient and timely manner. However, since they committed themselves to abolishing section 21 evictions, the Government have had more than four and a half years to make significant improvements to the system to support tenants and good-faith landlords, and they have not succeeded in doing so.

[Mike Amesbury (Weaver Vale) (Lab)]

On that four-and-a-half-years point, can my hon. Friend clarify how many people have been evicted through no-fault eviction since 2019, when abolition was originally promised?

[Matthew Pennycook]

That is a very good point. Every month that the Government delayed tabling the Bill, many thousands of tenants were put at risk of homelessness by a section 21 eviction. I cannot remember the precise figure, but I think the last Government data release showed that just under 80,000 tenants had been put at risk of homelessness as the result of a section 21 notice since the Government first committed to abolishing section 21. And we are talking not just about those 80,000, but about however many tens of thousands more will be put at risk of eviction while the Government delay the enactment of the provisions on the basis of court reforms.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Does my hon. Friend agree that this issue is putting huge strains on local authorities, which are being forced to pick up so many homeless families at a time when social housing unit availability is at its lowest and it is difficult to find any form of temporary accommodation that is half-decent?

[Matthew Pennycook]

I thank my hon. Friend for that well-made point. A related and incredibly important issue is the supply of genuinely affordable housing, and the Government have failed woefully to build enough social rented homes in this country to meet housing need. She is absolutely right that local authorities are picking up the burden for this failure and the failure in the courts. My local authority—like hers, I am sure—is now sending people in need of temporary accommodation as far as Dartford or north Kent, and even further in some cases. Those people are struggling to retain a foothold in the community they live in and value, and in the schools that their children go to. Frankly, that is unacceptable. We need an end to section 21 as soon as possible.

[Lloyd Russell-Moyle]

My hon. Friend talked about the insecurity for tenants if the measure is not implemented in time, but does he also think that if it is not clear when it will be implemented, there could be adverse effects on the wider rented sector market? We know that people game the system; if it is not clear when the measure will be implemented, the danger is that people can run rings around both tenants and the public sector.

[Matthew Pennycook]

My hon. Friend is right: a protracted delay in implementing this clause and the others in chapter 1 could lead landlords to look at how they can best abuse the system before the new one is introduced. Equally importantly, it could provide a real problem for good-faith landlords who are trying to do the right thing. If a landlord who is affected by high interest rates and section 24 tax changes is wondering whether they can stay in the market and continue to provide private lets, how does it help to have hanging over their head an undetermined date, based on an unspecified set of metrics, for when a new system will come into force?

As I was saying, the Government have had more than four and a half years to improve the court system. They have not succeeded. If they had, then, as the former Housing Minister—the hon. Member for Redditch—claimed, they would have had no justification for delaying the enactment of this clause and the others on the grounds that the system is failing to such an extent that landlords have no confidence in it. The truth is that the Government’s record on court reforms is as woeful as their record on social rented housing. In a damning report published this summer, the Public Accounts Committee made it clear that, seven years into the courts and tribunals reform programme, HMCTS

“is once again behind on delivering critical reforms to its services. Overall, despite an increase in budget, the programme is set to deliver less than originally planned, at a time when the reforms are even more vital to help reduce extensive court backlogs.”

[The Chair]

Order. I indicated to the hon. Gentleman that I was content with a reasonably wide-ranging, Second Reading-type debate on clause 1 stand part, but we are now going well beyond the scope of the clause. Perhaps he might like to return to it.

[Matthew Pennycook]

I am bringing my remarks to a close. The degree of progress in improving the courts is pertinent to the debate, given that the Government have linked the implementation of the clause directly to it. When it comes to digitisation, which the Government have flagged as one of the target areas for improvement and on which the implementation of this clause relies, the Government have made agonisingly slow progress. As Mr Miller from the Law Society argued in his evidence to the Committee last week, the project to digitise private family law was announced in 2020 and was scheduled to be completed in December 2022. Yet the issue is ongoing and the roll-out has not yet been completed.

Given the Government’s record on court reform, how can tenants, looking for clause 1 and other clauses in chapter 1 to be enacted as soon as possible, have any confidence that sufficient progress will now be made in even the limited number of areas identified by the Government? As I have remarked, the inefficiency of the court system is a huge problem and action must be taken to address its lack of capacity so that possession claims can be expedited. The end of no-fault evictions cannot be made dependent on an unspecified degree of future progress subjectively determined by Ministers.

On Second Reading, we asked for clear commitments from the then Housing Minister on metrics and timescales that would give renters a degree of certainty about when the new tenancy system would be introduced. None was forthcoming. There is a huge amount of confusion, and genuine concern, about this issue. In the absence of any assurances to the contrary, the conclusion that has been reached by many tenants, and those who represent them and defend their interests, is that the Government have reached for a spurious excuse in order to delay the implementation of some of the most fundamental reforms in this legislation, under pressure from the landlord lobby and discontented Members on their own Back Benches.

I have spent some time on this clause stand part debate, but that is because of its importance to millions of tenants in England and Wales. We will return to this issue again when we debate clause 67, but given that the Government have made it operational on clause 1 and the rest of chapter 1 is dependent on those unspecified reports, we would appreciate it if the Minister took the opportunity in this debate to clarify precisely what the Government’s intentions are and set a clear timeline for when the new periodic tenancies provided for by this clause, as well as the rest of the new tenancy system, will come into force.

--- Later in debate ---

[Matthew Pennycook]

Can the Minister tell us clearly why the two-stage transition process set out in clause 67 does not afford the Government enough time to make the necessary improvements?

[Jacob Young]

We will come on to that point when we discuss clause 67. I want to address some of the points that have been raised, particularly the question about bailiffs. HMCTS has already begun making improvements at the bailiff stage, including automated payments for debtors, to reduce the need for doorstep visits in those cases. We are also improving guidance to increase awareness of each party’s rights and responsibilities.

The hon. Member for North Shropshire spoke about the concern raised in evidence about longer fixed-term tenancies. I completely understand the hon. Lady’s position. I understand the genuine concern that she and the people giving evidence have. Our fear, which was rightly identified by the hon. Member for Brighton, Kemptown, is that to include any fixed-term tenancies creates a loophole. We are certain about abolishing section 21, so we do not believe that having a fixed-term tenancy will provide any security to the tenant. It could, in fact, lock a tenant into a property that they would be unable to get out of, even if the property was of poor quality, because the term of their tenancy was fixed. I hope that the hon. Member for North Shropshire can accept that.

I will write to the hon. Member for Brighton, Kemptown other Committee members specifically on the points raised by the Opposition on new clause 6. I am pleased that there is a consensus on clause 1. We all want to see this measure implemented. I commend it to the Committee.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Abolition of assured shorthold tenancies

Question proposed, That the clause stand part of the Bill.

[Jacob Young]

Clause 2 removes the assured shorthold tenancy regime entirely, including section 21 evictions, meaning that in future all tenancies will be assured. Ending these section 21 no-fault evictions will provide tenants with more security and the knowledge that their home is theirs until they choose to leave, or the landlord has a valid reason for possession. It will allow tenants and their families to put down roots, providing them with the stability that we know is a prerequisite for achievement.

Government new clause 18 deals with property abandonment. The Housing and Planning Act 2016 introduced provisions that would allow a landlord of an assured shorthold tenancy to recover possession without a court order if the tenant had abandoned the property, owes more than two months’ rent and the landlord has served three warning notices. Those provisions were never brought into force and we consider they are inconsistent with the intentions of the Bill to provide greater security. Removal of the provisions will help prevent landlords from ending a tenancy without a court order where a property appears to have been empty for a long period. It is possible that, on occasion, a property may appear to have been abandoned, but the tenant is in hospital or caring for relatives. Instead, landlords will need to use one of the specified grounds.

[Matthew Pennycook]

Let me start by making it clear that the Opposition welcome Government new clause 18. Although I have not been in Parliament long compared with other Members, I have been here long enough to remember sitting on the Bill Committee for the Housing and Planning Act 2016. Part 3 of that Act, which this new clause repeals, was always a foolish provision, and has rightly never been brought into force. We believe it is right that we rid ourselves of what might be termed statutory dead wood.

Clause 2 will remove section 21 of the Housing Act 1988 and, as the Minister made clear, will abolish assured shorthold tenancies and remove mechanisms by which assured social housing tenants can currently be offered ASTs—for example, as starter tenancies—or be downgraded to an AST as a result of antisocial behaviour. The provisions in this clause, as well as those in clause 1, will be brought into force on a date specified by regulations made by the Secretary of State under clause 67. It is appropriate to raise a very specific issue on this clause. We have just discussed court improvements at length. I know that is not the Minister’s brief, and that this is his first Bill, but I have to say to him that his answers on court reform were not adequate. At some point, the Government will have to explain specifically what improvements they wish to see enacted and on what timeline they will be brought into force. Leaving that aside, can the Minister provide further details on precisely how the Government intend to phase in the provisions in this clause? What consideration, if any, has been given to preventing unintended consequences arising from the proposed staged implementation?

The guidance on tenancy reform that the Government published alongside the Bill on 17 May said:

“We will provide at least six months’ notice of our first implementation date after which all new tenancies will be periodic and governed by the new rules”—

that is when they will introduce Part 1, Chapter 1. It continued:

“The date of this will be dependent on when Royal Assent is received”.

I take that to mean that, at some point in the future, a Government Minister will hopefully determine that the court system is, in the their eyes, finally ready to implement the new system—although there is nothing in the Bill to ensure that will happen. He or she would then presumably announce that the first implementation date—that is, the date when all new periodic tenancies come into force—will be six months hence.

I would like the Minister to confirm whether my understanding of how the Government expect the process to develop is correct. If so, can he respond to the concern—the flip side of my hon. Friend the Member for Mitcham and Morden’s point on a rush to section 21 evictions—that this may create a clear incentive for landlords to offer new tenants a lengthy fixed-term assured tenancy before the new system comes into effect?

If the safeguard in the Government’s mind is that all existing tenancies will transition to the new system on the second implementation date, can the Minister provide any reassurance that the period between the first and second implementation dates will not be overly long? I raise the point because the guidance makes explicit reference to a minimum period between the first and second dates, but does not specify a maximum period after which the second date would have to come into effect. As the Bill stands, it could enable a scenario where all new tenancies become periodic, but there is an extensive period of time where all existing fixed tenancies remain as such. It could be an indefinite period, there is nothing in this Bill to put any time limit on it at all. I look forward to hearing whether the Minister can provide any reassurances in relation to that concern. If he cannot, we may look to table another amendment to account for this loophole, whether it is intended or unintended.

[Jacob Young]

I thank the hon. Member for his support. He asked about the first and second dates. He is entirely right on the first date—it is six months. The second date is 12 months. I hope that gives him reassurance.

[Matthew Pennycook]

Just to clarify: as I understand it, 12 months is the minimum. Is the Minister saying that there is a maximum? If not, will the Government consider introducing a maximum? I see the officials shaking their heads. There is no maximum in the Bill. We could have a system where, six months after Royal Assent, all new tenancies become periodic and all existing tenancies could remain fixed indefinitely. What is there in the Bill to prevent an incentive for landlords to rush before the first implementation date to hand out fixed tenancies across the board for very extended periods of time to circumvent the measures in the law?

[Jacob Young]

Ultimately, we want to bring in these measures as quickly as we can. The system will be in place soon. What I will do to give the hon. Gentleman the assurances he desires is to write to him further. We can agree on that principle and if changes are needed to the Bill, I am happy to consider them.

[Jacob Young]

I appreciate the hon. Gentleman’s concern about this point. As I mentioned earlier, I think we will discuss this issue when we debate clause 67, so we can have that debate then.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Changes to grounds for possession

[Matthew Pennycook]

I beg to move amendment 145, in clause 3, page 2, line 32, at end insert—

“(aa) after subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 1 if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”

This amendment would extend the greater hardship provisions to new Ground 1 (occupation by landlord or family).

[The Chair]

With this it will be convenient to discuss the following:

Amendment 146, in clause 3, page 2, line 32, at end insert—

“(aa) after subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 1A if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”

This amendment would extend the greater hardship provisions to new Ground 1A (new grounds for sale of a dwelling-house).

Amendment 150, in clause 3, page 2, line 32, at end insert—

“(aa) After subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 6A if the court is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order than by refusing to grant it.’”

This amendment would extend the greater hardship provisions to Ground 6A (ground for possession to allow compliance with enforcement action).

[Matthew Pennycook]

Clause 3 amends the grounds for possession in schedule 2 to the 1988 Act, by means of the changes set out in schedule 1 to the Bill, which we will debate separately later today. Taken together, amendments 145, 146 and 150 would extend “greater hardship” provisions to three of the mandatory grounds set out in amended schedule 2 to the 1988 Act, namely grounds 1, 1A and 6A.

Ideally, we would have debated these amendments as the last amendments to clause 3, because they are very much our fall-back position if we cannot convince the Government to accept the other changes that we propose to the clause. In due course, we will debate our concerns about several of the revised or new possession grounds provided for by the Bill that can still be fairly categorised as de facto “no fault”. These include grounds 1, 1A and 6A.

In cases where a landlord has proved a discretionary possession ground, a judge must decide whether it is reasonable to make the possession order. In reaching their decision, a judge can consider not just the reason for the possession claim, but anything relevant to the case, including the tenant’s conduct and the likely consequences of eviction for the individual or individuals in question. They can also consider whether the tenant has tried to put things right since the claim was issued. If the judge is not satisfied that it is reasonable to award possession in these discretionary cases, they can dismiss the claim all together. In contrast, if a landlord proceeds on a mandatory ground—I remind the Committee again that proposed new grounds 1, 1A and 6A are mandatory—the judge must make an order, if the landlord has proved their case.

The amendments would give the court very limited discretion, in relation to mandatory grounds 1, 1A and 6A, to consider whether the tenant would suffer greater hardship as a result of the possession order being granted.

[Shaun Bailey]

I appreciate that the hon. Gentleman has tabled further amendments on the evidential burden, but does he not appreciate my concern that there is perhaps a little bit of a floodgate situation around appeals on this issue? Notwithstanding his comments about the judicial system and the court system, I am conscious that we may have a scenario where judges’ decisions are challenged and we end up with a backlog. As a result, what the amendment tries to do would either be delayed, or would end up in a system of appeal after appeal, because clearly the result would be down to a judge’s subjective decision, based on the evidence in front of them at the time.

[Matthew Pennycook]

I thank the hon. Member for his intervention. Perhaps I have not explained myself clearly. These amendments do not provide for an appeals process. As I have tried to make clear, when it comes to a discretionary possession ground, judges can weigh up the evidence. That is not the case for a mandatory ground. The amendment provides for not an appeal process, but discretion for the court and the judge to consider whether their decision would cause greater hardship to the tenant. I will come on to explain how that would work.

[Shaun Bailey]

To clarify my point, I am aware that the amendment is not about an appeals process. However, as the hon. Gentleman will know, an application for appeal can be made against any judge’s decision, and that application can be granted by the superior courts, so the process is not immune from appeal; decisions can be taken to appeal. That is a right, which would be granted, and it could be achieved through another part of the system. I just wanted to clarify my position on that point.

[Matthew Pennycook]

It is an interesting debate, but not particularly pertinent to the amendments. It is not my understanding that a mandatory possession ground order can be appealed. If it can, then I think that the instances in which it can are vanishingly small. However, that is not what these amendments seek to do. They purely seek to protect very vulnerable tenants who might suffer great hardship as a result of the court’s decision.

The starting point for the court would remain that the landlord in question has proved his or her intention to either occupy the property under ground 1 or sell it under ground 1A, or the need to respond to enforcement action under ground 6A. In other words, the presumption would be that a possession order will be made, and in most cases it would be. However, the amendments would provide tenants with the opportunity to demonstrate to the court—not at appeal, but at a hearing of the court—that their eviction on any of the three grounds in question would lead to hardship greater than that of the landlord or, in the case of amended ground 1, potentially the landlord’s family. If the judge determined that the hardships each party is likely to experience were the same, under these amendments, the tenants would not succeed, and the possession order would still be made. However, if the tenant could prove to a court that they or a member of their household would suffer greater hardship than the landlord or the landlord’s family if a possession order were made, the court could refuse to make the possession order.

--- Later in debate ---

[Jacob Young]

I thank hon. Members for their contributions. I thank the hon. Member for Greenwich and Woolwich for his amendments 145, 146 and 150. As has been discussed, the amendments look to make grounds 1, 1A and 6A discretionary.

[Matthew Pennycook]

To clarify, the amendments do not seek to make those grounds discretionary in any case. We accept that they are mandatory. We believe that the amendments would allow those mandatory grounds to be used in almost every case, unless great hardship would result from them. They do not make those three possession grounds discretionary.

[Jacob Young]

However, judges would be required to assess whether possession would cause greater hardship than not. We think that would count as making the grounds discretionary.

The changes would add significant uncertainty to the system. It is right that landlords should have confidence in the process, and can manage their properties, including when they want to move into or sell a property. The uncertainty that the amendments would cause means that landlords may simply choose not to rent their properties in the first place if they know that they may want to move into or sell a property in future. That would reduce the vital supply of homes in the private rented sector. In the case of ground 6A, on enforcement compliance, if possession is not granted, the landlord would continue to be in breach of their obligations, and could face fines and other penalties. Given the adverse consequences that the amendments would cause, I hope that the hon. Member will withdraw them.

[Matthew Pennycook]

I am disappointed by the Minister’s response. I welcome the clarification he gave. The amendments would introduce a limited amount of discretion. We would argue that they do not make the grounds discretionary—it is a point of debate—but introduce a limited amount of discretion into the system. However, we trust judges in county courts to make these decisions in most cases. The amendments would put the burden on the tenant to prove great hardship, and make the presumption that the mandatory ground award will be issued in most cases.

I will bring the Minister back to some of the hypothetical scenarios I gave. We absolutely agree with the Government that landlords need robust possession grounds to take their properties back. In one of my hypothetical examples, the Bill would allow a terminally ill cancer patient to be evicted and put at risk of homelessness, just because the landlord wished to sell. They may have no need to sell; they might own eight properties and wish to sell one or two of them. In limited circumstances and cases, we should give the judges a bit of discretion. Otherwise, some very vulnerable and in-need tenants will evicted through these means.

I am disappointed that the Government have not accepted the amendments. I hope that they go away and think about them, but I will not push them to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 149, in clause 3, page 2, line 32, at end insert—

“(aa) After subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 6A if the court considers that it is not just and equitable to do so, having regard to alternative courses of action available to the landlord or the local housing authority, which may include—

(a) a management order under Part 4 of the Housing Act 2004;

(b) in relation to paragraphs (b) and (f) of Ground 6A, other measures which are more appropriate for reducing the extent of overcrowding or the number of households in the dwelling-house, as the case may be;

(c) in relation to paragraph (c) of Ground 6A, the provision of suitable alternative accommodation for the tenant, whether under section 39 of the Land Compensation Act 1973 or otherwise; and

(d) in relation to paragraphs (d) and (e), other means of enforcement available to the local housing authority in respect of the landlord’s default;

and having regard to all the circumstances, including whether the situation has occurred as a result of an act or default of the landlord.’”

This amendment would permit a court to refuse to make a possession order under Ground 6A where a more appropriate course of action exists.

One of the changes made to schedule 2 to the 1988 Act by the clause, as we briefly discussed, is the introduction of a new ground for possession to allow compliance with an enforcement action. The new mandatory ground 6A will require the court to award possession if a landlord seeking possession needs to end a tenancy because enforcement action has been taken against the landlord, and it would be unlawful for them to maintain the tenancy.

The relevant enforcement actions (a) to (f) are set out on page 73 of the Bill. They include situations where a landlord has been issued with

“a banning order under section 16 of the Housing and Planning Act 2016…an improvement notice under section 11 or 12 of the Housing Act 2004”

and

“a prohibition order under section 20 or 21 of the Housing Act 2004”.

We take no issue with the fact that the Bill introduces the new mandatory power. Clearly there are circumstances in which landlords will require possession of a property in order to comply with enforcement action.

We wrestled with what should be the minimum notice period that applies to the new ground, given that it feels somewhat perverse to provide for a mechanism by which possession can be gained quickly when the reason for the possession being granted is that the landlord has fallen foul of an obligation under housing health and safety legislation, particularly if it resulted in a banning or prohibition order. As we will come to discuss, we ultimately determined to argue in amendment 136 for a four-month minimum notice period in relation to ground 6A, because in all the situations set out on page 73 of the Bill, the tenant will be evicted because of neglect or default on the part of the landlord. In other words, it is a de facto no-fault ground for eviction that will punish tenants and put them at risk of homelessness because of bad practice on the part of a landlord, particularly as there is no requirement for the landlord to provide suitable alternative accommodation.

Amendment 149 seeks to provide tenants with a measure of protection in such circumstances—this touches directly on the point the Minister made on the previous group of amendments—by giving the court the power to consider whether the relevant enforcement can be met by means other than the eviction of the sitting tenant or tenants, including through a management order under the Housing Act 2004 or the provision of alternative accommodation. If the court judges that the enforcement objectives can be met by other means, the amendment would give the court the power to refuse to make a possession order on the grounds that it is not just and equitable to do so in the circumstances, given that there are other means of ensuring that the enforcement action is complied with.

We believe that the amendment would provide tenants with stronger protection in circumstances where they are victims of poor practice on the part of a landlord. Importantly, it would also ensure that tenants have an incentive to seek enforcement action through their local authority if their home is in a very poor condition or is non-compliant with HMO licensing schemes. That would address the fact that, as things stand, the introduction of the new mandatory no-fault ground with only two months’ notice is likely to actively discourage tenants from doing so. I hope the Minister will give the amendment serious consideration.

[Lloyd Russell-Moyle]

Following on from the debate on the last group of amendments, I want to add my concern about ground 6A. Where there are issues with fire or flood, landlords are often expected to find alternative accommodation before a house is vacated, but there is no such provision when enforcement action has to be taken. There is a real worry that a landlord who has multiple properties that are perfectly fit for habitation might seek to punish tenants who have pushed for enforcement, rather than moving them into those properties. That seems wrong, so it is important to require the courts to go through a checklist of other options that the landlord has to consider before they get to ground 6A.

The amendment also provides a checklist for landlords. They can go down it and say, “Okay, I need to comply with enforcement action. Have I considered these things?” It also allows the local authority to consider other courses that they could pursue, such as management orders. We do not want tenants punished. Although revenge evictions are illegal, we know that they happen time and again, because there are loopholes in the law. Closing those loopholes is important, and a statement from the Minister on the matter might suffice.

--- Later in debate ---

[Jacob Young]

I should be clear that the landlords who are subject to enforcement action are the rogues; they are the people we are trying to root out of the system through the Bill. They are unlikely to be able to provide the suitable alternative accommodation that the hon. Member mentioned. If things get to this stage, they are that bad. We therefore do not feel that we can accept amendment 149, and I hope that the hon. Member for Greenwich and Woolwich will withdraw it.

[Matthew Pennycook]

I have been on enough Bill Committees to know that the Minister has been sent out with explicit instructions to resist amendments—we all understand that—but the Government will have to grapple with the Bill’s weaknesses regarding how the new possession grounds will affect tenants who are not at fault. They could clearly be affected by a landlord’s using ground 6A—a ground that I find perverse, because it allows for possession where the landlord is at fault.

The Minister gave the game away when he said that 6A can be used only when it is the only way that the landlord can comply with an enforcement order. Well, we could leave it to the court to make that determination under the amendment. If possession is the only way that the landlord can comply with an enforcement order, the court will grant the possession order, but there will be cases in which it is not the only way, and the Minister said that he encourages local authorities to explore those other means. I would say that, in those circumstances, encouragement is not enough. We need some provision to ensure that all alternatives are completely exhausted before this very severe mandatory ground—we are talking about eviction and potential homelessness—is brought into force.

[Jacob Young]

I take the hon. Gentleman’s point on board, but as I have outlined, these are landlords who are subject to enforcement action. Does he accept that such landlords should not be operating in the private rented sector anyway, and that this ground allows us to root out those bad landlords?

[Matthew Pennycook]

I think the Minister has to be very careful on that point. It depends on what the enforcement action is, and on the degree to which the landlord is at fault. The enforcement action could relate to a breach under the housing health and safety rating system that merely needs to be rectified before the landlord can continue to rent as an appropriate and good-faith landlord; or it could relate to a very severe enforcement ground, as the Minister described. I come back to the point I made when moving the amendment: there are other enforcement powers that could deal with those types of landlords. I gave the example of a management order under the 2004 Act. There are ways that local authorities could enforce that do not require a mandatory possession ground order to be awarded. All we are saying is: give the courts the discretion to decide that.

If the Government are not minded to give the courts that discretion, there are other ways that the clause might be changed. The local authority might be required to have first exhausted other grounds before the landlord can issue a 6A notice. Let us find a way of protecting tenants who are not at fault from being evicted by landlords. In this situation, landlords, not tenants, are to blame, and they could abuse this new mandatory ground in ways that will have detrimental consequences for tenants.

I hope that the Minister has taken that point on board. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendments 138, 139, 143 and 144—

[The Chair]

Order. Technically, the hon. Gentleman is moving only amendment 138; the other amendments are merely being debated.

[Matthew Pennycook]

I welcome that clarification, Mr Gray.

[The Chair]

I am a stickler. I told you I was a stickler.

--- Later in debate ---

[Matthew Pennycook]

I like having a stickler in the Chair. I prefer it to having a non-stickler.

I beg to move amendment 138, in clause 3, page 3, line 3, at end insert—

“(5C) (a) Where the court makes an order for possession on Grounds 1 or 1A in Schedule 2 to this Act (whether with or without other grounds), the order shall include a provision requiring the landlord to file evidence at court and to serve the same on the tenant, any other defendant, and the local housing authority for the district where the dwelling is located no later than sixteen weeks from the date of the order.

(b) The evidence referred to in paragraph (a) must—

(i) give details of the state of occupation of the dwelling-house since the date of the order,

(ii) give details of the progress of any sale of the dwelling-house, and

(iii) be verified by a statement of truth signed by the landlord.”

This amendment would require a landlord to evidence the progress toward occupation or sale of a property obtained under grounds of possession 1 or 1A no later than 16 weeks after the date of the order and to verify this by a statement of truth.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 139, in clause 3, page 3, line 4, at end insert—

“(2A) After section 7 of the 1988 Act insert—

‘7A Evidential requirements for Grounds 1 and 1A

(1) The court shall not make an order for possession on Grounds 1 or 1A in Schedule 2 to this Act unless the landlord has complied with the relevant provisions of subsections (2) to (4).

(2) Where the landlord relies on Grounds 1 or 1A, the claim must be supported by evidence which is verified by a statement of truth signed by the landlord.

(3) Where the landlord relies on Ground 1 and the dwelling-house is required by a member of the landlord’s family as defined in paragraphs 2(b) to (d) of that Ground, the claim must also be supported by evidence which is verified by a statement of truth signed by that family member.

(4) Where the landlord relies on Ground 1A, the evidence referred to in subsection (2) must include a letter of engagement from a solicitor or estate agent concerning the sale of the dwelling-house.’”

This amendment would require a landlord seeking possession of a property on the Grounds of occupation or selling to evidence and verify in advance via a statement of truth.

Amendment 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.

Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.

Amendment 192, in schedule 1, page 65, line 10, after “6 months” insert

“or 6 months have elapsed since rent was last increased”.

This amendment would prohibit evictions under Ground 1 within 6 months of each rent increase giving periodic protection at each rent renewal.

Amendment 203, in schedule 1, page 65, line 29, at end insert new unnumbered paragraph—

“Where this ground is used no rent will be due in the final two months of the tenancy.”

This amendment would ensure when a no-fault eviction on Ground 1 is used tenants would not pay rent for the final two months of the tenancy.

Government amendments 2 to 3.

Amendment 144, in schedule 1, page 66, line 6, leave out “6 months” and insert “2 years”.

Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.

Amendment 193, in schedule 1, page 66, line 6, after “6 months” insert

“or 6 months have elapsed since rent was last increased”.

This amendment would prohibit evictions under Ground 1A within 6 months of each rent increase giving periodic protection at each rent renewal.

Government amendments 4 and 5.

Amendment 194, in schedule 1, page 66, line 23, at end insert—

“(e) the landlord has offered to sell the property to the current tenant at the same value at which the landlord intends to list the property for public sale and the tenant has informed the landlord within four weeks of receiving the offer from the landlord that the tenant does not intend to buy the property at this value.”

This amendment would require landlords wishing to issue a notice for possession on the basis of Ground 1A to offer the current tenants the right to buy the property at the intended listing value before it goes onto the market.

Amendment 204, in schedule 1, page 66, line 24, at end insert new unnumbered paragraph—

“Where this ground is used no rent will be due in the final two months of the tenancy.”

This amendment would ensure when a no-fault eviction on Ground 1A is used tenants would not pay rent for the final two months of the tenancy.

[Matthew Pennycook]

As we have already discussed, clause 3 amends the grounds for possession in schedule 2 to the Housing Act 1988, by means of the changes set out in schedule 1 to the Bill. Paragraph 2 of schedule 1 sets out revisions to the existing mandatory ground 1. Under the existing ground 1, a court is required to award possession of a property if the landlord requires it to live in as their “only or principal home” or if they have previously lived in it on either basis. Under ground 1 as amended by the Bill, a court is required to award possession if the landlord requires the property for use as their only or principal home, but also if they require it for such use for members of their immediate family, for their spouse or civil partner or for a person with whom they live

“as if they were married or in a civil partnership”,

or for that person’s immediate family, such as the child or parent of a partner in those terms. Under the existing ground 1, landlords are required to provide tenants with prior notice that the ground may be used. This requirement is absent from ground 1 as amended by the Bill.

In turn, paragraph 3 of schedule 1 inserts a new mandatory ground 1A into schedule 2 to the 1988 Housing Act. Under this new ground, a court would be required to award possession, with limited exceptions, if the landlord intends to sell the property. We believe very strongly that there is a clear risk that both of these de facto no-fault grounds for eviction could be abused in several ways by unscrupulous landlords. I want to be very clear that we believe that only a minority of landlords are unscrupulous and may act in these terms.

In her evidence last week, Samantha Stewart, chief executive of the Nationwide Foundation, provided us with the example of just how these grounds are being abused in the Scottish context. She gave an example of a renter named Luke, who lived in a property with rats and maggots falling out of the ceiling. The landlord refused to act on the complaint but was eventually forced to do so by the Scottish tribunal. Shortly afterward, however, Luke was served an eviction notice using the new landlord circumstance possession grounds. As soon as the prohibited re-let period was up, they moved a new tenant in.

The risk of these grounds being abused is clearly not a point of difference between us and the Government. Ministers clearly accept that amended ground 1 and new ground 1A could be used as a form of section 21 by the backdoor, because the Bill contains provision to attempt to prohibit their misuse by preventing landlords from re-letting or re-marketing a property, or authorising an agent to do so on their behalf, within three months of obtaining possession on either ground. We will debate the adequacy of those no-let provisions when we get to clause 10 and press our amendment 140 to extend the proposed period, but it is enough to know at this stage that the Government felt it necessary to include such safeguards in the Bill. We can take it as given that their decision to do so is evidence of a clear understanding that there is potential risk of abuse along the lines I described.

In addition to strengthening the no-let provisions in the Bill, we believe tenants require protection from the misuse of grounds 1 and 1A in two other important respects. First, we believe there needs to be a greater burden of proof placed on landlords who issue their tenants notices seeking possession on either of these grounds. As the Bill is drafted, at any point after the protected period is ended a landlord can simply issue their tenant with a mandatory ground 1 or 1A notice, and a county court would be required to award them possession. When it comes to expanded ground 1, there is no requirement for the landlord to evidence whether they actually require the use of the property for themselves; or, if they do not, which family member or members or person connected to them does.

Similarly, when it comes to new ground 1A, there is no requirement for the landlord to evidence that they are trying in good faith to sell a property after possession has been awarded. The risk to tenants should be obvious: six months after the start of a tenancy, when the protected period ends, a model tenant who is not at fault in any way—but who, for example, complains about damp and mould in a property—could be evicted with just two months’ notice using these grounds, without any need for the landlord to verify through evidence that they are using these landlord circumstances legitimately.

As the chief executive of the Legal Action Group and chair of the Renters’ Reform Coalition, Sue James, argued in her evidence last week, there is no indication at present that landlords will have to provide much, if anything, in the way of evidence. Although the Government have made noises to that effect, as things stand we do not know what that evidence might consist of.

The case for requiring landlords to provide evidence is obvious. As Samantha Stewart argued in her evidence,

“landlords using grounds 1 and 1A—moving in and selling—should be required to provide adequate and appropriate evidence”.––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 127, Q170.]

Amendments 138 and 139 are designed to address that deficiency by requiring relevant evidence to be submitted both prior to an eviction and after one has taken place. Amendment 139 would require a landlord seeking possession on the grounds of occupation or selling to evidence and verify that they are doing so in advance of a possession order via a statement of truth or, in the case of sale, by means of a letter of engagement from a solicitor or estate agent. That mirrors provisions in the Private Housing (Tenancies) (Scotland) Act 2016, which require the landlord to provide specific evidence proving his or her intention to sell.

Amendment 138 would require a landlord to evidence progress towards occupation or sale of a property obtained under grounds 1 and 1A no later than 16 weeks after the date of the order, and to submit that to the court and—most importantly, because they will be the enforcement bodies under the Bill—local authorities.

The clear benefit of amending the Bill to include those evidential requirements in respect of grounds 1 and 1A would be their deterrent effect—the consequences to any landlord of being found guilty of lying to a court, in terms of litigation and potential liability for damages. At present, after an eviction takes place on either of those grounds, either because of the tenant leaving voluntarily or the court issuing a possession award, the Government are proposing only two means of redress: local authority enforcement action or a compensation award, issued by the new ombudsman. The Bill provides only a framework for the new landlord redress scheme, so the ombudsman is still largely an unknown quantity, and there are well-known issues, attested to in the evidence that several witnesses gave last week, about the efficacy of local authority enforcement.

We believe that rent repayment orders have a role to play, but those evidential requirements and the deterrent effect they would have on unscrupulous landlords seeking to abuse grounds 1 and 1A would strengthen the Bill and ensure that tenants are better protected. We urge the Government to give them due consideration.

Secondly, we believe that the proposed protected period of six months during which a tenant cannot be evicted under either of these grounds is insufficient. The explanatory notes accompanying the Bill state that the protections mirror those that tenants currently receive. That is true, but the current protections, as Liz Davies KC made clear in her evidence to the Committee, reflect the assured shorthold tenancy regime, which the Bill is abolishing. The decision to mirror the current protected period also fails to take into account the fact that ground 1A is a new mandatory ground, and that ground 1 has been amended such that the previous requirement to serve a notice that it may be relied upon prior to the start of the tenancy has been removed. As the Bill is drafted, a landlord can let a property to a tenant, provide them with no prior notice whatsoever that they may in future wish to rely on either ground 1 or 1A, and then serve them with a notice at four months.

We believe that any landlord likely to use ground 1 or 1A in good faith will have some prior awareness that they or a family member may need the property for use at some point in the coming years, or that they may wish to sell it in the near future. As such, and because the Government have chosen to remove the prior notice requirement that currently applies to ground 1, we believe that there is a strong case for extending the protected period with respect to grounds 1 and 1A from six months to two years, allowing landlords to first serve notice under either of them 22 months after a tenancy begins. Taken together, amendments 143 and 144 would extend the proposed protected periods accordingly.

These four amendments, while retaining mandatory grounds 1 and 1A as the Bill proposes, would go a long way to preventing and deterring abuse of the kind that we fear will occur fairly regularly if these possession grounds remain unchanged. I look forward to hearing the Minister’s response to them as well as further information about the four Government clauses.

[Ms Buck]

I rise briefly to speak in support of the amendments, which seek to address two key themes. One is that tenants start disproportionately from a position of lack of power, and a large minority of tenants are in a position where they are limited by their access to advice and representation and a lack of alternative accommodation. They are frequently unable, without stronger legislative protection, to exercise their rights against the landlords who abuse their role.

Renters (Reform) Bill (Fourth sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[The Chair]

May I welcome our three witnesses to the first of several sessions this afternoon in which we are taking expert evidence on the Bill? We are now in public and our proceedings are being broadcast. Perhaps it would be easiest if the witnesses introduced themselves.

Liz Davies: My name is Liz Davies. I am a barrister specialising in housing and homelessness law at Garden Court chambers; I also act as a legal consultant to the Renters’ Reform Coalition.

Giles Peaker: I am Giles Peaker, a solicitor and partner at Anthony Gold solicitors and a housing law specialist.

Simon Mullings: I am Simon Mullings, co-chair of the Housing Law Practitioners Association. The experience I bring to this panel is 20-odd years of housing law practice, which includes representing tenants in possession proceedings on court duty in seven or eight different London courts across the years.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Q135 I thank each of you for coming to give evidence to us. I have two questions. The first relates to the amended grounds for possession, which we have discussed numerous times in previous evidence sessions. There are concerns about the amended or new grounds, particularly the de facto no-fault grounds that remain. Can you give us your view on some of those? Should they be removed entirely, made discretionary, or tightened in a way that might better protect residents from loopholes, abuse and exploitation by a minority of landlords?

[The Chair]

Who wants to go first?

Liz Davies: May I start and deal in a little detail with ground 8A? I will then say a couple of things about 1 and 1A, but my colleagues can develop that. There is a great deal of concern about ground 8A, and the “three sets of rent arrears in three years and you’re out” ground. There is a concern that that is a mandatory ground and that it is punitive. There can be an awful lot of reasons why people in insecure employment or on zero-hours contracts, or just because of life events, can slip into arrears—and then make them up, of course—that get as far as two months. If that happens to you three times, you know that you will be subject to a mandatory possession order unless the landlord has kindly told you that you are not. It is punitive and unnecessary because we have ground 8. I would like to see ground 8 made discretionary, but we have it currently as a mandatory ground and we have the discretionary grounds 10 and 11 for rent arrears. I think there is a worry about unintended consequences, because once a tenant is in that third set of rent arrears, you have to ask what incentive they have to remedy that position if they think they are inevitably going to lose their home. I am very concerned about ground 8A and would like to see it omitted altogether.

The courts have plenty of flexibility to deal with tenants who persistently do not pay their rent: such tenants can be subject to an outright order under any of grounds 8, 10 or 11. If ground 8A is to remain, much the best thing would be to make it discretionary, so that at least the court could look at whether this has happened inadvertently to somebody—whether they are now back in a reasonable financial position, can pay their current rent, have made up the arrears and should be able to stay in their home, paying rent to their landlord, which is of course a good thing for the landlord. The courts could enforce that. Equally, the courts are relatively wise: they can spot quite well a tenant who has no intention of paying rent in the future, and they can make an outright possession order if it is a discretionary ground. A discretionary ground is not a “get out of jail free” card for the tenant, by any means. I would like to see ground 8A either omitted altogether or made discretionary.

On grounds 1 and 1A, the deep concern is the short period of time that a tenant is protected—the six-month protected period. The Renters’ Reform Coalition and I would like to see that being much longer, because the six-month period merely reflects the current assured shorthold tenancy regime. The other big concern—I will not go into the detail, but you can ask me—is of course the extent to which a landlord may have no real intention of selling or moving back in: they simply wait three months and re-let. There has to be much greater provision about abuse.

Giles Peaker: I totally agree with Liz’s points. On 1A and 1B, the three-month period and the potential fine for breaking the three-month period both need to be looked at. If you consider what London rents are, the potential fine is actually less than three months’ rent, so there is an issue there. As it is currently drafted, the three-month period also appears to run from the point when the landlord has given notice and the tenant has left—it does not apply to a period after a court has made a possession order—so if the landlord brought possession proceedings and a possession order was made, they could then re-let the next day, with no penalty, even though the possession proceedings were on the basis that a family member was moving in or they were intending to sell.

I would also add a few words of caution—I am afraid that this is anecdotal, but it is certainly what I have gathered—from various practitioners in Scotland. There is a degree of gaming going on. There certainly have been a few tribunals in which a landlord who had supposedly been intending to sell most certainly did not and had never set the process in train—ditto in the case of a family member intending to move in. There is a question of what the evidential requirements would be for a landlord to establish that they were intending to sell, that they were in the process of trying to sell, or that they or the family member were intending to move in as their only or principle home. A simple statement that that is their intention cannot really be sufficient when the consequences for the tenant are quite severe. There is an option to use this as a sort of get-out for the abolition of section 21. The three-month period is too short.

On 8A, I simply echo what Liz said. If you are in a position in which, on literally three days—three separate, individual days—over three years, you find that you have slipped into two months’ rent arrears, even if you could make them up the very next day, you still face mandatory possession proceedings. That is extremely draconian. There would be no appeal to the courts’ understanding that your rent payments were otherwise perfect apart from those occasions, because it is a mandatory ground. It needs to be addressed.

[The Chair]

I am sorry to interrupt, but we have only 45 minutes and then I will cut you off even if you are mid-sentence. Saying that you agree with one another does not add to the Committee’s general understanding, so say different things and do not feel that all three of you have to answer all the questions.

Please go on. I rudely interrupted; I apologise.

Simon Mullings: Not at all. The second thing about 8A is that it is not just inapt; it is inept because it will not do what it is designed to do, which is to stop the gaming of ground 8. First of all, in my experience—I hope this is useful to the Committee—I have only seen one example in 25 years of that occurring. On that example, the tenant then became subject to a suspended possession order under ground 11, which was a perfectly adequate way of dealing with it.

It is inept because it is perfectly possible to game ground 8A anyway. Let us assume that people do want to try and game it, but I really do not think people are doing that for a moment. If you get into two months or more’s arrears on a first occasion and then on a second occasion, you would think perhaps you should bring your arrears down to less than two months at that point. Well, not really; not if you want to game the system. You keep your arrears at two months or more so you do not trigger the third occasion. Then, when your landlord brings you to court, that is the moment at which you then pay off the arrears and try to game avoiding a possession order. So it is perfectly possible to game 8A anyway. It is not just inapt; it is not going to do what it is supposed to do.

[Matthew Pennycook]

Q Briefly, to follow up on clause 6, which revolves around challenging the amount or increase of rent, we have concerns that even with the expanded right to challenge, the tribunal system will not provide sufficient protection. Do you have any thoughts on how, leaving aside other options, that process might be tightened? For example, should the tribunal’s ability to award rents higher than what the landlord specifies be taken out of the Bill? Should there be other protections that allow renters to leave if they are served with that higher notice? Should they have another section 13 notice? I am keen to hear your views on how we might tighten clause 6.

Simon Mullings: A simple amendment to do exactly what you are saying, which is so that the tribunal does not set a higher rent than the landlord is asking for, would be extremely welcome. The reason for that is that if somebody comes to me asking whether they should challenge the rent that has been set by their landlord, I am bound to advise them that, unlikely as it is, the tribunal could set a higher rent. That has a real chilling effect on somebody’s willingness to then challenge a rent. It has been in section 14 of the Housing Act 1988 since it came into force in 1989, but this is a real opportunity to cure what seems to be a rather bizarre anomaly. I am not really sure why it was there in the first place, but it has this chilling effect. Also, section 13 challenges will become much more important when the Bill passes.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to our panel of witnesses. We have spoken a few times about ground 8A. What would you say to someone who said that it is unfair for landlords to suffer multiple breaches of rent arrears? And on a completely separate thing from ground 8A, we are introducing a new ombudsman to the private rented sector. How do you think that ombudsman can work? Would you say that it can help to reduce the pressure on the court system?

Liz Davies: I will start with the point about multiple breaches of rent arrears. I think that the answer to that is to trust the wisdom of the courts. The courts have the mandatory ground at the moment under ground 8—again, the concern is gaming and you have heard Simon’s answer on that—and they have discretionary grounds for possession under grounds 10 and 11. A well-advised landlord who wants to ensure that they can get a possession order from the type of tenant you have just described will ensure that they plead all the rent arrears grounds available to them, including ground 8A, if you put that through.

When you get to the court hearing, courts are perfectly capable of identifying somebody who has got into arrears in the past but has made them up or is in a position to pay current rent and to pay off the arrears within a reasonable period. Courts deal with people in financial hardship day in, day out; they are very good at scrutinising budgets and knowing whether or not an offer to pay is realistic. They are equally good at looking at a rent arrears history, no doubt prodded by the landlord, and saying, “Hang on a minute. You’ve just told us when your payslips were and you were not paying rent at that time. You really have been abusing the system.” And they will make an outright possession order.

Case law on suspended possession orders on the basis of rent arrears requires that a suspended possession order, as an alternative to an outright order, can be made only where the court is satisfied, first, that the current rent will be met in the future, and secondly, that if there are arrears at the date of hearing, those arrears will be paid off over a reasonable period. There is some case law, depending on a landlord’s circumstances, about what a reasonable period is. Courts are very sympathetic to the point that private landlords in particular need that money paid back to them, so they are not going to approve an unrealistic repayment offer. I think that all the appropriate safeguards are there in the courts now. Of course, they are not currently used by private landlords because of section 21, which means that they do not need to. I think that those safeguards are there against the scenario that you have just suggested.

On the ombudsman, I will leave Simon and Giles to develop that point. All I would say is that an ombudsman is a very good thing. Access to justice through the courts is also a good thing. It would be wrong if some of the matters that courts deal with on behalf of tenants are then solely dealt with by the ombudsman. You have to have two opportunities.

Giles Peaker: Briefly on the ombudsman, in principle it is a very good thing, but it generally tends to depend on the ombudsman. It really is a question of somebody actually being able and willing to take a serious and proactive approach. I think that there has been quite a market change in the social housing ombudsman over the last five or six years, and performances have really turned around. An ombudsman is not necessarily an answer in and of itself, but it can be a very good thing and, in the right hands, it can be extremely useful.

Simon Mullings: We heard Mr Blakeway’s land grab earlier in the week—he fancies a crack at it. As Giles said, Mr Blakeway has done extremely well in the social housing sector, and, as Liz said, the ombudsman will do well in the jobs that it can do. It is not fair for landlords to face that situation, but it is also not fair for landlords to face a ground for possession that, whether they use it or not, will incentivise tenants to stop paying rent. I really believe that that is what 8A will do in certain circumstances.

--- Later in debate ---

[Jacob Young]

Q We heard evidence this morning that suggested that the courts are currently overwhelmed and that the abolition of section 21 would increase contested cases. That is not your assessment?

Giles Peaker: I do not see that it would necessarily increase contested cases. It would inevitably involve the process that leads to an initial hearing—those are 10-minute hearings on a list day. I really do not see why it would increase the number of contested hearings, because unless there is a defence, the possession order is highly likely to be made at the first hearing. On at least some of these new grounds, if the ground is made out, there is no defence. So I am unsure of the amount of additional burden.

Liz Davies: I think that is the point. Currently, under section 21, landlords can get possession on the papers. There is no court hearing: the papers go in; the tenant has the right to respond; the district judge considers on the papers whether or not there is a defence. If there is no defence, the possession order is made; if there is a defence, it is put over to a hearing. Once section 21 is abolished, the starting point is that there will be a five or 10-minute hearing, which is usually about eight weeks after issue. That is about the same period of time as for the paperwork procedure I just described. At that hearing, the question for the court is, “Is the case genuinely disputed on grounds that appear to be substantial?” That is set out in the rules.

The great thing about that hearing is that there are housing duty solicitors at court. If a tenant does not have legal advice or advice from a citizens advice bureau beforehand, they turn up and talk to a duty solicitor—I am sitting next to one of them. Duty solicitors give realistic advice. If there is a defence—if the landlord has got it wrong—the duty solicitor will go in front of the court and say, “Actually, there is a defence,” and it gets adjourned for a trial, and that is right and proper. But if there is not a defence, the duty solicitor will say, “I’m sorry, there is absolutely nothing that can be said legally to the court,” and a possession order will be made.

One of the important things about advice, and indeed early advice, is that tenants get realistic advice, so they know whether they have any realistic chance of prolonging the proceedings, and so forth. In many ways, a hearing with a duty solicitor will be beneficial to landlords, and, as Giles says, it takes about the same length of time. There is lots to be said about county courts’ efficiencies and inefficiencies, but I do not think that is the problem.

[Matthew Pennycook]

Q The Government dropped 111 pages of amendments on us on Tuesday evening, which is not particularly good practice—I will put that on the record—so you may not have had a chance to look through them, but if you have, do you have any thoughts about whether they address some of the deficiencies in the Bill that we and others have highlighted? My reading of the decent homes standard amendment is that it does most of what we want it to do; my reading of the “No DSS” amendment is that it does not. I wonder if you could flesh out a couple of the amendments that have been introduced and whether they do what is needed.

Simon Mullings: Two of us were involved in Rakusen v. Jepsen, and we were very happy about amendment 21—thank you very much for that; Christmas has come early. I understand that Shelter is looking very carefully at the “No DSS” amendment. I do not want to try to drive a tank on its lawn; I suspect that it will write in with any concerns it has about that. The principle, though, is extremely welcome. Forgive me, Mr Pennycook, but you mentioned another one.

Liz Davies: The decent homes standard amendment.

Simon Mullings: There was too much to read overnight, I am afraid, so I do not have anything particular to say on that.

Liz Davies: I was very pleased to see it, in principle. I am reserving my position on the wording. I am sorry; I am in the same position you are in, Mr Pennycook, from Tuesday night.

[Matthew Pennycook]

Q Maybe I could invite you all to share any further thoughts you have down the line.

Liz Davies: We will write in.

[The Chair]

If you do, please write to the entire Committee.

--- Later in debate ---

[Helen Morgan (North Shropshire) (LD)]

Q I want to pick up on the point about delays in the court process. We heard this morning that the president of the Law Society is concerned about the lack of access to legal aid and the fact that, because so many people are unable to access it, they will be disadvantaged in the court process. My first question is, what are your thoughts on that?

My second question is about clause 18 and local authorities no longer having a duty to help people when they have been made homeless. Shelter has said that the Bill does not specify when help to prevent homelessness should be available to private renters. Do you have a view on that and how it could be addressed?

Liz Davies: First, housing legal aid is absolutely in crisis. The number of housing legal aid providers is diminishing each year. The Law Society has an amazing and heartbreaking interactive map where you can press on a county and discover that there are no housing legal aid providers or one of them in the area. Obviously, London is slightly better served. That is letting down everybody who cannot afford to pay for housing legal advice.

That needs fixing, and it needs an injection of resources—there is no doubt about that—but that is not a reason why there would be difficulties for landlords in obtaining possession under these new proceedings, not least because the Government have put this money into the duty solicitor scheme. Where there are no housing legal aid providers and a tenant turns up at court having been unable to find advice in advance, they will see the duty solicitor. While Richard Miller is absolutely right to be concerned about the sustainability of the housing legal aid sector—we all think it could collapse in a few years—this particular area of getting advice about possession is covered by the duty solicitor scheme. That is the first thing.

Homelessness is covered partly in clause 18 and partly in schedule 1, but this is one of the unintended consequences that the Committee should look at. The current position is that somebody is threatened with homelessness if they are likely to be homeless within 56 days. If they have a valid section 21 notice, which is two months or 56 days, they are threatened with homelessness. It is deemed. All that a local authority has to do is look at the notice and say, “Yes, that’s valid,” and that means that it owes the tenant what is called a prevention duty—a duty to help them to prevent the homelessness—and spends the next two months trying to help them to find somewhere else to live. That is a good thing, because if it works, it averts the crisis of homelessness. It means that someone can move from their previous tenancy into their new one.

As a result of the abolition of section 21, this Bill retains the definition of threatened with homelessness within 56 days, but takes away the deeming provision whereby if you have a notice of possession within 56 days, you are deemed to be threatened with homelessness. If that was reinserted, if a tenant received what would be a section 8 notice requiring them to leave within two months, you would be back in the straightforward position that they go along to a local authority, the local authority would say, “Yes, you are threatened with homelessness. We don’t need to make further inquiries or think about it any more. We accept that we owe you a prevention duty and we will help you to find somewhere else to live.”

That is absolutely the best thing, because it front-loads all the looking for somewhere else to live while a tenant still has a roof over their head, rather than waiting for the crisis moment when they have to go into interim accommodation or end up on the streets. I urge the Committee to think about an amendment that requires that section 8 notices count as deemed homelessness. I know there have been some drafts flying around, so the work has been done.

[Matthew Pennycook]

Q I have three questions, if we can squeeze them in—I will get in as many as I can. Do tenants have enough power to enforce the measures in this Bill via rent repayment orders, and if not, where might we seek to reasonably apply them where they do not apply as the Bill is currently drafted?

Simon Mullings: Rent repayment orders create, as I have said before to officials in DLUHC, an army of motivated enforcers, because you have tenants who are motivated to enforce housing standards to do with houses in multiple occupancy, conditions and all sorts of things. There are clearly opportunities to expand the rent repayment order scheme, perhaps to sit alongside existing enforcement measures to do with offences. I am sorry that I do not have really specific references for you, but certainly expanding the rent repayment order scheme could in principle take some burden off local authorities in terms of their obligations, which would be an extremely important measure.

Giles Peaker: Was the question about enforcement of RROs or about the use of RROs in enforcing?

[Matthew Pennycook]

I suppose it was about their application—I think Mr Mullings has answered on whether they should be expanded in principle.

Giles Peaker: I would agree. I think that since the Housing and Planning Act 2016 they have been a success.

Simon Mullings: You would expect a legal aid lawyer to say that it would be great if legal aid were available to help tenants to bring RROs.

[Matthew Pennycook]

Q Can I ask about the portal? At the moment it is a broad framework of powers, and we think that there are requirements that should be woven into it. I am thinking, for example, of all the preconditions and requirements surrounding section 21 that will fall away. Do you think there should be other information as a condition in that portal that goes much further, such as previous applications for grounds of possession, or even rent levels under previous tenancies? How much information should be transparent and available to tenants, in your view, on the portal?

Simon Mullings: I am tempted to say, “As much as possible.” For example, with ground 1 or 1A, if it were decided that post-possession order information was needed to ensure that they operate correctly, the portal is an ideal way of dealing with that. Very often, information relating to tenancies is a cause of disputes in possession proceedings—all the time. You have mentioned the conditions that attach to a section 21 notice at the moment; it will be extremely advantageous to landlords and to tenants, in an information and communication sense, to be able to essentially deal with those through a transparent portal.

Giles Peaker: To very quickly follow up on that, there is certainly the dropping of consequences for not providing gas safety certificates, energy performance certificates and so on. Everything except the deposit has effectively been dropped. Those are very important documents that are important for maintaining housing standards, so there need to be some consequences, other than a hypothetical prosecution by the Health and Safety Executive, for failing to provide that. Those kinds of things do need to be in there.

[Ms Buck]

Q I want to ask your views on the amendment to ground 14 on antisocial behaviour. What safeguards do you think would need to be incorporated to ensure that, for example, that does not lead to vulnerable people—people with mental health problems, or those experiencing domestic violence and so forth—being at risk?

Liz Davies: The change from “likely” to “capable” is a worry. Ground 14 remains discretionary; I made the point about the wisdom of the courts, and one would hope that, where it is a case of domestic abuse, or a case of mental health, and so forth, the courts would have the wisdom to see that that person was not at fault. However, I do not see any need to reduce the threshold. If antisocial behaviour is such that a private landlord needs to get their tenant out because of the effect that that behaviour is having—usually on the neighbours but sometimes on the landlord themselves—then it is going to cross the threshold of “likely to cause”. I do not see the point in lowering it.

--- Later in debate ---

[The Chair]

We will now have a series of quick evidence sessions of 15 minutes each with a series of learned witnesses, the first of whom is Ben Leonard, senior remote organiser and policy and research officer at ACORN, the union. Mr Leonard, will you introduce yourself?

Ben Leonard: My name is Ben Leonard. I work at ACORN, a community and tenants’ union. We represent thousands of private renters across the country.

[Matthew Pennycook]

Q As a tenants’ union, you are in a unique position to give us some insight into the broad question of whether the Bill strikes the right balance between the interests of landlords and tenants. Can we open with that?

Ben Leonard: What my experience working with tenants and addressing their issues has taught me is that there is a massive imbalance of power between landlords and tenants, which leads to tenants being too afraid to speak up about repairs or harassment. The issue of no-fault evictions is central to that imbalance of power. If people know that a landlord can turf them out of their property and potentially make them homeless with just a couple of months’ notice, they will not speak up about things that need to be addressed, such as repairs. I am sure you are all familiar with the terrible condition of a lot of private housing in this country. In the case of harassment, including sexual harassment, we see tenants just grin and bear it because the stress of having to find a new property within two months is too much.

The Bill could be transformative for tenants. It could offer dignity and security to millions of renters who up until now have been denied that. But I am sorry to say that in its current form the Bill fails to address the fundamental problems that renters face. If a landlord can effectively pretend to need to sell or move into their property and turf out the tenants, we will still have no-fault evictions. If landlords can raise rents past what their tenants can afford, in practice we will still have no-fault evictions. If a landlord can send a tenant an eviction notice as little as four months into their tenancy, with just two months to find somewhere new, unfortunately the Bill will fail to give tenants the secure housing that they desperately need.

[Jacob Young]

Q Thank you for your evidence. How do you think the Bill will improve the experience for tenants? We have discussed section 21. Do you think that abolishing section 21 will give tenants more confidence in going for new rental agreements?

Ben Leonard: As long as the loopholes that I have mentioned are ironed out and the Bill is strengthened in that way, it will massively shift that balance of power and give renters the confidence that they need to come forward. We are a tenants’ union, so we use our strength in numbers to put pressure on a landlord to make repairs and things like that, but it should not have to be that way. A tenant should be able to complain about repairs and get them dealt with in a reasonable timeframe. Often they are just too afraid to complain. I am not saying that every single landlord is a demon, but, as things are at the moment, the system allows bad landlords to treat people horrendously, with very little recourse for tenants. If the changes that I have outlined are made in the Bill, it could be really transformative for tenants.

--- Later in debate ---

[The Chair]

We will now hear from Chloe Field.

Chloe Field: Thank you for having me. I am Chloe Field. I am the vice-president for higher education at the National Union of Students, which represents students and students’ unions across the country on various issues facing students right now.

[Matthew Pennycook]

Q Thank you, Ms Field, for coming to give evidence to us. I have two related questions, which are quite broad, to get us into the issue. Do you think the Bill as it stands takes sufficient account of the particular needs of every aspect of the student market, which is not uniform? There are different people starting courses at different dates and people renting different types of houses. Do you think it takes account of that? Then, specifically on the Government amendment that was tabled on Tuesday for a new mandatory ground for possession for student houses in multiple occupation, do you have any concerns about that? How workable do you think that is?

Chloe Field: I do not think it takes sufficient account of the student rental market. People forget how unique and diverse students are and the student rental market is. As you just mentioned, students do not always do their courses in the typical September to June time. We have postgraduate researchers who study and work throughout the year. We also have mature students and students who have families and who will live in properties with non-students. There are things there that need to be taken into account regarding students in the Bill.

We also have the fact that the student rental market is very precarious. Renting in that market is rushed; you are expected to sign a contract about nine months before you move. That means that students end up having to pay really high prices because there is such a rush and people just accept the first house they find. It also means you cannot do sufficient research into the house you are about to sign the contract for. For example, is there mould? Is the quality of the house any good? Those are the unique factors of the student rental market.

In terms of the student exemption, our position has always been that it is incredibly dangerous. It sets a precedent that students will not be afforded the same rights as other renters and sets a further precedent for any future reforms and future exemptions for students. Like I said before, students are not a homogeneous group. They are not just 18 to 21-year-olds doing an undergraduate degree. They come in all types and different forms. It is one thing to make an exemption for purpose-built student accommodations, which is a type of accommodation, but it is another thing to create an exemption for a demographic of people who are studying. We are worried about that.

Also, the reasoning is that landlords are threatening to leave the market. As the previous witness said, landlords should not be renting in a market where they cannot accept that there are slight reforms and accountability for landlords. We consistently see exploitative landlords in the student market. I do not think we should be left threatened by those rogue landlords who cannot accept any form of regulation. Those are the main things on the student exception, but we accept that if there is that exception, it has to be carefully curated to fit the student rental market.

[Lloyd Russell-Moyle]

Q The Government have tabled an amendment that would create a ground 4A, which is what you were just talking about there. Have you had time to look at that and do you think it is tightly or too broadly drafted? Are there particular things, such as requiring accommodations to be rented by the university or something, that might give that level of protection, rather than it just being that there happen to be students in that house?

Chloe Field: If I remember it correctly, it is good that the amendment specifically acknowledges term times and stuff like that, but it specifies a certain time in the year and, as I said before, not all students fit into term time. It does not sufficiently recognise that different types of students rent in different ways; they are not a homogeneous group of people. Some students live with non-students and families, and it does not fully recognise that.

An idea we have floated is if there is an exemption, it should potentially be done like a council tax exemption: HMOs with a certain percentage of students are exempt from council tax. We think that kind of specification will be really important. Without more specification about the exemption, for a lot of students, especially those living in family homes, there will be the threat of back-door evictions if they have started their studies.

Your idea about universities renting out accommodation is really good. It would provide a bit more accountability if the institution that provides the education and has a form of duty of care is responsible for the accommodation. I think that is really important, but if that is the case, we would have to take it further. Right now, prices for university-owned accommodation are going up. Universities are trying to bring in more and more students to make more money because their incomes are so precarious right now, and that is not sustainable. We would have to look at the higher education model as a whole if we were thinking of doing anything like that.

--- Later in debate ---

[The Chair]

Surely not!

We have 45 minutes for this panel.

[Matthew Pennycook]

Q I have two questions, the first of which relates to standards. The Government have tabled an amendment introducing a version of the decent homes standard. I wondered what your thoughts were on that and, importantly, on the ability of local authorities to enforce it. I am thinking of part 3 of the Bill, which will put a general duty on local authorities in a number of areas. If we introduce the decent homes standard in the way that the Government have proposed, will it materially improve residences, and will local authorities be able to enforce it effectively?

Linda Cobb: In its current format, a property is classed as being decent if it is free from category 1 hazards as defined in HHSRS. The decent homes standard is linked to HHSRS, and many landlords and tenants do not really understand HHSRS. It is complex.

[The Chair]

Sorry, but what is HHSRS?

Linda Cobb: The housing health and safety rating system. It is a tool that local authorities use, and a fundamental part of the decent homes standard.

Based on that, HHSRS was reviewed recently. It has gone through a two-year robust review, looking at how it is enforced, what will be included in it and how it will be altered. One of the workstreams in the review looked at the guidance for landlords and tenants. That review is now complete but has not come into force yet. As the decent homes standard relies on HHSRS and we need users to engage with it, it is really important that the reviewed HHSRS comes into force as soon as possible, so that enforcement teams and training providers such as DASH can embed it and get used to it, and so that landlords can get used to the tool as well. The decent homes standard is another layer of enforcement, which really goes to the point that local authority enforcement teams are lacking appropriately skilled and resourced multidisciplinary teams. There is lots of information there.

Finally, when we are looking at decent homes standards, we need to learn from the electrical safety regulations and the smoke and carbon monoxide regulations. When they came into force, they created huge spikes in demand: you could not get an electrical insulation condition report because there were not enough electricians around. You could not get hold of carbon monoxide detectors, which needed to be in every rental property, because there was not the supply of them. We need to learn lessons when looking at decent homes standards as well.

Roz Spencer: Could I just add, from the point of view of how things work out in the shadow private rented sector, that the proposal in the Bill that enforcement teams have the right to go and inspect properties proactively, without having to rely on complaints, is important and welcome? Particularly in the shadow sector, tenants are quite unlikely to report and complain because of their fear of consequences, so even if it does not happen, the fact that it can be concluded that an enforcement team is acting on intelligence proactively and the tenant has not necessarily complained is a helpful protection for renters.

Samantha Stewart: On the enforcement of standards, it is really important to add that one of the main findings from the Scotland research was that even if the law changes, it has limited effect without proper enforcement. Despite the changes, that research told us that tenants living in poor conditions still struggle to access local authority enforcement, leaving them without any other form of redress.

[Matthew Pennycook]

Q Do I take it from your answers that it is partly a resourcing point, but it is not just resourcing; it is the skills and capacity?

Linda Cobb: It is, yes. Enforcement teams across the country are producing some fantastic, life-changing results for tenants; however, they are doing so in a very firefighting, reactive way. This Bill and the decent homes standard do not change that—they do not magically change the fact that those teams do not have the staff or the training ability. Going back to what Sam said, DLUHC commissioned a report in 2022 that explored local authority enforcement and concluded that capacity and skills shortages in enforcement teams can undermine any potential gains from legislation and new powers.

[Matthew Pennycook]

Q On a completely different issue, we have spent a lot of time discussing chapter 1 of part 1—reforms to the tenancy structure, grounds for possession and so on—and relatively less on part 2, the ombudsman and the portal. Could you give us your general views on what the Bill does, on whether it is prescriptive enough and on what either or both of those things should look like in practice?

Samantha Stewart: We strongly welcome the provisions in the Bill, particularly on the property portal. We believe that it will create an essential tool for the PRS to drive up standards and improve landlord compliance, supporting enforcement teams and also supporting landlords to understand their rights and responsibilities. This is something that the foundation has been calling for, for some time. As some of you will know, we funded a report called “The Evolving Private Rented Sector”, by Julie Rugg and David Rhodes, which was published in 2018 and called for a national landlord register.

As an important addition, that research also recommended ways in which the portal can work. One of those recommendations, which we support very strongly and which you heard about earlier today from Jacky Peacock, was for an independent property assessment. That assessment could confirm compliance with safety and other relevant checks on the property, and would also be required to be submitted to the property portal before the property can be let out. One of our beliefs is that the property assessment, alongside the portal, will help to shift the burden of compliance somewhat from overstretched local authorities to landlords and the property portal itself.

Roz Spencer: This may be a statement of the obvious, but Safer Renting recently pulled together the best estimate it could from published data about the incidence of offences under the Protection from Eviction Act 1977. Why did we do that? Because nobody else does it and there is no reliable centrally held Government data. This goes into a massively controversial space. People are always arguing on both sides of the fence: “Is this a big problem? Is this not a big problem?”

The absence of data fundamentally undermines the process of good policymaking and being able to identify, for example, the unintended consequences or omissions in legislation. It also undermines enforcement, which I think my colleagues will speak to more eloquently. Having big data is so important. Otherwise, how can you legislate, and how can you know the impact of your measures? When the public finances are so stretched—as we have heard from Linda, there is a problem with skill shortages and capacity in enforcement teams—you really need to have slick systems. That is what a well-designed portal needs to offer: a slick system that will support something that is really stretched for resources and needs systemic support desperately.

Samantha Stewart: Do you want me to take the question about the ombudsman?

[The Chair]

I think we have moved on. Let’s crack on with the Minister.

--- Later in debate ---

[The Chair]

We theoretically have until 4.15 pm, but it is unlikely that we will use all that time. If we finish earlier, we can all go off and have a cup of tea. Mr Munro, could you introduce yourself for the record?

James Munro: My name is James Munro. I am head of the National Trading Standards estate and letting agency team. I want to put it on the record that we are grant funded by the Department for Levelling Up, Housing and Communities, and we also receive funding from the Department for Science, Innovation and Technology.

[Matthew Pennycook]

Q I have two quick questions. The National Residential Landlords Association has called for the selective licensing of landlords to be abolished. Do you think it falls away if the portal operates in a particular way, or will elements of selective licensing still need to be in place to augment the portal if the local area in question chooses that? I am thinking of space standards and other things that the portal might not necessarily cater to.

Secondly, is the Bill missing something by not incorporating any regulation of property agents? Are we missing an opportunity to incorporate the recommendations set out by Lord Best’s working group in or alongside this legislation in some form?

James Munro: The first part of the question is a very good one, and I am not sure I am going to be able to give you an answer. I think the answer is probably yes and no, or somewhere in between. It is very difficult. It is one of those things where time will tell. Selective licensing schemes can bring benefits, but they are also a rather blunt tool in some respects, so I think it is a mixed bag. Possibly yes, that could happen.

Again, to be transparent, I sat on the working group with Lord Best where the regulation of property agents was debated. I think regulating property agents would be a good thing. When the public deal with professional people responsible for significant assets or significant issues in their life, they are, generally speaking, licensed or regulated in some way. As things stand, there is quite a mixed bag of regulation that applies to estate and letting agents—collectively, property agents. For example, the regulatory regime applying to estate agents is completely different from the regulatory regime that applies to letting agents, and I think bringing them together would be a good thing. Obviously, it would be expensive and would probably require another public body to be set up. There are issues about who would take on that role, but in theory I think that is a good thing.

[Jacob Young]

Q I am interested in your view on the principle of blanket bans and the measures we are taking in the Bill to stop them.

James Munro: Blanket bans are a good thing on paper, but in practice they can be very difficult to enforce. Obviously, the enforcement is where I am coming from with this. That is what we do with estate and letting agents at the moment, and with landlords in respect of the Tenant Fees Act 2019. We are the leading enforcement authority under the Estate Agents Act 1979 and the Tenant Fees Act. It is very tricky when you start putting blanket bans on things—for example, on saying, “No pets”, “No children”, or “No DSS”—because ultimately it is up to the landlord to decide who he or she wants in the property. It is very difficult to prove that that decision has been taken to directly discriminate against somebody with a pet, with children or in receipt of benefits.

While I am on that subject, I think the legislation would benefit from always including the words “prospective tenant” when dealing with issues around discrimination. Clearly, at the point at which someone is being discriminated against, they are not normally a tenant—they might well be a tenant at some stage, but at that point they would be a prospective tenant. It is important to have consistency throughout the legislation in that respect.

Renters (Reform) Bill (Third sitting)

Matthew Pennycook Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[The Chair]

We will now hear oral evidence from Judicaelle Hammond, director of policy and advice at the Country Land and Business Association. We have until 11.45 am; I remind all Members that matters should be limited to those within the scope of the Bill and that we have to stick to the timings. Could you please introduce yourself for the record?

Judicaelle Hammond: I am Judicaelle Hammond; I am the director of policy and advice at the Country Land and Business Association. We have 26,000 members in England and Wales, who own and manage land-based businesses.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Q 98 Thank you for coming to give evidence to us. Your association and members have expressed concerns about the impact of measures in the Bill on rural businesses and communities. Could you give us some detail about those concerns and how you think any changes to the Bill might mitigate them?

Judicaelle Hammond: We are looking at the Bill very much from the rural perspective, and there are differences between rural and urban areas. A survey of our members in 2020 found that 90% of respondents provided some form of private rented housing. In a more recent survey, we found that 23% of respondents’ properties were let out at less than 80% of market rent, which means that CLA members are, in effect, key providers of affordable rural housing.

We represent rural landlords, but we also represent rural businesses that are trying to grow. To do so, they mostly need staff, and staff need somewhere to live. The private rented sector provides flexibility and solutions for people who either cannot or do not wish to buy. However, we are worried because the private rented sector is shrinking at an alarming rate: Government figures suggest a reduction of 16.5% between 2018 and 2021 in the number of privately rented homes in areas defined as rural. That is in line with what we are hearing on the grapevine. I should probably say that one thing that the CLA does is provide one-to-one, bespoke advice to members, including on the legal aspects of residential properties.

In 2023, we ran a member survey with a particular focus on housing in England. It suggested that 44% of rural landlords are planning to sell some of their properties over the next two years. Of those, 90% said that that was mainly for two reasons. The first was stricter minimum energy efficiency standards, which are expensive as well as technically difficult to implement in the kind of properties that our members have; the second was removal of section 21, which brings us to this Bill.

Our members are concerned because, at the moment, section 21 provides reassurance that they can get a property back relatively quickly if their personal circumstances change; if their business need changes, which is quite prevalent in rural areas; or if, God forbid, something is going wrong with the tenancy. That is something that section 8, both in its current form and in its new form, would not provide, because of the need for a court hearing. That is why we would want a court system that works. Actually, members would ideally prefer to have a version of section 21 at their disposal, albeit perhaps with a longer notice period.

[Matthew Pennycook]

Q We all want a court system that works. We hope we will get one at some point! Separately from that, what are the particular concerns about the amended grounds for possession in the Bill? Can you give us a sense of what your members want the properties back for, if it is not one of the categories that, say, ground 1 or ground 1A allows for? Are we talking about the very real problem in coastal and rural communities of people switching over to short-term lets and second-home sales?

Judicaelle Hammond: No, it is none of those things. In terms of the alternative set of grounds, I think some new grounds in the Bill are really helpful, such as the incoming agricultural workers ground, the employers ground and the ground for repeated rent arrears. Where we would want to go further comes within two buckets: an economic bucket and a compliance bucket.

In the economic bucket, the new mandatory ground for possession for an incoming agricultural worker is great. We would like it extended, because although 85% of rural businesses have nothing to do with agriculture, quite a lot of them still need to house employees. For example, they could be in tourism, hospitality, trades, food manufacturing, forestry or the care professions, which we tend to forget. There is something about rural areas, just by dint of geography and the fact that they might be away from other places, so extending that ground would be very helpful.

Still in the economic bucket, there is another scenario. Here we are looking at properties being required to house an outgoing or retired agricultural worker or another protected tenant whom the landlord has a statutory duty to house and who is being moved to suitable alternative accommodation. This is in cases in which there is a new employee who will replace, as part of the business, an outgoing employee, but the landlord either still wants to house that outgoing employee or has a duty to house them. They might therefore need another property in which to house that retired employee or that protected employee. That is the second ground.

The third ground is where a landlord intends to use a property, or the land on which it is situated, for a completely non-residential purpose, by which we mean making it a workshop, turning it into an office or putting it to a commercial use. These are the three grounds in the economic bucket, if you like.

I have another two grounds, in terms of compliance with statutory duties, that are not yet in the Bill and which I will go over quickly. It is more than just a rural issue, but we are hearing quite a lot about it in our case load. The first is a landlord needing possession to undertake works required to meet statutory obligations—for example, minimum energy efficiency standards or the proposed decent homes standard. In some of the properties that our members have, the works that will be needed are so extensive that you cannot do them with a sitting tenant; you need to regain possession. The second ground that we would like to see is where there is a persistent refusal by a tenant to allow in a landlord or their agent for a statutory inspection, for example for gas and electricity safety. You would be surprised at how often this is the case.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Helen Gordon, who is chief executive officer at Grainger. We have until 12 noon. Could you please introduce yourself for the record?

Helen Gordon: Good morning. My name is Helen Gordon. I am the chief executive of Grainger plc, the UK’s largest listed residential landlord. We have 10,000 homes; we specialise in mid-market and affordable homes. We have been around for 110 years—not me personally!—so we have experience of dealing with much of what is in the Bill. Thank you for inviting me.

We support the policy intent of the Bill. We think that there are some unintended consequences in the detail with respect particularly to the grounds for possession, but also to the minimum term of two months and how that might deplete housing stock in the UK.

[Matthew Pennycook]

Q Thank you for coming to give evidence. You will no doubt touch on your wider concerns in answer to other questions, but I want to ask you specifically about student accommodation, in which I think Grainger has an interest. Am I right?

Helen Gordon: No, we don’t have student accommodation.

[Matthew Pennycook]

Q I have got that wrong; my apologies. In that case, could you expand on the concerns you touched on in your introduction about the grounds for possession and the notice period?

Helen Gordon: I think the Bill’s intent was to give security to occupiers. Encouraging long-term renting is absolutely at the core of the build-to-rent business model. One of the difficulties we have is that a minimum term will affect both the planning for build to rent and the financing of it. It will also have an impact on small buy-to-let landlords, as most of their financing has a requirement in it for a minimum term. I do not know whether the Committee is going to speak to the banks about that, but two months would be in breach of most lenders’ requirements. It is definitely in breach of a lot of capital requirements for going into the professional build-to-rent sector as well.

[Matthew Pennycook]

Q Would you accept that if the private rented sector is overhauled and improved, for example if we drive up standards, there should hopefully be a trend towards tenants not needing to move out after that minimum period, and we should have a system in which people have security and have less reason to stay in a property for only a short time?

Helen Gordon: I think that that is absolutely the intent, and it is the business model. I want to talk about the fact that there is a lot of bad practice. If you go now to Rightmove’s website, or wherever, you will pay significantly more for a short-term tenancy than you would for a six-month or 12-month tenancy. People will abuse that. Searches of Rightmove’s data will give you only a certain amount of data, but we have data showing that in London up to 10% of the people wishing to rent only want to rent for a couple of months. Not having a minimum term greater than a couple of months will lead to a lot of Airbnb and transient renting. That is why, in planning, Westminster City Council and many other councils insist on a minimum term for rental property. The two months approach in the Bill seems to fly in the face of that.

[Jacob Young]

Q Thank you to our witness. You are proposing that tenants should not be allowed to give notice to end the contract for the first six months. What would you say to someone who says that it is unfair for a landlord to be able to end a tenancy early, after less than six months, when a tenant is not able to end it early?

Helen Gordon: Just to clarify, I think a minimum term of six months would work. That could be four months with two months’ notice. There is a balance between the two. Most landlords will work with a tenant if they make that decision. What I am trying to stop is the abuse of sub-letting and the unintended consequences of financing. Obviously, there is all the protection, so if it does not meet the minimum home standard, it is in breach or it was misrepresented to the tenant, they have all of those grounds, in any event, to leave. But if their circumstances change, I think most landlords would work with the tenant on that.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Richard Miller, the head of justice at the Law Society, and Nimrod Ben-Cnaan, head of policy and profile at the Law Centres Network. We have until 12.30 pm for this panel. Could you both introduce yourselves for the record, please?

Richard Miller: I am Richard Miller. I am head of the justice team at the Law Society.

Nimrod Ben-Cnaan: I feel I should give a slightly longer introduction, as the lesser party here. My name is Nimrod Ben-Cnaan. I am head of policy and profile at the Law Centres Network. The Law Centres Network is a charity; it is a membership body that represents law centres. A law centre, for those who do not know, is basically a law practice that is a charity: it gives free legal advice on social welfare legal matters. Our point of insertion into this debate is very much on the side of representing tenants across the country—we have 42 law centres doing so—and delivering one in five of the duty desks that are available through the legal aid scheme for possession proceedings.

[Matthew Pennycook]

Q Gentlemen, thank you for coming to give evidence. As you know, the Government have tied the enactment of chapter 1 of part 1 of the Bill to court improvements. The best sense we have of what they mean was set out in the response to the Levelling Up, Housing and Communities Committee, which covers four target areas: digitisation; prioritisation of certain cases; improving bailiff recruitment and retention; and providing early legal advice and better signposting. Is that your understanding of what court improvements might mean, or are there things outside the scope of that? How would we measure that? What could we put in the Bill so that we have some specific metrics by which we are able to judge when the abolition of section 21 will happen and when chapter 1 of part 1 of the Bill will come into force? How do we determine when court reform is sufficiently advanced?

Richard Miller: That is as comprehensive a view of what they mean by reform as we have. We have concerns about this idea of putting digitisation ahead of implementation. To give an example, we can look back at the HM Courts and Tribunals Service programme and what happened in private family law. They announced the project to digitise that in August 2020; through 2021, there were various workshops and engagement with the professional and other users of the system to help them to design and build the system; and then there were roll-out plans. The original project was scheduled to finish at the end of December 2022, but it is still ongoing, and the roll-out has not yet been completed. So we are now more than three years down the line and still just about approaching the end of the roll-out of that project.

That is not to be critical of HMCTS. It is vital that it engages with users, understands what the functionality of the systems needs to be, and designs them robustly so that they deliver what will work. There are always teething problems when you roll out these systems, and inevitably it takes a long time. We would be very surprised if this could be done in less than two years.

The fundamental question that underpins all this is why you would design a build around the current processes in law when you are fundamentally changing them. We would all be guessing as to what functionality will be required in a new digitised system. There is a strong argument to say that it would be better to implement the new system before undertaking the digitisation, so that you understand what your digital platform actually needs to achieve. So there are some real concerns about whether we are getting the cart and the horse the wrong way round on that.

More broadly, there are some genuine concerns about the capacity of the system at the moment. We are seeing significant backlogs within the courts. An example was recently provided to us by a member of ours who was representing a landlord. The landlord had issued a section 21 notice and applied to the court for the possession order, but the court took so long to issue the proceedings that the possession order expired—the time limit came to an end. The court had to issue a new notice and fresh proceedings, but the same thing happened again. The administration within the courts is not coping even at the moment.

We expect that the provisions in this Bill will lead to a significant increase in the number of contested hearings, so there is substantial concern about the capacity of the system to handle the workload that will come with this change. There needs to be investment to increase capacity, and that also needs to extend to legal aid. Landlords’ solicitors, as much as tenants’ solicitors, have told us that they need tenants to be represented. Landlords do not want to be up against unrepresented parties in contested hearings: it is bad for the landlords, it is expensive for the landlords and it is expensive for the court, which has to put a lot more resources into dealing with litigants in person. There needs to be substantial investment in legal aid, as well as in the court system, if this change is going to work effectively.

Nimrod Ben-Cnaan: I would agree with most of what has been said. As Richard has said, the court reform programme has been running since 2016, and we have known that possession reform was coming, even though it has now been delayed a little further than was expected. Using that now as an excuse to delay what is otherwise a long-promised measure—the repeal of section 21 and the like—feels unnecessary and misdirected. That is partly because, again, the pinch points are elsewhere and the kind of work that we could do to prevent cases from even getting to court, by expanding early legal advice through legal aid, is so much more significant. Frankly, rather than waiting at the cliff edge to help people showing up for their day in court, law centres would rather advise them at an earlier point to resolve disputes earlier and to talk people out of making a defence that will not do them any good. All of those things would substantially reduce the burden on the courts.

[Matthew Pennycook]

Q Just to be clear, do you agree with Mr Miller that we should introduce the new system and then look to improve the courts, or do you think that it would be fair to instead specify metrics for what we mean by improvement and then put a time period in place for it to happen?

Nimrod Ben-Cnaan: Our opinion is that, as I think Polly Neate said on Tuesday, the Government should hold its nerve and not wait at all. We can do this without that. There will be a surge; there are other ways to address that surge. That is our opinion.

[Jacob Young]

Q Thank you to both our witnesses. This question is specifically for Mr Miller. I am a little confused by your argument, because you seem to be suggesting that we should implement the changes to section 21 before court reform, but you then say that the courts are currently overwhelmed and that there would be more contested cases, therefore overwhelming the courts even further, if we were to abolish section 21 straight away. Could you clarify the points that you are making about that? What could we do to improve the court system today, before we bring in the changes to section 21?

Then, on Nimrod’s point about resolving cases before they even get to court, which I think is really relevant, I would be keen to know how you think the ombudsman could be used in such dispute resolution.

Richard Miller: In response to the issue of digitisation, our view is that digitisation is one part of the picture only, and it is a part of the picture that will take a long time and involve quite a bit of investment. Fundamentally, the issue is that we do not know exactly what functionality will be required of the system until we have implemented the process.

Let us suppose that the digitisation programme did not exist. We would be saying, “As long as the courts have the resources to handle the cases, that is fine.” That is what we are saying should happen here: digitisation should be on the cards—it should be something that we intend to do over the coming years—but the starting point is to make sure that the courts are resourced to handle the cases as they are conducted at the moment. That does mean more judges, more court staff to process applications and more investment in legal aid, but the digitisation is not a necessary prerequisite to get the courts into a state where they can handle this workload.

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Q Can I just say to Nimrod that I am greatly helped by South West London Law Centres in my constituency? I am very grateful for the work they do, particularly at the emergency and routine desk at Croydon county court. I can only imagine what that is like on a daily basis. Lots of very vulnerable tenants turn up with absolutely no advice, and the best advice I give to them is to get there really early and get to the front of the queue. I imagine all sorts of things happen to tenants and landlords in those courts that are not fair or reasonable, but because nobody is represented, or it is very difficult to get representation, it is difficult to avoid that.

On reforming the whole county court system, what can be done other than to resource it better and provide better advice to people? I can only imagine the amount of time-wasting going on because people are desperately in search of help. Currently, at Croydon county court, it takes 16 weeks on average to get a bailiff’s warrant after a possession order is secured. On the other end, we have the local authorities that are desperate to delay for as long as they can, because they do not have anywhere to put people. What is the resolution to that?

Nimrod Ben-Cnaan: It is a tough one, for two reasons. First—this has been mentioned in previous sessions—a separate housing court should probably not be set up. That is partly because if you already have a system that is starved of relevant—mainly judicial—staff and has had its budget starved, creating a separate jurisdiction that would need to have its own of everything makes no sense. The Government are right not to create a separate one. In effect, we have a housing court that works—when resourced—fairly well in the county court. This is something that I have heard Richard talk about before, and certainly we are very strong about that.

Our understanding of where justice begins for people needs to go well beyond the court doors. That is why we keep mentioning the advice sector, legal aid and other measures. I would also include in that public legal education and helping people understand their rights as tenants, which we are not doing nearly enough. Those kinds of support would not necessarily, in themselves, create a more efficient justice system, but they would create the kind of solutions that many people seek in it, rightly or wrongly, and which they could reach elsewhere. I am sure Richard has more on that.

Richard Miller: This is one of the ultimate challenges. If we are being asked how you can improve the situation without quite a bit of significant investment, my answer would be that you cannot. The point—this is so often overlooked—is that if you take that step back, you are still spending the money. You made the point that local authorities have to pick up the burden of homeless families. A bit of early advice to sort out the housing benefit might have meant that the family was never homeless in the first place, with huge savings to the public purse and in relation to pressures on the system. Early advice can stop cases getting to court at all and make sure that cases are better dealt with when they do go to court.

All that investment saves substantial sums. That is even before we get on to housing disrepair, where there is an impact on people’s health and the stress that is caused, which has an impact on the health service as well. There are substantial savings for the health budget in getting these things right early as well. It is penny wise and pound foolish to think we save the money here and to not look at the broader costs that we incur as a result of those tiny savings.

[Matthew Pennycook]

Q There is concern about a number of the either amended or new grounds for possession. I want to ask you specifically about the changes made to ground 14 and what they might mean for courts on the ground—specifically the change in the Bill’s wording from “likely to cause” to “capable of causing”. What do you think that means on the ground? Is there any concern from the point of view of county courts about that change, and is there perhaps a need, if the change is made, for at least guidance to the courts on how you differentiate genuine antisocial behaviour from instances of domestic violence, mental health crises and so on?

Richard Miller: From the Law Society’s point of view, we do not take a view on the specific wording. We note that this is a still a discretionary ground and so the courts have the opportunity to look at all the circumstances and determine what is a proportionate response. That, we feel, gives a degree of protection. Beyond that, we do not have any views one way or the other about the change in the wording there.

Nimrod Ben-Cnaan: We, however, do have quite a few concerns about that, mainly arising around case load, as you will probably recognise from yours in the community. Broadening the definition of antisocial behaviour from “likely to cause” to “capable of causing” nuisance is almost designed to catch out patterns of behaviour that could be interpreted as antisocial but which may, in fact, reflect mental health crises or domestic abuse. It is particularly worrying in situations in which the nuisance is more of a modality, as in the example of a tenant who is a hoarder but whose hoarding affects him alone and is not an environmental menace may be caught up in that ground. It needs a lot of clarification, although we are very glad that it is a discretionary ground.

[The Chair]

I am afraid that that brings us to the end of the time allotted for you. Thank you very much to both of you for attending and for the evidence that you have given.

Examination of Witness

Jacky Peacock gave evidence.

[The Chair]

We will now hear oral evidence from Jacky Peacock, who is the head of campaigns for the organisation Advice for Renters. We have until 12.45 pm for this panel. Could you please introduce yourself for the record?

Jacky Peacock: I am Jacky Peacock from Advice for Renters, which I guess does what it says on the tin. We have a legal aid contract to deliver advice that we complement with other services, such as money and debt advice, and so on. We also have a brilliant team of volunteer mentors who provide support for our clients when they need it. After the last session, I should add that we could not provide the legal aid service without getting independent grants from charitable trusts; it does not even cover the salaries or the fees, let alone the overheads.

[Matthew Pennycook]

Q Thank you for coming to give evidence to us. Chapter 3 of part 2 sets up a new database as a prelude to the portal, and we very much welcome it. We think it is actually one of the more exciting aspects of the Bill that could really make a difference. Assuming you agree with that, do you think there are any ways in which we might want to amend the Bill to be more prescriptive about what the portal needs to do and what conditions those registering on the portal need to meet? Do you have any concerns about how the portal might potentially operate?

Jacky Peacock: Yes. I did listen to some of the sessions that you had on Tuesday and I was quite frustrated because, with all the problems that people were grappling with, they were not being seen in the context of the portal and its potential to avoid or minimise—certainly lessen—the problems that have been cited. So yes, it absolutely has a huge potential, and I think that it would be crazy to try to implement this legislation without having the portal in place. Although the intention is that it will be introduced through regulations, I do think that as the Bill progresses through the legislative process, the more flesh that can be put on the bones of it, the better.

I am trying to be as brief as I can. One reason why we think this is so important, although much in the Bill is welcome, particularly the measures to improve tenants’ rights—so that they can exercise their rights and will have security, can challenge poor conditions, and so on—is that we do have to be realistic. At the end of the day, the majority, if not the vast majority, of tenants will have no more idea what is in this Bill or what their rights are when it is enacted than they do now. If there is anything more important than giving the tenants the right to challenge poor conditions, it is ensuring that they do not have poor conditions to start with.

The portal has the potential to regulate the sector so that landlords cannot let properties unless they are safe, fit for human habitation and competently managed. We have worked with the Lettings Industry Council, which represents all stakeholders across the board, to develop a model. We have called it the MOT, and we have used the car analogy. If you want to drive a car or any vehicle, it is a pretty simple process: you register once a year through the Driver and Vehicle Licensing Agency, you provide evidence that the car is roadworthy—of course, the MOT is separately uploaded to the site—and you have a driving licence. All we are asking for is a similar system to operate for the private rented sector.

The other important thing is that the portal is an opportunity to put all the legal requirements in one place. We are not asking for any duties on landlords that do not exist already. But they are in a whole range of different pieces of legislation, and the landlord, with the best will in the world, finds it difficult to know exactly what they are and are not supposed to do. It is all in one place. Whether it is called the decent homes standard and incorporated in that does not matter: it is there on the portal. All the landlords who want to know how to do things properly can find it.

In order to let, landlords have to register and provide objective, independent evidence. All that exists already: the building insurance, the energy performance certificate, gas safety, electricity and so on. There is no reason why that cannot be either scraped from other sites or uploaded directly. The only thing that is missing is that you could have all those and still have a property, for example, with damp and mould that is not fit and that has category 1 hazards. The simple answer to that is for landlords to employ a surveyor to produce a surveyor’s report, which also gets uploaded by that person. Provided that everything is there, the legislation goes through.

I go back to the car analogy. If you want to register, you pay your annual fee; if you have forgotten to get your car insured or something, that will be flagged up—“Gosh, I have to sort that out”—and then you go back and do it. It is all very simple, and nobody complains about it.

[The Chair]

Can I move on to the Minister?

Jacky Peacock: Well, that outlines it; I can give more detail about how it works if you like.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Jen Berezai, the co-founder of AdvoCATS. We have until 1 pm for this panel. Could you please introduce yourself for the record?

Jen Berezai: Hi. My name is Jen Berezai; I am the co-founder of AdvoCATS. We are a wholly voluntary non-profit organisation. On the ground in the east midlands, we help landlords and tenants where there are issues concerning pets and rented properties. We help to produce pet CVs, obtain vet references and do anything else that will help to demonstrate responsible pet ownership so that a landlord can make an informed decision about allowing a pet in their property. Nationally, we ran the “Heads for Tails!” campaign, which was launched in September 2021: it was an umbrella campaign with big names supporting our proposals for a change to the Tenant Fees Act 2019 to make renting easier both for landlords and for tenants. We had support from the Property Redress Scheme, the likes of the NRLA and Propertymark and, on the animal welfare side, International Cat Care and the National Office of Animal Health.

[Matthew Pennycook]

Q Thank you for giving up your time to come and talk to us this afternoon. You will no doubt welcome clause 7. Do you have any concerns that landlords may attempt not to advertise or let to tenants with pets on the basis that, if they offer the tenancy, under the Bill they cannot unreasonably refuse the tenant the right to keep that pet? Relatedly, do you think the Bill is robust enough on what an unreasonable refusal might mean and how it is defined and used?

Jen Berezai: Yes. We understand that there will be guidance on the grounds of unreasonable refusal, but the main reasonable excuse for refusing a pet is likely to be the existence of a head lease on a leasehold property. As I understand it, the head lease legislation is superior to that proposed by the Renters (Reform) Bill, so if there is a head lease on a property that prohibits pets, that will be a reasonable excuse. As approximately 20% of the housing stock in the UK is flats, that will have an impact on a lot of tenants. There is a huge lack of awareness within the tenant community, and among the general public, of what a head lease is and how it can affect you.

Sorry, but what was the first part of your question?

[Matthew Pennycook]

Q Do you think that there is a risk of discrimination, with landlords attempting to filter out pet owners so that they do not have to encounter the unreasonable refusal provision?

Jen Berezai: Research that we have done, along with research undertaken by the likes of Battersea Dogs & Cats Home and Cats Protection, seems to indicate that a large number of landlords would be willing to consider pets provided that they are able to protect their own interests. That is why we proposed an amendment to the Tenant Fees Bill to add pet damage insurance to the list of permitted payments. Having said that, the rental market is very hot at the moment. I believe that there are something like 20 to 25 applications per property in London. In the east midlands, I think there are about 11 applications per property, and viewings are usually closed off at about 30. That means that landlords are able to cherry-pick tenants. A lot will take the course of least resistance and choose what they perceive to be the lowest risk.

[Jacob Young]

Q What are your concerns around the Bill?

Jen Berezai: My concern is that it is an excellent step in the right direction, but it is probably going to benefit those who rent houses more than those who rent flats. That is because of the head lease issue. I know that leasehold reform is going through; it would be nice if the two things could work hand in hand. Giving landlords the ability to say either “You must hold pet damage insurance” or “I am going to charge you for pet damage insurance” will make a difference to a lot of landlords who are currently on the fence about allowing pets.

Renters (Reform) Bill (Second sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[The Chair]

Thank you very much.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Q38 Thank you to the witnesses for coming to give evidence to us. I want to start off with possession grounds. We have heard from the Government, and from a number of the witnesses this morning, about the need to strike the right balance between the interests of landlords and the interests of tenants. What are your views on the new and revised possession grounds in that regard, and specifically the ones we have heard some concerns about: grounds 1, 1A, 6, 7, 8A and 14?

Ben Twomey: Thank you, shadow Minister. On the grounds, it is important to think about the question of what actually changes for the renter experience if the Bill passes in its current form. We welcome the Renters (Reform) Bill and think it is an important piece of legislation, but on some key areas not much will change.

The Government promised to abolish no-fault evictions. The Bill does not do that. It removes section 21 no-fault, or no-reason, evictions but introduces new no-fault grounds. Particularly on grounds 1 and 1A, which are where a landlord can move a family member in or may sell the property, it is important that we put ourselves in the renter’s shoes when that happens. A no-fault notice is given. That could happen to me or any renter across England. Right now, I could go home and find one of those notices on my doorstep. I would have to be out of my home within two months. Given the current economic climate, it is going to be difficult for me to find a new home quickly, so the risk of homelessness—no-fault evictions are one of the leading causes of homelessness—is very great.

In the current wording, that situation does not change for renters, and their experience does not change. A renter receives a no-fault notice and is out within two months. We think there should be better protections there. It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live. That saves the Government money because they do not then have to support people who are in temporary accommodation or are otherwise homeless. That is one of the key areas we want to change in respect of the grounds.

Similarly, I currently have a fixed-term contract that will move under the Bill to a rolling tenancy. The minimum fixed term is six months, and as soon as that ends I can receive a no-fault eviction. Within the rolling tenancy, under the wording of the Bill, once the six-month protected period ends, again, a renter can receive a no-fault eviction. It is important that there are better protections so that there is more security for renters. We say that period should move to two years instead.

Finally, on the no-let period, if the grounds are to be introduced, they need to be enforced. It needs to be clear that they cannot be abused by some landlords. At the moment, if someone says that they are moving a family member in or that they are going to sell the property, there are three months during which the property cannot be re-let. We think that should move to one year to make sure we rule out the idea that some landlords could still do retaliatory evictions or abuse the grounds in other ways. By moving that, we make sure that tenants have that greater protection and can enforce where local authorities may not be able to. If we can put that information on the property portal in the Bill, which we welcome, it will be much easier for tenants to play a role in the enforcement and scrutinise what is happening.

As I said, I could go home today and receive a no-fault eviction. The Bill could pass and I could go home and find one and the same thing could happen. I would be out within two months and it could happen after six months of my having a tenancy. That is a big problem. If you want to reduce one of the leading causes of homelessness and save the Government money in doing so, you need to address those factors.

Sue James: What we are talking about today is someone’s home. Over the past 20 years we have seen a huge increase in families who are living in the private rented sector, and we are talking about having enough protection for them. The private rented sector has doubled in size, so we do need to pay attention to it.

At the moment, the new grounds are all mandatory grounds, and we say they should be discretionary grounds. We want the court to make an order that will take into account the circumstances of the tenant and of the landlord. Grounds 1A and 1B, as they are currently written in the Bill, will essentially be a back door for section 21. I agree with what Ben said about improving the notice periods that are outlined in the Bill.

We also have a problem with grounds 1A and 1B in relation to the evidence. At the moment, it does not look like the landlord will have to provide much evidence. We want that to be strengthened so that you would have to have evidence that the landlord required the property for a member of their family or wanted to sell it.

The problem also is that once a landlord takes possession on that basis, or tells the tenant that they are going to seek possession on that basis, you have just a three-month period in which they are not allowed to let. That needs to be much longer—at least a year—in order to protect the tenant from unscrupulous landlords taking back their premises. Three months is not a very long time at all.

The other issue relates to enforcement. Currently, that rests with the local authority and the ombudsman. The tenant must have the right to challenge that and to take action against the landlord, including when the landlord has taken possession in court, because at the moment it is only if the tenant voluntarily leaves. It needs to be a bit more joined up in terms of having that protection.

The biggest problem is ground 8, and ground 8A in particular. I know you heard some evidence on that this morning. It is a particular problem: basing it on three times in three years when someone is at least one day in arrears is going to cause grave hardship. It has a perverse incentive, because the final time that the tenant is in arrears, a possession order will be made and they will not have an incentive to make that payment. That seems really perverse. All of that needs to be discretionary. The court absolutely has to have a look at that.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)]

Q Thank you to the witnesses. You have mentioned aspects of the Bill that need to be strengthened; what aspects do you welcome or think of as helpful? How do you think the private rented sector supply might be impacted by the reforms?

Ben Twomey: We absolutely welcome the end of section 21 no-fault evictions—it could not come soon enough. We were promised it some time ago. For renters, that is one of the biggest insecurities we face. That is why I talk about the experience needing to change for renters. In Generation Rent, we love it when renters are aware of their rights and when they know what the system is like, yet those renters who discover they have received a section 21 suddenly become aware that the rights they have do not mean much at all, because they will be out in no time and there is not much they can do to challenge it.

One of the saddest things I have heard from renters we support is that insecurity follows them into the next home. Even when they are trying to feel settled and comfortable and to build their lives again, they are in constant fear that another no-fault eviction notice could come. It needs to be really clear that the new no-fault grounds do not keep that insecurity in the system.

We welcome the end of section 21 and we welcome the property portal. It will be really good to finally have a register of landlords. We hope to be able to put things into that portal that are not yet in the Bill: we hope that we will be able to track evictions, so that they are enforceable around the no-let grounds, and that we will be able to look at actual rents and properly monitor what goes on. One of the big advantages of ending section 21 will be that finally a reason is given for every eviction, so we can understand when things start to go wrong that lead to homelessness. At the moment, quite a lot of guesswork is happening to prevent that problem.

We also welcome an ombudsman coming into the sector, to have an equivalence with the social housing sector. As much as possible, in any way we can, we think renters should have the same rights across social housing and private renting. When the experience can be very similar, and the risks, insecurity and unaffordability are still factors across the piece, there is no reason to have a two-tier system. In fact, I would go further and say that we will have reached our goal only when homeowners start to kick themselves and say they wished they were renting because there are so many rights available, so much security of tenure and so much flexibility, and because they have organisations such as mine and Sue’s to inform people. We look forward to working with the Government to see how that ambition can happen.

Sue James: I agree. The property portal has such potential if we get the information in there right so that there is transparency around renting. That would be amazing. We absolutely love the fact that this has been brought in. There are some changes that we think need to be made. The fact that you are looking at delaying action on section 21 is something I would love to talk about, if you would like to hear that.

--- Later in debate ---

[Nickie Aiken]

Good.

Sue James: But it needs more.

Ben Twomey: I would add that it lacks detail at the moment, and we are very keen to see that detail. I mentioned that we are particularly interested in eviction notices and the outcomes of evictions being logged there; otherwise, there is not really much improvement in the way you monitor and enforce against abuse of some of the new no-fault grounds. So eviction notices are really important. Getting the rents charged on there will be really important, and we should think about energy performance certificates going on to the portal so that they can be enforced. When I talk about enforcement, I think it is really important that local authorities are empowered and have the necessary resources to enforce against bad practice—the kind of practice that can lead to people being unsafe in their homes.

It is also about having a place for tenants to access this information, as they have a vested interest in what happens afterwards. The only way to give them a vested interest is to have an incentive, and we think that is through rent repayment orders. We would encourage the portal to be made accessible to tenants. For example, where they can see that no-let periods have been abused, there should be a rent repayment order. If the landlord is not compliant with the portal, there should be a rent repayment order. Also, if the landlord is not compliant with minimum energy efficiency standards, we think that there should be a repayment—you would equalise it in that way. At the moment, where licensing schemes exist, for example, and the local authority pursues landlords for a fine, often that money does not actually get back to the person who has lost out—the tenant. It is important that rent repayment orders go directly to the tenant wherever possible.

Sue James: I totally agree, and I would like to pick up on the issue around the basic requirements of gas safety and stuff. At the moment, that is a huge protection in section 21; a landlord cannot get a possession order unless they have all those protections, and that does not appear in the Bill. We absolutely need to have them included, and the portal could be a place to put them. We would then have transparency; a tenant knows when they are looking in the portal that this is a good landlord and that they have complied with everything. I think that is so fundamental to changing the nature of the private-rented sector.

[Matthew Pennycook]

Q As we have you here and you have unique access to residents and organisations that represent residents, I wonder whether I could push you on some areas that are not covered in the Bill. Some of them were flagged in the White Paper and some were not, but they are a problem for renters every day—at least on the basis of my postbag—and we might deal with them in the Bill. I am thinking of things like guarantors, advanced rent and bidding wars, which we are hearing a lot about at the moment, particularly in the part of London that I represent. Could you speak about some of the potential solutions that we might look to work into the Bill?

Ben Twomey: The question of guarantors is really important. Usually, there would be a guarantor if you are not earning a certain amount to cover the rent—usually, you should have an income that is two and a half times the rent and, if not, you require a guarantor. For younger people, for people on low incomes, that can be quite difficult, so they would need a guarantor.

We have been working with the National Youth Advocacy Service to look at the barriers facing care leavers when they access private rented homes. This has been a major barrier for care leavers. At the moment, 60% of local authorities do not offer people the ability to be a guarantor for care leavers. Local authorities are the corporate parent for care leavers, so they are basically taking on parenting duties. We think that is a big problem. The 40% that offer the guarantor scheme in principle vary in the way that they do so. We think that it is for the Government to step in and say, “If, as a state, you are going to take on parental responsibility, you should be a guarantor to make sure that young people who are care-experienced are not being locked out of rented accommodation, compared with their peers.” That would be a major step forward.

To touch on bidding wars, we have found in our research at Generation Rent that there are seven times more bidding wars than there were just five years ago. We have gone up from 3% of tenants experiencing this to 21%, from our research. I experienced it when I moved down to London relatively recently. I was asked how much more I would want to give and how much longer I would want to stay in the property as a fixed-term tenancy. It is very, very common now. We think that the issue needs to be addressed. There is nothing in the Bill at the moment, but there should be some consideration given to this. When a landlord offers a price for rent, they are almost, by definition, offering a rent that they are comfortable with. Just because of the changes in market forces—that is a change not to their costs, but to the number of people queuing round the block for them—it should not be that they can then increase the rent as they please and encourage others to enter into these kinds of bidding wars, which basically pit tenant against tenant. The only one who is benefiting from this is the landlord.

Sue James: To pick up on that point, this is not in the Bill, but the position of the Renters’ Reform Coalition is that, at the moment, unless you restrict the amount that landlords can put up rents, you potentially have an economic eviction, and we would suggest that you restrict that to the lowest of either inflation or wage growth.

To touch on what is in the Bill, section 14 of the 1988 Act allows the tenant to apply for the tribunal to have a look at the rent. Originally, it was restricted to whatever the landlord was requesting, but in the Bill it is now the market rent. That would potentially have a chilling effect on tenants who want to challenge the rent that has been set. As an adviser, I might say, “It is limited to what your landlord has suggested,” but at the moment, with the way Bill is, that could be the market rent if the landlord has asked for less than that. Does that person then challenge it? That could have a chilling effect. When thinking about rents and, as Ben said, bidding wars, that absolutely needs to change, because it is really difficult. There are queues of people for every tenancy and the protection needs to be there, so thoughts around that would be really welcome.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Ian Fletcher, director of real estate policy for the British Property Federation. We have until 3 o’clock for this panel. Could you introduce yourself for the record, please?

Ian Fletcher: Hello. I am Ian Fletcher, a director of policy at the British Property Federation. Thank you very much for the invite this afternoon.

[Matthew Pennycook]

Q Thank you for attending, Mr Fletcher. I want to ask you about build to rent. In terms of supply, build to rent is mainly catering to—let’s say—the top half of the market, rather than meeting mainstream supply. What do you think the impact of this Bill will be on the build-to-rent sector?

Ian Fletcher: Build to rent is something that started over the past 10 years. It is trying to encourage institutional investment into market rented housing. It is not pitched at high-income earners. We do a survey each year that looks at the demographics of the build-to-rent sector, and I would say it is catering for medium earnings—often key workers and people of that nature—and supporting our core cities particularly, as a lot of investment has gone into a number of the core cities across the UK.

In terms of impact, a lot of the things we very much welcome in the Bill have, to some extent, been pre-empted by the build-to-rent sector: a number of my members are already members of an ombudsman voluntarily; the build-to-rent sector has proudly been at the forefront of welcoming pets; and decent homes is not something that will trouble the sector. The portal is something I have been campaigning for since 2007. There is a lot to welcome in the Bill.

Some challenges that are specific to build to rent are things like the Government abolishing rent review clauses and the lack of any minimum tenancy length in the Bill for landlords, which means that there could be a danger, particularly in properties in core cities, of significant churn.

[Jacob Young]

Q You mentioned the decent homes standard. Could you elaborate on your thoughts on that?

Ian Fletcher: As I say, the stock of build to rent has been developed over the past 10 years, so it is unlikely not to be meeting the decent homes standard. Equally, the management of the property is done to a very high standard. That is something the sector is very proud of. I do not see any challenges in introducing decent homes into the sector from a build-to-rent perspective. We have sat around a number of tables with the Department as it has worked through the specifics of how the standard would impact the private rented sector, and I have not heard many dissenting voices in terms of this being introduced into the sector.

--- Later in debate ---

[The Chair]

Q We will now hear oral evidence from Kate Henderson, chief executive of the National Housing Federation. We have until 3.15 pm for this panel. Please you introduce yourself for the record?

Kate Henderson: Good afternoon. I am Kate Henderson, chief executive of the National Housing Federation. We represent housing associations in England, which are not-for-profit providers of 2.7 million homes to around 6 million people.

I would like to say a little about housing associations, just for 30 seconds. While, on the face of it, this Bill does not apply to social housing, and a lot of the homes that we provide would not be seen in the private rented sector, it is important to acknowledge that the Bill has implications, particularly for supported housing, where we might currently be using assured shorthold tenancies.

That type of accommodation—we provide three quarters of all supported accommodation in this country—covers things such as emergency accommodation for people fleeing domestic abuse, for veterans experiencing homelessness, for care-experienced young people, for adults with both physical and learning disabilities, and also step-down accommodation from mental health facilities.

Again, it is about just being really mindful that, while the vast majority of the tenancies in the housing association sector are assured, there are implications for that important supported housing provision, and just making sure that there are no unintended consequences from this Bill coming forward.

[Matthew Pennycook]

Q Thank you, Kate, for coming to give evidence. You are absolutely right: the Bill does have implications for social housing providers in a number of areas—tenancy reform and others. Could you speak to whether you think that the Bill strikes the right balance when it comes to those changes, first in general terms and then, specifically, on grounds for possession? The NHF has made the case for changes in a number of areas—for example, ground 1B to include transfer to another tenant as well as sale. Could you give us a sense as to why you think that those changes are required?

Kate Henderson: The National Housing Federation supports the Government’s aims of protecting the rights of tenants, and we agree with the abolition of section 21. That should extend across the board. It is important to strike the right balance between landlords and tenants in all sectors, including tenants of housing associations, so it is really important that the Bill does not have any unintended consequences for the ability of housing associations to operate effectively and to provide decent, secure and affordable homes for their tenants, particularly in that area of support and need.

We have four areas in which we would like to seek further clarification. The first is around changes to rent increases. The second is around ground 1B for rent to buy specifically. The third is around superior landlord grounds—so 2ZA and 2ZB—and the fourth is around ground 6 for redevelopments.

We would like to see all types of social housing exempt from the proposed approach to rent increases, whether included within the rent standard or not. That is a limited change to the Bill but it would help to deliver vital forms of housing to meet specific sub-market needs. We would like to see ground 1B be extended to apply when a property is not being sold but a tenancy is being offered to another tenant wishing to take part in a rent-to-buy scheme. We would like clarification around ground 2ZA so that that can be used on a tenancy at will. Lastly, we would like housing associations to be given access to ground 6. There could be a possibility of making that a prior-notice ground as a safeguard for tenants. I have just listed several grounds for quite specific contexts, so I would be happy to give examples of why we would find changes in those areas useful.

On the specific ground that Matthew has just raised, the current wording of the rent-to-buy ground 1B does not allow it to be used when a property is not being sold but when a new tenant is moving in instead. For example, you have somebody who is in a rent-to-buy property, has been there for five years and has decided that they do not want to buy it or they cannot buy it; we would like the ground available so that that property could be given to another tenant who would like to use the property as it was intended and designed to be used—as a rent to buy. Just to highlight, that is a Government product supported by the affordable homes programme and regulated by the Regulator of Social Housing, so we would like it to be able to operate as intended. Again, just that access to that ground would ensure that rent to buy works as intended.

[Matthew Pennycook]

Q I think that you implied there that you might send us further evidence, but could you touch briefly on the rent increases point that you made earlier? I think that it was the first of your areas for clarification.

Kate Henderson: Sure. At the moment, the social housing sector is regulated by the Regulator of Social Housing, and the vast majority of our rents are set by Government and set annually. The Bill makes changes that would restrict rent increases to once in 12 months and require landlords to give two months’ notice of rent changes.

As I mentioned in my introduction, our members manage 2.7 million homes. Requiring two months’ notice of a rent increase, and requiring each tenant’s rent to be changed on the anniversary of their tenancy, would place a huge administrative burden, whether it is on a large-volume landlord or even on a smaller landlord with fewer staff.

This would take away from a provider’s ability to deliver those core services. The Bill acknowledges that by including an exemption for social housing in the rent standard—social housing is exempt from those changes. However, some types of social housing, such as intermediate rents, specialist supported housing and some forms of low-cost home ownership, are not included and do not appear to be exempt from the changes. Not exempting some types of social housing would cause complications and administrative burdens. It might mean that neighbours had their rents increased at different times, and it would really affect delivery.

Housing associations are responsible landlords, and we are regulated by the Regulator of Social Housing, so any concerns about unscrupulous rent increases do not apply to us. We are asking that all types of social housing be exempted from the proposed approach to rent increases, whether or not they are included in the rent standard.

[Jacob Young]

Q We spoke to the housing ombudsman earlier. I am interested in your reflections on the social housing ombudsman, the creation of the new private rented sector ombudsman and what lessons can be learned.

Kate Henderson: It is absolutely right that residents in the private rented sector have access to an ombudsman. It is really important that that access is clear and easy to navigate and that there are routes to address where things have gone wrong in the private rented sector.

From a housing association perspective, we want to make sure that there is clarity about the remit of a new ombudsman, because we already have an ombudsman service. However, some housing associations also provide market rent homes. If you were a resident in a market rent home, would you go to the current housing ombudsman or to the new PRS ombudsman? We need real clarity on remits so that there is not confusion either for the landlord or, most importantly, for the tenant.

--- Later in debate ---

[The Chair]

Good afternoon. We will now hear oral evidence from Henry Dawson from the Chartered Institute of Environmental Health. For this panel, we have until 3.30 pm. Will you please introduce yourself for the record?

Dr Dawson: Hi. My name is Dr Henry Dawson. I represent the Chartered Institute of Environmental Health.

[Matthew Pennycook]

Q Thank you for coming to give evidence. Could I ask you about the decent homes standard? In what is, I must say, a very welcome move—we have been very clear about that—the Government have made it clear that they intend to require private rented homes to meet the decent homes standard, and have committed to bringing forward legislation, in their words, “at the earliest opportunity” to see that enacted.

I suppose I would like to probe what you think the consequences are if that legislation takes some years to deliver. How does the delay bear on the other reforms that this Bill enacts? How might we use the Bill to tie into that other legislative process? How does this Bill need to relate, if at all, to that forthcoming legislative decent homes standard for the PRS?

Dr Dawson: Thank you for the question. I have a few thoughts with regard to indications we have had that the decent homes standard might be brought in through the Bill. That is something that the CIEH is very keen to see. At the moment, the decent homes standard provides a fairly simple set of criteria, which are measurable, are fairly easy to understand, and provide the opportunity for both tenants and landlords to have some consistent standards to refer to when considering the condition of the property. Not having that in the private rented sector results in an odd disparity: we have social rented accommodation with the highest standards, and conditions have improved considerably through that standard, and then there is private rented accommodation that does not have that standard.

We find it very difficult for the sector to self-regulate and for landlords to organise their own repairs and maintenance schedules, when they very often have to wait for a local authority inspector to visit their property to carry out an inspection under something like the housing health and safety rating system schemes. It is something we can also get some benefit from through the Housing Act 2004 licensing, which allows us to set some of these conditions, and allows us to tailor them by area. However, bringing in a national standard across the sector would be very advantageous and provide a very clear requirement, although the CIEH would like to see some more clarity and would like to be involved in the consultation on the proposed changes to the decent homes standard.

The standard could be implemented in the sector at a later date, after being included in the Bill in order to get it enacted. That would give us a two-step process, and then we could bring the standard in when the amendments had been made and we had the updated standard to work from.

[Jacob Young]

Q It would be interesting to know your thoughts on the portal, and on how we can make the most use of it to support councils in taking enforcement measures.

Dr Dawson: The CIEH is very happy to see the portal introduced. I am based near Wales, and I sit on the advisory panel for Rent Smart Wales on behalf of the CIEH. We have seen the portal brought in, and it has been very effective. It provides a lot of data on where rental properties are, and who their landlords are. Local authorities have quite a hill to climb in trying to find that out independently. It will be a very useful source of information. It is also a good source to look at when collecting certificates on properties.

However, we find that the portal has limited impact with regard to the condition and contents of properties, and management practices. It is an information-gathering tool. It has the potential to be a central information portal that landlords and tenants can refer to—a sort of single source of truth. On very small landlords registering with landlord bodies, 85% of landlords own one to four properties, and we are finding what an author referred to as a cult of amateurism. These landlords have differing levels of expertise, and of knowledge of a complex legislative environment. The portal can be a central reservoir of information for them, with quite a bit of scrutiny behind it.

As I say, we welcome the portal when it comes to providing data on where the properties are and who the landlords are, though the more unscrupulous operators will still try to avoid the register so as to evade their duties. I would not go so far as to say that it will make a significant impact on the condition and contents of properties, or the management practices of landlords in the sector.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Dr Julie Rugg, senior research fellow at the Centre for Housing Policy at the University of York, and from Professor Ken Gibb, professor in housing economics at the University of Glasgow, who joins us via video link. We have until 4 pm for this panel. Will the witnesses please introduce themselves for the record?

Dr Rugg: I am Dr Julie Rugg from the University of York, where I am a reader in social policy.

Professor Gibb: Hello. My name is Ken Gibb. I am a professor at the University of Glasgow and I direct the UK Collaborative Centre for Housing Evidence.

[Matthew Pennycook]

Q Thank you both, and good afternoon. Given your extensive expertise in this area, could I ask a general question about whether the Bill strikes the right balance between the interests of landlords and the interests of tenants? I would like your thoughts specifically on the grounds for possession, linking the abolition of section 21 to “court improvements” unspecified, and other things that might, in your opinion, be missing from the Bill.

Dr Rugg: That is a very big question. I do have concerns about the Bill as it currently stands. We have become quite focused on the abolition of section 21, and I can understand why, but the abolition of section 21 does not deal with the reasons why a landlord might serve a section 21 notice. My feeling is that, if the Bill goes through as it stands, it will give tenants the impression that they have greater security than they in fact have.

One of the biggest concerns with the Bill as it stands relates to possession on the ground of the landlord selling the property. The fact that the landlord is selling is one of the biggest reasons tenants are asked to leave, and a lot of landlords are exiting the market. The Bill does not prevent that, so that will continue. We have to think about how we neutralise the market. At the moment, the market is weaponised for both landlords and tenants in ways that are very unhelpful.

We have to think about how to calm everybody down and start thinking about what the problems are in the market. One of the biggest issues in the market at the moment is the lack of supply. That is quite problematic for tenants, and it is one of the reasons there is a lot of energy around section 21. Abolishing section 21 is not going to deal with supply issues. From the evidence we have at the moment, it is very likely to make supply issues worse.

Professor Gibb: My perspective on this stems to a large extent from the experience we had in Scotland after the introduction of some aspects of the Bill and some of the kinds of measures that you are now proposing. I would echo what Julie says, in that we made these changes, which brought some confidence to tenants—that is what some research tells us—but some fundamental issues remained unchanged.

Despite investing in tribunals—in justice, as it were—there is still a strong sense of asymmetry in access to justice, which is to the detriment of tenants. People supported the changes, which are very similar in terms of the grounds for possession and so on, but none the less we find ourselves with a similar housing rental market in Scotland, which exhibits a great deal of shortage and very high and accelerating rents.

The counterfactual is what it would have been like without the changes. It probably would have been worse, but the changes have not stopped those kinds of things happening. In a sense, they probably are not supposed to do that. It is not enough to do these necessary things to make the rental market work more satisfactorily.

[Jacob Young]

Q Thank you both. First, could you clarify your initial points? What effect do you think the reforms we are proposing would have on supply in the private rented sector? On a different tangent, what are your views on how we should strengthen councils’ enforcement powers to crack down on criminal landlords?

Dr Rugg: On the issue of supply and section 21, counterfactually, a lot of landlords let because of section 21; they do not evict people because of section 21. Section 21 gives them the confidence that, if they run into severe difficulties, they will not have to go through a protracted court process in order to end a tenancy. This is particularly pressing for smaller landlords, who might find themselves paying two or three mortgages at the same time, with tenants that are problematic. You can understand the reasons why risk is hugely important to landlords a lot of the time. Antisocial behaviour is really problematic. If there is a tenant causing lots of problems in the neighbourhood, the landlord wants to get that situation to a close as fast as possible.

Abolishing section 21 would increase landlords’ perception that there is risk in the market. An area that will be problematic is that landlords who come to the sector with property—perhaps they have inherited it or they have started a partnership and there is a spare property—will think very hard about whether to bring that property to the market. I think that is one of the consequences we will see. The market does not look like a very friendly place to landlords at the moment, and that is the big issue we have around supply.

How we help local authorities deal with criminal landlordism is something that I am particularly concerned about at the moment, because it is part of a big project I am working on. Local authorities have very different approaches to dealing with enforcement action in their area. One of the issues is that there is an awful lot of variation in political—i.e. councillor—attachment to the notion that this is something they should be dealing with, so councils invest at different levels in their enforcement activity. That is a democratic issue, and that is something we cannot do anything about, but I agree with the notion that Dr Dawson introduced that we really need some baseline standards that everybody can expect to adhere to.

One thing we have not really mentioned is the use of letting agents. They cover an awful lot of property in the market, but we do not expect them to show responsibility for the quality of the property they are letting. In a sense, I think that is soft policing, if we think that letting agents should have greater responsibility for ensuring that the properties they have responsibility for meet the standards that we set for the sector. In some ways, that would relieve local authorities of some of the burden of inspecting all properties. At the moment, local authorities are obliged to inspect only a certain proportion of properties that sit under licensing regimes. An awful lot of the sector sits outside that and is covered by letting agents. I think we are missing an opportunity to think about how we skill up different parts of the market to improve property quality.

Professor Gibb: I think one of the reasons I am here is that yesterday my colleagues and I published an evidence review for the Department for Levelling Up on the question, “Is there evidence that increasing non-price regulation has led to disinvestment in the private rented sector?” That is clearly a very important question for the kinds of policies being proposed here. In producing the review—it is an international evidence review over the last 20-odd years—we found that it is very hard to answer that question, because there is very little research that directly speaks to it, but you can infer from some of the peer-reviewed literature, and there is actually very little evidence that that is the case.

In other words, we believe that there is probably a constellation of factors that drive disinvestment in the sector, and it is very hard to identify whether increasing regulation, per se, is behind that. The fact of the matter is that in England, there was increasing regulation in the last 20 years, while the sector was growing. There is also evidence internationally that where regulation has increased in the short-term lets market, there might have been a short period of disinvestment, but there has not been disinvestment in the longer term. In the longer term, investment tends to have stabilised and continued to grow.

So we have been quite struck that there is very little evidence to that effect. That is not to say that there is not disinvestment going on, but it is a much more complicated thing. Another problem is that often we have several regulations being introduced at the same time, and it is quite hard to unpick the causal forces of individual things. The bottom line is that we found it quite hard to identify that increased regulation was causing disinvestment or was correlated with it.

--- Later in debate ---

[Matthew Pennycook]

Q Thank you both for coming to give evidence. As you know, the Government have now explicitly tied the enactment of chapter 1 of part 1 of this Bill to the court reforms, and the concern is that the nature of those reforms is unspecified. To what extent do you think the court system, as it applies to matters in this Bill, needs improving? I ask that because the county court system is working relatively well vis-à-vis other parts of the criminal justice system; the guidelines are being met and the then Minister extolled the significant improvements that have been made in recent years.

To the extent that the system still needs to be improved, what is your understanding of what the metrics are? My reading of the Government’s response to the Select Committee, what is in the White Paper and what was in the King’s Speech briefing notes is that there is a whole set of different metrics—end-to-end digitalisation, new digital processes, bailiffs and so on. How are we to know, because the concern is obviously that the abolition of section 21 could be years away, if we have court improvements that are undefined or are large in scope?

Fiona Rutherford: That is one of the concerns that we have. Looking at the history of the reform project, while there have clearly been some successes, there have also been quite a few delays. And we are also concerned given the implications for the tenants in particular in relation to section 21, and given that a proper argument has not been made as to why that dependency between the two exists.

I am just thinking of the court performance, which you have just raised. Civil court performance, even during the pandemic, was better than that of most of the other jurisdictions and even now section 21 is taking roughly 28 weeks from notice to point of repossession, versus the estimation that the Government have made that section 8—the new approach in the new Bill—would take possibly the same time, maybe even a week less.

We would say, first, that a proper rationale has not been put forward as to why that dependency exists and why section 21 cannot proceed. Secondly, the implications for the tenants themselves are so considerable that it is not at all clear to us why that cannot proceed as fast as possible.

Professor Hodges: I tend to look at things in terms of quite long stages of evolution. Going back a hundred years, we had courts that administered law. One realises, and I speak as a professor of law, that law is not the answer to everything; in fact, in some situations it is not the answer to very much. A lot of colleagues would shoot me for saying that, but I profoundly believe it.

What we have discovered is that human behaviour, and therefore psychology and other forms of dispute resolution and supporting people to work together and restore relationships, is important. The answer to that is usually not law and the process is usually not an adversarial process involving courts or judges, however sympathetic they are.

We then started talking about a technique of mediation and that went into an institution of alternative dispute resolutions, or ADR, and the courts are sort of playing with trying to put these things together at the moment. Actually, that has been leapfrogged by things like ombudsmen, in the private sector as opposed to the public sector—parliamentary or local government ombudsmen. In the private sector, virtually every regulated sector now has an ombudsman—financial services, energy, communications, motor vehicles, lawyers, blah blah blah. It is quite a long list.

There are various reasons why that is true. The first is that the ombudsmen usually deal with codes—codes of behaviour—and not just legal rights. They can and do decide legal issues, but it is usually codes. They are looking at the underlying behaviour of the bank or the rail company or whatever it is, and therefore you need a different process as well. So it is not adversarial and it is usually free to the consumer, because the business is made to pay or pays for the infrastructure of the ombudsman.

However, there is a very considerable advantage of an ombudsman over a redress scheme, and many of the redress schemes are still somewhat old-fashioned because they are basically arbitration and basically adversarial, and therefore the larger party will bowl up with a whole load of expensive lawyers and you just maintain cost—an adversarialism of not bringing people together. And there is an imbalance of power in that situation.

That does not happen with an ombudsman, because it is a question of “Let’s talk to each other.” The mediation technique is automatically in the process—you encourage communication. If it is not going to work, the ombudsman makes a decision.

Another big function of why the ombudsman is really useful is that they collect data. In all the sectors I can think of, and critically in financial services, energy and so on, ombudsmen are the data controller for the sector because they can tell the banks or the regulator what is going on and what consumers are worried about. That is a feedback system within which people can see in real time exactly what is going on and can therefore respond to it. You sometimes then need responses. On the legal side, the responses may be enforcement of law by a court, or by a regulator if you have one—we do not have one in private rented yet, but we are, perhaps, close—and on the other side, you can have decisions by an ombudsman that are then put in place.

It was very interesting listening to Dr Rugg, who knows much more about the sector than I do. She spoke about support for landlords. Every regulatory system I know needs support for all the actors—tenants, landlords, agents, whatever. Ombudsmen can help with that, but I think there is a gap in local boots-on-the-ground support. Enforcers, like local authorities, or a national regulator if there is one, are sometimes able to support and help, but we have a missing piece.

Summing up, therefore, my view is that this Bill is a very important step forward in modernising towards a useful, effective future system. It is taking an ombudsman as being a central institution, as well as the portal where you get data—admittedly, it is a regulatory portal, rather than a disputes portal, but we may evolve; it is fairly easy to evolve once you have it. These are absolutely critical elements of what a really good future system would be.

I would go further, with just a couple of sentences. One point is that one needs to think about boots on the ground, with people supporting people. An ombudsman is national, so one has to fill that gap. Actually, I think tribunal judges, ombudsmen, local authorities and maybe others—I have had discussions with people about this—could fill that gap. It is critical for everyone. The other part is that one should ensure that everyone knows where to go—“Where do I go to get support? Have we got too many people?” On the dispute resolution side, do you go to court, a tribunal or an ADR scheme? How many ombudsmen are there? We already have three in the property and housing sector. Proliferation is never a good idea, and there are other sectors that show that. The objective is to pull things together. The inevitable logic of this means that you squeeze together the courts, the tribunal and the ombudsmen.

At their request, I chair an ad hoc committee involving the president of the tribunal, the various ombudsmen and the property redress scheme, who, in the past year, have worked on working together on service charges. It has been very effective. I am not sure it has actually been announced yet, as such, but it is not secret. They are working on how to work together. From the point of view of the tenant, certainly, but also the landlord, you want a simple pathway: where do you go? The data reason for that is that if you have a pathway where you have one database, you are going to maximise it; the data is all over the place at the moment, and we do not collect it.

I see this as a direction of travel. The answer to your question on when we will be ready to institute it is: do it now. I would be bold and move the county courts into the tribunal. We already know that the tribunal and the ombudsman can work together. You just squeeze people together one way or another. Then, you will have a fantastically good system, which is the basis of a very self-regulating regulatory space.

[Jacob Young]

Q Thank you, Professor Hodges, for your in-depth explanation of the benefits of the ombudsman. I wonder, Fiona, whether you have reflections on the ombudsman, particularly on some of the things that Christopher has just mentioned about how we get people to engage in the process and to engage in mediation and settling early, rather than getting lost in the court system.

Fiona Rutherford: Thank you for the question. I think I am going to quote Dr Rugg again—I am afraid I only joined recently—but I thought the point on supporting the tenancy was really good: it is about neither the landlord nor the tenant, but the relationship. That is key to ensuring that, whatever solutions are put in place, you are looking at that as being your key outcome, as opposed to trying to take sides, as we have seen all too often.

The other thing that we have seen—Professor Hodges has strongly alluded to it—is the disaggregation of the amount of services that exist. To some extent that is great, because it means that there are potentially lots of places to go. However, the reality is that most landlords and tenants do not know that those services exist or how to access them. Whether or not that is through another ombudsman—I have some concerns about creating more and more ombudsman, and whether there is a way to streamline the available services—I think the most important thing is that those services are signposted to individuals, which means landlords and tenants, and also that the services are provided.

JUSTICE alluded to that in the report we published in 2020, where we talk about our long-term vision of adopting a multidisciplinary approach to avoid escalation and address the common underlying features behind tenants going into arrears, such as debt, family issues or employment issues. If there is a way to keep the longer term in mind, while not delaying on things like section 21, but also thinking carefully about addressing the disaggregation of services and including signposting and information, then ultimately, as far as I am concerned, all those things will be ingredients to success.

Professor Hodges: I have a quick comment. Your question was, “How do we get people to engage in mediation?” It is automatic in the pathway. It is not in courts; it is in ombudsman, and to some extent it is now in tribunals. The Ministry of Justice has just introduced a mediation stage for low-value cases, but it is not necessarily automatically in the pathway.

All the consumer ombudsmen have been using this for up to 20 years, automatically. You put in your complaint and the ombudsman then says, “Okay.” It is investigative and collaborative, rather than adversarial. You do not need lawyers; they do not do anything. You just say, “Tell me about it,” because you have a central expert. It is not that you have two lawyers and a judge—who are not there. Rather, you have one ombudsman in the middle, so it is efficient and quick, and they are saying, “Tell me about it.” So you pull all the evidence in, and then you say, “Okay, what do you say? And you?”

That is automatically mediation, and most cases settle at that stage, because they talk to each other. If it is not going to work, you know fairly quickly, in which case you just get more evidence and then make a decision, unless they agree. So it is in the process. The courts are moving toward that but, because of the cost of public provision, they cannot do it as well as the ombudsmen.

[Matthew Pennycook]

Q Your comments there just provoked a thought. It might be too early to tell, but are there any lessons about signposting from the Social Housing (Regulation) Act 2023? We had the issue with that legislation, which we touched on earlier with Richard Blakeway, the ombudsman, about what the regulator can now do, which is to look at systemic things but also dip into cases. You have the ombudsman taking cases but has a view on the systemic side, so there is a potential conflict of interest. I think the Government are trying to get around that by saying to tenants, “Here’s where you go for each particular type of problem,” or “This is when you might go to the courts.” Are there any lessons from that, or anywhere else, where signposting has worked well, so that we can try, on the basis of this Bill, to send tenants to the right place in the first instance?

Professor Hodges: The signposting is to have a single ombudsman.

[Matthew Pennycook]

Q Just the one route?

Professor Hodges: I would have one for the entire property and housing sector, and this is not the first time that I have said that. My ombudsman and judge colleagues know that, and quite a lot of them would not disagree. Fiona mentioned that we have a number at the moment. It must not proliferate. I am fairly confident that, if the Government just send the right signals, they might not have to legislate and that we can get adhesion on the ADR and the ombudsman side—people joining up spontaneously, if they are encouraged and pushed—so that you actually get there.

What we are doing here is filling a gap in private rented. We have already got the property ombudsman, which largely cover agents, and the private rented redress scheme. Then you have got have got social housing—let us converge. If you converge courts and tribunals as well, that is a major step forward for all the players, and certainly tenants and landlords. You will deliver things more quickly, basically, and everyone will know where to go.

As I said, look at every other sector. In financial services, you have the Financial Conduct Authority and the Financial Ombudsman Service; in energy, you have Ofgem and the energy ombudsman; and so on. It is not 100%, but it is well over 95%. In social housing, you have got a regulator. We have not got one in private property. We could have one, which would be a regulatory space involving these elements in a new and very effective way, within which you would not have, if you like, an old-fashioned regulator. Rather, you would have a system regulator, but all the people would work together in the system on supporting good practice, because codes already exist for that. The decent homes standards is just a code. It should apply, obviously, and then everyone would work towards that, whether it is local authorities, or the system regulator, the various ombudsmen, or the various self-regulatory bodies that exist—everyone knows where they are.

I am involved in several discussions like this, in totally different regulated sectors. If you say to people in your sector, “We’re all going to work together, and this is how we’re going to do it,” and if you have responsibilities to everyone—if you are no longer just a self-regulatory body on your own, but you are an ecosystem, and it has to work—then that works incredibly well, if everyone realises that is the game that has to be played.

Fiona Rutherford: I agree with a lot of what Professor Hodges said, but I am not sure that everybody does know where to go.

Professor Hodges: No, they don’t.

Fiona Rutherford: To answer your question about where there may be good examples, the health justice partnerships, which we have seen work together, are good examples to look at. They do not rely on a tenant or a landlord to know what they cannot know or do not know, and that is what is missing. The health justice partnerships are where we have seen lawyers, or support workers or sometimes NGOs, sit in doctors’ surgeries, so that when a GP sees a patient who is suffering from mental health issues, or various other physical illnesses, and they have it diagnosed that it is probably related to something outside of a medical solution, then there is somebody in the building who that person can go to—if not immediately, then an appointment can be booked. That stops us relying on what are sometimes very vulnerable people, or people who are at vulnerable points in their lives, to seek out support services and help themselves.

Professor Hodges: Just to add one sentence, which was implicit in what I said at the start: in the regulated sectors where you have an ombudsman, such as financial services or energy, no one goes to lawyers or courts—they disappear. People have voted with their feet, because the procedure is faster and more user-friendly, it is free, and it delivers a broader range of behavioural outcomes on the part of the energy companies, or whoever it is, and does not just ask, “Are they breaking the law?” If you feed that in to the ombudsman, you might get a decision, but you will also get the point referred up to Ofgem, or whichever regulator it is, so that it can do something systemically about it, if necessary. It is an ecosystem, but everyone knows where to go. I am afraid that lawyers and courts are toast.

[Lloyd Russell-Moyle]

Q The amount that the ombudsperson can award is currently capped. Should the cap should exist, and if so, should it be fixed at £25,000, or should it be linked to another, more sensible amount, bearing in mind that that is a year’s rent on some properties?

Fiona Rutherford: I would like to make a separate comment about the fine in the enforcement process within the Bill, but that is not your question, so perhaps Professor Hodges might start.

Professor Hodges: The amount of money that either a judge or an ombudsman should award must be relevant to the dispute, because you cannot have people not being compensated. Therefore, there should be a mechanism for the amount to be amendable over time. Personally, I would not waste your time with that—coming back again and again to put it up. I would put a mechanism in the Bill, so that someone can set it, whether that is a Minister or whoever. You cannot have people not bringing forward claims because they will not get fully compensated, or bringing forward claims that are not fully compensated when they should be.

That takes you over, however, into penalties or sanctions for behaviour. That is a complicated issue, but the point is that usually we have a national regulator, and here we have a lot of local authorities, and they need the right powers as well, but quite often the right powers are not fines. I am afraid that there is rather a lot of psychological and other evidence that deterrence does not work—which is a shock, the first time that you hear it. Therefore, other, quite significant penalties—such as talking to people, explaining, informing and giving supporting about how things ought to be different, or, in the extreme, removing the licence to operate and saying, “You cannot let this property”—are the ones that work. A broader toolbox of responses and interventions—I am not using the word “enforcement” here—is what actually delivers good outcomes.

--- Later in debate ---

[Dr Spencer]

Q Then you would need a separate database of people who are registered landlords.

Professor Hodges: Not necessarily. I think one database is enough, frankly. You should be able to capture all the data about, “Who owns this?” We have been talking about foreign-owned companies and things in other contexts, and there are techniques for identifying them.

Fiona Rutherford: I am going to make a point in relation to enforcement that I referenced earlier. Local authorities have been brought into this as we are talking about the widest panoply of options that might be available. I am going back to the penalties that I referenced earlier, so forgive me—I am moving out of the ombudsman perspective and the regulatory questions—but this is possibly related to enforcement. While there is a plan with the penalties as and when section 21 can be moved forward, and while the local authorities get a benefit from those penalties, a rate of £5,000 probably does not go far enough to act as any kind of incentive, in so far as you want enforcement to work in that way. Of course, there are other examples: £30,000 is the maximum financial penalty for a breach of the Leasehold Reform (Ground Rent) Act 2022.

The other thing to say about local authorities is that while they benefit from the financial gain of any fixed penalties as a result of section 21 breaches, there is a real problem with local authorities’ resourcing. I am probably not saying anything that is particularly new to the Committee, but we are asking local authorities to do something more: it is not only enforcing section 21, but the other obligations to investigate antisocial behaviour appropriately. I again reference a report on behavioural control orders that we have looked into and the poor quality of data and understanding around antisocial behaviour. This means that the resources required are quite simply not going to be delivered through the proposed fixed penalties. We very much urge serious consideration around proper resourcing in a wider sense, but specifically in relation to antisocial behaviour and the section 21 enforcement regime.

[Matthew Pennycook]

Q Briefly on the breaches and penalties, how extensively do you think rent repayment orders should run through the Bill as a back-up? I am talking about the clause 9 and 10 breaches and the ombudsman portal registration breaches. Do you think we should have a much wider inclusion of rent repayment orders—probably as a final resort; we do not want to throw all the onus on tenants—as another deterrent?

Professor Hodges: Following the principle that the pathway and the process should be as simple as possible, we should not have a system in which people have to go to different institutions—a judge, an ombudsman, a regulator or a local authority—to get everything fixed if that can be done in one place at one time. The logic of that takes you towards giving power to the ombudsman, the judge and the regulator to issue rent orders at the end of a case. Why should anyone have to start again and go somewhere else to get that result? They should say, “Okay, on the proposition, the landlord was wrong—badly wrong, probably—in this particular circumstance. Fix it and we will come and make sure you’ve done all this stuff. The right result is to repay the rent.” Give them the power to do that and to be holistic.

[The Chair]

If there are no further questions, I thank both witnesses for their evidence.

Examination of Witness

James Prestwich gave evidence.

[The Chair]

We will now hear oral evidence from James Prestwich, the director of policy and external affairs at the Chartered Institute of Housing. We have until 4.45 pm for this panel. Welcome, James. Could you please introduce yourself?

James Prestwich: I am James Prestwich, director of policy and external affairs at the Chartered Institute of Housing. We are the professional body for the housing sector. Our members are individuals rather than organisations. We are cross-tenure and cross-UK in our remit.

[Matthew Pennycook]

Q James, I will ask you this because I have seen you sitting at the back listening to all the other evidence, and you may well have seen what we did this morning. This is a very open question: after all that you have heard today, is there anything you want to highlight that we have not covered? Do you want to generally give us your views on what is good in the Bill, or what its defects and deficiencies are? I might come back with a further question about that.

James Prestwich: I am very conscious that you have heard from any number of really esteemed experts on all manner of aspects of the Bill in today’s sessions, and there was an awful lot to agree with. A question has continued to be posed about striking the balance, and I suppose the position of the CIH is that if we accept that the private rented sector has an important role to play in meeting housing need—I think we all probably do—it is hard to look at what we have at the moment and think that the balance is right. It is tipped much too far in favour of the landlord rather than the tenants. A lot in the Bill is positive in looking to provide a better deal, but there are still some gaps and areas where it would be good to go further. A lot has been said about what was in the White Paper. We need action and to follow through on that now, particularly on the decent homes standard and an assurance on a timetable for its introduction.

We have seen over the past year to 18 months the impact on people of the cost of living challenges, particularly around energy efficiency. Experts have spoken about the importance of ensuring that families and people in receipt of welfare benefits are not discriminated against by landlords, so it is important that we see really firm action on that. We have talked a lot about section 21 and no-fault evictions, and it is worth saying that it is really good to see what is in the Bill as far as section 21 is concerned.

As for those landlord grounds of concern, though, the two-month notice period is a little on the short side. We know—witnesses have stressed this point—that one of the biggest causes of homelessness is the ending of a tenancy via section 21. It takes time for people to find another property, particularly in hot rental markets, and I think it would be reasonable to expect a longer period to allow people to try to find alternative accommodation.

[Matthew Pennycook]

Q Very quickly, specifically on ground 8A, which we discussed this morning, what is the view of the CIH on whether it should be removed from or remain in the Bill? If it should remain in the Bill, should it be made discretionary? Should it be tightened? What is your view on that new ground for possession?

James Prestwich: We have heard really well-reasoned, well-argued points today about the importance of making that a discretionary ground. We know the challenges that people face when paying rent, particularly when we think about interaction with the local housing allowance, which witnesses have talked about. It is important that we are able to trust judges to make informed decisions based on the evidence of the case—the evidence presented before them.

Renters (Reform) Bill (First sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[The Chair]

There being no further interests to declare, we will crack on with the evidence. I call the shadow Minister.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Q It is a pleasure to see you in the Chair, Mr Gray.

I will start with section 21. This was the Government’s manifesto commitment and is in many ways the centrepiece of the legislation, but clause 67 of the Bill has always given Ministers discretion as to when the system is introduced. A two-stage transition has been advertised, but the Government have recently made it clear that they will not abolish section 21 until unspecified court reforms are in place. Could you give us your views on those? Specifically, have the Government been clear enough about what they mean by court reforms? What are the criteria by which improvements will be judged?

[The Chair]

I should say at this stage that it is not necessary for all witnesses to answer all questions. Just answer those questions that you feel particularly interested in.

Dame Clare Moriarty: The thing we really want to underline is the urgency of passing this Bill, introducing it and allowing tenants to benefit from its provisions. We are currently helping nearly 100 people a day with section 21 evictions. The longer the current situation continues, the more problematic it will be. We are seeing a very consistent rise in the number of people coming to us with homelessness issues.

Anything that looks at what needs to be put in place before the provisions can be brought into force, assuming they are enacted, needs to be looked at against that background. There may well be issues with the court system. It is worth remembering that only a minority of section 21 evictions actually go to court, because the majority of tenants leave at the point of getting a notice. It is an important symbolic issue, but it is not the biggest practical issue. Having looked at what is available and at what the Government say they plan to do on court reforms, I do not think it is very precise at this stage, but I am sure that work is going on in the background.

There is, in any case, an implementation timetable that will extend beyond Royal Assent. A reasonable thing to do would be to set that as the timetable for making court reforms, rather than making the provisions’ entry into force conditional on rather imprecise commitments about court reforms.

Polly Neate: This is a once-in-a-generation opportunity and has been years in the making. At Shelter, we support thousands of renters every year face to face and millions digitally. Without question, we are seeing increased homelessness as a result of section 21 evictions, so I really want to stress, first of all, the urgency of ending section 21 evictions—it is the most urgent thing in the Bill. A tenant is served with a no-fault eviction every three minutes. In our view, there really is no need to delay ending no-fault evictions because of the reform to the justice system. We agree that court proceedings could be made more accessible and more efficient, and that that could be beneficial to tenants, but we do not think that the vital reforms in the Bill should be held up.

In fact, we believe that a robust Bill would reduce the number of evictions by increasing security to renters, rather than causing a significant increase in the burden on the courts. It simply is not the case that all evictions that now occur under section 21 will in future be heard in the courts as section 8 evictions. Many tenants—probably most tenants—will continue to leave before the end of their notice period, and therefore before court proceedings. Also, many evictions that now occur under section 21 would not meet the threshold for eviction under the new eviction grounds.

The Government were always going to have to hold their nerve over this Bill. This is a brave and reforming piece of legislation, so there was always going to be lobbying for delays and for watering down. That was always going to be the case; I think the Government always knew that. We urge the Government to hold their nerve and not to hold up the vital provisions in this Bill, which will reduce homelessness, for the sake of much more minor reforms that are massively less urgent.

Darren Baxter: To build on what has been said, it is clear that this delay is unspecified. It is not clear at what point the Government would determine that sufficient reform had taken place in order to enact section 21: whether that is having put in place a process of digitalising the court system, or whether it is more of an “outcomes” measure with respect to caseload or waiting time being reduced. If this is the reason for delaying, there is an urgent need for clarity.

I absolutely back up what has been said so far: there is no need to delay this legislation. For landlords to go through the court process is fairly rare. Most tenants leave at the point at which they are sent a notice. In 2022, about 11,000 or 12,000 repossessions went through the court system in England and Wales. That is less than 1%: it is about 0.3% of all households who are renting privately in England and Wales. I understand why this is an anxiety for landlords, but we have to keep that anxiety proportionate to the great harms that an insecure private rented sector is doing. We have to move quickly to reform, particularly given that the consultation was in 2019. We have already been waiting a long time for reform to take place.

--- Later in debate ---

[Helen Morgan]

Q Building on the point about local authorities and their responsibilities to people who have been evicted, they are currently reporting intense pressure on their budgets because of the escalating number of people who have been evicted and made homeless. Could you build on what you would like to see in the Bill to protect those people? Do you think that ending no-fault evictions more rapidly would assist local authorities in managing the financial pressures of those homeless people?

Darren Baxter: We know from the data that local authorities capture why households come to them reporting homelessness, and why they then have a duty to house them, and section 21 no-fault evictions are a really significant part of that. Anything that reduces that flow will inevitably take some pressure off local authorities, so the more quickly you do this, the more quickly you stop one of the really significant drivers of homelessness.

Dame Clare Moriarty: We need to recognise that there is a whole range of problems with the housing market, including the extent to which rents are simply not affordable for many people. The local housing allowance is now seriously out of kilter with what people are paying for rent. That means that if you are on benefit in the private rented sector, a big chunk of your living costs go just on paying rent.

There are lots of broader questions playing into the pressures landing on local authorities. Having said that, section 21 evictions are definitely part of the problem, but they can be addressed, and the Government are committed to addressing them. As Darren was saying, this Bill has been a very long time in the making, and addressing the issue of insecurity for tenants, and the number of evictions that that is driving, has to be helpful. We should not kid ourselves that it solves the whole housing market problem, but it would make a real difference to people.

Polly Neate: I agree with all that. The Government have decided to remove the prevention duty and not replicate it for section 8 evictions, leaving it to the discretion of local authorities to decide when a duty is owed to tenants. Given the resource constraints and the issues in local authorities, there is a real risk that people just will not get the homelessness support that they need, so we urge that that be changed in the Bill.

It is absolutely right to say that no-fault evictions are not the only reason local authorities are overwhelmed by homelessness. The freezing of housing benefit and of local housing allowance is another major reason, and of course the really serious lack of social housing stock is at the root of this. This is not a magic bullet to resolve these issues, but the Government can remove a really significant factor contributing to the overwhelming pressure on local authorities.

[Matthew Pennycook]

Q Returning to possession grounds, concerns have been raised about new grounds 1, 1A and 6A and the changes to existing ground 14. I want to ask the witnesses a question about the new ground for possession 8A, which concerns repeated rent arrears. Do you think that that new ground is needed in any form, or should it be removed from the Bill? If it is to stay in the Bill, what changes might strengthen it to better protect tenants?

[The Chair]

We have two minutes left. Who can do this in two minutes? Polly.

Polly Neate: Answering as quickly as possible, we think it should be removed from the Bill.

--- Later in debate ---

[The Chair]

We have until precisely 10.55, at which stage we will call the session to order even if you are mid-sentence, so please be aware of the time.

[Matthew Pennycook]

Q We asked the previous three witnesses a variety of questions and touched on the issue of supply. I want to ask these witnesses about that. Mr Beadle, I was intrigued to read the transcript of an industry webinar earlier this year, in which you said:

“Actually the truth is that while some landlords are leaving the sector, this sector is actually still increasing. That’s not terribly helpful to our argument, to be honest with you. But in the context of cost of living and rising costs we have to tell that story and link the two.”

Is it not the case that all the evidence would suggest that the sector is relatively stable, at about 20% of households, over recent years, and that it may even have grown, and that there is no evidence to suggest that we will see, as some claim, an exodus of landlords from the sector?

Ben Beadle: I am not going to sit here and say that after looking at the Bill, everybody is going to sell up. We are not scaremongering here. We are saying that some nips and tucks are necessary to give responsible landlords the confidence to deal with the reforms. As far as the webinar is concerned, I have been very clear that the sector is growing, but the reality is that whether landlords are exiting or not—and I would point to the Bank of England, which says that they are, and is a pretty reliable source for the most part—our members tell us that they are reducing their supply, rather than investing.

The reality is that although the sector might have grown, we still have 25 people, on average, applying per property. We have a massive demand and supply imbalance. Is that a result of renters reform? No. Is it a result of a lot of factors, including renters reform? Yes. I can point you towards the uncertainty about energy changes; I know that that has been dealt with, but it might be only a year or so before that comes back. I can point to taxation changes that are punishing individuals and forcing them perhaps to sell, and putting them between a rock and a hard place for their tenants. I can point to mortgage costs, and I can point to the fact that, I am afraid, we are all getting a bit old, and some of my members are selling off their stock because it is time to do that. It is a mix of those things.

[Matthew Pennycook]

Q May I turn to court improvements? We have discussed how the abolition of section 21 is now linked to them. Non-accelerated possessions are not taking significantly longer than the relevant guidelines stipulate, and possession claims are, in relative terms, one of the faster and better administered parts of the criminal justice system. Is that not the case? While we want the courts system to improve, possession cases are not the worst example of the state that the courts system is in. What improvements are you pressing for and telling the Government are required before chapter 1 of part 1 is introduced?

Ben Beadle: We have been very clear on this. We have not sought to block, or say that section 21 abolition will destroy the market, but we have been very clear that responsible landlords need alternative grounds on which they can rely, and need confidence in the system that underpins them. I sit as a magistrate, and I would be loth to compare different areas of the justice industry, because it is such a low bar that I don’t think it is worth comparing.

We have very grave concerns about how things are recorded. Although you can point to some of the statistics, a lot will depend on how cases are logged and when they come in. I have been involved in a number of discussions with senior members of the judiciary who have exactly the same concerns. Something may have sat in a post tray for three months but get logged as having come in today, for example, and that impacts the overall timings. The overall timings are worsening. I believe that there is a quid pro quo to some of this stuff. I am as frustrated as you that court reform has not happened, because I am very clear: Government should get on with it. They need to deliver something that feels like renters reform. There are lots of issues in the sector. Broadly, there is stuff in this Bill that we can support, but I cannot support section 21 abolition when the courts service is in such a state.

[Matthew Pennycook]

Q Very specifically, you have had access to No. 10. What are the x, y and z that you are going in and saying need to be in place before chapter 1 of part 1 can be introduced? What are the specific metrics, if you like, of court improvement that you are pressing for?

Ben Beadle: I want timings to be much, much faster, and that needs to be supported by digitalisation. To deal with this, we need significant investment in the support team and additional judges. In London, we have seen evictions not take place because the right sort of stab-proof vests for bailiffs were not procured. That does not give me a great deal of confidence that Government is all over this like a rash, and we need to have confidence. Section 21 was brought in to give landlords the confidence to bring their properties to the market. The vast majority of our members can live without section 21 provided the alternative is fit for purpose, but until we see these things come to fruition, I do not think I can recommend that. That is not to say that section 21 should not be abolished. It is just that the alternative needs to work, because otherwise it will hurt the very people you want to protect: the renters.

Timothy Douglas: First, we have a demand crisis. If we are not looking at supply, we certainly have a demand crisis. Looking at our member data from August 2023, year on year demand is up 32%, based on tenants registering with properties. It is a demand crisis and a housing crisis. It has to be about the tax, social housing, people being able to buy homes and energy efficiency legislation. These are all part of a wider housing strategy. You cannot look at the private rented sector in isolation.

On the courts, bailiffs are an issue; certainly in London, there is an issue around not being able to get personal protection equipment, and that has spread to other parts of the country. It delays proceedings. Should we look at privatising that service—the county courts service—in order to almost remove that funding element from the Ministry of Justice and ensure that we have enough bailiffs? I think we need to provide landlords with an automatic right to a High Court enforcement officer. That is part of the process. Normally, if you cannot get the bailiff, they will have that. We have worked with officials on integrating mandatory notices for possession into the possession claim online. We have also looked at improving the Money Claim Online website and that process, which is important.

I have two final points. There are things in the Government’s antisocial behaviour action plan. The courts need to prioritise dealing with antisocial behaviour; that would help. If that were a directive from the UK Government, that would be helpful. We also need to define low-level antisocial behaviour in statutory guidance, or any guidance, so that courts can see that, deal with the behaviour and get evidence of it.

Theresa Wallace: I agree with a lot of what Timothy and Ben have said. They have covered a lot of the points that I would have made. There is no question but that we have a shortage of stock. We are experiencing that on a daily basis. More than a million tenants in the private rented sector who are in receipt of income support and benefits to pay their rent should be in social housing. We need to address that to solve the housing crisis.

We need to instil confidence in our landlords. It takes time for trends to feed through, but we are definitely seeing landlords leaving the market. We have a lot more at the moment sitting on the fence, waiting to see what this Bill brings in, before they make their decision. It is crucial that we keep those people in the market. Build to rent fills a gap, but we cannot build in the places where the demand is, because that does not work for the model. We still need the private landlord to provide properties.

There are two recent surveys. A Royal Institution of Chartered Surveyors survey came out last week, which showed that overall there were 43% fewer homes available to tenants to rent in the first 10 months of this year. Research by Hamptons came out yesterday and also showed the 43% reduction. RICS says it is definitely seeing a fall in instructions of minus 18%. We want to find a balance. We want to find more security for tenants; I do not think abolishing section 21 will do that, if I am honest. We still need some fixed-term tenancies for those tenants who really want to stay in a property for three or four years because their children are in school, and where the landlord is happy to grant a tenancy for that length of term.

We could even include a break clause for the tenant, whereby for a month, or throughout the whole time, they could terminate, if their circumstances changed. If the property is not fit for purpose, the local authority should be able to visit quickly and make a decision, and the tenant should be able to get out. That way, we are giving the tenant much more flexibility and security. We still need to let landlords know that they can get their property back if they need it, but many are very happy to commit to a longer term, and I think they should be allowed to.

Timothy Douglas: I think clause 1 should include the option of fixed-term tenancies. We are not saying that it should be one or the other; I totally agree with Theresa on the option of the fixed term. The previous panel talked about the insecurity of tenants who can be evicted after six months. If a tenant has a 12-month fixed-term tenancy, they have that guarantee at the start of the tenancy that they will be in place for 12 months before a decision can be made on eviction from that property. That is vital for guarantors. If you are going to be a guarantor for a rolling periodic tenancy, you are not sure how long you will be a guarantor. How can you have rent in advance if the tenancy is not for a set period?

The fixed term is a vital point, and we need to bring that in as an option. It should not have to be one or the other. There could be the option of a periodic tenancy or a fixed-term tenancy. That will be vitally powerful in the student market as well, for any household with a student—and for non-students. Even if the student leaves after 10 months, the tenancy could stay as a fixed-term tenancy until month 12. It could either be renewed for another 12 months, or roll on to the new periodic. We need that flexibility in the system.

[Jacob Young]

Q Thank you to members of the panel. You heard comments from the previous panel on antisocial behaviour. What do you think of the changes that the Government are introducing to the antisocial behaviour grounds? Do they strike the right balance, and ensure that landlords can evict tenants that cause significant disruption? Timothy, you mentioned students. Do you agree that the new possession ground for student landlords will be effective in supporting the operation of the student market?

Timothy Douglas: I think we need more detail on that ground. I have not seen it, I do not know what it looks like and I do not know how it will work in reality around when it is served at the time of the year. There are myriad student semesters, term times, different types of students and mixed properties. Defining a student let is really difficult. You can do it under an HMO because the licence conditions will be in place, but a lot of students these days rent in a high-rise modern flat. How do we define them as students?

From the point of view of our members, if we retain that fixed term, you have the clarity. A UK student—this is important as well for rent in advance for UK students—can have a letter from the uni. For overseas students, it is the right-to-rent check, the visa and the share code. On the students, we remain sceptical about how that ground works. The simplest and easiest way would be to retain fixed-term tenancies as an option for any household that is either a student or mixed student household, to give that flexibility as a fixed term for 12 months as an option.

On the antisocial behaviour ground 14, I am not sure what the difference between “capable” and “likely” is. That is why I reiterate the point that local partnerships between police and councils will be really important. The guidance, defining antisocial behaviour and prioritising it in the courts will be important for that ground to work.

Ben Beadle: We like the suggestion around antisocial behaviour. The Secretary of State has been very clear that managing antisocial behaviour is important. This is one of the challenges in section 21 being abolished. Like it or loathe it, section 21 allows landlords to deal with antisocial behaviour effectively. What we are trying to do is to not end up with just the perpetrator of antisocial behaviour in the property.

I would take issue with the comments that were made in the previous session. This will be tested by a judge. It is a discretionary ground. Although the wording is wider, I think that is absolutely right. It goes before a judge to assess the merits of it, and it succeeds or fails based on judicial discretion. That sounds like something that we can all support, because it means that antisocial behaviour can be dealt with. No politician wants to write back to constituents in their area to say, “That noise that is waking your kids at night cannot be dealt with because of this, that or the other.” This strikes a balance, to coin a phrase, between protecting those who are at the hands of antisocial behaviour and not making it too easy so that it is a back door to section 21, which I absolutely get.

The second thing came up around domestic violence in the previous session. I see this as quite different. We have ground 14A, which allows social landlords to evict the perpetrators of domestic violence. I suggest that something like that is more clearly made available to the private rented sector. What happens in practice is that the landlord is working closely with the victim and wants to keep—I would say “her”, but it does not have to be—the victim in the home and to deal with the perpetrator. Anything the Government can do to make that clearer would be very helpful.

The third point is on the student market, which is an area we have been campaigning on vigorously. We support the ground, obviously, and think that it can work, but a lot of good things come as a pair—Ant and Dec, strawberries and cream—and what is missing from the ground is that it does not fully protect against the cyclical nature of the market, which Tim spoke about.

We propose an amendment that would deal with a whole range of matters. In the first six months, landlords cannot give a no-fault reason for repossession; we propose that that moratorium be extended across the sector, to deal with issues in three or four areas. First, it would provide for a fixed period, and that would deal adequately —but not fully, granted—with the need to keep the cyclical nature of the student market, because it is not broken, and we want to protect it, in the interests of both renters and landlords.

Secondly, more widely, outside the student sector, it is a possibility that a tenant will give two months’ notice on day one, and set-up costs hurt landlords. In my briefing, which I sent round to you, I gave an example of that.

Thirdly, the amendment protects against the creation of an “Airbnb lite” in the sector. We do not want the private rented sector to become Airbnb by the back door, and there is a real risk of these periodic tenancies creating that.

Fourthly, the Bill is about fairness, and striking the balance between protecting tenants from bad landlords, and landlords from bad tenants, so there is no justification for us not being treated in the same way, through that moratorium.

There is a fifth thing: this is quite easy to do through an amendment. For those five reasons, I think that we can make this work.

--- Later in debate ---

[The Chair]

I am delighted to welcome our next panel to give evidence to us on this important Bill. Perhaps I could ask you both to introduce yourselves.

Richard Blakeway: I am Richard Blakeway. I am the housing ombudsman for England.

Paul Dennett: Hello. My name is Mayor Paul Dennett. I am the Mayor of the city of Salford, the deputy Mayor for the combined authority in Greater Manchester, and a member of the Local Government Association’s local infrastructure and net zero carbon board.

[Matthew Pennycook]

Q With your leave, Mr Gray, I would like to ask each of the witnesses a separate question, if possible. First, to Paul on local authority capacity, the White Paper committed the Government to conducting a new burdens assessment into the reform proposals, assessing their impact on local government specifically and, where necessary, fully funding the additional cost of the new burdens placed on local councils. There is nothing on the face of the Bill or in the explanatory notes to that end. Could you set out your concerns about what the Bill does in terms of the new duties and new requirements placed on local authorities? Do they presently have the capacity for that? If not, what assurances do you need to seek from the Government?

Paul Dennett: In terms of local authority capacity, I think it is well known that 13 years of austerity have had a profound impact on local government. In the case of my local authority, we have seen a reduction of £240 million as a cut to the revenue support grant and also unfunded budget pressures. An example of that would be—

[The Chair]

We need to remain within the terms of the Bill.

Paul Dennett: Absolutely. From a capacity point of view, we do not have capacity and that has impacted regulatory services. That is relevant to the Bill. You will be aware that we are asking for a whole range of things—the establishment of a portal and the enforcement powers for local authorities to uphold this legislation, when it is brought forward, and that will require significant investment in workforce. I say that because we have lost a lot of people who work within housing enforcement, over many years. Such things as Grenfell and what has happened in terms of housing standards has brought all that to the fore more recently. So to be able to enact some of the duties in here will inevitably take time, because we will need to develop the workforce of the future to support tenants and, ultimately, landlords in enacting the legislation as it stands today.

For me, though, there are a lot of requirements here for local government. At the moment, the legislation does not adequately respond to how local authorities will be resourced to meet some of those requirements.

[Matthew Pennycook]

Q Richard, on the landlord redress scheme, we have just had a discussion about whether the Bill is prescriptive enough on how the ombudsman would operate. I am taking it as a given that there will be one ombudsman, of whatever form—I know you have views on that. The Bill gives the Secretary of State the power to create an ombudsman, but it does not commit them to—it is a “may”, not a “must” power. If the ombudsman is set up, do you think the Bill needs to be more prescriptive about what the Government believe that ombudsman should do?

Specifically, in clause 29, there is a requirement to set out guidance on how the ombudsman redress scheme would work alongside local authorities, so that they have complementary but separate roles. What do you think that memorandum of understanding, as I suspect it will be, needs to look like? How do those roles not overlap in a way that duplicates duties?

Richard Blakeway: I think that is a very important question. This is a thoughtful Bill, but to fulfil the ambitions set out in the Bill means real operational challenges. The first challenge speaks to the first part of your question about how you design a system where the ombudsman has sufficient teeth to be effective. That is one of the reasons why we have said that creating, or enabling, an ombudsman through the Bill does not necessarily mean that people will access redress. That in itself can be a real barrier for people when navigating a system where they may be passed from pillar to post. That is exactly the reason why the Cabinet Office guidance on the creation of ombudsman redress is explicit that you should build on existing schemes.

At the moment, we are the only approved scheme that does landlord and tenant dispute resolution. I heard some of the evidence in the previous session and think we need to really distinguish between agent and landlord redress, where the responsibilities of agents are very different from the landlord’s. The Landlord and Tenant Act sets out clear obligations that rest with the landlord and cannot be delegated to the agent.

What we are seeing is a convergence in policy, which I think is welcome. You already have some of those building blocks in place. The Landlord and Tenant Act is universal; it does not distinguish between social and private. The decent homes standard potentially extends that. The health and safety rating system is, again, universal. What we need is to bring that together into a single scheme. Otherwise, regardless of the powers of the ombudsman, people are going to struggle to access the system.

In so far as the powers of the ombudsman are concerned, overall, the Bill is quite effective at setting out role of an ombudsman without being overly prescriptive. You have to avoid compromising the independence of the ombudsman to make independent decisions and to have integrity, and also agility, by being independent. The Bill is responding to a private rented market which was not envisaged 30 years ago, so you need to enable the ombudsman to be able to produce guidance and codes of practice that can respond to a changing market and changing circumstances, without being overly prescriptive in the legislation.

On clause 29, that is a really important point, because there is a risk of duplication between the role of a council and the role of an ombudsman. Again, there is a lack of clarity for residents—tenants—about which route to take. An ombudsman does not operate in isolation—it will not operate in a bubble—so the relationship between the ombudsman and the courts will be critical, as well as the ombudsman discharging its own functions.

We currently see cases in which someone has gone through environmental health, and a local authority might even issue an improvement notice, and then someone is coming to us for redress—those are two distinct roles. Any information-sharing agreement needs to be really clear that when an ombudsman sees concerns that may indicate there is a category 1 hazard, for example, that information is provided appropriately to a local authority for potential enforcement. Also, the local authority needs to be able to signpost very early to a resident who has approached it through environmental health that they may have a right to redress.

The crux of this, alongside the memorandum of understanding, is the portal or database. Part of the problem is that there are a large number of landlords and there might not be clarity about which parties are subject to the Bill—subject to enforcement and redress—and then it is about being able to access that information easily so that compliance can be met. I agree with your point: there has to be a framework for operation and a clarity about roles, but both local authorities and the ombudsman will want access to the database so that they can be effective.

[Jacob Young]

Q Thank you to the panellists. Richard, what do you feel is currently working well in social housing redress that we need to ensure we bring over to the PRS?

Richard Blakeway: That is a really good question. An ombudsman is not a surrogate for an effective landlord-tenant relationship and effective dispute resolution at source, done locally by a landlord. One thing that we have sought to introduce through our work on social housing is our complaint handling code, which has set out how to create a positive complaint handling culture and resolve disputes as early as possible without having to escalate them to the ombudsman. We have done a significant amount of work with landlords to implement that code and to avoid a postcode lottery whereby, depending on your landlord, different approaches might be taken, and some of those approaches were not promoting natural justice at a local level.

For me, although an ombudsman might be conceived as the potential stick—there is an element of that, which is important—another part of an ombudsman’s role is to promote effective complaint handling locally and support landlords. There are a lot of landlords who want to get things right—they are not rogue landlords—but sometimes they may not be aware of all their responsibilities, or they may struggle to engage the resident effectively or to discharge their responsibilities. That role is important for the ombudsman. It is something we have done in social housing and, were we to be appointed as the ombudsman, it is something we would certainly seek to do with landlords in the private rented sector.

--- Later in debate ---

[Mike Amesbury]

Q The Select Committee advocated for specialist housing courts. What is your assessment of that? Would it help matters?

Richard Blakeway: The courts themselves, or some aspects of the courts, have talked about the simplification of the courts and the creation of a housing court. My assessment of that is that an ombudsman is an alternative to the courts. Therefore, you need to be clear about why you might use the redress route, depending on what outcome you are seeking, alongside the court route, and a simplification of the court route, potentially through the creation of a single housing court, for example. That would be really beneficial, by making clear people’s rights, so that they can consider, “Do I want to go through the courts process, because this is the outcome I am looking for? Or do I use the ombudsman process?”

One thing I would stress is that an ombudsman should not be perceived as dealing with leaky taps or broken windows. These are not low-level disputes; we deal with some complex disputes in our current casework, as Committee members will have seen through our decisions. That approach needs to be applied here. The more you can apply that approach, the greater confidence people will have in a free and impartial alternative to the courts, or a free alternative to the courts, rather than feeling that their only effective route to redress is the courts process, given all the pressures on it.

Paul Dennett: Just to respond to the point about a housing court, we have to be careful that it is not a distraction from getting on with legislation. First, we do not believe the court backlogs are severe enough to warrant a delay in making progress with this legislation. We are therefore calling on the Government to publish that evidence, based on the court backlogs, in order to inform how best we implement the abolition of section 21. If courts are found to be in sufficient need of improvement to delay the ban on section 21 evictions, we call on the Government to commit in law to delivering a strategy based on evidence to reduce the backlog, backed up by sufficient funding and a specified date. To go down the road of considering a housing court would delay all that, and would be of real concern to many people in the country.

[Matthew Pennycook]

Q I want to ask a niche question about local authority investigatory and enforcement powers; I hope I explain myself clearly enough for you to understand. There is the issue we have discussed about the new duties and responsibilities in the Bill, which, assuming they are sufficiently resourced and supported, should work well, and which we support.

The White Paper also committed the Government to exploring and bolstering local authority enforcement to tackle a wider range of standards breaches. That is not in the Bill. We have a commitment in the King’s Speech, as one of three areas for the Government to bring forward amendments to make it easier for councils to target enforcement action and arm them with further enforcement powers. Could you speculate on what we might expect the Government to bring forward in that area? What would you like to see? Should we seek to weave into the Bill the more expansive measures outlined in the White Paper?

Paul Dennett: The Bill deals with enforcement for local authorities quite adequately. It is about how we resource that and develop the workforce within local government, and how we ensure that this legislation is genuinely resourced and empowered to deliver on what we are setting out here. At the end of the day, any legislation and regulation is only as good as our ability to enact it.

To enact it requires a trained, skilled and developed workforce. I say that against our losing many people from regulatory services, certainly since 2010-11. It also requires the resources to employ people to do the work, gather the data and intelligence, prepare for court and, ultimately, work with landlords, ideally to resolve matters outside of the courts, if we can do that. That is the LGA’s position on all this.

We would like to be in a position of having a working relationship whereby we resolve matters outside of complaints systems, outside of courts, working through local authorities. Nevertheless, if that is required, it is important to have a skilled, resourced workforce. I stress the importance of resource, because local authorities spend an awful lot of money these days on children’s services and adult social care. Those are responsive budget lines that ultimately consume a lot of our budgets and that therefore diminish our ability to get on and do some of that regulatory activity in local government. The legislation is there for enforcement; we just need the resources to get on and do it, and we need the workforce strategy to train the people of the future to enact this and, ultimately, to prepare to support landlords and tenants in this space.

Richard Blakeway: That is a really interesting question, Matthew; I have a couple of thoughts in relation to it. It is perhaps worth testing—if, for example, the ombudsman is seeing repeated service failure in a particular area—what powers there might be to address those kinds of recurring systemic issues, and whose role and responsibility it should be. That goes to the heart of your question about clause 29 and the relationship between the various parties.

The second thing, which goes back slightly to your first question, is how redress is scoped in the Bill. The one area that I would highlight—I can understand why it has been introduced, but it might not stand the test of time—is the cap on the financial compensation that an ombudsman can award. At the moment, we do not have a cap. The Bill proposes a cap of £25,000. I can understand the motivation there and, as an ombudsman, we are always proportionate, transparent and clear about the framework in which we work when awarding compensation. None the less, in time to come, £25,000 might not seem an appropriate sum. It also slightly incentivises people to think of the courts, which do not have a cap, to solve their dispute, rather than using an ombudsman.

It is critical that the ombudsman has sufficient power to enforce its remedies, as well as the council being able to enforce its role and responsibilities, but the cap might be something to re-examine.

[Lloyd Russell-Moyle]

Q Does the ombudsperson have the right to initiate? You talked about seeing a pattern of behaviour, rather than waiting for the complaint to come to you. Do you have the right to initiate at the moment? I know that other ombudspeople do.

Richard Blakeway: There is a term that may be in the statute or scheme of an ombudsman called “own initiative”, which allows them to initiate an investigation without a complaint whenever they have a strong sense that there might be service failure. That is not currently explicitly in our scheme. However, three years ago, we had scheme amendments that allowed us to investigate beyond an individual member of our scheme, or beyond an individual complaint, if we had concern that there may be repeated systemic failure. That is something that is exercised.

Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023

Matthew Pennycook Excerpts

Wednesday 25th October 2023 General Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Robertson. I thank the Minister for that explanation of the instrument before us.

We welcome the regulations, which, as we heard, increase the fees payable for major and non-major planning applications for the first time since 2018, add an annual inflation indexation of those fees, and make changes to both fees payable for repeat applications and the planning guarantee period for non-major applications.

Local authorities play an instrumental role in efforts to meet housing need and demand, yet many are struggling to fulfil their responsibilities due to a lack of capacity, capability, skills and resourcing in their planning departments. As a report published last year by the House of Lords Built Environment Committee put it, we face an “evolving crisis”, with local planning authorities under-resourced and consequently unable to undertake a variety of skilled planning functions effectively. The resources dedicated to planning within local authorities, which were never particularly high by international standards even before 2010, have fallen dramatically over the past 13 years, primarily as a result of local authority belt tightening in response to central Government funding cuts.

The “Planning for new homes” report published by the National Audit Office in February 2019 found that between 2010-11 and 2017-18 there was a 37.9% real-terms reduction in net current expenditure on planning functions by local councils. Even when the income that authorities generated from fees, sales and charges or transfers from other public authorities was considered, the report concluded that total spending on planning had fallen by 14.6% in real terms between the dates in question—from £1.125 billion to £961 billion. Given that context, I would be grateful if the Minister could tell the Committee whether the Government are considering any other means, beyond the fee increases provided for by this instrument, to provide local authority planning services with additional funding.

Although the fee increases provided for by the regulations will not compensate fully for the sharp real-terms reductions in funding that authorities have had to cope with over recent years, they do have the potential to help enable local planning authorities to better deliver the service that applicants and the public rightly expect. I use the word “potential” deliberately, because there is a justifiable concern that increased revenue from planning application fees will not necessarily be allocated to planning departments or lead to improved performance. Although there is both a clear expectation and a requirement in primary legislation for planning fees to be used by local authorities to perform the function of determining planning applications, in practice many councils use planning fee income, despite the lack of surplus, to cross-subsidise other services. If they did not, the Government would never have felt the need even to consult on ringfencing in their “Increasing planning fees and performance” technical consultation earlier this year.

As such, what further assurances can the Minister provide today that the Government’s expectations—and ours—and the statutory requirements in respect of revenue generated from planning fees will be adhered to? In addition, can she confirm that the Department plans to begin actively monitoring how planning fees are generated and used, and evaluating whether they are having a beneficial impact on performance?

I would also be grateful if the Minister could provide further clarity on what other steps the Department is taking to ensure that local planning authorities are improving their performance. When the other place considered these regulations last week, Baroness Swinburne, speaking for the Government, referred to “a new framework” that will measure local authority performance across

“a wider set of criteria to ensure that local authorities are delivering on all fronts, for all users of the system.”—[Official Report, House of Lords, 17 October 2023; Vol. 833, c. 141.]

Can the Minister tell us when that new framework is expected to be put in place?

Lastly, increasing fees by the proposed amount or in isolation, even if supplemented by other funding sources, will almost certainly not be enough to address the capacity and capability issues faced by local planning authorities. As the Minister knows, difficulties in recruiting and retaining principal planners, and a shortfall of specialist skills, is another significant challenge. Although the Government have seemingly abandoned the proposals in the 2020 “Planning for the future” White Paper for a comprehensive resources and skills strategy, the policy paper that accompanied the Levelling-up and Regeneration Bill committed Ministers to bringing forward a planning skills strategy. Can the Minister tell us whether the Department still intends to publish one, and if so, when?

--- Later in debate ---

[Rachel Maclean]

I thank my hon. Friend for his point, and the feedback is noted, but what I was talking about regarding planning performance is a policy decision that we are in the process of making. I am sure that further legislation will come forward in due course.

[Matthew Pennycook]

Will the Minister give way?

[Rachel Maclean]

I will, briefly, but then I want to make progress.

[Matthew Pennycook]

I appreciate the Minister’s giving way. She has provided some useful additional clarity on performance and funding. May I press her on greater transparency, and the Department’s monitoring of how the increased planning fees are used? Does it monitor how fees are generated and used by planning authorities across the country? If not, will it start to, and will it actively track whether the increased fees are contributing to the improved performance that we all want?

[Rachel Maclean]

Yes, I can assure the hon. Gentleman that that is one of the core activities that I carry out in my role, with the assistance of my civil servants and various teams that feed into this. I have already spoken about our powers to intervene where local authorities are not performing. On top of that, we expect that the additional funding that we are giving through the separate funding pots that I referred to, and this new broader funding, will be spent, and we can track performance. Notwithstanding the challenge put to me by my hon. Friend the Member for Central Suffolk and North Ipswich, we intend to bring forward details of how we will track performance. I know that every Member in this House is very interested in how their local authority performs on planning applications, because we are often the first to receive complaints when they not performing well.

My hon. Friend has indicated his concerns about the disproportionate impact of the fees. I obviously take that on board, and we have considered that carefully; that is why the fee for householders will rise only from £206 to £258. We consider that to be proportionate, given the need. Planning services do not make a profit from fees; the services are still subsidised through wider funding. It is not a cost-recovery fee. Applicants still benefit from what they pay, even with the increase. He raised the point about people making modifications for disabled residents of a property. They will still be exempt. The current set of exemptions will still apply, so people in that situation will rightly not be charged; he is right to say that.

[Rachel Maclean]

The changes that we are making have removed the “free go”; we debated that in the House in proceedings on the Levelling-up and Regeneration Bill. We made that change because the free go placed a disproportionate burden on planning departments, and added to their overall workload.

It is really important to look at this small increase in the round. We are talking about increasing capacity and providing a better service across the board. I have recent experience of making a planning application to my local authority, so I know how much work is involved. When people pay a fee, they want to get a good service. If we resource the system as a whole to a greater extent—I hope Members will be reassured, both by this instrument and by the other grants that we have mentioned, that we are doing that—small householders building an extension will see a better service overall, and that should minimise the need for repeat applications. The idea is to capture everything up front.

It is also important to note that we are embarking on an ambitious programme to digitise the whole system. Members will know how paper heavy the system is now. That is where mistakes creep in and things need to be repeated. By improving the whole system overall, we will remove the need for repeated applications and, I hope, provide a fairer service.

My hon. Friend the Member for Central Suffolk and North Ipswich asked me about flooding, so I will touch on that before I wind up. We have all seen the recent events, which I know have affected his area greatly. All our sympathies are with the people affected, and I hope that they can be back in their homes soon. He will know that the national planning policy framework—the planning system more broadly—already takes account of flooding. Work has been done on this matter by my colleagues in the Department for Environment, Food and Rural Affairs, particularly in setting up the Flood Re scheme and making sure that planning applications and local plans are made with flooding in mind.

We will be going further. My hon. Friend will know of the work that we have done through the national development management policies; we debated again yesterday on the Floor of the House when considering the Lords message how the planning system responds to climate change, of which flooding is one manifestation. We have been clear that we intend to strengthen our approach, to give planners and the country the reassurance that the planning system can respond adequately to climate change and help us achieve our net zero objectives.

[Matthew Pennycook]

The Minister has missed out one of my questions. Will we see the planning skills strategy that was promised in the policy paper that accompanied the Levelling-up and Regeneration Bill?

[Rachel Maclean]

I understand the hon. Gentleman’s eagerness to see that, and we will bring it forward in due course. If he will allow me, I will write to him with more details on the timeline.

I thank Members for their interest in this matter. I must reiterate that it is critical that we have well-resourced, effective and efficient local planning services so that development is not delayed. We need to build the right houses for our country, in the right places, and planning is critical to that. The regulations will contribute to that by delivering much-needed additional resources. As I hope I have said multiple times, we are clear that local planning authorities must invest the additional income from the increase in planning application fees in their planning service. Improvements will enable speedier delivery and the economic growth that our country needs. I hope the Committee will welcome these important and necessary regulations.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023.

Levelling-up and Regeneration Bill

Matthew Pennycook Excerpts

Consideration of Lords message
Tuesday 24th October 2023 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to follow that characteristically sensible speech from the hon. Member for Waveney (Peter Aldous). I put on record our thanks for their lordships’ continued engagement on the Bill and all the work they have done on it over many months. After considering an extensive number of Lords amendments to the Bill last week, just two issues remain for us to debate again. The first is remote local government meetings.

Labour remains firmly of the view that while in-person council meetings should continue to predominate, there are circumstances in which virtual or hybrid local government meetings might be either useful or necessary. We also maintain that permitting their use in certain instances would have a number of additional benefits, not least in helping to reduce barriers to public engagement in the planning process, which is a goal shared across the House. As has been previously noted, an extremely broad range of organisations support change in this area, including the Local Government Association, Lawyers in Local Government, the Association of Democratic Services Officers, the Society of Local Council Clerks and the National Association of Local Councils. Indeed, as the hon. Member for Buckingham (Greg Smith) pointed out during last week’s debate, evidence from NALC suggests that support for it among local councils is overwhelming, with 90% of town and parish councils wanting the ability to hold virtual meetings in some form to widen participation.

As we just heard, it is not just those organisations and authorities and those on the Labour Benches who support greater local discretion in this area. In last weeks’ debate, the right hon. Members for Chipping Barnet (Theresa Villiers) and for North Somerset (Dr Fox) and the hon. Members for Buckingham, for Waveney and for Worthing West (Sir Peter Bottomley) all expressed support for a degree of flexibility so that councils could enable remote participation in meetings in certain circumstances. No one is arguing that we should require every local government meeting to be virtual or hybrid. Doing so would clearly undermine the principle that members of the public should have suitable opportunities to interact in-person with their local representatives. Instead, the case is being made for a degree of local discretion so that such meetings would be permitted in certain circumstances.

Lords amendment 22B addresses the Government’s understandable concern that permitting councils to hold wholly virtual meetings might have unintended and adverse consequences for local democracy. The amendment would allow Ministers to determine by regulations the range of circumstances in which hybrid meetings could take place. For example, they might choose to enable parish councillors in more remote parts of a given authority area to attend meetings virtually while ensuring that most are still required to be present in person. To take another example, they might choose to allow members of the public—say, people with mobility issues or those with children—to participate actively in planning committees, while councillors would still be required to attend in person. We believe that this is a reasonable and proportionate amendment, and we will support it.

The second issue concerns the planning system’s role in mitigating and adapting to global heating. The Government’s amendment in lieu is noticeably weaker than Lords amendment 45 as it applies only to national development management policies rather than all national policy, planning policy or advice relating to the development or use of land. It also excludes precise statutory definitions of what constitutes mitigation and adaptation. Nevertheless, we welcome that the Government have made a concession on this issue by tabling their amendment.

However, while we welcome the fact that the Government’s amendment in lieu would ensure consideration of climate mitigation and adaptation in the preparation or modification of NDMPs, it would not achieve what Lords amendment 45 would: namely, to establish genuine coherence between the planning system and our country’s climate commitments, not least by requiring local planning authorities to have regard to climate when making decisions on individual planning applications. The planning system in its current form is manifestly failing to play its full part in addressing the climate emergency. Indeed, one might go so far as to argue that it is actively hindering our ability to mitigate and adapt to climate change in myriad different ways.

The Bill is a missed opportunity to fully align the planning system with our climate mitigation and adaptation goals and ensure that new development produces resilient and climate-proofed places. The provisions in the Bill that require local plans to be designed in such a way as to contribute to the mitigation of, and adaptation to, climate change are welcome, but they are transposed from existing legislation introduced 15 years ago, and, alone, they are not sufficient. The promised related update to the national planning policy framework to ensure that it contributes to climate change mitigation and adaptation as fully as possible is vital, but it will not take place until well after the Bill has received Royal Assent if it materialises at all during what remains of this Parliament.

As we have argued consistently throughout the passage of the Bill, there is a pressing need for clear and unambiguous national policy guidance on climate change, a purposeful statutory framework to align every aspect of the planning system with net zero, and an overarching duty on the Secretary of State, local planning authorities and those involved in neighbourhood plan making to achieve climate change mitigation and adaptation when preparing plans and policies or exercising their planning decision-making functions.

The Climate Change Committee recommended in its 2022 progress report that

“Net zero and climate resilience should be embedded within the planning reforms”

contained in the Levelling Up and Regeneration Bill.

As things stand, they have not been. In this week—of all weeks—when we have seen once again the impact on communities across the country of the more frequent extreme weather events that climate change is driving, we should look to improve how the planning system responds to the climate emergency. The Government amendment in lieu is welcome, but it does not go far enough. For that reason, we will support Lords amendment 45.

[Theresa Villiers (Chipping Barnet) (Con)]

I would like to start by thanking the Minister for her involvement in the very long saga that is the Levelling Up and Regeneration Bill, which, finally may be drawing to a close. It is good to see the areas of difference between the two Houses reduced.

I appreciate that Lords amendment 22 on councils meeting virtually is a significant issue, as it could set a precedent for other parts of the public sector. I understand the Government’s concerns and why they have resisted it up to now, but I hope there is room for further compromise and at least some flexibility to allow councils to deploy hybrid meetings. If the amendment still goes too far, I hope that Ministers can come up with something, perhaps specifically in the planning context or in at least some circumstances, to make the life of our local councillors a little easier. We must remember that they do a difficult job; they work hard and many are trying to hold down day jobs at the same time. A bit more flexibility for virtual meetings could help to enhance democratic participation.

An amendment that we did not get back from their lordships was on NDMPs. I have a certain amount of regret about that, because I continue to believe that the replacement of local development management policies with a single centralised diktat is the wrong approach. However, I welcome the fact that, thanks to the Government’s amendments in lieu, we now see in the Bill a commitment to consult on NDMPs. That was an important part of the compromise announced last December by the Secretary of State to tackle problems outlined in the amendments package headed by new clause 21, which I tabled. It resulted from concerns felt by many on the Government Benches about problems leading to massive pressure for blocks of flats in the suburbs and housing estates on greenfield and agricultural land in rural areas. Now, we need to see the remainder of that package delivered by the national planning policy framework. Once again, I encourage and urge Ministers to get that published.

We also need to see the new set of planning policy guidance—another document that will be crucial to ensuring that the reforms promised in the planning system deliver real change. Concern remains among Back Benchers about the rush for volume of units at all costs. We all accept the need for new homes and want more homes built, but they need to be the right homes in the right places. I know that you, Mr Deputy Speaker, strongly agree with that.

With that in mind, I can understand the rationale of Lords amendment 45 on climate change mitigation and adaptation. We need to do more to ensure that the developments that come forward for approval are consistent with our net zero goals. I am not necessarily saying that Lords amendment 45 is the right vehicle to deliver that, but if we are to make that huge transition to carbon neutrality, construction and development has an enormous part to play, and significant change needs to be delivered. I hope that the Government will make every effort to ensure that the new NPPF reflects our climate goals, in terms of both mitigation and adaptation.

In particular, as we have heard many times during the debate on the Bill, we must take care in relation to areas prone to flooding since, even if we deliver net zero on time, the climate has already changed to make such episodes more serious and more frequent. I would like to take this opportunity to put on record my great sympathy to anyone who has been affected by the floods of recent days. I hope they are back in their homes soon. I truly understand what a miserable experience it is to be subjected to these climatic episodes.

Returning lastly and briefly to the December compromise announced on Report by the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), I reiterate what I have said a number of times in this House: we need the compromise to be implemented. The issues raised in new clause 21 on excessive targets have not gone away. Back-Bench concern has not gone away. We are all determined to defend our constituencies from overdevelopment. We believe it is vital to shift the focus of home building to big urban city sites like Old Oak Common, Beckton and central Manchester. The Docklands 2.0 approach outlined by the Secretary of State in his July speech and in his long-term plan for housing reflects our climate commitments by situating people close to jobs, services and public transport systems. It helps to take the pressure off suburban and rural areas, protecting green spaces and the green belt, and supports our ambitions for nature recovery. So, please, let us make sure that that change really happens.

Renters (Reform) Bill

Matthew Pennycook Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to close this Second Reading debate for the Opposition, and I thank all hon. and right hon. Members who have spoken in it. It has been a good debate and one defined by a great many thoughtful and eloquent contributions.

As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) so rightly argued in her remarks at the outset, this is a piece of legislation that is shamefully overdue. As she and other speakers pointed out, not only is it now over four and a half years since the Government first pledged to abolish section 21 no fault evictions, but, for reasons that now appear quite clear, Ministers sat on the Bill for a further five months subsequent to its publication in May. Drawing attention to the lengthy delay in bringing the Bill forward is not simply a parliamentary debating point. As many of my hon. Friends, including my hon. Friends the Members for Putney (Fleur Anderson), for Liverpool, Riverside (Kim Johnson), for Liverpool, West Derby (Ian Byrne) and for Blaydon (Liz Twist) pointed out, it has had very real consequences for private renters across the country.

During the years that Ministers prevaricated and the months this year they clearly spent negotiating with the discontented on their own Benches, tens of thousands of renters have been pushed to financial breaking point by multiple rent rises or threatened with homelessness as a result of being served a section 21 notice. We will continue to justifiably bemoan the fact that the Government have not acted with the urgency that was required, but we do welcome the Bill’s finally progressing. I want to take the opportunity to thank once again, on behalf of those on the Labour Benches, all organisations, particularly the 20 that comprise the Renters Reform Coalition, for not only making the case for change over many years, but for joining Labour over recent months in urging Ministers to get on with the process of turning the Bill into law.

The case for fundamentally reforming the private rented sector is as watertight as they come, and Labour has called for it for many years. More than 11 million people in England—not just the young and the mobile but, now, many older people and families with children—live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction. Such a situation cannot possibly be justified.

The sector should have been transformed a long time ago. Its regulation should have been overhauled to level the playing field between landlord and tenant decisively. The Bill is a good starting point to that end, and, as the debate has made clear, the principle of it enjoys broad support across the House. General support has been expressed today for the White Paper proposals that have found their way into it, including a new property portal and ombudsman, a simpler tenancy structure, the end of rent review clauses, prohibitions on multiple in-year rent increases, the right to request keeping a pet, and, of course, the abolition of section 21 notices.

However, as nearly all Opposition Members mentioned, a significant degree of uncertainty now surrounds the implementation of the promised section 21 abolition as a result of a concession made by Ministers to appease a minority of disgruntled Conservative Members—seemingly without complete success, given the tone and content of the contributions of the right hon. Members for Calder Valley (Craig Whittaker) and for Gainsborough (Sir Edward Leigh) and the hon. Members for Yeovil (Mr Fysh) and for Don Valley (Nick Fletcher).

As we have heard, the Government have made it clear in recent days—although it would seem that Members were told two weeks ago—that section 21 notices will not be phased out until Ministers judge that

“sufficient progress has been made to improve the courts.”

Explicit reference was made to end-to-end digitisation of the process, which could well take a great many years to achieve. Private renters across the country, who have been assured repeatedly by Ministers that the passage of this Bill will finally remove the threat of a section 21 eviction, have no guarantee whatsoever that the concession made does not amount to an effective deferral of that change well beyond the phased transition already provided for by the Bill.

If this sounds all too familiar, that is because it is. The Secretary of State has form when it comes to acquiescing in damaging concessions rather than facing down the unruly Benches behind him, with future housing supply in England a notable past casualty.

After 13 years of Tory government, the courts system is on its knees. The Government have had more than four and a half years, since they committed themselves to abolishing section 21 evictions, to make significant improvements to it in order to support good-faith landlords, and they have not succeeded. As things stand, HMCTS does not expect to be able to deliver even the reduced-scope reform programme to its current timetable. Given this Government’s record, why on earth should renters take it on trust that things will improve markedly any time soon? The inefficiency of the courts system is a huge problem, and action must be taken to address its lack of capacity so that landlord possession claims can be expedited, but the end of no-fault evictions cannot be made dependent on an unspecified degree of future progress subjectively determined by Ministers. In the absence of very clear commitments from the Minister on metrics and timelines in this respect, we will seek to amend the Bill in Committee to ensure that it is not.

While Ministers face the prospect of having to give further ground as the Bill progresses to keep their Back Benchers onside, Labour will work in Committee to see it strengthened so that it truly delivers for tenants. We will press for clarification of the new grounds for possession for students’ landlords to ensure that they are not too expansive, and will probe the Government’s intentions in respect of dealing with the complexities of the student market. My hon. Friend the Member for Sheffield Central (Paul Blomfield) and the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), rightly called for that.

We will put forward a number of sensible changes, including an increase in the proposed notice periods from two months to four months to protect renters better. I am pleased that my hon. Friends the Members for Stretford and Urmston (Andrew Western) and for Brighton, Kemptown (Lloyd Russell-Moyle) argued for that. We will press the Government to reconsider their position on a range of White Paper proposals that did not make it into the Bill. They include measures to strengthen councils’ enforcement powers—I thank my hon. Friends the Members for Battersea (Marsha De Cordova) and for Blaydon for raising that point—along with powers to limit the amount of advance rent that landlords can ask for, and provisions to expand rent repayment orders to cover repayment for non-decent homes.

We will explore why essential reforms that were outlined in the White Paper, including the proposed legally binding decent homes standard and the proposed ban on landlords refusing to rent to those in receipt of benefits or with children—a point powerfully made by my hon. Friend the Member for Sheffield South East—are not on the face of the Bill. We will explore what more might be done to ensure that the separate measures that have been promised to enact each of those reforms are passed and applied quickly and effectively. We will also look to amend various provisions in the Bill relating to new and revised grounds for possession, including the far too sweeping and punitive proposed new mandatory ground 8A and the proposed change to discretionary ground 14 relating to antisocial behaviour, so that blameless and vulnerable tenants are properly safeguarded.

Perhaps most importantly, we will seek to close the numerous loopholes in the Bill that would allow the minority of disreputable landlords—such as the unscrupulous owner of Dorchester Court mentioned in the powerful contribution of my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes)—to exploit tenants and jeopardise their security of tenure. Let us take two examples that are featured prominently in the Bill. Even with the proposed expanded right to challenge, it is far from clear that the tribunal system would prevent significant numbers of tenants from being evicted by means of an extortionate rent hike. We need to explore what more can be done to put in place genuinely effective means of redress for them. Similarly, the proposed three-month ban on landlords re-letting properties they have taken back to sell or move into themselves is not only insufficient but appears not to apply in some circumstances and will almost certainly be impossible to enforce even when it does. We need to tighten it.

The Bill is shamefully overdue but imperative. We support it in principle and are pleased that it will progress today, but it needs to be enhanced rather than undermined by concessions aimed at placating a minority of Members. Private renters deserve a piece of legislation that will ensure that they have real security and enjoy better rights and conditions in short order. We are willing to work constructively with the Government on the Bill, but make no mistake, we plan to do everything in our power to see it strengthened to the benefit of private renters who have waited long enough for meaningful change.