Renters (Reform) Bill

Natalie Elphicke Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Mrs Natalie Elphicke (Dover) (Con)]

In 2014, fellow housing expert Calum Mercer and I published a then-seminal paper called “Nation Rent”. That paper challenged what was then the status quo, which was that generation rent affected only younger people and would be a passing phase. “Nation Rent” set out that it was a changing structural environment in the housing and financial markets that had occurred since 2003, which saw a rapid acceleration of the private rented sector—overtaking social rent—together with a fall in home ownership. That structural change started long before the credit crunch and financial crash, but accelerated after them.

A decade on, little has changed in structural terms, and it should concern Members of all parties that generation rent has now become nation rent. The percentage of people aged between 35 and 44 and between 45 and 54 who are renting privately has tripled over the past two decades, and has more than doubled for those aged between 55 and 64. Nation rent is now embedded, not just in the younger generation but through the generations. As I set out in my 2018 paper with the Housing and Finance Institute, “A Time for Good Homes”, that structural change towards private renting affected around 2.4 million homes, or around 6 million people.

The need for legislation reflects that long-term structural shift. The private rented sector is no longer a flex or transitory tenure: it is the main tenure for millions of people for much, if not all, of their lives. The current legislative framework—a short-term tenure for long-term living, one person’s pension pot but another person’s only home—is not fit for that purpose. That is why there is tension and strain, which is reflected in the design of the Bill and the comments that have been made about it. There is a need to find a new balance that reflects this new reality for millions of people in our country, acting in a way that is fair and responsible to those who are being housed as well as to those who house them.

It remains my view that although the principle of the Bill and its measures are very welcome, they do not go far enough in dealing with the fundamental challenges of an overweighted private sector. There needs to be a long-term plan for housing that rebalances the housing tenure mix—a plan to boost home ownership and expand affordable rented housing substantially; one that unblocks the financial and regulatory constraints on affordable home ownership and professional renting, and one that builds more homes. I continue to work cross-party and cross-industry, inside and outside of this place on those priorities, as I have done for many years and as is reflected in my entry in the Register of Members’ Financial Interests.

Given my long-term campaigning for housing, I was pleased to stand on a manifesto to build 1 million homes this Parliament, work towards 300,000 homes a year by the mid-2020s, and scrap section 21 evictions. We have done well on the first, the second is a work in progress and the third manifesto commitment is why we are here today. I know at first hand the personal commitment that the Secretary of State and the Housing Minister bring to this matter, and how hard their commitment to it is.

This is a vital piece of legislation, because it seeks to provide greater security and stability for renters. This matters—and it should matter to everyone on the Conservative Benches—because housing instability destroys wealth creation, damages life chances, restricts educational prospects and harms health. I see this in my constituency inbox, as I am sure do all Members. In my MP surgery, I had a mother who had spent hundreds of pounds of her own money over many years building a comfortable home for her and her disabled daughter, only for them to be turfed out by their landlord with nowhere to go. Recently, I had to discuss with Ukrainian refugees how someone had complained to their landlord about the heating not working, only for them to find themselves served with a section 21 eviction notice. How do you begin to explain that that is just how things work in our country? They should not work like that; this needs to change.

That is why this reform is so important, but we cannot allow any delay, and that includes the proposed delay because, supposedly, repossession is taking too long. That is nonsense. There is already clear court guidance to deal with repossession claims in a timely manner, as set out in civil procedure rule 55.5, which states that the hearing must take place between four and eight weeks from the claim. Although there have been some spikes in court hearings over the covid pandemic, the timeliness of possession claims has remarkably improved. The latest available figures from the Ministry of Justice show that the average time between claims and orders is now back to under eight weeks. The average time between claims and warrants is the same as it was in December 2019, when the Conservative commitment was made to the nation. The repossession figures have collapsed from the post-covid high of 69 weeks, and are back on track to pre-covid levels. For landlords, every single median metric—be that for orders, warrants or possessions—has dramatically improved on the latest Government data.

Therefore, this landmark section 21 reform should not be delayed on the basis that court improvements are required. That was a concern of our Select Committee, and I think it has now been met in part by the improved data. Any change to the Bill that delays the implementation of these vital reforms cannot be supported. This issue affects millions of people in our country. That is why renters reform—specifically the abolition of section 21—was in the 2019 manifesto, on which all of us on the Conservative Benches stood. It was a manifesto that put the Conservatives on the side of the people, and a manifesto that secured such a huge majority. It would be a grave mistake not to honour that commitment, or to stifle it by delay.

To conclude, the Renters (Reform) Bill will provide security and stability to millions of renters across the country. It should be passed by Parliament without any further delay, but we must also do more to continue to unlock home ownership and other housing to deliver the homes and the housing stability that our nation needs.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Levelling Up, Housing and Communities Committee.

--- Later in debate ---

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

Let me first refer the House to my entry in the Register of Members’ Financial Interests and declare that I am the co-chair of the all-party parliamentary group for renters and rental reform and am supported by Generation Rent.

It is almost hard to believe that the words “ban on no-fault evictions” will not be in the next Tory party manifesto. Those words have been in Queen’s Speeches. The Tories have promised, but they have not delivered. Now we know, of course, that that is because there was an almighty fight on the Conservative Benches—a fight that is still going on by the sounds of it. To all the dodgy landlords and vested interests watching this debate, I say that if they delay the Bill and its implementation further—as has been rumoured today—the result will be rental reform at the very core of the next general election campaign, and when Labour is in government, legislation might well go even further beyond what some of those vested interests want.

Enough about the politics; let us get down to the Bill itself. Central to this legislation is the abolition of section 21 no-fault evictions, which have been the blight of renters for many years. The aim is to provide safe homes that allow renters to establish roots in the community and start families—that is lacking at the moment. I am concerned, however, that the vastly expanded grounds for eviction might undermine the very concept of the Bill. Under schedule 1, grounds 1 and 1A remain no-fault clauses. They are for the landlord moving themselves in or selling. To prevent potential abuse of those grounds, it is crucial that landlords provide unequivocal evidence of their intentions, including through solicitors, agents’ letters or sworn statements to the court. After using those grounds, landlords should submit another statement within 16 weeks of possession, for example. Landlords who genuinely need to possess under those grounds have nothing to lose in making such legal declarations, and the clauses are useless without them.

There may be legitimate circumstances in which a ground is no longer relevant—someone might have been evicted but the landlord no longer wants to sell the property or have a family member move in, for example. Should that happen, reasonable compensation should be offered to the person who has been evicted. It is not fair to use the grounds and then say, “Whoopsie-daisy, I didn’t realise that I couldn’t sell.” There must be redress for the tenant who has been harmed.

Ground 6 allows for an eviction when the landlord is found to be at fault. Although I do not think that people who are unfit to be landlords should remain landlords, this ground penalises the tenants by discouraging them from co-operating with enforcement action. As such, we need either compensation for any no-fault eviction, or an administrative mechanism that keeps the tenant in the property but removes the landlord’s day-to-day control for as long as that tenant wishes to remain.

Grounds 8 and 8A deal with tenants who are in arrears. While there are some protections for universal credit payments, there are no protections where the arrears are irregular under ground 8A. Arrears might be repeated but very short, and the Domestic Abuse Housing Alliance has highlighted the risk that this poses to victims of domestic abuse. The courts need to have discretion; these clauses cannot be mandatory.

Lastly, ground 14 is one I have raised with the Minister. We need to ensure that antisocial behaviour is not an excuse for a section 21 eviction by the back door. Equally, the idea of a student eviction clause is very worrying; the National Union of Students does not support it, and I do not see how it could be practically enforced. I would want to see that idea fleshed out in Committee, or a pledge that it will be ditched.

I welcome the Government’s inclusion of two methods of enforcement. The first is local government; the second, which is more encouraging, is the ombudsperson. I am pleased that the Secretary of State has agreed to look at merging the ombudspersons—we have too many at the moment—but we need to make sure that that ombudsperson has the authority to rectify matters in a timely manner, one that still allows people to go to the courts if they wish to pursue that method of redress.

It troubles me that the landlord’s notice period has not been changed from two months. In my view, that notice period should be four months, and importantly, tenants should have the flexibility to move out during a notice period: if a tenant is given notice and moves out the next week, they should not be liable for two months’ worth of rent. That seems wrong to me.

Turning to protection periods, tenants will have protection from eviction for the first six months of their tenancy. Currently, they have six months after they sign each new assured shorthold tenancy, meaning that long-term tenants might have fewer protections than they do at the moment. Renters need to be protected: one proposal is to give them two years’ protection, which is a very good idea that we should explore in Committee.

On rent increases, we must ensure that we do not face a wave of economic evictions. Otherwise, what will happen is that the landlord will whack up the rent, and someone will have to move. The rental tribunal’s decisions being tied to markets means that an increase will be considered valid if the final rent aligns with market rates in local areas. That is clearly unaffordable for the LHA rate, which is under 30%—I remind colleagues that in 2010, that rate was 50%. It has been decreased year after year, and we need to address that. The Bill is also in danger of failing to address the “no DSS” benefit discrimination and the rampant guarantor discrimination that happens all the time in the rental sector, as well as affordability checks, which are used as methods of economic discrimination. Those problems also need to be addressed in the Bill.

I am a fan of the theory behind the property portal, but I fear that it might end up being like the bad landlords list, which never really worked and was never enforced. I appreciate that there are fines for not registering a property, but those fines should be paid to the tenant, as is the case with the deposit protection schemes. That would encourage tenants to make sure that their landlord is registered—they would receive recompense if the landlord was not. We cannot have local authorities doing all the checking: they just do not have the resources at the moment. We need everyone to be able to support these reforms.

[Mrs Elphicke]

My co-chair of the APPG on this subject is making some very important points. Could he further develop the important principle of the tenant being compensated for some of the no-fault or other fines that he has mentioned?

[Lloyd Russell-Moyle]

I would love to, but we do not have much time. However, there needs to be some discussion about what compensation someone will be given if they are no-fault evicted: for example, should they be given two months’ compensation, which could pay for a deposit and the first month’s rent in their new property? If the landlord has not registered, and the tenant is then evicted because their landlord has failed to be a good landlord—which is, of course, one of the grounds—what compensation will that person receive, enabling them to move into new, decent accommodation? Their money is tied up in the deposit and in having paid the rent. There needs to be some serious thought about how we compensate tenants so that they can move on in the private rented sector. Some people have also said that the property portal might be a back-door way of getting rid of selective licencing, which would be a great mistake.

The real story of these reform methods is the work of tens of thousands of hard-working activists, advice workers, policy leaders and organisations up and down this country, many of them in the Renters Reform Coalition, to which I give much praise. We are close to significant reform, but we must be vigilant.