Private Rented Sector: Regulation

Debate between Rachel Maclean and Navendu Mishra

Wednesday 24th May 2023 Westminster Hall

[The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)]

It is a great pleasure to serve with you in the Chair, Mr Davies, and to have the opportunity to make my remarks. Of course, I thank the hon. Member for Liverpool, Walton (Dan Carden) for securing this debate. I also thank the other Members who have spoken, who I will turn to in just a moment. They have spoken passionately about the need for greater security for tenants and improved standards in the private rented sector.

I am grateful to the hon. Gentleman for bringing his considerable experience to this debate. He has a long history of campaigning and speaking on this issue in Parliament, and I say to him and to any Member that of course the Government will listen to constructive dialogue from all parties in the House. That is the right thing to do as we go forward and get this legislation right.

I thank the other Members who have spoken—the hon. Members for Stockport (Navendu Mishra), for Bath (Wera Hobhouse), for East Londonderry (Mr Campbell), for Brighton, Pavilion (Caroline Lucas) and for Erith and Thamesmead (Abena Oppong-Asare)—who all made useful contributions. We all agree there is a considerable amount of consensus that we need to provide a better deal for renters, which is exactly what we are doing through the Renters (Reform) Bill. Members have brought to the House’s attention, again, the very good reasons why we need to act and are acting.

The private rented sector is the most expensive, least secure and lowest quality of all housing tenures. A fifth of renters pay a third of their income to live in substandard accommodation. That is the reality and it is unacceptable. We are determined to crack down on irresponsible and criminal landlords and to make the private rented sector a better place to live and work. That is why I am delighted to talk about the vital measures we are bringing forward to meet the needs of renters and good landlords.

The hon. Member for Liverpool, Walton brought to my attention, as did other Members, the experiences of constituents. I assure him and the House that I have spoken to many tenants who have faced situations similar to the ones he described. I visited tenants in Leeds last week and saw for myself some of the conditions and why we need to act. It is worth reminding the House that the reforms are the biggest in a generation and the biggest in the sector for many years. They have been welcomed by tenants’ groups, people who represent tenants, Shelter and many others that have been referenced by Members. They have also been welcomed by groups who represent landlords. It is important to get that balance right.

I know that feeling safe and secure in a home is vital to a person’s wellbeing and so that they are able to put down roots in a community. The threat of a section 21 no-fault eviction with just two months’ notice hangs over many renters and prevents them from complaining about poor standards. The Renters (Reform) Bill will deliver our manifesto commitment to end section 21 no-fault evictions. Tenants will be able to challenge poor standards without fear of retaliatory eviction. We will abolish fixed terms and move to periodic tenancies that allow either party to end the tenancy when they need to.

As Members have highlighted, there are legitimate reasons why landlords could or would need to regain their properties, which is why we are reforming the grounds so that they are fair, comprehensive and efficient. In future, landlords will be able to regain possession only if one of the grounds for possession defined in law applies. We will introduce a new ground for use when the landlord intends to sell the property and extend the existing moving-in ground so that it can also be used if close family members of the landlord intend to live in the property.

We have changed the rent arrears grounds so that they are fair and proportionate, striking a balance between protecting tenants’ security and supporting landlords who face undue financial burdens. We have retained the existing mandatory rent arrears ground that allows a landlord to serve notice once a tenant is in two months’ rent arrears, and introduced a new ground for repeated rent arrears.

To ensure that landlords can swiftly gain possession when a tenant’s antisocial behaviour is causing problems for their neighbours and communities, we are allowing landlords to make a possession claim to the courts immediately, and we have lowered the discretionary ground to include behaviour capable of causing nuisance or annoyance. We are considering further changes to the way the courts handle antisocial behaviour possession cases, including in respect of prioritisation and the matters that judges must consider when deciding whether to award possession under the discretionary ground. There are other grounds, and I encourage Members to look at the information that the Government have published.

We understand that rent is likely to be a tenant’s biggest monthly expense. It is important that tenants have notice of any rent rises so that they are able to plan effectively. Our reforms will simplify the system for tenants and landlords. All rent increases will take place via one mechanism. We will retain existing legislation that allows rent increases once per year in periodic tenancies, and increase the notice that landlords must give to two months, thereby giving tenants more time to plan and seek advice.

Our reforms will also prevent revenge or forced evictions by the small minority of landlords who may look to use rent hikes to force a tenant out once section 21 can no longer be used. That will create a fairer system that allows both parties to negotiate rents effectively, while protecting security of tenure. Where the landlord has served notice on the tenant to increase their rent, the tenant may refer the notice to the tribunal. The tribunal will assess what the landlord could expect to receive if re-letting the property on the open market and will determine the rent. That will help to avoid the large rent increases used by a minority of landlords as a back-door method of eviction. We will update the guidance to ensure that tribunal users have the confidence and information they need to engage with it effectively. That includes helping parties to understand how they can provide evidence of comparable rents.

The Conservative party does not support rent controls. Evidence suggests that they would discourage investment in the sector, lead to declining property standards, and be negative for both tenants and landlords. We are absolutely committed to outlawing the unacceptable discrimination against families with children and people in receipt of benefits through blanket bans, but we want to ensure that landlords retain the final say over who they rent to. Members have asked for more clarity on that, and we are carefully considering how we get it right. We will introduce legislation at the earliest opportunity.

Members raised local authority enforcement. We expect local councils to take a proactive approach to enforcement and make it a priority. Substantial civil penalties will be available if landlords fail to comply with our reforms. Local councils are able to keep the revenue they receive from civil penalties; it is ringfenced for further enforcement activity. In accordance with the new burdens doctrine, we will ensure that, where necessary, the net additional costs that fall on local councils as a result of our reforms are fully funded, and we will continue to explore how best to create a sustainable self-funding system over the long term, including through fees.

Members will be interested to hear that we are providing £14 million to 10 pathfinder projects that have been designed to build capacity and team capabilities and to test and disseminate innovative enforcement approaches. I am pleased that one of those pathfinder projects is being led by Liverpool City Council, which covers the constituency of the hon. Member for Liverpool, Walton. It is working with a number of other key players locally to create a multi-agency, intelligence-led model for proactive enforcement in the PRS. That will ensure that enforcement is streamlined more effectively, particularly against landlords engaged in serious criminality. I have seen for myself the effectiveness of the selective licensing scheme in Leeds, to which Members referred, and how effectively the housing teams work to deal with issues.

[Navendu Mishra]

The Minister is generous to give way. Will she address the point that, over the past 13 years, local authorities have lost hundreds of millions of pounds in central Government funding? My local authority in Stockport has lost a significant amount of money since 2010, when the Conservative-Liberal Democrat coalition came in.

The Government do not seem to have a sense of urgency in addressing the loopholes in the Renters (Reform) Bill and the crisis in the private rented sector. There are no Conservative Back Benchers in this debate; they must have either local authorities that are financially secure or tenancies that are long-term and reasonably priced.

[Rachel Maclean]

I gave way to the hon. Gentleman because I thought he was going to ask a question about the issues in front of me. I am happy to address them. I will continue my remarks, which will address the substantive issues of this debate.

Information is key when it comes to regulating effectively and efficiently. That is why the Bill will legislate for a new private rented sector database that will support the new privately rented property portal digital service. That service will support the Government’s aim of reducing the number of non-decent rented homes by 50% by 2030, and will give local councils tools to drive criminal landlords out of the private rented sector. It will help landlords to understand their obligations and give tenants the information they need to make informed choices.

My team is working hard to develop the portal, which recently passed its Government Digital Service assessment. It was assessed against standards to ensure that it meets clear user needs, is simple to use, is designed securely to protect privacy, and uses tools and technology that are fit for purpose. We will take forward the development of that service and continue to engage with end users to ensure we get it right.