Monday 23rd October 2023
(6 months, 1 week ago)
Commons ChamberRenters (Reform) Bill 2022-23 Read Hansard Text Watch Debate
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
I beg to move, That the Bill be now read a Second time.
Before I get into the detail of what the Bill allows for and the reforms that it portends, may I say a few words of thanks? In particular, I thank my hon. Friend the Member for Walsall North (Eddie Hughes). During his time at the Department, he was responsible for the White Paper that essentially did the groundwork for the Bill, but prior to working in the Department, he worked for a variety of third sector and voluntary organisations, helping the homeless and standing up for those in poor-quality housing. His foreword to the recent report by the Centre for Social Justice on the importance of reform in the private rented sector is both eloquent and effective. May I take this opportunity to thank him for his excellent work?
I also thank the Centre for Social Justice, which was founded by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) some time ago. The report that it has prepared makes a compelling case for reform in the private rented sector, in order to help those most in need. May I also thank those organisations, including Shelter and the National Residential Landlords Association, that have supported me and the Department in framing this legislation?
May I also thank the Levelling Up, Housing and Communities Committee and its Chair, the hon. Member for Sheffield South East (Mr Betts), for the recommendations in its report on the need to reform the private rented sector? There were a series of recommendations in the report, upon which we have acted. It is the case that we will bring forward changes to ensure that the student market, which operates differently from other aspects of the private rented sector, is regulated in a different way; it is the case that we will bring forward details of a decent homes standard in the private rented sector, as requested by the Select Committee; and it is the case that we will ensure that the justice system, which is controlled by the Ministry of Justice and His Majesty’s Courts and Tribunals Service, is fit for purpose before we move ahead with some of the reforms in the Bill.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I add my thanks to my right hon. Friend for finally publishing a response to the Select Committee? He will recall that, as Chair of the Liaison Committee, I wrote to him last week—he responded very promptly, for which I am grateful. However, the Government’s response was published only on Friday, more than six months after the Committee published its original report, yet it is de rigueur in the civil service code that responses should be published within two months. Will he explain to the House why it took so long, can he give an assurance that it will not happen again, and will he say what measures are being taken to ensure that such delays will not recur?
Michael Gove
My hon. Friend makes an important point, which gives me an opportunity to apologise to the House, on behalf of the Government, my Department and in particular myself, for the delay in responding to a number of Select Committee reports that have been put forward. The Chairman of the Select Committee knows that I hold him and his Committee in the highest regard. I deeply regret the delays in responding to the many excellent reports that the Select Committee has put forward. The reasons for that relate to policy discussions within Government. We wanted to make sure that we had a clear and settled position in response, but that does not excuse us of the need to do better. I have discussed with Ministers and others in the Department the vital importance of responding quickly and showing respect for this House, so may I again apologise to my hon. Friend and to the Chairman of the Select Committee?
Tim Farron (Westmorland and Lonsdale) (LD)
The delay has cost hundreds of families in my constituency their homes. Section 21 evictions have been carried out on so many families, as the sector has moved into the Airbnb short-term let market. Will the Secretary of State apologise to those families? Will he also very quickly bring in the change of use designations that I know he is considering, to ensure that short-term lets and also second homes are separate categories of planning use, so that we can protect our lakes and dales communities and ensure that they can survive?
Michael Gove
As the hon. Gentleman knows, I have an enormous amount of respect for the work that he does in this area. I would draw a distinction between the response to the Select Committee’s report and the bringing forward of legislation, but he is absolutely right to draw attention to the fact that we need to consider—and we are—our responses to the consultations on registration and on changes to planning use requirements in the short-term let market. We hope to come forward shortly with our response to those consultations. I should also say that I had the opportunity last week to talk to the founder of Airbnb, and I outlined concerns very similar to those that the hon. Gentleman has outlined.
Michael Gove
I will not give way at this stage; I will make a wee bit of progress, then I hope to give way shortly.
I want to emphasise that a healthy private rented sector is in all our interests. Making sure that both landlords and tenants have a new deal and a fair deal is critical.
Michael Gove
Not for the moment.
The private rented sector has doubled in size since 2004, to the point where it now constitutes between 19% and 20% of the total housing stock in our country. Given the number of people in the private rented sector, it is absolutely vital that we ensure that tenants have the rights that they deserve, while also recognising the importance of the private rental sector to our economy and the fact that the overwhelming number of private landlords provide an excellent service. It is also important that we provide them with the rights to redress required when dealing with antisocial tenants, tenants in arrears or other factors that may mean that they need to have recourse to securing vacant possession of a property.
The private rental sector is vital for reasons of labour mobility and personal convenience and, overall, because of the different ways that we respond to the labour market and other pressures at different points in all our lives. We need a healthy private rented sector. I would like to place on the record my thanks to Ben Beadle and the National Residential Landlords Association for the work they have consistently done to ensure that the voice of landlords is heard and to ensure, as Ben Beadle has made clear, that landlords, the overwhelming majority of whom provide a good service, can be certain—because of our property portal, the ombudsman and the other changes in the Bill—that the small minority of poor landlords who victimise tenants can be driven out of the system and the good name of those in the private rented sector upheld.
Several hon. Members rose—
Michael Gove
I am very happy to give way to the hon. Member for Brighton, Pavilion (Caroline Lucas), then to the hon. Member for Strangford (Jim Shannon), then to the hon. Member for Chesterfield (Mr Perkins) and then to the hon. Member for Enfield North (Feryal Clark).
Caroline Lucas
There is plenty to welcome in this Bill, but it should have been an opportunity to increase minimum energy efficiency standards. When the Secretary of State for Energy Security and Net Zero last week tried to defend the scrapping of energy efficiency standards for the PRS, she essentially said, on the Floor of the House, that it was because they could cost property owners up to £15,000. The right hon. Gentleman will know that the regulations include a £10,000 cap, so the cost cannot possibly be £15,000; indeed, according to the Government’s own assessment, the average cost of upgrading homes to an energy performance certificate rating of C would be less than £5,000. Will he please correct the record, apologise on behalf of his colleague, who has misled the House, and put it on the record that it could not possibly cost £15,000? His own assessment suggests that it costs less than £5,000.
Michael Gove
I am grateful to the hon. Lady; no one could doubt her sincerity or her commitment to making sure that we improve the condition of homes and that we deal with energy efficiency. The first thing to say is that the cost will be determined in the market. The amount that an individual might have to pay can be capped by legislation, but the cost is a function of the market. The second thing that it is important to stress is that the decent homes standard, and indeed the work we are doing on retrofitting overall, will improve, and has improved, energy efficiency, but we need to balance the improvement of energy efficiency against the costs that individual landlords and tenants face in a cost-of-living time that is challenging.
Jim Shannon
The Minister is right to say that the encouragement of private landlords is important to ensure that rental properties are available, but it is also incredibly important that unscrupulous landlords are not facilitated in avoiding their obligations. In relation to the obligations, Citizens Advice has recently announced some figures, which show that 48% of evicted tenants have been told that their landlord wanted to sell. This is a common reason for ending a tenancy. With respect, nothing in this legislation suggests that landlords must give evidence that they have followed through on their intention to sell. Will the Minister rectify that?
Michael Gove
Of course, landlords and any property owner must have the right to sell their home if they need or wish to do so; nothing should interfere with that. None the less, it is the case that there may be circumstances in which there will be some landlords who use an attempt to sell, or a claim to sell, as a feint in order to evict a tenant. In Committee, we will explain how we will ensure that, in those circumstances, the situation is effectively dealt with.
Mr Perkins
I thank the Secretary of State for giving way. This weekend I was out meeting flood victims in Chesterfield. The flood damage of one of them was up to 3 feet high in their front room. They were told by the landlord, who was busy as I arrived, hoovering the carpet, which had sewage and river effluent all over it, that they must accept that the landlord would attempt to clean the carpet rather than a renter expecting a new one and that if they would not tolerate that, she would end their tenancy and throw them out. Does that not demonstrate how the balance of power between landlords and renters is totally skewed? Is there not all the more need for the strongest possible legislation to ensure that we do take action against those rogue landlords?
Michael Gove
I agree with the hon. Gentleman up to a point, but I would not characterise it in quite that way. On the basis of everything that he has said, that was completely the wrong response from the landlord concerned, but I would stress that there is only a minority of bad landlords and also that the law clearly delineates, and has done so for some time, the responsibilities for repair between the tenant and the landlord. It is important that we always strike a balance between the need of landlords to ensure that their business is effective and the protection that tenants enjoy. If the hon. Gentleman writes to me about that specific case, I will see what I can do to help.
Feryal Clark (Enfield North) (Lab)
I am grateful to the Secretary of State for giving way. My constituents, Esther and Fred, lost their son two weeks ago in the most horrific of circumstances. The very week that they lost their son they were served a section 21 notice, despite the landlord knowing their circumstances. What message does it send to renters like Esther and Fred that the Government are yet again delaying the abolition of section 21 evictions?
Michael Gove
I am deeply sorry to hear about the personal tragedy that the hon. Lady’s constituents have suffered—please do pass on my sympathy and condolences. I would say, though, that this Bill leads to the abolition of section 21, and it does so in a way that I believe is right and proportionate. I will explain why I think it is necessary, but before doing so I must give way to the right hon. Member for Islington North (Jeremy Corbyn).
Jeremy Corbyn
I thank the Secretary of State for giving way. I noted he said that, nationally, around 20% of the population live in the private rented sector. In constituencies such as mine, the figure is 30% to 35%, and many people feel very insecure in their lives. For those on universal credit and housing benefit, the problem is that the local housing allowance does not meet their rent needs. Therefore, they are actually subsidising landlords through their benefits and living in desperate poverty as a result of it. In turn, this forces people in mainly ex-council properties to leave the borough, so we end up with a sort of social cleansing of our inner cities all over the country. Does the Secretary of State understand that we need rent control, so that those people who cannot afford to remain in their own home get some comfort and are allowed to continue being a valuable part of our local communities?
Michael Gove
Although the right hon. Gentleman and I have had many disagreements, there is no one who doubts that he is a very assiduous constituency Member, and he is right that the pressures faced by a number of people in the private rented sector are significant. The principal reason for those rental pressures is inflation. We can debate the causes of inflation, but this Government are determined to do everything possible to halve it. and I believe the steps that we are taking have shown progress so far.
Michael Gove
Please forgive me; I am just responding to the right hon. Gentleman. It is the case that our effective system of tribunals ensures that excessive rents that are way out of kilter with the market can be dealt with. However, one of the challenges of rent controls of the kind that I believe he is advocating, and that have been advocated by others on the Labour Front Bench, is that they are proven to reduce supply overall, and a reduction of supply on the scale that an intervention of the kind that he puts forward would only increase rents and reduce the capacity of people to be able to live in the private rented sector.
Mr Marcus Fysh (Yeovil) (Con)
Does my right hon. Friend not agree that the Bill would do exactly what he has just been saying is the problem with rent control, which is to drive private landlords out of the market? Is that not entirely contrary to the Government’s main aim right now, which is to bring down inflation? Private rents are the key cause of core inflation, and this is a disastrous Bill for every renter in the country who wants to see a well-supplied housing market.
Michael Gove
I am very fond of my hon. Friend, but that is just not true. We have seen an increase in the number of homes in the private rented sector recently, not a reduction. [Interruption.] As we say in Scotland,
“facts are chiels that winna ding.”
There is no evidence at all that the abolition of section 21, and at the same time the enhancement of section 8, will lead to any reduction in the number of homes in the private rented sector. However, let me say to him, and to the whole House, that what we need is not so much an arbitrage between the private rented sector and the number of homes available for private ownership, or indeed the social rented sector, but more homes overall. It is that which is at the root of our challenge, and we will solve it with our long-term plan for housing, which was outlined in July of this year.
Several hon. Members rose—
Michael Gove
No, I have been generous so far. Every intervention only takes time from those who wish to contribute to the debate. Let me develop my argument and then I will give way to some other colleagues—but perhaps not all.
I just wish to stress what the abolition of section 21 involves. Getting rid of section 21 means that a weapon used by unscrupulous landlords can no longer be in their hands. Essentially, section 21 no-fault eviction is used by that small minority of bad landlords to intimidate tenants. It is the case that a significant number of tenants have concerns about the quality of their home, or indeed about excessive rent rises, but section 21 has been used to silence those who have complained about the quality of their property, to intimidate them into accepting excessive rent rises, and in certain circumstances it has been prosecuted anyway, leading to a significant number of people—20,000 in the past year—finding themselves rendered homeless, and therefore the taxpayer and local authorities having to pay for their accommodation.
It is in nobody’s interests to allow unscrupulous landlords to continue to behave in this way, to allow vulnerable people to be rendered voiceless in this way, and to force the taxpayer to pick up the bill. The idea that abolishing section 21 is somehow un-Conservative is to me absolutely nonsensical. Conservatives exist to protect the vulnerable in society, to make sure that markets work and to save the taxpayer money. I have to say to any hon. Member who thinks that such a policy is un-Conservative that they should consider the Conservative record. The artisans’ dwellings Act 1875, the Law of Property Act 1925, the Leasehold Property (Repairs) Act 1938, the Landlord and Tenant Act 1954, the Landlord and Tenant Act 1985—when Margaret Thatcher was Prime Minister—the Housing and Planning Act 2016 and the Tenant Fees Act 2019 were all Conservative measures introduced by Conservative Prime Ministers in order to ensure that the private rented sector could work better and, critically, they all make provision for the rights of tenants.
Mr Deputy Speaker (Sir Roger Gale)
Order. I think that I am right in saying that the hon. Lady has only just entered the Chamber. She should wait for a wee while before she rises to intervene.
Several hon. Members rose—
Michael Gove
I will give way to colleagues in a moment. The key thing to consider when thinking about how those in the private rented sector live is that the overwhelming majority of landlords do a great job, but we know that, because of section 21, 23% of tenants in that sector who wished to complain about conditions chose not to do so, and 31% of those who did were subsequently evicted under section 21. As I mentioned, 20,000 people were assessed as homeless as a direct result.
I am absolutely committed—as was the right hon. Member for South West Norfolk (Elizabeth Truss) when she was Prime Minister, as was the former Member for Uxbridge and South Ruislip when he was Prime Minister, and as all Conservative Members were when we put it in our 2019 manifesto—to getting rid of section 21, but it is important to recognise that in so doing we need to strengthen the provisions that landlords have in order to deal with those tenants who, for whatever reason, need to be evicted from their property.
We are outlining an extensive range of provisions under section 8. We are moving to ensure that antisocial behaviour is dealt with more effectively by making it mandatory grounds for removing a tenant. We are lowering the threshold so that it is easier to establish antisocial behaviour. We are dealing more effectively with rent arrears, and the way in which some unscrupulous tenants have hitherto manipulated the system on rent arrears. We are making it clear that anyone who wishes to occupy their property because they need to sell it, repair it, or have family member within it, or for any other reason, can do so. It is about strengthening both protections for tenants and powers for landlords in the cases where they need it.
Several hon. Members rose—
Michael Gove
I am now more than happy to give way to a range of colleagues.
Mr Deputy Speaker (Sir Roger Gale)
Order. I will allow the right hon. Gentleman to do that in just a moment, but first let me set the record straight. The Clerks have informed me that the hon. Member for Twickenham (Munira Wilson) was in the Chamber from the start. I apologise. I would not wish that to influence the decision of the Secretary of State on who he gives way to.
Sir Desmond Swayne (New Forest West) (Con)
I accept entirely the force of what the Secretary of State has said, but clearly under section 8 many landlords will, for perfectly legitimate reasons—to get rid of a tenant for antisocial behaviour or whatever—have recourse to section 21 simply because of the convenience and ease, particularly in the face of tenants who make particular difficulties. That is why the provisions that he is making in respect of the courts being able to deal with such things effectively and efficiently are vital as part of the reform that he is bringing forward.
Michael Gove
Actually, I agree with my right hon. Friend. It is vital that we ensure that the courts system is reformed and that we have end-to-end digitisation. We have seen section 21 abused, but if a determined tenant wishes, for whatever reason, to ignore section 21, that ends up in the courts anyway.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
My constituent Jan Childs rented a property in Much Wenlock to an individual she got into a dispute with. He has now scarpered, owing my constituent £10,000, and nobody seems to be interested in helping her to retrieve the money—neither the police nor the local authorities. How will this Bill help my constituent Jan Childs to retrieve her £10,000?
Michael Gove
It is not so much this Bill; it is more the steps that we are taking in order to improve the justice system that will help, but I would be grateful if my hon. Friend would write to me about that particular situation. It is always the case, no matter how well framed any piece of legislation might be, that if we are dealing with unscrupulous characters who seek to evade justice, we have to rely on the agencies of the criminal justice system to pursue them.
Sir Desmond Swayne
On a point of order, Mr Deputy Speaker. I apologise; I should have referred to my entry in the Register of Members’ Financial Interests when I intervened.
Michael Gove
My right hon. Friend is nearly always right and always honourable.
Wera Hobhouse (Bath) (LD)
I, too, put on the record my entry in the Register of Members’ Financial Interests. Some months ago, I raised with the hon. Member for Kensington (Felicity Buchan), who is present, my concerns about the illegal eviction laws, which are over 40 years old, complex and difficult to understand. Unless we reform illegal eviction law alongside section 21, I worry that bad landlords will take matters into their own hands. Has the Department taken into account the concerns that I raised with Government officials about reforming illegal eviction law at the same time?
Michael Gove
I know that my colleague the Housing and Planning Minister has met the hon. Lady, and we will respond in further detail about the steps that we propose to take.
Munira Wilson
Given that the Secretary of State is getting quite a few pot shots from behind him, let me help him out by saying that I welcome the ban on section 21 no-fault evictions. It is sadly very overdue, and I hope that he will not delay in implementing it, because as a London MP I have had countless people in my surgeries and contacting me via email who have been evicted under section 21. A most egregious case involved a father of two young children, both of whom were gravely ill. He had to tackle the mould in his home himself because the landlord was not dealing with it. Then the landlord evicted him for making the repairs. Will the Secretary of State commit to implementing the reform without delay?
Michael Gove
Absolutely. The sooner the Bill is on the statute book, the sooner we can proceed. Alongside that, we of course need to ensure that the justice system, as my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) made clear, is in a position to implement it effectively. That is why the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), is present. He and I, and the Minister for Housing and Planning, are working to do just that.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
On the enhanced grounds for antisocial behaviour, I have one constituent who has been evicted because their baby was crying too much, and another who has been evicted because her husband was beating her too loudly. Does the Secretary of State not recognise that the grounds need to be discretionary ones on which the courts can deliberate, not mandatory ones? Otherwise, it will be a handle for abusers to use.
Michael Gove
I very much take the hon. Gentleman’s point. I do not believe that either of those two cases would count as antisocial behaviour under our proposals, but we need to ensure that we are clear about what constitutes antisocial behaviour liable to lead to eviction and what is, as in those cases, either a preposterous claim or an example of domestic abuse that the police should be investigating.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I, too, welcome the intention to scrap no-fault evictions. A year ago I asked about the matter at Prime Minister’s questions, saying, “It’s going to be winter. It’s cold.” As 2019 was a long time ago, I welcome the proposals, although some detail is needed on the burden of proof.
Under Thatcher, from my recollection, the Conservatives were the party of the family, so why has the blanket ban on unscrupulous landlords saying, “No children,” vanished, as has the no-people-on-benefits stipulation? A I know from my weekly surgery, landlords who say, “No DSS” are the big barrier to unlocking this part of the market, because pensioners and others are excluded. Have the Conservatives done away with Thatcher, or is their tail being wagged by all the people—apparently one in five Tory MPs is a landlord—making declarations of interests?
Michael Gove
First, we will be clear that landlords cannot have blanket bans of the kind that the hon. Lady rightly draws to the House’s attention. Secondly, colleagues will declare interests, but landlords are good things. We need landlords to provide homes. It is nothing to be ashamed of to be in the business of providing a safe, warm and decent home for someone, and there is nothing wrong with people who have saved and work hard investing in property. You do not need to be Margaret Thatcher to believe that that is right.
Mr Clive Betts (Sheffield South East) (Lab)
The Levelling Up, Housing and Communities Committee raised the need for an effective and efficient court system to deal with such matters. Evictions will now have to go to court because they will not be automatic under section 21. Also, many more tenants may go to court over landlords refusing to do repairs, because they will no longer fear retaliatory evictions.
Officials in the Department have suggested that the delays in implementing the Bill came about because of the need to reform the courts, and that that is down to the Select Committee. As I am sure the Secretary of State is aware, the Select Committee actually recommended a specialist housing court—we did that several years ago. If the Secretary of State had agreed to that at the time, there would no longer be any need for delay. The court would be up and running, and be effective and efficient in dealing with cases in the future.
Michael Gove
I am grateful to the Chair of the Select Committee, but the view of the Ministry of Justice, His Majesty’s Courts and Tribunals Service and others involved in the court system is that the creation of a specialist housing court would divert resources from the effort to make the existing system work better. But good people can disagree on that point.
Eddie Hughes (Walsall North) (Con)
I rise as what is known as an “accidental landlord”, who conveniently owns and rents out a property in Tamworth. Speaking as a landlord, I welcome the Bill—particularly the property portal, which will allow councils to focus their resource better on landlords who provide poor-quality accommodation and give councils the opportunity to drive them out of business.
Michael Gove
My hon. Friend is absolutely right. Two of the less conspicuous but important parts of the Bill are the creation of the property portal and the role of the private rented sector ombudsman. If they work effectively, both should obviate the need for the court processes that the Chair of the Select Committee and my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) have mentioned. The property portal should ensure that we can identify properties in the private rented sector whose landlords have not registered, and we can focus our enforcement action on them.
Selaine Saxby (North Devon) (Con)
I welcome better protections for renters; in my constituency, swathes of constituents have been evicted so that landlords can flip their properties to become short-term holiday lets. Nationally, there may have been a growth in landlord numbers, but the Country Land and Business Association and the English housing survey both report that rural seats have seen a demise in landlord numbers of about 24%. In my constituency, we have lost 67% of our long-term landlords since the end of the pandemic. What steps will be taken to reverse the trend, so that long-term landlords come back into constituencies such as mine?
Michael Gove
What I would like to see in my hon. Friend’s constituency and so many others is an increase in housing overall—houses for social rent, for private rent and, above all, for people to own. As the hon. Member for Westmorland and Lonsdale (Tim Farron) pointed out, there is a particular challenge in the very attractive parts of the country, such as those my hon. Friend represents, that attract tourism.
There has been a phenomenon whereby houses that would have been available for rent to the local community have been Airbnb-ised, although not just through that company. They have been turned into short-term lets and effectively been operating as shadow B&Bs or shadow hotels. There is nothing wrong—there is everything right—with making sure that we utilise property as efficiently as possible, but that has created percussive and deleterious consequences in some areas. That is why we are consulting on both using the planning system and also, with our colleagues in the Department for Culture, Media and Sport, a form of registration to ensure that the situation works. Ultimately, however, the challenge is increasing supply overall.
Sir Stephen Timms (East Ham) (Lab)
The Secretary of State has just mentioned the private rental ombudsman, a post that I welcome. Is he considering the case for giving that job to the existing housing ombudsman, who supports the social housing sector at the moment?
Michael Gove
Yes, we are. There is a case for both a separate organisation and for having the issue fall to the existing ombudsman—who, I have to say, has been doing a very effective job.
I must draw my remarks to a close shortly so that all colleagues who wish to contribute can, but the right hon. Gentleman’s intervention provides me an opportunity to suggest that the condition of housing in this country—particularly housing built in the ’50s, ’60s and ’70s—is a profound cause for concern. Many of those homes are reaching the end of their natural lives. As a result of how they were built, we are seeing not just building safety issues but children in particular living in homes that are not decent.
The tragedy of Awaab Ishak’s death reminded us that damp, mould and other poor housing conditions can have a deleterious effect not just on life chances but on lives themselves. That is why the Social Housing (Regulation) Act, the actions of the housing ombudsman and the actions that my Department has taken have been focused on ensuring that registered providers and social landlords live up to their responsibilities.
What we seek to do in the Bill is ensure that the small minority of private sector landlords who also need to up their game do so. We are not targeting any one sector. We are not targeting registered providers of social housing while leaving the private rented sector off the hook; nor are we directing particular attention to the private rented sector and letting registered social landlords off the hook. What we are doing is ensuring that citizens, who deserve a warm, decent, safe home, get one. That is what the establishment of the decent homes standard through this legislation will do.
Marsha De Cordova (Battersea) (Lab)
The Bill would have been a good opportunity to bring forward provisions ensuring that homes are kept at a decent standard. Will the Secretary of State assure the House that he will bring forward measures before the next election that will address decent home standards for the private rented sector?
Michael Gove
At the very beginning of my introduction to the Bill, I stressed my gratitude to all those who had worked to shape the measure and make recommendations on how we could improve it. I am sure that in Committee we will hear representations from different Members and different organisations about how we can improve the Bill further. I am open-minded about that: my aim is to ensure that we get a new deal and a fair deal for both landlords and tenants.
I have listened to representations from the National Residential Landlords Association and others about making sure that the overwhelming majority of landlords, who do a great job, are able to deal with a small minority of tenants who behave badly. I have also listened to representations from individual tenants and those campaigning for them, who want us to move ahead with the abolition of section 21 and the establishment of the portal. The establishment of the portal and the existence of the ombudsman will, I believe, ensure that landlords are on firmer ground and no longer undercut by rogues, and that tenants get a better deal. It is because the Bill provides both landlords and tenants with stronger protections for the future that I commend it to the House.
Mr Betts
I completely agree with those points, and I hope the Secretary of State responds positively to them. I think the situation is of real concern, and there is no reason why the ban cannot be enacted.
I have already made the point about local housing allowance. It is not part of the Secretary of State’s Department, but it is part of Government policy. It is always going to be a challenge for tenants to pay their rent in the private rented sector given the rise in rents recently, but people on the lowest incomes and on benefits are now being excluded from most properties because they simply cannot afford it, because their local housing allowance has been frozen. The LHA needs to be lifted. Even if the Secretary of State cannot say so today, I hope he is encouraging those behind the scenes who can make the changes to make them in a proper and timely way.
I have a couple of other points. Student housing is different. The difference in student housing has been recognised where it is purpose-built student housing in that it will be exempt from the ban on periodic tenancies. That is entirely sensible. Recently, we have seen some real pressures on student accommodation in some university cities. Last year, Manchester students were actually being encouraged to live in Liverpool, because there was not enough housing in Manchester for them. That is just one of a number of examples in relation to protecting the student market, including non-purpose-built accommodation.
Michael Gove
Briefly, I wish to declare my interest. As the parent of a daughter who is currently at Manchester University, I know exactly what the hon. Gentleman means. We will be doing everything we can.
The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)
It is a huge pleasure to deliver the closing speech today on the Second Reading of the Government’s Renters (Reform) Bill, and I begin by thanking Members across the House for their valuable, thoughtful and knowledgeable contributions to the debate. I have enjoyed and noted the contributions from my hon. Friend the Member for Dover (Mrs Elphicke), the hon. Member for Sheffield South East (Mr Betts)—the Chair of the Select Committee —my right hon. Friend the Member for Calder Valley (Craig Whittaker), the hon. Member for Westminster North (Ms Buck), my hon. Friend the Member for Milton Keynes North (Ben Everitt), whom I thank for all his work across a range of all-party parliamentary groups, the hon. Member for Liverpool, Riverside (Kim Johnson), my hon. Friend the Member for Cheadle (Mary Robinson), the hon. Member for Sheffield Central (Paul Blomfield)—I would be very happy to meet him and his APPG—and my hon. Friend the Member for North Norfolk (Duncan Baker), who will know about all the work we are doing to help address the second home issue in his constituency. He has spoken to me about that on a number of occasions.
I also thank the hon. Member for North Shropshire (Helen Morgan) for the support from the Liberal Democrat Front Bench. I declare an interest similar to that of my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), as I have four children in their 20s who are renting in London. I know at first hand of the issues that they and their friends face, and that is why I am so convinced that this Bill is the right thing to do for the next generations of our children and grandchildren.
Rachel Maclean
I will come on to that precise point, if the hon. Member will allow me.
I want to thank the hon. Member for Battersea (Marsha De Cordova), my hon. Friend the Member for Poole (Sir Robert Syms), the hon. Member for Liverpool, West Derby (Ian Byrne) and my hon. Friend the Member for Don Valley (Nick Fletcher), whom I will be happy to meet again, as requested. I also thank the hon. Member for Coventry South (Zarah Sultana), my hon. Friend the Member for Guildford (Angela Richardson) and the hon. Member for Dulwich and West Norwood (Helen Hayes). I am deeply concerned about the case she has raised with me and will continue to work with her. I thank my hon. Friend the Member for Totnes (Anthony Mangnall), the hon. Members for Stretford and Urmston (Andrew Western), for Brighton, Kemptown (Lloyd Russell-Moyle), for Blaydon (Liz Twist), for Brighton, Pavilion (Caroline Lucas) and for Putney (Fleur Anderson), and the right hon. Member for Hayes and Harlington (John McDonnell).
It is right to say at this point that we are committed to honouring the manifesto commitment that we made in 2019 to create a private rented sector that works for everyone and to level up housing quality in this country. I am grateful to all hon. and right hon. Members who continue to engage constructively with us on the provisions in the Bill so that we can deliver the change needed to create a fairer rental market for both tenants and landlords. Of course, I echo the sentiment of my right hon. Friend the Secretary of State, who said in his opening remarks that we will continue to work closely with Members to further hone and refine this legislation as it is put on the statute book.
Several hon. Members rose—
Rachel Maclean
I will make progress, because I have limited time and I must address the points that have been put to me.
First, it is right that antisocial behaviour is a discretionary ground. Judges must decide on the circumstances of a case. Having formerly been Minister with responsibility for safeguarding and domestic abuse, I completely understand the importance of taking such serious issues into account and striking the right balance between tenants and landlords. I was asked whether local authorities will have funding to carry out their enforcement duties. Of course they will have that new burdens funding, as they would with any Government legislation.
I was asked about blanket bans on benefit claimants and families with children, and I make it very clear that we are committed to outlawing the unacceptable practice of such blanket bans. We are carefully considering how to get these measures right. This is a significant reform, as I think all Members understand. We must do it in the right way, while ensuring that landlords rightly have the final say on who they rent their properties to.
Rachel Maclean
I will give way to Members if I have time, but please allow me to make my points.
There have been many questions about the ombudsman. We need simplicity and clarity for landlords and tenants. It is important to say that this Bill does not, in itself, establish a new ombudsman. An existing ombudsman could do the job and, again, we are looking at that very carefully to make sure we get the right solution for this vital part of our regulatory reforms.
I am grateful that many Members have welcomed the point about pets, and I agree that we are a nation of animal lovers. Again, this is about reasonableness. My hon. Friend the Member for Cheadle is exactly right—the circumstances she set out would constitute a reasonable ground for refusal, but we need to look carefully at how this works.
The decent homes standard has been raised again, and it is a key part of our reforms. We must make sure that the new system we introduce means people are living in decent, safe and warm homes. Everyone in this House will be under no illusion about how importantly this Government take this issue, as they can see the work that has been introduced by my right hon. Friend the Secretary of State to tackle these issues, which have laid unresolved for many years. This Government brought in groundbreaking reforms in the social rented sector, and we will do so in the private rented sector to give tenants the same protections.
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. In my capacity as Housing Minister, I work closely with the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), who is responsible for His Majesty’s Courts and Tribunals Service. There is a wide-ranging programme of reform in the court system.
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. When we bring in this reform, however, it is right that we ensure landlords have confidence in the justice system because, as everybody has pointed out, if we do not have good landlords in this country who have confidence in the systems that underpin the justice system, we will not have the rented homes in every constituency that our country needs.
We have always committed to aligning and synchronising the reform of the private rented sector with the court system; we note that that was a recommendation of the Levelling Up, Housing and Communities Committee. We do not think that a housing court is the right way to do that; nor is that the view of the sector or of the stakeholders, with whom we have engaged in huge detail. This work remains a priority for our Department and for the Ministry of Justice. We want to see landlords being offered a digital process for possession on all grounds.
Richard Graham (Gloucester) (Con)
If the Bill’s Second Reading receives widespread support because it will rightly ditch no-fault evictions of tenants without triggering an exodus of private sector landlords, that will in no small part be down to the hard work, for which I am very grateful, of Ministers including my hon. Friend. While she is looking at what is a reasonable speed to resolve antisocial behaviour claims in the courts, will she confirm that it is the Government’s firm intention to fulfil our manifesto commitment and implement the Bill as soon as possible?
Rachel Maclean
I thank my hon. Friend very much. I can absolutely give him that assurance.
Mr Fysh
Does the Minister accept that if the Country Land and Business Association’s estimate is correct that the Bill may reduce the available private rentals by 40% in rural areas, that could have a completely deleterious effect on the Prime Minister’s main pledge, which is to get inflation down? Core inflation is driven by rentals. Will the Minister work with me to fix the Bill and ensure that that does not eventuate?
Rachel Maclean
I am very happy to work with my hon. Friend on this and many other issues, but it is important that I say that we have done considerable analysis. There is no evidence, such as the estimate that he has just pointed to, that the Bill will lead to landlords leaving the sector, but it is right that any policy that the Government bring in is based on evidence. That will always be our approach.
Rachel Maclean
I want to wind up now, because I cannot detain the House any longer. I assure right hon. and hon. Members that we are focused on introducing this groundbreaking once-in-a-generation reform. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Renters (Reform) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Renters (Reform) Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 5 December 2023.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Renters (Reform) Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by the Secretary of State; and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Renters (Reform) Bill, it is expedient to authorise:
(1) the charging of fees under or by virtue of the Act; and
(2) the payment of sums into the Consolidated Fund.—(Andrew Stephenson.)
Question agreed to.
Renters (Reform) Bill (Carry-over)
Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),
That if, at the conclusion of this Session of Parliament, proceedings on the Renters (Reform) Bill have not been completed, they shall be resumed in the next Session.—(Andrew Stephenson.)
Question agreed to.
Petition
Tuesday 14th November 2023
(5 months, 2 weeks ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 14 November 2023 - (14 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
Polly Neate: The connection is not brilliant, but I hope I heard the question correctly.
There are reasons why landlords might be facing difficulties, particularly due to mortgage rates, but we do not believe that there is evidence that these reforms will, in themselves, influence the PRS supply. In fact, the Government’s own work shows that the impact on supply will be minimal. We are not overly concerned about that. The evidence from Scotland is that there was not the promised mass exodus of landlords: data from the Scottish landlord register indicates that there has been no quantitative evidence of an impact on supply of PRS accommodation since the reforms there were introduced.
The most recent English housing survey data tells us that the private rented sector is still increasing in size. Some landlords may well be selling up or retiring, but we do not think that there is evidence that this is happening in the unprecedented numbers that people are suggesting. We just do not believe that is taking place. We certainly do not believe that this Bill will impact it significantly.
Darren Baxter: I would back that. Various forms of data—the English housing survey, a comparison of stamp duty at the higher rate against capital gains tax on people selling properties, and other sources—show that over the past few years the private rented sector has grown. More landlords might be selling up in any given year, but there are still more who are buying. That has been against the backdrop of tax changes and various forms of regulatory reform over time that has tightened up the responsibilities on landlords.
I do not think we can draw a conclusion that that landlords are selling up. It is kind of the opposite. If that has changed—and the data is unclear—it has changed since interest rates increased significantly. That is because the cost of borrowing is a really significant variable for landlords. That should give you, as legislators, more confidence about this reform. It is not going to be this reform that pushes landlords out; it will be the responsibility of the independent Bank of England. That should provide sufficient confidence.
Blanket bans are important but not perfect. If we think of “No DSS”—discrimination against people who claim benefits—there are all sorts of ways in which people who are in receipt of social security benefits might be discriminated against by landlords at the point at which they apply for a house. Income checks, for example, might push them out of the market.
Fundamentally, unless you increase people’s income, they might struggle to rent privately, but it is an important signal to the market that you cannot discriminate against a group of people just because they receive benefits. The same goes for families with children: it is important to say that if you have kids you should be allowed to rent a property, and that if you are putting a property on the market you should be open to who lives in it. These measures will not solve 100% of the problem, but they are really important signalling devices that this legislation can provide.
Dame Clare Moriarty: On the supply question, it is worth looking at the international angle. The Social Market Foundation has done some quite interesting analysis. First, England is an outlier in still having no-fault evictions. Most countries do not, and many of the countries that do not have them have much larger private rented sectors. There are all sorts of different reasons for that, but there does not appear to be a correlation between reduced size of private rented sector and the banning of no-fault evictions. That is just to add to the important points that Darren and Polly have made.
On the point about blanket bans, that is something that we see coming through quite a bit, including with people who would not fail to be able to rent on the grounds of income alone. They are either told that they cannot rent or possible conditions are put on them, including six to 12 months’ rent up front, just because they are in receipt of benefits. Those are really serious points. I know that the Government have made a commitment to table an amendment to deal with that, which we would very much welcome.
The Chair
Before we go on, may I reiterate that we will finish at 10.10 am precisely, even if someone is mid-sentence? Questions and answers should both be brief and to the point.
Matthew Pennycook
Q
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
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.
Lloyd Russell-Moyle
Q
Ben Beadle: To turn that on its head, why have the clause one way in the first place? Why not let the market talk for itself? If a landlord wants to sell, why not let them?
Matthew Pennycook
Q
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
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.
Lloyd Russell-Moyle
Q
Paul Dennett: Selective licensing is very interesting for Salford, because I think we were the first local authority in the country to pilot the new legislation at the time. Selective licensing schemes will inevitably continue to be an important tool for councils to manage and improve the private rented sector properties in their area. In our opinion, local areas should have the flexibility to employ selective licensing schemes to meet local need, as we determine that. We are calling on the Government to amend the Housing Act 2004 to remove the requirement for councils to seek approval for larger selective licensing schemes. You will be aware of the 20% threshold—
Tuesday 14th November 2023
(5 months, 2 weeks ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 14 November 2023 - (14 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
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
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.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
With Ben, I would like to probe no-fault evictions, which are very expensive for the person who is not at fault. They have to pay for removal costs, a new deposit and, very often, a month’s rent up front, which is very difficult for people. Are there any ways that could be ameliorated when it is no fault and the tenancy is being curtailed early, within two months?
Sue James: Shall I go first? You also heard this morning that the Government need to hold their nerve, and I absolutely reiterate that. The Bill has been a long time coming, and we have a crisis out there. Colleagues of mine who are at law centres have queues of people coming to see them because of this, and we absolutely need to get it right.
The county court is not the experience I have been hearing about in some of these conversations. You heard this morning that the county court is pretty much getting it right: it is not one of the courts with a huge backlog of hearings and stuff like that. When you start a possession claim, there are fixed rules around that. The case has to be listed within eight weeks, and it is usually listed in six to eight weeks. You then have a hearing before a judge, so it is not actually taking that long. You have the hearing and the court has to apply strict criteria on whether it is just and proportionate, and whether there is a reasonable defence that can be pursued.
In the court, we have a fantastic duty solicitor regime that has just been improved to include benefits advice beforehand. So you already have judges who are experienced in housing, you have duty advisors who are very experienced in housing, and then you have income officers who are at the same courts all the time. You build these relationships, and as duty solicitor, you are working out a plan where you can get the arrears paid off and get the stuff sorted out. We now have crisis navigators in law centres, and they resolve the benefit issues that are sitting behind it. Of the rent-arrears cases I have ever seen, I would say that probably about 60% to 70% have been a benefit-related problem. I think those issues are different from the issues around the court.
The only thing that you could invest more in—well, obviously if we invested more in the court that is brilliant, but I do not think we need to wait for that—is the bailiffs and the end period. Sometimes, with a bailiff’s work, it can take up to eight weeks to fix a date. That is just about money. If you address that, you do not have these problems. That is why I am saying that discretionary is the way to go, because it provides fairness.
You already have a housing court sitting there. It could do with some tweaking, but you are already there with that. I think we are good to go. Given that section 21 is the biggest cause of homelessness, you would rebalance in the way that you want to, so I would say, “Hold your nerve and go with it.”
Ben Twomey: I have two very quick points on the court reform before I go into your other question, Lloyd. First, in quarter 3, the latest data from the Ministry of Justice shows that the median time it took for a repossession case was about 22 weeks in both section 21 and in section 8. The idea that section 21 is much quicker is not true. With section 21, more people move out beforehand because there are fewer ways in which you can legitimately challenge it. There is a problem if you are setting up the court system to say that we want to basically stop tenants having their rights and a way in which they can challenge an eviction. That is a really important point: it does not actually lengthen the time that will be taken. That is not true.
Secondly, I will talk quickly about Jasmine, a renter who very recently challenged an eviction because she could not move in time. She was given two months to move under a section 21, but she could not move in time, so she challenged it and it took up the court’s time instead. If you extend the notice period to four months, that challenge would potentially never happen, the court never has to see Jasmine, she finds a new place and is comfortable and able to move out in good time. She is happy, and potentially the landlord is happy too.
On the cost of no-fault evictions for renters, we estimate that the average cost to a renter of an unwanted move is £1,700. For a renter to be able to save, it is really important that they are able to find some way in which, when the move is through no fault of their own, they can make those savings quicker in order to be out of the home. We think the best way to do that—rather than, for example, thinking about repayments from the landlord—is just to say that the final two months of renting will have no rent cost attached. The tenant then has time in that space to save in order to find a deposit and the first month’s rent, for example, and they are able to move out with the savings they have made because of the two months’ lack of rent.
It potentially means two months out of pocket for the landlord who has chosen to do a no-fault eviction, but if it is a no-fault eviction for a sale, they are potentially getting a big windfall through that anyway. The two months out of pocket can be balanced against the fact that otherwise it would be two months in which the tenant is likely to find themselves as one of the record number of homeless people we have at the moment. It is an important balance to strike, and that is one of the ways in which you could do it.
Mike Amesbury
Q
Francesca Albanese: We at Crisis recognise that changes do need to be made to the courts. Obviously, that is one of the central themes in this Bill and it is about making sure we get that right. But the problem is that if you bring in the court reforms first and then make the changes around abolishing section 21, you are effectively creating a two-tier system. For us, that does not protect tenants in the right way, so we would argue that both need to be brought in at the same time.
Jacob Young
Q
Francesca Albanese: To clarify, are you referring to ASTs, and their length?
Jacob Young
Yes.
Francesca Albanese: We would welcome longer-term tenancies. We know through our services—this is increasingly so at the moment—that people come to us who may have had their tenancies shortened for a reason that is not of their making. Being able to have longer-term tenancies in the private rented sector gives more stability for tenants. Equally, if you look at where rent increases can happen, this also manages that part of the market—making sure that there is proportionality in terms of when rent increases are made, as well as stability for tenants through longer-term tenancies.
Jacob Young
Q
Francesca Albanese: I think they certainly help. If we are looking at longer-term tenancies, I suppose it is about having more emphasis on longer-term tenancies being used more regularly. Going back quite a lot of years of working in this space, I know that there are ways you can do that now, but it is not the norm. Most tenancies that are given are six or 12 months with a rolling period or a fixed term.
I would also go back to the points made at the beginning: this is helpful, but there are other areas that we are concerned about, such as ensuring that people getting served notice on the kind of grounds that were under section 21 and which will now go over to section 8 are protected sufficiently. Even though longer-term tenancies can give tenants more protection, from the perspective of Crisis, which works with people at the lower end of the private rented sector market, where there is often a higher turnover of tenancies, we would want to make sure that those protections are still in place so that we do not end up pushing more people into homelessness as an unintended consequence.
Lloyd Russell-Moyle
Q
Francesca Albanese: I might make a broader point first and then come back to that. At the moment, as you will all be aware, the local housing allowance does not meet rents. It has not done so for a long time, and it has been frozen since 2019. That decoupling of rents from local housing allowance levels is causing huge problems. We did some research six months ago—I would say the situation has probably got worse since then—that shows that only 4% of the market in England is affordable to people on local housing allowance. In some areas of the country, that drops to 1%, so it is a massive issue. That needs to happen now, and it is something that the Government can do now. They can give broader access to the private rental market. There is obviously a longer-term issue: we need more social housing. Where private rental sits within the broader housing market is really important.
On the point about discrimination, we do not want tenants to be discriminated against because they are in receipt of welfare benefits. Anything that prevents that is welcomed. The problem at the moment is that quite a lot of tenants are not getting anywhere near properties within the private rented sector. We are seeing record levels of people trapped in temporary accommodation and local authorities are very stretched. The point about the private rented sector is that quite a lot of people are not even getting access to it, let alone being discriminated against because of being on welfare benefits.
On the more specific point about tribunals, that is not my area of expertise, so I do not want to comment on something where I would be giving an opinion rather than factual evidence.
Matthew Pennycook
Q
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
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.
Ms Karen Buck (Westminster North) (Lab)
Q
Ian Fletcher: It is something that we have been continually concerned about. In a London context, the removal of the planning constraints on the short lets market affects property across not only the rental sector but the leasehold sector.
It is a concern, I suppose, in terms of members. At the moment, you obviously have to take a minimum six-month tenancy, but what members often find is that you do not want to restrict subletting, because often that is helping the ultimate tenant, if they have to move for various reasons. You are finding that quite a lot of people are moving into these premises and then subletting to somebody who will take it on a short-let basis, so these are portals and things of that nature that, to some extent, are exploiting that situation.
Matthew Pennycook
Q
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
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.
Matthew Pennycook
Q
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
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.
Ms Buck
Q
May I also ask a question about enforcement, which is central to this issue? As we know, the enforcement record is very patchy in local government. In your view, why is that?
Dr Dawson: With regard to the use of the decent homes standard in the sector, I have found through my personal research on the sector that there is a lot of variation in the licensing conditions and standards set for private landlords in different sub-markets up and down the country. It is only right that local authorities tailor their approach to suit their local market, but there is great need for more consistency between the licensing conditions that they set and what they require in their area.
If we were to bring in the decent homes standard across the sector, licensing standards could be revised to accommodate that new duty and any updates made to the decent homes standard. That would provide a fairly common set of grounds for properties nationally. Then, local authorities need only make small changes to what they require of properties in their area to fit local peculiarities of housing; for example, northern back-to-back houses are something to burden yourself with only if you need to be aware of the issues that they present. You get steel-framed houses in some areas and concrete houses in others. Local authorities need to be able to focus their approach and the standards that they require to fit what they have going on in their area.
We still have the opportunity to use the housing health and safety rating system under the decent homes standard. The updates to the HHSRS will come through fairly shortly; we will welcome their being brought into practice. Use of the HHSRS would remain a common requirement during the inspection of properties, to satisfy the requirement on properties not to have serious hazards.
A whole range of factors influence levels of enforcement in local authorities. At the moment, we have about 2.2 qualified environmental health officers for every 10,000 private rented sector dwellings, so that is already a pretty low rate. Where we have larger authorities and significant political backing, we see more environmental health officers, with better recruitment, better political backing and more funding for those officers, which is key, so you start to see a collection of experience building up and the legal backing behind it. For example, Newham has something like 100 environmental health officers or enforcement staff in its departments, and they can move their way through more than 200 prosecutions in a year. In contrast, a rural authority may have one or two environmental health officers, who must share their duties across all the regulatory functions of environmental health, including food safety, health and safety, environmental protection and public health.
One of the profession’s big problems is ensuring consistency in funding. When funding is renewed annually and you are looking at changes each year, it is very difficult to do succession planning. We have seen a gradual reduction in the number of people coming through university environmental health programmes in order to support the profession and provide a reservoir of expertise for the inspectorate. We are also seeing more of them going off to private sector employers, rather than the public sector.
A range of issues are affecting the sector, and the sustainable and predicable funding such as we get with Housing Act 2004 licensing has been a real lifeline for the sector. Where we have big schemes going, it has managed to keep the nucleus of staff that is required for the expertise and the momentum to move large-scale enforcement forward. My apologies—that was quite a long answer.
Jacob Young
Q
Dr Dawson: When Wales first implemented the scheme, about 196 penalty notices were given out in the first couple of years and there were about 13 prosecutions. The main reason, from the Welsh Government’s own analysis, is that they did not set up clear systems and processes for liaison with local authorities ahead of the formation of Rent Smart Wales.
There is a process whereby local authorities are expected to carry out enforcement functions and can then bill Rent Smart Wales, through an agreement—a memorandum of operation—that they have all signed up to. However, because they are trying to account for small amounts in hours and tasks, it is very difficult for local authorities to predict the workload and allocate officer time against it. That has become somewhat of a Cinderella to local authorities’ other duties.
One of the higher impact areas is that, although Rent Smart Wales provides licensing and can therefore enforce conditions, it also has a separate registration function, which is purely information gathering and gives it the ability to send out mailshots to landlords and letting agents about changes to the law and training courses that are available. However, landlords have the opportunity to exempt themselves from those communications, and a very large proportion did so at the point at which they registered. Therefore, they receive no communications and no updates, so they are none the wiser, despite the benefit of having registered and made themselves available to get that information. That was a sad loss, and there is not much you can do about it now.
Lloyd Russell-Moyle
Q
Dr Dawson: I think we could probably do with the portal as an information repository. That is very welcome. Research shows that a lot of landlords tend to deal with the need for information on a reactive basis, when a situation presents itself. As most of them are not members of recognised landlord bodies, they are using things such as internet portals, chatrooms and blogs to get information on what is required of them. Through local authority licensing, local authorities are getting much better penetration and being brought closer to landlords, and that allows them to provide advice, but landlords in general will tend to use online resources to get information. We would like them to use a single portal that we have quality control over.
The same goes for tenants. At the moment, one of the main reasons for tenants’ not complaining is ignorance of their rights; I am sure that Generation Rent will have raised that in its submissions. If we can point to a single, consistent source of information, that will help the sector to regulate itself. Given that so many landlords are small scale—85% of properties in the sector are owned by landlords with portfolios of one to four properties —providing the opportunity for more self-regulation in the sector would be a big help. Local authorities have limited budgets, and because the regulations are so complex and there is such a range of operators—there is a sort of sliding scale from the good to the poor—a more interventionist approach is required. Using rent repayment orders incentivises tenants to keep an eye on landlords.
Things like the three-month period in which you are unable to re-let a property after you have used grounds 1 and 1A will be exceptionally difficult for a local authority to follow up on. We just do not have the resources to react in that sort of time and proactively go out and visit these properties. Six months to a year would be much more sensible.
On incentivising tenants to take action separately from the local authority, the only thing we would say is that we should be able to give them advice. Under the original rent repayment order clauses, we were prevented from giving advice to tenants on cases. If we are taking action, they will often come to the local authority and ask for information. We have not looked at that as an option. We would certainly be open-minded to it, and we would support anything that helps the sector to regulate itself.
Matthew Pennycook
Q
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
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.
Ms Buck
Q
Dr Rugg: I am better able to speak about the lower end of the market, because that is the area that I specialise in. We had some comments earlier about build to rent, and there are some concerns about the build-to-rent sector, but I will not go into those here.
Thinking about the lower end of the market, the proposed regulation seeks an end to “No DSS”, as a catch-all. I do not think that that will necessarily work particularly well. Landlords seek not to let to people in receipt of benefits for two reasons: first, because they might have some prejudiced view about the people who tend to be in receipt of benefits, and that is something that is certainly not right; and the other set of reasons sits around frustration with the benefits administration and the level of benefits being paid.
I have researched landlords and housing benefit for many years—too many to mention. In the past, landlords who routinely let in the housing benefit market enjoyed quite good relations with their local authority and they worked together to deal with problems that their tenants might encounter in the benefits market. The introduction of universal credit has completely taken that link away. A lot of landlords are feeling quite exposed now: they have tenants with quite high needs having problems with their benefits, and they simply cannot do anything about it. That is a problem that we need to think about.
One of the earlier speakers referred to the rent control that sits in the local housing allowance system. That is hugely problematic. It means that tenants who receive local housing allowance simply cannot shop around the market, because the rent levels are far too low for them to act as effective consumers. Essentially, they are having to shop where they can, and some landlords are definitely exploiting that situation, letting very poor-quality property on the understanding that the tenants do not have very much choice.
Professor Gibb: I do not have much to add, except to say that I completely agree on the local housing allowance. We have just been doing some research in Scotland that suggests that the levels are far too low to be effective for the great majority of people. It is really welcome to think about the market rental sector as a series of segmented markets. We should therefore not expect regulation that covers the whole area to have equivalent effects in different parts of that area.
The only other thing I would say is that we also need to think as much as we can about housing as a system, recognising the importance of social and affordable housing alongside the bottom end of the rental market, and thinking about how those things can connect together and about the value that increasing investment in social and affordable housing would bring.
Matthew Pennycook
Q
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
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
Professor Hodges: The signposting is to have a single ombudsman.
Jacob Young
Q
James Prestwich: Again, as other witnesses have said, there is an awful lot to like about the landlord portal. We have talked quite a lot about the benefits that the portal will have for tenants, but it is right that there are significant advantages for landlords as well. This point might not have been made yet, but the overwhelming majority of landlords, regardless of the number of homes they own, are thoroughly decent people doing a decent job. We know there are examples of poor quality and poor practice, as there are in all professions, but any tool that enables landlords to get a better understanding of the responsibilities expected of them is to be welcomed. The point about how we get the portal to work both ways is really important. There is something about the sort of information that local authorities will be able to access from the portal, although they do not at the moment. That should enable local authorities, providing they have got the capacity and resources, to be able to take a harder line when people fall below the standards that we all want to expect from landlords.
Lloyd Russell-Moyle
Q
James Prestwich: There is a lot that Ben Twomey said that you could agree with. I think the challenge here is about how we try to find that balance. We know that a lot of people in the private rented sector are accidental landlords. Previously, I was an accidental landlord and an accidental tenant, and neither of those things was particularly pleasant, so I have a little experience of that. There is a real challenge around all of that that we have not quite bottomed out yet.
Thursday 16th November 2023
(5 months, 2 weeks ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 November 2023 - (16 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
Q
You further mentioned the CLA’s opinion on section 21. In terms of reforming the court system, what changes would you want to see before the CLA would be happy to see the abolition of section 21?
Judicaelle Hammond: If you do not mind, I will take your last question first. I think there is a need to reduce the time between making a court application and getting a property back. It can be a very lengthy process, particularly if you have to resort to bailiffs. There should be a success trigger on the face of the Bill, if at all possible, so that it is measurable. If you are going to abolish section 21, it should not be on any arbitrary date; you need to have a number of weeks. At the moment, the Ministry of Justice measures the average time it takes as 28 weeks, which is quite long. We need something much shorter, at which point you could say, “Yes, the court system, as reformed, is working.”
On the reforms themselves, digitisation will no doubt help. The question in our mind—given what analysis by the National Residential Landlords Association suggests as the cause of the delay—is whether that will be enough. There is a tremendous problem with the resourcing of the court system. To go back to my rural brief, we have lost 74 county courts since 2010, which has meant that the rest of the work has had to go elsewhere. It has also meant that landlords, and indeed tenants, in rural areas have to go further to go to a hearing. There is a question about resourcing as well as about making the process and system easier. Of course, there is the question of what happens after the court order has been given, so there is more to it than what is in the Bill at the moment.
The Chair
I am afraid that this will have to be the last question to this witness, so could we please have a short question and answer?
Matthew Pennycook
Q
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
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.
Jacob Young
Q
Helen Gordon: Absolutely. We have real live examples that I am happy to share with the Committee. We do differ. A minimum build to rent is usually at least 50 homes. The majority of Grainger’s properties are around 250 in a cluster. If you get antisocial behaviour, that can have a very detrimental effect on the whole of the community—we build communities.
Evidencing antisocial behaviour often requires you to get neighbours to make complaints and witness statements, at times when they have been personally intimidated. I have a very live example where we literally had to empty the six properties adjacent to the property causing a problem, and it took something like 15 months to get the ground for possession through the courts.
So we would really welcome lowering the bar on antisocial behaviour. I would particularly like it to reference sub-letting and party flats. There is quite an industry, which, fortunately, Grainger does protect itself from, where people take a property and then sub-let it as a party flat at weekends, causing disruption to the whole block.
Lloyd Russell-Moyle
Q
Helen Gordon: Can I take your first question first? There is a difference in terms of what we would generally say is a party flat. Grainger forbids these things in its lease, and the prospect of anybody who is already in contravention of the lease—probably not paying rent and making a profit rent out of the party flat—going through a registration scheme is pretty unlikely. I am talking about illegal sub-letting as far as the lease is concerned, and illegal party flats.
Matthew Pennycook
Q
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
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.
Jacob Young
Q
Richard Miller: That’s right, yes. Digitisation is absolutely necessary. It is disappointing, but we understand the reasons why it has not happened already. It is a major project and we need to have the system that will be in place for the foreseeable future before we start building the digital systems to cope with that system.
Nimrod Ben-Cnaan: On your point about the ombudsman, Minister, there is little to comment on in the Bill. The shape outlined in the Bill is just that: an outline of an idea that has been suggested by various parties. You have heard some of them in previous sessions, and that might be useful in their own terms. Our concern has always been that the ombudsman would be used to displace, specifically, tenants’ access to the courts when they need it, and through that to displace the provision of legal advice that would otherwise be available for them. We would like to ensure that tenants have a good, reliable source of information and advice about their rights, what they can act on, how they can act on it and the support to do so. On the ombudsman, well, let us see that idea get fleshed out in detail.
I was heartened to hear from the Department’s officials that the intention is not to have the ombudsman somehow displace access to courts, for example, with disrepair claims, which would be so important to us. The court still does, and can do very well, the kinds of things that the ombudsman cannot do at all—be that through things such as establishing fact, applying the law, interpreting the law and sometimes being able to issue injunctions when there is, for example, an unlawful eviction. A law centre would normally be able to step in and stop that right there and then, in a way that the ombudsman would not even have the power to do so. Actually, we have a lot going on with the courts at present, and we should resource them and resource the allied measures to make the most of them.
Ms Karen Buck (Westminster North) (Lab)
Q
Richard Miller: The Law Society has published a number of maps showing the availability of legally aided housing advice across the country. Those have shown, over time, that the picture is getting worse. The number of law firms and law centres delivering these services is reducing. We now have something like 42% of the population without a housing provider on legal aid in their local authority area. By definition, the sort of people we are talking about—those who are financially eligible for legal aid, where very often the issue is that they are unable to pay their rent—cannot afford public transport to travel significant distances to get the advice they need. Local provision of advice is vital.
The problem we have—there may well be many people around the table who are not experts in the legal aid system—is that the last time the remuneration rates for legal aid were increased in cash terms was in the 1990s. That is what the profession is up against, and that is why more and more firms have decided that it is not economically possible to carry on delivering these services. We are seeing an absolute crisis in the state of legal aid provision across the country, and that needs to be addressed. I will pass over to Nimrod to deal with the consequences of people not being represented.
Nimrod Ben-Cnaan: Things have got so bad that even delivering the duty desk at court—the scheme that we are so reliant on to make possession work well for all parties—is difficult. In the last procurement round, the Legal Aid Agency had such problems sourcing providers in the greater Liverpool area—Merseyside, if you like—that there was a reliance on transitional arrangements. If you have a large urban centre where a legal aid firm should be able to make a sustainable business but is not able to do so, we have a real problem.
In terms of the kind of impact that legal aid services could offer us, I would say that the current scope of legal aid needs to be addressed, not just the remuneration. Ten years ago, in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the scope cut to legal aid was such that a lot of early intervention to help people was taken out of scope, so you are basically incentivised to let problems escalate. It is the wrong way round, and even the Government are realising that in their current review of civil legal aid. If you get in early, you are able to divert people from the court wherever possible. You get to represent tenants wherever possible, lightening the load of the court, and you get to give assistance for as long as it is needed, rather than by adhering to whatever original parcels you were apportioned by legal aid. There is an opportunity here to make a secondary provision to legal aid that would help to prop up the system through this transition.
Richard Miller: To build on that, some unrepresented tenants do not bring cases that they could and should bring and do not enforce their rights; others bring cases that are misconceived, and that has an impact on the landlord, who has to defend the misconceived case, and on the courts, which have to put in resources to hear it. When these cases go to court, whether they are validly brought or misconceived, unrepresented tenants very often do not understand the processes and what is required of them, so they do things wrong and have to have things explained to them. That means that the courts have to put a lot more resources into managing the case than they would if the tenant was represented, so there is a whole range of ways that landlords and courts—and therefore the taxpayer—are adversely impacted by tenants being unrepresented.
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.
Jacob Young
Q
Jacky Peacock: I think it will in a number of cases, yes, but neither section 21 nor the Bill as a whole will make a dramatic difference to the landlord-tenant balance or relationship. I know the most robust, feisty tenants, but the idea of going to court and defending themselves is terrifying. In the vast majority of cases, if a landlord tells a tenant to go, they will go; they are not going to question whether they have a right to remain or what process has been followed—they will go. We still refer to the land “lord”—a direct descendant from a feudal stage—and we have not changed that relationship very much. We need to protect tenants by making sure that, without the tenant’s having to exercise the rights, even if they have them, the property is safe and competently managed.
Lloyd Russell-Moyle
Q
Jacky Peacock: We think that all the grounds should be discretionary. There is no more draconian decision that a civil court could make than to deprive someone of their home. The thought that they will be prevented from looking at all the circumstances before making a decision seems, in principle, unfair. Judges are not soft. If they have discretion, they will still grant possession in the majority of cases where the evidence is there and it is the fairest thing to do. But to deprive them of being able to look at every single circumstance in any of those cases before taking someone’s home away is not justice. It does not deliver justice. I have seen many cases of possession orders being issued against the tenant that have been grossly unfair for all sorts of reasons but, technically, the decision was mandatory.
Matthew Pennycook
Q
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
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.
Helen Morgan
Q
Jen Berezai: It is there now. There are only a handful of companies, to be fair, but it is there now. We at AdvoCATS tend to deal with one company called One Broker, which has been providing a product for quite a few years. Premiums start from about £15 per month, which gets a landlord £4,000-worth of cover. We are aware of people developing other products, because when the Bill goes through we foresee a lot more of them coming to market. In the course of preparing the “Heads for Tails!” report, we spoke to insurance companies, including the Alan Boswell Group. It developed and launched a pet damage policy for tenants, backed by SAGIC—the Salvation Army General Insurance Corporation—specifically as a result of our campaign and what we were calling for.
Thursday 16th November 2023
(5 months, 2 weeks ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 November 2023 - (16 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Matthew Pennycook
Q
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
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.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
Liz Davies: Entering into a new tenancy at market rent is one thing, but there is a real worry about rent increases to market rent. Although it initially plausible sounds—why should rent not go up to the same level as elsewhere, if it was a new tenancy?—the problem is that you may then end up with an unaffordable rent for the tenant, who had entered into the tenancy on the slightly slower rent, and they then leave voluntarily, but as a result of economic pressure; and when I say voluntarily, I do not mean entirely voluntarily, but it is not due to a notice served or a court order. The Renters’ Reform Coalition is certainly suggesting that the tribunal’s power should be limited to inflation or local median wages to increase rents, along, of course, with the prohibition on increasing them more than the landlord has proposed. I think that must be right. I understand that landlords are conducting a business, but they have let the tenancy initially at rent x; it is not that unfair for both landlord and tenant to have certainty that rent x will increase only by inflation or median wages, rather than out there in the open market.
Ms Buck
Short answers are fine.
Simon Mullings: We are lucky because we have had very recent statistics. The timescales for the various stages of possession and litigation are exactly as they were in 2019, when this Bill started its slow journey to where we are today. There is no doubt that there is a need to improve processes through the courts. 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. What we lack is resources for the county courts for both the physical estate and the personnel in the court to be there to provide the sort of first-class service that you would like to see in possession cases.
HLPA members have been campaigning on court reform and improvements to the court system since around 2015 or 2016, so we are all for it. I echo what Shelter’s director said earlier in the week: it is so important that we move forward with the Bill and the abolition of section 21, which is a key driver of homelessness and of misery, particularly for families with children in schools, who want the stability of knowing that the children can go to the local schools. Section 21 is also a driver of rent increases in various ways—I am telling you things you all know. I do not think there should be any further delay whatsoever.
Giles Peaker: I do not think it is necessary. I am reluctant to think that the process of legislation should be based on whether the courts are functioning as they should be. I agree with Simon: the actual process of possession proceedings is probably one of the quicker processes within the county courts at the moment and is fairly well honed. I would add that 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. Most possession claims will go no further than first hearing—if there is no defence, that is it. There would not be such a significant impact on the courts’ functioning to make this a concern that should cause further delay.
Jacob Young
Q
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
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.
Ms Buck
Q
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.
Jacob Young
Q
Liz Davies: No, clearly that is not fair, but the current ground 14 allows for a possession order when the tenant or somebody residing in or visiting the tenant’s property
“has been guilty of conduct causing or likely to cause a nuisance or annoyance”
to other people residing, living nearby or next door, visiting, and so on. So, that test is there. There is an antisocial behaviour ground for possession. It is discretionary, but the Bill will continue it as a discretionary ground; it simply lowers the threshold by a small amount from “likely to cause a nuisance” to “capable of causing a nuisance”. I really cannot see the circumstances in which a very difficult tenant who has been causing the sort of antisocial behaviour that you have just talked about will not meet the threshold of “likely to cause” but will meet the threshold of “capable of causing”. It is a very narrow distinction.
The point is that antisocial behaviour grounds are there—they really are—and courts use them. At the moment, they are used only by social landlords because of section 21, but we can all tell you that courts are very heavy on antisocial behaviour, and it is impossible for a tenant to remain in possession unless the court is satisfied that that behaviour has stopped and will continue to stop. Courts do not allow tenants to remain in possession under the current test.
The Chair
I thank our three witnesses: Simon Mullings, co-chair of the Housing Law Practitioners Association, Giles Peaker of Anthony Gold solicitors, and Liz Taylor KC of Garden Court chambers. Thank you all very much for giving us the benefit of your wisdom.
Examination of Witness
Ben Leonard gave evidence.
Matthew Pennycook
Q
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
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.
Jacob Young
Q
Ben Leonard: Absolutely. It needs to be robust, free of loopholes and properly enforced. There are two key ways to do that. The first is properly funding local authorities. It would be no use granting the powers to local authorities to enforce a decent homes standard—we all know the state of local authorities and their finances at the moment—if they do not have the resources or a duty to enforce. It just will not happen, with the best will in the world.
The other thing, which has been discussed already, is incentivising tenants to do it: creating an army of enforcers who are properly incentivised to report landlords who are not up to scratch. The property portal can play a big role here. More transparent information inherently gives renters more power to put pressure on and see when their landlord is lying to the authorities. If a landlord says, “We have met these standards” on the property portal, a tenant can look at it and go, “Well, that’s not true, and I can point to all the problems that exist,” and then there is an incentive for them to pursue it. I speak as someone who has pursued a rent repayment order in the past. I won 80% of my rent back, but it was a long, gruelling and difficult process, with no access to legal aid. The financial incentive was quite strong, but there were times when I felt like giving up. There are many ways to solve that problem, but making the process straightforward for tenants and properly incentivising and supporting them in it, alongside local authority enforcement, are important.
Lloyd Russell-Moyle
Q
Ben Leonard: Ideally, it should be publicly available information. You should not have to move into a property to discover that there are issues with it or that there are issues with the landlord; you should be able to check up a property on the portal before you move in. You should be able to see what it has been rented at in the past and compare that to the rent today. Has the landlord just done a massive rent increase, with no real improvement to the property? Do they have a history of improvement notices from the council? I would like to see that on there as well. In fact, any disciplinary action against the landlord should be available there. Nobody, whether they are a family, an elderly person or a student, should have to move into somewhere to find that they have a rogue landlord and a house that is falling to pieces.
Lloyd Russell-Moyle
Q
Ben Leonard: Definitely. That could take a lot of forms. It could be a simple payment, like a rent repayment, to help with that transition, or it could be that, from the moment the notice is issued, it is illegitimate to collect rent on that property and no further rent needs to be paid. That would go some way to, first, put off rogue landlords from abusing the power and, secondly, make the circumstances of the tenant’s life more liveable. Moving house is a massive hassle, especially if you have dependants, so if that is being foisted on you by an outside force, there is no reason why that outside force should not support you in some way.
Jacob Young
Q
Ben Leonard: I think it is fair to place a reasonable barrier to the abuse of those grounds. These things are always a balancing act. Would it be fair for someone to have to continue paying rent while having to uproot their life and sort things out? They are not really getting what they are paying for in those two months, because those two months are spent preparing to leave, moving their children’s schools or saving for a deposit. They need to pay for all those sorts of things.
For the landlord, it comes down to the cost of doing business. Landlords make a hell of a lot of money on those properties, and I think it is reasonable that sometimes there are times when the amount of money they are getting in will dip because of such things. If it is a choice between landlords’ profits coming down for a series of months and tenants potentially being impoverished, I would choose the former.
Ms Buck
Q
Ben Leonard: Yes, absolutely. The limit on deposits was a huge step forward, but they are going by the back door, so not much has changed, because people ask for rent in advance. I can speak from my own experience: I had to pay six months’ rent in advance before moving to my current flat. A lot of the people I know and work with do, and often they are borrowing money to do it, because not a lot of people have that kind of money lying around. In a way, it is often discrimination—it is a way of saying, “Well, you might be able to afford the rent, but we don’t like the look of you. Let’s see if you can stump up this much cash up front.” It is totally unjust, basically. If you are earning enough income to pay the rent, the property should be available to you. That is the bottom line; extra barriers should not be put in the way, such as rent up front.
Bidding wars are a big thing as well. Something should be done about landlords pitting tenants against each other to drive up rents. If a landlord wants more rent for a property than it is on the market for, they should have listed it as that in the first place, because again tenants end up chasing properties for months at a time, because everything they think they can afford suddenly goes up £300 or £400 a month by the time they can actually let something. It is an absolute nightmare. Imagine you have been evicted, then you are put in a situation of rent in advance and all that. It just doesn’t work. It is a broken system.
Jacob Young
Q
Ben Leonard: Are you talking about landlords exiting the market?
Jacob Young
Yes, if the Bill is too punitive.
Ben Leonard: The first point to make is that these reforms are reasonable, and if a landlord is not willing to deal with reasonable reforms, they have no business renting to someone in the first place—it shows that you are not of good enough character to supply someone’s home.
Secondly, the evidence does not show an exodus from the market. The reforms were announced four years ago, and there are more landlords now than there were then. From the evidence that I have seen, it seems that mainly smaller landlords are selling up to bigger landlords, which from the point of view of the tenant can be a step forward. Many tenants have a better experience dealing with corporate landlords than with one-man bands, who do not know the regulations, cut corners and will take advantage of vulnerable people. Generally, you do not get that with corporates. From the point of view of tenants, it is better to deal with larger, more professional organisations.
The other thing is that that provides an opportunity for first-time buyers to get in the property market. We would like to see a situation in which most people in private renting are either in council or social housing, or are homeowners. If landlords were selling up, first, first-time buyers could get on the property market—
The Chair
Order. I am sorry. I feel I have to interrupt you, it being three o’clock. As Big Ben strikes, you have to stop speaking. I apologise for that. Mr Leonard, thank you very much for your evidence, which has been useful to the Committee and will be useful in the discussions that lie ahead.
Examination of Witness
Chloe Field gave evidence.
Jacob Young
Q
Roz, do you think the portal addresses the problems that you see in the shadow rented sector, in so far as it brings it into the light by making people aware of where those landlords are, highlighting their bad practices?
Samantha, I am very interested in the assessments that the foundation has done in Scotland. What big lessons have been learned from them which could inform how we shape this Bill?
Roz Spencer: I think the devil is in the detail. You need a well-designed portal, and there are many seasoned professionals in the licensing and enforcement field who can tell you exactly what needs to be in that portal. Provided that it is well designed, I think it would be enormously helpful—both to hard-stretched enforcement teams and to people like me in the third sector, who are trying to advocate for tenants in the shadow sector who do not understand their rights—in empowering people to access that information to support themselves.
Samantha Stewart: Are you wanting to understand the more general lessons that we have learned from Scotland around the PRS reform?
Jacob Young
Q
Samantha Stewart: There is lots of evidence. The research commenced in 2019; it is a five-year piece of research. From the perspective of this Bill, it gives us key evidence on how English reform might and will impact vulnerable tenants. That is important, because we know that vulnerable tenants are the most at risk of being harmed by a poorly functioning PRS: they do not have the same consumer power, confidence or voice as their better-off peers. We know that vulnerable tenants have not benefited in the same way as their better-off peers from the reforms in Scotland.
There are two main things we know are happening. The first is about enforcement, as I have already said. Even if the law changes, it has limited effect without proper enforcement. Tenants living in poor housing still struggle to access local authority enforcement, leaving them with no resource at all to address their problems. The second relates to the new mandatory grounds. When the Scotland equivalent of section 21 evictions was removed, some landlords found that they could continue to carry out revenge evictions by abusing the new grounds on sales and on landlords moving in.
I will give you an example. Take Luke, a renter who lived in a property with rats and maggots falling out of his ceiling. The landlord refused to address these issues for months after Luke asked, but was forced to do so by the Scottish tribunal—great. However, shortly afterwards Luke was evicted from his home by his landlords, using the new possession grounds, and soon after he moved out, the property was re-let—not so great. That is just one example of how an unscrupulous landlord can abuse the new grounds if there are not sufficient safeguards.
We know that it is vulnerable tenants who will suffer most, for reasons that I have already mentioned. Based on that evidence, in order for the Bill to benefit vulnerable tenants, it needs amending to provide additional protections for them. First, landlords using grounds 1 and 1A—moving in and selling—should be required to provide adequate and appropriate evidence that they are selling or moving back in. Secondly, landlords who evict tenants using the new grounds should be prohibited from re-letting for a year, not three months. Three months is just not good enough—it is not a meaningful deterrent to landlords—but we believe a year would be. Thirdly, the Bill should be amended to provide a clear legal mechanism for tenants to seek redress, such as through a rent repayment order. Those are the three areas that we feel would really strengthen those mandatory positions.
I will finish by saying again that we really, truly believe that good landlords doing the right thing, who are the majority, would not be affected by changes along these lines, because they truly believe that they are providing homes.
Jacob Young
Q
Samantha Stewart: That is a really good question.
Jacob Young
Also, forgive me—I cannot remember which panellist mentioned Jacky Peacock earlier on, but she talked about this idea of an MOT in order to access the portal. Each of the panellists has mentioned that local authorities have struggled for resource. How would an MOT help? Who would verify such an MOT? I suppose, if we were to go down that route, it would mean local authorities facing even more burdens.
Samantha Stewart: In answer to your first question, there will probably be some. I will definitely make sure that we cover that in our written evidence, because I am sure there will be something we can contribute that we are pleased not to see. Forgive me—I do not know that answer right at this moment in time.
On the MOT, we all know that it is not an easy thing to do, but there is certainly a lot of detail in the Rugg and Rhodes report about how we could go about that. Again, I would be really happy to put that in our written evidence.
Linda Cobb: I manage a large landlord accreditation scheme across lots of different local authority borders, and obviously landlords then register on to a portal, so I am aware of the complexities of managing such an unwieldy beast, so to speak. As part of our landlord accreditation scheme, we have a property check—similar to what Jacky was saying with the property MOT. We do a sample compliance check. DASH and Unipol looked at about 2,000 properties that we had inspected; we assessed those inspections, and we had actually helped our landlords to remove or reduce almost 1,500 hazards that simply would not have been removed or reduced by simply registering on a portal and just self-declaring. Those were good landlords; they were landlords who were willing to make the change, and they made it quickly. But there is an argument that with just self-declaring, we have to be careful about the digital policing of a portal and giving false assurances. We can learn from landlord accreditation schemes and from schemes that are already going on. We really need to do that with the portal as well.
Samantha Stewart: It’s true. It is about taking the best in class as well, isn’t it?
Linda Cobb: Yes. We also have to be careful about avoiding duplication. From my landlord accreditation scheme, I know that landlords do get a little bit confused—they have licensing, accreditation, deposit registration and so on. If we are going to add an ombudsman, we will have to be very careful about avoiding duplication.
Helen Morgan
Q
Linda Cobb: I will take the landlord bit. I think that to call smaller landlords unprofessional is not quite right. The majority of landlords in our landlord accreditation scheme have between one and four properties; most have just one. We see very professional behaviour.
Ms Buck
Q
Roz Spencer: Thank you for asking. You heard it here first: the safer renting count, which was first established in 19—sorry, 2021; I am showing my age—established a methodology that looked at five different sources of data that could be collected on an established, reliable basis, and did not involve any significant overlap between the data points, and we have just updated those figures from 2021 to 2022. The trend between those two years is an 18% increase in reported offending under the Protection from Eviction Act 1977—so, those are illegal evictions and cases of extreme harassment likely to give rise to the loss of a home. That 18% uptick is of significant concern. I have no evidence to suggest that the performance in courts has had any bearing on that, and I would be surprised if it had.
There is another figure that is interesting—I think it is buried in the Government’s H-CLIC data. All local authorities report on trends in Protection from Eviction Act offences leading to homelessness. That is a very big, stable and reliable time series for the data. Interestingly, during the pandemic, when there was a ban on section 21 and a subsequent inability to use bailiffs to enforce lawful evictions, there was a substantial drop in lawful evictions between 2020 and 2021. There was no such drop in the number of unlawful evictions. In fact, those numbers held up, sadly, at more or less the same level. As a proportion of evictions leading to homelessness, the figure came close to doubling.
The interesting suggestion buried in that statistic is that it is so important, when you are quite rightly considering replacing section 21 with new grounds for possession, that you avoid the unintended consequences of those changes in access to lawful eviction increasing the number of landlords who feel that they can get away with just doing it anyway.
I have another statistic to offer you. If you look at our count of what we think is a very conservative estimate of the number of unlawful evictions and the Ministry of Justice statistics for the number of convictions in a year, the figures show that in more than 99 out of 100 offences, the person who commits the offence, the landlord who undertakes the unlawful eviction, walks away scot-free, so it is little surprise that people do not regard the enforcement of the law as adequate.
Your clause 58 in the Bill is so important because it corrects one of the major defects in what is a 46-year-old piece of legislation, the Protection from Eviction Act, which does not do what it says on the tin. It has not been preventing evictions because nobody has a duty to enforce it. That is a very long answer to your question, but there is a lot of support for what I am saying in those data.
Jacob Young
Q
Roz Spencer: Our count report is in the House of Commons Library. It argues strongly that the Government need to start counting the data. I would not have thought it would be problematic for the Government to introduce their own mechanism for counting, and we talk about the methodology at some length in the report. I would advocate that you start showing, as Government, not only that the law and enforcement matter, but that you understand that the impact assessment needs to be based on data that you simply do not have at the moment.
Samantha Stewart: I am not saying that we are going to fund this, but we should all think about something similar to what we are doing with funding in Scotland. If you want to really understand how impactful the legislation is, we should start tracking it pretty soon, using the data and everything else at our fingertips.
The Chair
As there are no further questions from colleagues, I thank our three witnesses for their evidence: Samantha Stewart, chief executive of Nationwide; Linda Cobb, services manager for DASH; and Roz Spencer, director of Safer Renting.
Examination of Witness
James Munro gave evidence.
Matthew Pennycook
Q
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
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.
Lloyd Russell-Moyle
Q
James Munro: That could be a way forward. It just goes back to the fact that it is very tricky to work out, because discrimination can be written, verbal or non-verbal. It can be incredibly difficult to prove, unless it is recorded in some way, and then it is down to the investigatory powers, the sanctions available and, ultimately, the impact of that discrimination on someone, because it will be considered in line with all the other local authority priorities.
Tuesday 21st November 2023
(5 months, 1 week ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 21 November 2023 - (21 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Chair
With this it will be convenient to discuss the following:
Government new clause 2—Repayment of rent paid in advance.
Government new clause 6—Liability of tenants under assured tenancies for council tax.
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.
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?
The Chair
Before I ask the Minister to reply to the debate, may I make it plain that I have been relatively flexible in this first debate? I will not be so flexible and open-minded subsequently.
Jacob Young
I am grateful to you, Mr Gray, and to the Committee for their consideration. As you and members of the Committee have identified, we plan to debate further a lot of the things that have been discussed already.
I say to concerned hon. Members that the Government are committed to the abolition of section 21. In fact, I am sure the Committee is committed to the abolition of section 21. I invite any hon. Member who is not to speak now or forever hold their peace. That is exactly what we are debating today. No one could expect that the implementation of a brand-new tenancy system would not require reform. Surely all hon. Members agree that we need to get this reform right.
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.
The Chair
With this it will be convenient to consider Government new clause 18—Abandoned premises under assured shorthold tenancies.
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.
Lloyd Russell-Moyle
I want us to give the Minister an opportunity to elaborate on court reform, because it is also relevant to this clause, in terms of when it will be implemented and the indicators as to when it will be implemented. Will he be able to write to us, or publish after the Bill receives Royal Assent, what those clear indicator thresholds are regarding when court reform will be completed, so that it will be clear for everyone? It does not need to be set out in the Bill, but a commitment that the Government will do that, so that everyone will know when that threshold has been met, would be useful.
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).
Lloyd Russell-Moyle
Thank you, Mr Gray.
We have a problem here. It is important that the court is able to weigh up where the greater hardship is. Is it a greater hardship to evict a tenant who has complained to the council so that the property can be fixed? Or is the ground being used to get rid of a tenant who is constantly complaining about enforcement action? Without an element of discretion—other amendments would afford wider discretion—and without this particular measure on greater hardship, there is a danger that ground 6A could be misused. That is why it would be good to hear reassurance from the Minister, particularly on amendment 150, that advice and guidance will be provided to the courts to ensure that the ground is not manipulated or abused, and that the Government are considering other changes to prevent that.
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.
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.
Jacob Young
I thank hon. Members for their comments. Amendment 149 would require judges to consider whether there are suitable alternative courses of action available before granting possession under ground 6A, which permits a landlord to evict if evicting a tenant is the only way that they can comply with enforcement action taken by a local authority. That includes cases in which, disgracefully, a landlord has received a banning order, meaning they are unable to continue operating as a landlord. It also includes situations in which a prohibition order is incompatible with the tenant’s continuing to occupy the property. The ground is mandatory, so there is certainty that possession will be granted to the landlord and they can comply with enforcement action taken against them. That means that tenants will not be left living in unsafe situations and gives local authorities confidence that their enforcement action demands can be adhered to.
Lloyd Russell-Moyle
Will the Minister clarify that when courts grant possession under ground 6A, they will have to take into consideration whether that is the only option, and whether other options might be on the table? Confirmation of that would help courts’ deliberations in future.
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.
Tuesday 21st November 2023
(5 months, 1 week ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 21 November 2023 - (21 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Chair
I remind the Committee that with this we are discussing 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 and 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.
The hon. Member for Brighton, Kemptown was on his feet, but I think he had nearly completed his remarks, and he is not here, so I call the Minister to reply.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I thank hon. Members for their contributions so far, and for the amendments. As we discussed, we all agree that the removal of section 21 will give tenants more security in their home. Tenants will know that landlords can evict them only when they have a legitimate reason to do so. It is also vital that the new grounds give landlords the confidence to continue renting out their properties, rather than leaving them empty, if they might wish to sell or move in.
If a landlord goes to court to seek possession, a judge will determine whether the ground has been met, based on the evidence provided. We do not think it is necessary to prescribe in legislation what the evidence is, because a judge will always be best placed to determine, based on what is in front of them, whether the landlord intends to occupy or sell the property.
Mike Amesbury (Weaver Vale) (Lab)
The question is why it would not be useful for a judge to base that professional, informed decision on criteria that are in front of them.
Jacob Young
We feel that it is best to give the courts the power to make the decision themselves, rather than prescribing that in legislation. Of course, following Royal Assent, we will publish secondary legislation and guidance. I hope that that gives the hon. Member the assurance that he is looking for.
We will issue guidance to help landlords understand what type of evidence they may choose to provide. It would not be appropriate to be too prescriptive about that in legislation; that might inadvertently suggest that other evidence may not be sufficient. The decision is best determined by a judge on a case-by-case basis. I therefore ask that the hon. Member for Greenwich and Woolwich withdraw his amendment.
With regards to amendments 143, 144, 192 and 193, we thought long and hard while developing these reforms about getting the right balance between tenant security and landlords’ ability to move into or sell their homes. We believe that having a six-month period at the start of the tenancy during which landlords cannot use the grounds provides the right balance. A longer period risks landlords not making their properties available for rent and reduces the supply of much-needed homes. Landlords also need the flexibility that periodic tenancies allow, and our proposals strike the right balance.
On amendment 194, although we encourage landlords to consider selling to or with sitting tenants, landlords must have the ultimate decision over who they wish to sell their property to. Giving a tenant first refusal could prevent the landlord selling if, for example, they already had a buyer in mind. It could also cause delays in the public sale process and therefore financial hardship to the landlord.
On amendments 203 and 204, the Government do not believe in penalising landlords by mandating that tenants be entitled to a rent-free period at the end of their tenancy. Landlords looking to move into or sell their property may themselves be in financial difficulty, and amendments 203 and 204 could exacerbate that. By disincentivising landlords’ investment in the sector, the amendments would introduce uncertainty and ultimately be detrimental to tenants. On that basis, I ask that the hon. Member for Brighton, Kemptown, not move the amendments.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I want to ask about a two-month no-rent period. The Government must recognise that there is a huge cost to tenants who have to move out through no fault of their own. Does the Minister not think that there should be some alleviation of that cost? For example, if a tenant finds another property during the two-month notice period, they should not be bound to pay two months’ rent. They have been forced to leave through no fault of their own, and should not have to pay double rent; that would be totally unfair. Does the Minister have views on that?
Jacob Young
I accept the hon. Gentleman’s argument and understand the sincerity with which he makes it. We are trying to strike a balance throughout this Bill between tenants’ rights and landlords’ rights. A landlord may choose to evict someone on the grounds that they wish to sell their property, for example, and then be unable to sell their property; if we were to follow the hon. Gentleman’s logic, that landlord would be without rent for two months during the notice period, and three months during the refusal-to-let-again period before being able to put their property back on the market, given that they had been unable to sell their property. I do not think it is fair that if landlords were to pursue that course of action, they could be five months’ rent out of pocket.
Lloyd Russell-Moyle
May I press the Minister on that point? If a tenant leaves within the two-month notice period, does the Minister really think that they should be bound to pay those two months’ rent, even though they have been kicked out and have found another property, and relinquished the property to the landlord sooner than the landlord asked them to? Surely they should not be liable for that amount of money.
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—
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.
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.
Matthew Pennycook
I beg to move amendment 136, in clause 3, page 3, leave out lines 21 and 22 and insert— “1, 1A, 1B, 2, 2ZA, 2ZB, 6, 6A four months beginning with the date of service of the notice 5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”
This amendment would ensure that the minimum notice period for a number of ‘no fault’ grounds for possession would be four months rather than two.
Clause 3 amends the grounds for possession in schedule 2 to the Housing Act 1988 in relation to not only the courts making orders for possession, but notice periods, to which amendment 136 relates. Each existing, revised or new possession ground, with the exception of grounds 7A and 14, has a corresponding minimum notice period after which either a tenant must vacate the property or the landlord is permitted to start court proceedings to regain possession. Each of these minimum notice periods is set out in clause 3(3). I will read them all out for the record, Mr Gray, because it is important that we know precisely which grounds we are talking about.
As the Bill stands, there is a minimum notice period of two months before the landlord can begin court proceedings under grounds 1, 1A—which we have just discussed—1B, 2, 2ZA, 2ZB, 5, 5A, 5B, 5C, 5D, 6, 6A, 7 and 9. There is a four-week notice period for grounds 5E, 5F, 5G, 8, 8A, 10, 11 and 18, and a two-week notice period for grounds 4, 7B, 12, 13, 14ZA, 14A, 15 and 17.
Amendment 136 amends the provisions in question by creating a new minimum notice period of four months that would apply to a number of existing, revised or new possession grounds that can still fairly be categorised as de facto no-fault grounds because they could be used to evict even model tenants who scrupulously adhere to the terms and conditions of their tenancy agreements. The grounds for possession that we believe should have their minimum notice periods increased from two to four months are the new mandatory grounds for possession 1 and 1A for occupation of a property by the landlord or their family and for its sale; ground 1B for sale of a property by a registered provider of social housing; ground 2 for sale by mortgage; grounds 2ZA and 2ZB for when a superior lease ends or when a superior landlord becomes the direct landlord; ground 6 for redevelopment; and ground 6A for when compliance with enforcement action is required. Grounds 5, 5A, 5B, 5C, 5D, 7 and 9 would retain a minimum notice period of two months, as provided for by subsection (3).
While there are legitimate, genuinely held differences of opinion between the Opposition and the Government about how Ministers propose to implement the ending of section 21 evictions, there is broad consensus in the House on the removal of section 21 by means of the Bill. It is obvious why such a consensus exists. As we have discussed, landlords can evict tenants with as little as two months’ notice at any point after their fixed-term tenancy has come to an end, without giving a reason for doing so, or even having such a reason.
As we discussed this morning in discussion on clause 1 stand part, significant numbers of tenants are evicted each year through a section 21 notice. Worryingly, the numbers appear to be rising; the Government’s own figures make it clear that between July and September of this year alone, accelerated procedures numbers for England increased across all actions, with claims up 38%, orders up 32%, warrants up 31% and repossessions up by 29%. No-fault, no-reason evictions are hugely disruptive for tenants; they harm the health, wellbeing and life chances of many, particularly the growing number of young people growing up in the private rented sector. They are also the leading cause of homelessness in England.
Abolishing section 21 is, then, long overdue, and when it is finally enacted it will give private renters much-needed security in their homes and enable and embolden them to assert and enforce their rights more vigorously. However, the abolition of section 21 will not entirely remove the threat of short-notice frequent evictions, which put tenants at risk of homelessness, and the Bill proposes to retain a number of de facto no-fault grounds for possession with, as I explained earlier, minimum notice periods of just two months.
Some would argue, as the Minister may, that two months is more than enough time to find a new private rented property, but we think that such an assumption is highly questionable. There is a wealth of evidence to suggest that a significant proportion of the approximately 11 million private renters in England struggle to do so, particularly in hot rental markets where demand is extremely high, as pointed out in the evidence given by James Prestwich from the Chartered Institute of Housing. For example, research carried out by Shelter suggests that for 34% of renters it took longer than two months to find and agree a new tenancy the last time they moved. Worryingly, that increased to 40% of renters with children and 46% of black renters. That highlights the additional challenges faced by particular tenant cohorts.
Our amendments do not press for a blanket four-month minimum notice period in relation to all grounds for possession. That would be excessive and limit the ability of landlords to quickly regain possession of their properties in legitimate circumstances. For example, if a tenant is found guilty of breaching one of the terms of their tenancy agreement, it is right that, albeit on a discretionary and not mandatory ground, the landlord can recover the property in two weeks. We would not want to extend notice periods in a uniform way in that respect, which would undermine ground 12 or any number of others.
However, we do feel strongly that when it comes to the de facto no-fault grounds that the Bill provides for, the notice period should be increased to better protect tenants against the risk of homelessness, particularly families and those who, for a variety of reasons, will struggle to secure a new home within two months. As Ben Twomey, the chief executive of Generation Rent, put it in our evidence sessions:
“We think there should be better protections”
in this part of the Bill. He continued:
“It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 38, Q38.]
The Government maintain that, as we have just discussed, the Bill strikes the right balance between the interests of landlords and tenants. Indeed, the Minister made the point in the previous debate, and this morning, warning us that to seek to upset that delicate balance would be to invite ruin. We do not believe that the Bill as it is currently drafted strikes the right balance between the interests of landlords and tenants. The proposed notice periods are a prime example of where we believe the playing field is still tilted towards the landlord interest, in a way that would cause real problems for tenants. To ensure that the playing field between landlords and tenants is truly levelled, the latter require greater protection when it comes to the notice period for the de facto no-fault possession grounds that are to remain in force as a result of the Bill. I look forward to hearing the Minister’s response.
Mike Amesbury
Of course it is far worse in London and, indeed, other cities. I urge the Minister and the Government to do the to do the right thing with this amendment.
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.
Jacob Young
I beg to move amendment 1, in clause 3, page 3, line 21, after “2ZB,” insert “4A,”.
This amendment adds the new Ground 4A inserted by Amendment 9 to the table that the Bill inserts into section 8 of the 1988 Act, with the effect that a notice under that section relying on that ground must specify a date no sooner than 2 months after the date of service of the notice.
The Chair
With this it will be convenient to discuss the following:
Government amendment 9.
Amendment (a) to Government amendment 9, line 16, at end insert—
“(e) the property was exclusively advertised through a specified educational institution, their agents or providers as outlined in Schedule 1 of the 1988 Act.”
This amendment would only allow Ground 4A to be used as a ground for possession when the property was exclusively advertised through an educational institution, rather than in relation to a HMO property which is not exclusively provided to students.
Jacob Young
Government amendments 1 and 9 introduce a new ground for possession to ensure that the annual cycle of student lettings can continue in the new tenancy system. We have spoken to many, including landlords and universities, who are concerned about the potential impact of our reforms on the student market. I thank all those who have engaged with us on this important issue. The amendments address the concerns in a balanced and proportionate way.
As many of us will have experienced, the student housing market works on an annual, cyclical basis. Students typically move in and out of properties over the summer, in line with the academic year. Without the backstop of section 21, we understand that landlords would no longer be able to guarantee that properties would be empty for new groups of students. That would have knock-on implications for students, who could not sign up for properties in advance and know that they had somewhere to live for the start of the academic year. The introduction of this ground will mean that the annual churn of “typical” student lettings is maintained. Landlords letting to full-time students can ensure a property is vacant at the end of the academic year and ready for a new group of student tenants over the summer months.
I would like to reassure Members that we have designed the ground carefully. Our approach will protect this crucial part of the market while balancing the needs of both landlords and students. The ground can be used by landlords in England when a house in multiple occupation is occupied by full-time students at the start of a tenancy and the property is needed for a new group of students for the next academic year. That means that the ground is unlikely to capture students who have children or other caring responsibilities, or who are studying part-time alongside their main job.
The amendment tabled by the hon. Member for Brighton, Kemptown is therefore not necessary. It would narrow the scope of the ground significantly. Most properties are advertised on Zoopla or Rightmove rather than through a university, so the amendment would not provide the carve-out that the student market needs. Landlords will be required to give tenants at least two months’ notice in line with the other “landlord circumstance” or “no fault” grounds. I hope the hon. Member will withdraw his amendment to clause 9.
Jacob Young
Let me address some of the hon. Gentleman’s questions straightaway. On whether a landlord will have to check that the tenants are students, they must do that at the beginning of the tenancy. They can be fined if they try to use these grounds without having notified the students that they are in student accommodation and that the grounds are therefore included.
The hon. Gentleman asked if everyone in a property must be a student. That is the case; if the property is mixed occupancy, the ground will not apply. On his point about reasonable belief, that is specifically in relation to first-year students who have not yet become a student. A landlord can reasonably believe that a student taking out a tenancy is to become one, but until they are a student they are not technically one just yet.
The ground is designed to cover the majority of the market. Were we to make the ground available all year round, it would give much less security and open it up to much greater abuse.
Lloyd Russell-Moyle
That is why it is better to swap in my amendment on this point. Rather than working with the universities on the particular cycle they might have in their local area, we are trying to legislate for term times here in Westminster, but it does not work. Will the Minister go away, maybe when the Bill goes to the other place, and rethink how we can have a clause that requires landlords to work with a university to ensure that letting is in line with the relevant local term times and not our attempts to legislate for these things here? I get what the Minister is trying to say.
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.
Mike Amesbury
I want to probe the Minister a little more on the point that the landlord “reasonably believed” someone could be a student. Some time ago I was a councillor in Fallowfield, which had large areas of student accommodation. Some of those were mixed tenancies, but people would have made an assumption—would have reasonably believed—that all the people who lived there were students. Is that covered? Is the clause tight enough?
Jacob Young
As I said, everyone in a property would have to be a student. It would be an obligation on the landlord to ensure that they are students or that he or she reasonably believes that they are students. We will follow the Bill with statutory instruments plus guidance; we can make it clear in the guidance what we expect. For those reasons, I ask the hon. Member for Brighton, Kemptown not to press his amendment.
Mike Amesbury
It is about evidencing that. It would be in the guidance, but what kind of evidence would the landlord need to provide?
Jacob Young
I am not in a position to outline that today. I have made it clear that, in terms of a landlord reasonably expecting someone to become a student, that would hinge on them starting term in the very near future. I think that that is clear, but we will set that out further in guidance. For those reasons and others, I ask the hon. Member for Brighton, Kemptown not to press his amendment.
Lloyd Russell-Moyle
The Minister has given a good rationale for his amendment. Paragraph (d) requires the landlord, in the next letting cycle, to be letting out to exclusively students or those he believes to be students. How will we assess whether the property has been let out to students exclusively? That is the only point of the clause. Will the property portal be an opportunity to record information about whether the house is a student let, so that we can be clear when the tenancy is signed and when the next tenancy is released that it is a reserved student property?
Jacob Young
It is likely that a new contract would have to be signed with the new tenants, who would be students, for this to be used. It would be unusual for a judge to think that, “I thought all of these people were suddenly going to become students,” would be a reasonable argument to use this ground. I do not think the hon. Gentleman’s points have merit, and I ask him not to press his amendment to a vote.
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.
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.
Lloyd Russell-Moyle
The Minister may disagree. That is fine: he will get his way, and we will pass his wording, but there should then be an assurance that, in a few years’ time, there will be a review of the legislation. If the Minister is right, we will applaud him—well, we cannot applaud in the House of Commons, but we will metaphorically cheer him in the House and say that he did such a fantastic job with his civil servants and the Department that the legislation is watertight. Alternatively, we will say that there are some small loopholes that need changing or that the world has changed. I do not think that that is unreasonable.
Personally, I think these sorts of provisions should be in almost all Bills we pass, but they are particularly important in this Bill, because of the dynamic nature of the market and the wholescale reforms we are making. Nobody knows what effects this will have on the courts. Nobody knows quite what effects it will have on tenants. Opposition Members are all talking about unintended consequences, which is why our proposals are so important.
Ms Buck
I really do hope that the Minister will concede on this point. One of the striking themes that emerged in the evidence sessions was just how little we know about what is happening in the private rented sector. It is to the shame of the Government, and probably even the previous Government, that this massive transformation in the life of the country and throughout the housing stock, which is affecting millions of people, has happened without us having accurate data to assess the impact. We are struggling to catch up in so many respects.
We will no doubt be talking more about the changing grounds for possession in the context of antisocial behaviour and rent arrears but as has been reinforced—we just need to keep saying this—the people in the private rented sector who we have the most concern about are those whose equivalents were not in the private rented sector 20 or 25 years ago. Their patterns of need, the patterns of demand they place on the sector and the risks they have to face are also quite different.
Families with children, families experiencing domestic violence and those with all kinds of vulnerabilities, including serious mental health problems, addictions or learning disabilities, would for the most part not have been in this situation before, but they are now having to be accommodated. It is not only that they are in the private rented sector in a way that they were not before, and are at risk, but that they are disproportionately impacted by harsh decisions that cause them to lose their homes. They face a higher risk and are worst affected.
I do not know whether all Members have experience of this, but any Member of Parliament with a larger private rented sector will be experiencing the consequences and will have traumatised families coming to them with problems who will perhaps be facing eviction and be in distress. That is often for completely trivial reasons or because of circumstances that arise simply out of misunderstandings or the failure of the bureaucratic and social security systems to catch up.
It is the most basic and sensible thing to do to ensure that there is a proper data review and that we make up for the fact that we have spent several decades now trying to understand a system about which we have too little information. The Minister has a chance to put that right.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich and other hon. Members who have spoken on amendment 137 and new clause 54. We all agree that it is vital that the Government keep such an important set of policies under review. We must ensure that the grounds for possession are providing adequate security to tenants and functioning effectively for landlords, too.
We are committed to robustly monitoring and evaluating the private rented sector reform programme. Our impact assessment for the Bill, which has been published online, sets out our plans for evaluation. That builds on the Department’s existing long-term housing sector monitoring work, and we will conduct our process, impact, and value for money evaluation in line with the Department’s recently published evaluation strategy. Setting an arbitrary deadline in law for that work might detract from the quality of evaluation and prevent us conducting as robust an assessment as possible. I therefore ask the hon. Member to withdraw his amendment 137.
Mike Amesbury
Why could this not be added to the current evaluation plans? Surely good law is about assessment of the planning, implementation and then review. Given the nature of the current marketplace and how it can shape things, particularly for those who are out of sight or are vulnerable in the current population, surely that two-year review would be good law.
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.
Jacob Young
I beg to move amendment 6, in schedule 1, page 66, line 28, after “sell” insert
“a freehold or leasehold interest in”.
This amendment makes it clear that the ground of possession for when a landlord is selling the dwelling-house after a rent-to-buy agreement (Ground 1B) is available where the landlord’s interest is a leasehold one as well as where the landlord holds the freehold of the dwelling-house.
The Chair
With this it will be convenient to discuss the following:
Government amendment 7.
Amendment 147, in schedule 1, page 66, line 29, after “dwelling-house” insert
“or to offer it to another tenant”.
This amendment would allow private registered providers of social housing to use new ground for possession 1B to offer properties to another tenant.
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.]
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
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.
Jacob Young
I beg to move amendment 8, in schedule 1, page 68, line 25, at end insert—
“(d) after that unnumbered paragraph insert ‘and—
(c) if the tenancy arose by succession as mentioned in section 39(5), notice was given to the previous tenant under Case 14 of Schedule 15 to the Rent Act 1977, and
(d) the tenancy is not an assured agricultural occupancy in respect of which the agricultural worker condition is fulfilled by virtue of paragraph 3 of Schedule 3.’”
This amendment to the ground of possession for former student accommodation requires notice to have been given under the equivalent Case in the Rent Act 1977, where the assured tenancy succeeded a tenancy under the 1977 Act, and makes an exception for certain assured agricultural occupancies which arose by succession.
Jacob Young
Under the new system, landlords will be required to notify their tenant, through the new mandatory written statement of terms, where they wish to regain possession through the use of what are called “prior notice” grounds. Government amendments 8 and 10 make consequential changes to the Housing Act 1988 to reflect the new “prior notice” requirements. This will preserve the enhanced security of tenure afforded to assured tenancies that have succeeded tenancies under the Rent Act 1977 and assured agricultural occupancies.
Government amendment 60 will make further consequential changes to the Housing Act 1988 to reflect new “prior notice” requirements. These requirements under the new system mean landlords will need to notify their tenant through the new mandatory written statement of terms, where they wish to regain possession through the use of what are called “prior notice” grounds.
I commend the amendments to the Committee.
Amendment 8 agreed to.
Amendments made: 9, in schedule 1, page 68, line 25, at end insert—
“New ground for possession of student HMO for occupation by students
9A After Ground 4 insert—
‘Ground 4A
The dwelling-house is an HMO and—
(a) at the beginning of the tenancy, as regards each tenant either—
(i) the tenant was a full-time student, or
(ii) the landlord reasonably believed that the tenant would become a full-time student during the tenancy,
(b) the tenants are joint tenants,
(c) the date specified in the notice under section 8 is a date between 1 June and 30 September in any year, and
(d) the landlord seeking possession intends, on the next occasion on which the dwelling-house is let, to let it to people who are full-time students or who the landlord reasonably believes will become full-time students during the tenancy.
In this ground, “full-time student” means a person receiving education provided by means of a full-time course—
(a) of any description mentioned in Schedule 6 to the Education Reform Act 1988 provided by an institution in England or Wales;
(b) of any description mentioned in section 38(2) of the Further and Higher Education (Scotland) Act 1992 provided by an institution in Scotland;
(c) of any description mentioned in Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)) provided by an institution in Northern Ireland.’”
This amendment inserts a new ground of possession to allow a landlord to recover possession of a house of multiple occupation let to full-time students at the end of the academic year, in order to let it to students again.
Amendment 10, in schedule 1, page 68, line 27, at end insert—
“(b) after paragraph (b) insert—
‘(c) if the tenancy arose by succession as mentioned in section 39(5), notice was given to the previous tenant under Case 15 of Schedule 15 to the Rent Act 1977, and
(d) the tenancy is not an assured agricultural occupancy in respect of which the agricultural worker condition is fulfilled by virtue of paragraph 3 of Schedule 3.’”—(Jacob Young.)
This amendment to the ground for possession for a residence for a minister of religion (Ground 5) requires prior notice to have been given if the tenancy arose by succession after a statutory tenancy, and excepts certain agricultural occupancies from the ground.
Jacob Young
I beg to move amendment 11, in schedule 1, page 71, line 35, leave out from “authority” to end of line 36 and insert
“means a district council, a county council in England for an area for which there is no district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.”
This amendment makes it clear that the reference to a local housing authority in new Ground 5G in Schedule 2 to the Housing Act 1988 does not cover Welsh county councils and county borough councils.
The Chair
With this it will be convenient to discuss Government amendments 50, 61, 66, 69, 79 and 107.
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.
Jacob Young
I beg to move amendment 12, in schedule 1, page 71, line 40, for “A relevant landlord” substitute
“The landlord seeking possession is mentioned in the first column in a row of the table in this ground, the tenancy is mentioned in the second column of that row, and a person mentioned in the third column of that row”.
This amendment, together with Amendment 14, allows certain social landlords to rely on Ground 6 to get possession of a property let under an assured tenancy if they intend to carry out building works.
The Chair
With this it will be convenient to discuss the following:
Amendment 148, in schedule 1, page 72, line 3, leave out “6 months” and insert “2 years”.
This amendment would ensure that no tenant could be evicted on grounds of redevelopment within two years of the beginning of a tenancy.
Government amendments 13 to 15.
Jacob Young
Government amendments 12 to 15 expand the circumstances in which private registered providers of social housing can use the redevelopment ground for possession, known as ground 6. Private registered providers let out property that they know they will substantially redevelop or demolish through an assured shorthold tenancy. That allows them the use of section 21, as they are prohibited from using the existing redevelopment possession ground in almost all circumstances. The amendments widen the definition of “relevant landlord” to include private registered providers, so that they can use the ground for redevelopment in future. However, they will be able to use it only for tenancies that were not granted pursuant to a local authority nomination; that will ensure that tenants whose tenancy was granted pursuant to a local authority nomination retain their long-term social tenancy. The landlords will also be required to provide notice to the tenant before the tenancy begins, or on the day it begins, that they intend to use the redevelopment ground because they are planning to redevelop the property. That will ensure that tenants are fully informed about landlords’ intentions.
The Government believe that it is essential that property earmarked for future redevelopment is still available to live in. The amendments will enable social landlords to make the best possible use of housing stock, and prevent properties that could provide a home needlessly standing empty.
I thank the hon. Member for Greenwich and Woolwich for tabling his amendment 148, on ground 6. If there was a longer period before landlords could use the ground, there would be a risk of landlords not making their properties available for rent, which could reduce the supply of much-needed homes. Landlords also need the flexibility that is a key benefit of periodic tenancies. Our proposals strike the right balance. Although the vast majority of improvement works can take place with a tenant in situ, not allowing landlords to use the ground for two years may prevent them from ensuring that a property is maintained to the required standard. I therefore ask him to withdraw his amendment.
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. “Landlord seeking possession Tenancy Landlord intending to redevelop a relevant social landlord a tenancy of a dwelling-house that was granted pursuant to a nomination as mentioned in section 159(2)(c) of the Housing Act 1996 a superior landlord a relevant social landlord a tenancy of the dwelling-house that was not granted pursuant to a nomination as mentioned in section 159(2)(c) of the Housing Act 1996 (a) the landlord who is seeking possession (b) a superior landlord the unit-holder of a commonhold unit relation to which a commonhold association exercises functions a tenancy of a dwelling-house which is contained in or comprises the commonhold unit (a) the landlord who is seeking possession (b) the commonhold association any landlord other than a relevant social landlord or a unit-holder of a commonhold unit in relation to which a commonhold association exercises functions any tenancy the landlord who is seeking possession”
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
This amendment, together with Amendment 12, allows certain social landlords to rely on Ground 6 to get possession of a property let under an assured tenancy if they intend to carry out building works, and allows a commonhold unit-holder who has let their unit under an assured tenancy to regain possession if the commonhold association is planning works.
Amendment 15, in schedule 1, page 72, line 37, at end insert—
“‘relevant social landlord’ means—
(a) a non-profit registered provider of social housing,
(b) a body registered as a social landlord in the register maintained under section 1 of the Housing Act 1996,
(c) a body registered as a social landlord in the register kept under section 20(1) of the Housing (Scotland) Act 2010,
(d) a housing trust, within the meaning of the Housing Associations Act 1985, which is a charity, or
(e) where the dwelling-house is social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008, a profit-making registered provider of social housing.”
This amendment is consequential on Amendments 12 and 14 and inserts a definition of “relevant social landlord” into Ground 6 (possession because of redevelopment works).
Amendment 16, in schedule 1, page 74, line 1, at beginning insert “the”.—(Jacob Young.)
This small drafting amendment makes it clearer that the definition of “the local housing authority” in section 261 of the Housing Act 2004 applies for the purposes of the new Ground 6A in Schedule 2 to the Housing Act 1988.
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.
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.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich for tabling amendments 151 and 152, which seek to restrict the use of ground 7. I also thank the hon. Member for Brighton, Kemptown, for his comments. Ground 7 permits a landlord to evict when a tenancy has passed on by will or intestacy, following the death of an assured tenant. Landlords will not usually be able to evict bereaved spouses or partners from their only home on that ground. Eligible bereaved spouses or partners are, by law, entitled to succeed the tenancy, as long as the named tenant did not themselves succeed. When succession occurs, the ground cannot be used.
Lloyd Russell-Moyle
My understanding is that the Minister is referring to a legal partner or spouse, unless he can reassure me that he is not. Many people might not be legally married or be in a civil partnership. That puts them at risk, does it not?
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.
Ms Buck
I absolutely agree. It is an issue for the self-employed; the very small businesses operating at the margin; the people who, because of the structure of our labour market, dip in and out of employment and have highly variable earnings; and the people who are on zero-hour contracts. It is exactly those people who end up in difficulties. It would be lovely if the system had the competency and level of provision to help those people, but all too often it does not. Many young people and vulnerable people—for instance, after a relationship breakdown or a bereavement—do not know where to go for advice. They try to help themselves and fail to do so.
Ground 8A is both disproportionate to the scale of the problem and unnecessary, because there are powers in the system to deal with rent arrears anyway. It will inevitably lead to further evictions, which will be concentrated among those people who have the biggest problems, who will end up making claims for homelessness support from local authorities.
The Minister does not need to go down this route. As my hon. Friend the Member for Greenwich and Woolwich said, if the Government do not want to go all the way to removing the reformed ground 8A, which would be the simplest way, there are layers of protection that could be built into the system. The Minister should trust the courts: that is what they are for. They are good at this, they are experienced at this, and they know how to tell a charlatan from somebody with genuine and complex problems. The measure will place an unnecessary burden on the most vulnerable people, and I genuinely believe that the Minister will have cause to regret its implementation.
Jacob Young
I think we can all agree that it is better for a tenancy to continue where possible, and we encourage landlords and tenants to work together when rent arrears arise. However, sometimes a tenancy cannot be sustained, and in such instances it is right that landlords have certainty. Ground 8A is intended to support landlords when a tenant is repeatedly falling into serious arrears. It will also prevent tenants from repeatedly paying down a small amount of arrears to frustrate possession proceedings brought on ground 8.
Jacob Young
I shall endeavour to write to the hon. Lady with such evidence, if there is any.
The Government have set a high bar for the ground. Tenants must fall into serious arrears three times within a rolling period of three years, which is already a significant financial burden for landlords to bear, particularly at a time of rising costs in the sector. Amendments 153 to 156 and 180 seek to narrow the ground. They propose that each instance of arrears must last two weeks, rather than one day, and must fall within a one-year period. That is simply too high a financial cost to ask landlords to bear. It would severely limit the availability of the ground.
The ground must also remain mandatory. As the Committee has heard, there is already a discretionary ground, ground 11, for persistent delays in rent payments, but that does not offer certainty to landlords. Ground 8A is intended to give certainty to all parties: a defined threshold that can lead to eviction. We therefore think that the ground strikes the right balance. I ask that the hon. Member for Greenwich and Woolwich withdraw the amendment.
Ordered, That the debate be now adjourned.—(Mr Mohindra.)
Thursday 23rd November 2023
(5 months, 1 week ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 November 2023 - (23 Nov 2023)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Helen Morgan (North Shropshire) (LD)
I beg to move amendment 130, in schedule 1, page 75, line 4, leave out paragraph 23.
This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
With respect to the hon. Member, we have heard previously in Committee how the existing grounds do not work. There was an ask in the evidence for us to amend the grounds in the way we are doing.
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?
Jacob Young
Does the hon. Lady accept that we cannot possibly know those figures? At the moment, landlords have the ability to use section 21 to remove tenants who are causing repeated antisocial behaviour. We are removing section 21, so we cannot possibly know what the impact will be.
Ms Buck
If the Minister is going to propose a change to the law, it is incumbent on him to have some indication of what the implications might be; otherwise, I am not sure why the Government would make the change. I do not understand that argument at all. It might be difficult to provide quantified figures, but the Minister has a duty to present to the Committee a sense of the type of instances that the change will apply to so that we can have some idea why it is necessary.
Jacob Young
Let me put to the hon. Lady—this goes to a point that the hon. Member for North Shropshire made earlier—what Grainger has said in evidence to the Committee:
“We welcome the strengthening of anti-social behaviour grounds for possession, which has been of particular concern to us previously.”
Does the hon. Lady not accept that that, in and of itself, is reason enough to proceed on this ground?
Ms Buck
I have a very large Grainger development in my constituency, and it is not an issue that has come to me at any scale. Obviously—the Minister is right—landlords are likely to want these powers. Of course, if a landlord is able to circumvent the abolition of section 21 by using powers of eviction in other ways, at a lower threshold or with a lower evidential base, then they are going to want to do that.
We are saying that a balance has to be struck between the genuine need to deal with serious antisocial behaviour and the consequences of that. It will mean additional pressures on households, on local authorities, which inevitably end up having to deal with the consequences of it, and indeed on the courts, which will be expected to make judgments with a much looser and more nebulous definition of antisocial behaviour. I am not sure that the Minister’s argument works there at all.
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.
Jacob Young
Is the hon. Lady suggesting that landlords should be forced to house tenants that were committing antisocial behaviour, simply because they have been removed from social housing?
Ms Buck
Of course I am not suggesting that landlords should be forced. I am saying that a balance needs to be struck. As I have said several times, the Minister is completely failing to recognise that the Government have chosen to use the private rented sector for housing, at scale, households who previously would often have been provided with social housing and supported. The Government have to recognise the consequences of that. There has to be proper provision in law. The abolition of section 21 is part of that, but as we keep arguing, by taking away other safeguards in the legislation, the Government are undermining something that we regard as very positive.
The proposed change will lead to more evictions at a lower threshold; it will lead to families leaving their property before going to court, as my hon. Friend the Member for Greenwich and Woolwich says; it may lead to landlords actively avoiding tenants who may pose a risk; and it will lead to more applications to local authorities, which will then have to source more temporary accommodation, inevitably in the private rented sector, to house them.
The Minister has to ensure that there is a proper backstop. If the Government want to house people—particularly those with vulnerabilities and families—in the private rented sector at scale, as they do, getting the balance right is essential. The weakening of legislation in this respect is one way in which they are failing to do that.
The Chair
Thank you, Mr Amesbury. As 50% of a pair of terrible twins, I recognise the analogy.
Jacob Young
It is a pleasure to see you in the Chair, Mr Paisley. I thank hon. Members for tabling amendments 130, 131 and 158, and new clause 55. As we have heard, antisocial behaviour causes misery and it is an issue that the Government have considered extremely carefully when developing the reforms.
We know that antisocial behaviour can be hard to prove, as the hon. Member for Westminster North said, so this measure gives landlords more confidence that they will be able to evict a tenant when necessary. Members will be aware that antisocial behaviour encompasses a wide range of conduct. Lowering the threshold for this ground will help landlords to recover their properties when tenants engage in antisocial behaviour, even if it cannot be proved that it has caused or is likely to cause a nuisance or annoyance in any given case.
Repetition and regularity is obviously likely to be a key part of most people’s experience of antisocial behaviour. A one-off incident involving a visiting relative, for example, is already unlikely to be classed as antisocial behaviour. There is also precedent elsewhere in the statute book for defining antisocial behaviour as conduct that is “capable of causing” nuisance or annoyance to a person in occupation of residential premises or in relation to housing management functions.
It is important to remember that the ground remains discretionary. Judges will determine whether it is met and whether giving the landlord possession is reasonable. The Government are committed to publishing guidance on tackling antisocial behaviour before the new rules come into effect. My officials have already set up a working group with key stakeholders, including landlord and tenant groups, charities, antisocial behaviour specialists and legal professionals. The group will ensure that the reforms are implemented effectively and that the guidance is clear and thorough.
Lloyd Russell-Moyle
It is very good that the Minister is talking about the guidance. Will he expect courts to consider that guidance in their deliberations?
Jacob Young
On the hon. Gentleman’s specific point, we have expanded the factors a judge needs to consider when using discretion so they have particular regard to people who are sharing properties or not engaging with their landlord’s efforts to tackle ASB.
Lloyd Russell-Moyle
I am trying to ensure that courts will be empowered, required or encouraged—whatever form of words the Minister wants—to consider the guidance that he has outlined in making their deliberations.
Jacob Young
As we have already heard a number of times in this debate, it is important that the courts have that flexibility to make that discretionary judgment on this issue, and I think that they would consider all manner of things when deciding on that.
The working group will help to ensure that the reforms are implemented effectively and that guidance is clear and thorough. We intend to use the guidance to highlight the important links to domestic abuse, mental health and other vulnerabilities. That is the aim of new clause 55, and I hope that addresses some Members’ concerns.
Mike Amesbury
But if the guidance is not mandatory for the courts, what is the point?
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.
Jacob Young
I will write to the hon. Lady and other hon. Members to confirm the status of that issue—I appreciate that question was raised in the last sitting as well. As I was saying, with houses of multiple occupation, it will make it—
Lloyd Russell-Moyle
Further to that, will a judgment of a 5A be in the public domain and therefore available or declarable to potential new landlords? I am asking because a section 21 is not, but a county court judgment on financial grounds is.
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.
Jacob Young
I take the hon. Lady’s point fully on board. I inadvertently forgot to mention during my speech that tenants will be given full information on their rights when notice is served. I hope that addresses her concerns about the threat being enough to push someone out. People will know their rights and whether or not they can challenge this in a court.
Helen Morgan
I welcome the Minister’s intervention. It is sometimes hard for us to put ourselves in the position of the tenant who may not have the professional skills of some of us in this room. The threat of being taken to court is a very serious one, even if someone has been advised of their rights. It is an intimidating place, and an intimidating process to go through.
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—
Lloyd Russell-Moyle
I will speak to amendments 197 to 201 and new clause 66. I also support the other amendments put forward by my Front-Bench colleagues: amendments 160, 161 and so on.
The reason for these amendments is generally to probe the Government. The intention of the Bill is to stop landlords evicting people with no reason. It might well be through no fault of the tenant, or it might be that the landlord has genuine reasons, but it is still through no fault of the tenant. The danger is that without proper safeguards on economic evictions, landlords will be able to evict through the back door by whipping up the rent. The explanatory note from the Department for Levelling Up, Housing and Communities acknowledges the need to prevent back-door evictions, and that is why there are clauses to strengthen some of the rent tribunals’ work. We all welcome that.
However, there are a few particular problems with the current definitions of the rent tribunal. The Secretary of State himself says that 20% and 30% rent increases are “unacceptable”. However, the reality is that those kinds of rent increases could, in certain markets, still be acceptable in the rent tribunal, primarily because the rent tribunal looks at current market rents. Off the top of my head, I believe that the wording around current market rent refers to the rent that the landlord would be able to get if they were to put a property on the market, or in that phraseology. The problem with that is fewfold.
First, current market rent is based on the market rent of newly let properties, not of properties that have a sitting tenant. Quite understandably, if there is a sitting tenant, a landlord may not require as high a rent. They have not just had to deep-clean the property. Most good landlords—we all accept that they are the majority—make repairs to a house between tenancies and make sure it is back up to speed after general wear and tear. For a sitting tenant, those changes due to wear and tear will probably not be made, or they will have to make some of those improvements themselves. Asking the tenant to pay the general market rent is not a fair allocation of what the rent would be.
Tenants might have moved in and started paying a rent that was accessible on local housing allowance. Changes might then have happened around the area, or the area might have been gentrified, but the landlord may not have made any changes themselves—they have not invested anything more in the property. Suddenly, the rents go up and make that house unaffordable on local housing allowance. That does not seem fair to me either. The landlord has not invested. Clearly if the landlord has invested, there could be increases in rent. Under certain circumstances, we all think that rent needs to go up; it could not be fixed at one number forever.
I have therefore tabled a number of amendments. Amendments 200 and 201 state that the landlord may increase rents only according to the consumer prices index or median wages in the local area. This is effectively the clause that Grainger puts on its new properties. Grainger said in evidence that it does this routinely. It is not something that will come as a horrible surprise to lots of landlords, because many of the good ones—many of the big institutions—do it already.
Jacob Young
With respect to the hon. Member’s point, the Committee has heard other evidence that Grainger does not do that. Grainger did it specifically in relation to their fixed-term rents. Since we are abolishing fixed terms, I do not think his point applies.
Lloyd Russell-Moyle
Grainger currently does it on its fixed-term rents, and almost all new rents are fixed-term rents for a period of time. The Minister is right: we do not know what Grainger will do in future. However, Grainger did not say that it would abolish them for sure in future either. I would expect Grainger to continue some sort of mechanism where there is that discussion. That is one suggestion I put to the Committee, and I would like to have the Minister’s thoughts on it.
Lloyd Russell-Moyle
I digress, but I do believe that all of Britain will have a better deal under Labour—although, of course, I would say that.
Amendment 199 would give the Secretary of State the flexibility to work out what the local markets are, and they could even devolve that to local or regional bodies. It would give them the ability to say, “I’m laying down a statement to say that there is no restriction of the total amount whatever,” or they could say, “Certain areas have restrictions, and certain areas have none.” The Secretary of State should consider introducing the ability to do that, given that certain areas are more problematic than others, and also the ability to look at indicators that might be relevant from time to time. At the moment, the courts cannot consider Secretary of State guidance on this matter because they are bound to consider only one thing. All I am saying is that they should consider market rents and the Secretary of State’s guidance.
Jacob Young
The hon. Gentleman suggested that the Secretary of State could devolve that decision. The Mayor of London has asked for powers to introduce rent controls in London. Does the hon. Gentleman agree with the Mayor of London?
Lloyd Russell-Moyle
We are talking about in-tenancy rent controls, and I think there are cases where they should be devolved and cases where they should be decided by the Government. Different Governments will take different approaches, depending on the need of the local area. Out-of-tenancy rent controls are a different matter and are not covered by the Bill. I will not be distracted, because I am sure you would pull me up for going into a different area, Mr Paisley.
Thursday 23rd November 2023
(5 months, 1 week ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 23 November 2023 - (23 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I thank Members for their amendments. Let me start by being clear that the Government do not support the introduction of rent controls at any point in the tenancy, no matter what they are linked to. The Bill protects tenants from very large rent increases being used as a back-door method of eviction while protecting the ability of landlords to increase rent in line with market levels.
That said, I am concerned by the practices that my hon. Friend the Member for Cities of London and Westminster mentioned in relation to Dolphin Square and would be happy to meet her to discuss the matter further. Although I appreciate that the Bill will not be passed in time for her constituents, hopefully we can prevent some of those types of practice in the future.
Clause 5 amends section 13 of the Housing Act 1988 to ensure that in future all rent increases for private landlords will take place via the specified mechanism. If a landlord tries to make a tenant pay an increased rent outside of the process, it will be unenforceable.
Clause 6 amends section 14 of the Housing Act 1988. It sets out the conditions by which a tenant can submit an application to the first-tier tribunal to challenge the rent amount in the first six months of a tenancy, or following a section 13 rent increase notice.
Let me turn to the amendments. When a tenant challenges a rent increase, it is for the first-tier tribunal to then determine the rent. Although market data can indicate the general trends in an area, it can be challenging to use when calculating the value of a specific property. The tribunal is made up of experts who are experienced in understanding the different factors—including the rent for comparable properties in the area, the quality of fixings and the proximity to amenities—that result in a market rate. The tribunal members are best placed to determine the rent using the data that they feel is most appropriate, rather than having to use whichever indicator is the flavour of the month. The tenant must pay the rent from the date that the tribunal directs, or from the beginning of the rent period specified in the notice. In cases of undue hardship, that will be the date that the tribunal directs, but must not be later than the date of determination.
On new clauses 58 and 59, landlords and agents are already prohibited from engaging in pricing practices that are false or misleading, under the Consumer Protection from Unfair Trading Regulations 2008. If a prospective tenant believes that a landlord has acted dishonestly during the lettings process, they will be able to raise the matter via the new private rented sector ombudsman. Complaints about letting agents can be referred to the existing agent redress schemes.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Will the Minister confirm that he thinks that bidding wars that are not advertised beforehand constitute dishonesty?
Jacob Young
Yes, I do.
New clause 62 seeks to align the maximum amount of rent in advance that landlords can charge tenants with the limits set on security deposits by the Tenant Fees Act 2019. Although I understand the reasoning behind the new clause, to link the two on an arbitrary basis would not be an efficient means to achieve its intended effect. It would mean that any changes to one would directly affect the other.
As the Committee will be aware, and as the hon. Member for Greenwich and Woolwich mentioned, the Government committed to introduce a similar power to limit rent in advance as part of our White Paper. We have concluded, however, that no such additional power is needed, as it is already possible to limit rent in advance using the power in section 3 of the Tenant Fees Act 2019. Before deciding to use that power, which would significantly infringe on the business interests and financial freedoms of private landlords, it is vital that we gather strong evidence of need and undertake a thorough impact assessment.
Furthermore, rent in advance can be beneficial in a variety of situations. For example, it can be employed to balance a financial risk when a prospective tenant could not otherwise pass a reference or affordability check. Above all, it is vital that landlords retain the ability to ensure a sustainable tenancy for both parties. We have made it clear that asking for a large amount of rent in advance should not be the norm.
On new clause 66, we will update the guidance to ensure that tribunal users have the confidence and information they need to engage with it effectively. This includes helping parties to understand how they can provide evidence of comparable rent. Our reforms strike a balance between the landlord’s ability to increase rent in line with the market and protecting tenants from back-door evictions through excessive rent hikes.
Matthew Pennycook
Forgive me if I missed it, but I do not think the Minister addressed the argument that underpins amendment 160. Why did the Government commit in their White Paper to limit the tribunal to determining a rent increase in line with or below the section 13 notice, instead of giving the tribunal the power to increase notice? If a landlord asks for a certain amount of rent and the tribunal determines that that is the amount to be paid, surely a tenant should not suffer by seeing the rate increased. Does the Minister not worry, as we do, that the Government’s approach will have a chilling effect on the confidence that tenants have in taking such cases to the tribunal?
Jacob Young
I understand the argument that the hon. Gentleman is trying to make, but we have listened to concerns and think it is fair that the tribunal is not limited when determining the market rent. This will mean that the tribunal has the freedom to make full and fair decisions, and can continue to determine the market rent of property.
Lloyd Russell-Moyle
The Minister has talked about the tribunal making free and fair determinations, but the tribunal is already limited by what it cannot take into account. For example, it cannot take into account alterations that the tenant has made to the property, at their own cost, to increase its value. The tribunal already indicates what it can take into account, so widening that scope or making it clear that the tribunal should not issue a higher rent is not about giving it more restrictions. Surely it is about giving it clearer guidelines on the face of the Bill, so that everyone entering the process knows where it is going.
Jacob Young
As I have already set out, we believe that the tribunal should be free to make whatever determination it thinks is the market rent for a property. I therefore ask hon. Members not to press their amendments.
Lloyd Russell-Moyle
I think the Minister is missing a trick here, because we have tabled some reasonable amendments. I welcome the fact that he seemed to suggest that it is already possible, via regulation, to prevent rent from being paid in advance, but he needs to enact that and get on with it. He seemed to be a bit cautious about doing so. A regulatory framework that allows advance rent in some, but not all, circumstances would be a good compromise. Maybe that is where the Minister was going, but we need to have more flesh on that bone.
I also worry that when the Minister talks about flexibility for the tribunal, he is actually saying that it can look only at market rent and not at other things. What I am trying to say is that it should be able to look at all the different indicators—not just the flavour of the month, as he put it, but the local housing allowance, the consumer prices index, and the rents via the property portal. At the moment, it is not clear that the tribunal would have access to use the rents via the property portal as an indicator, rather than new rents. That is what the amendments attempt to do. Some of these improvements could be made when the Bill comes back, and I hope the Minister will do that.
Finally, the Minister needs to reconsider the upper limit. A landlord could still re-issue another section 13 if, via the tribunal process, they realised that they wanted to increase it higher, but rather than involving the tribunal, they just set it at a higher rate themselves. That creates a disincentive to go to the tribunal.
Jacob Young
I should be clear that there is no requirement for the landlord to accept the tribunal’s final outcome. The landlord could still offer the initial rent to the tenant.
Lloyd Russell-Moyle
They could, so why not? It would be expected if a property was marketed at a certain price for that to be the accepted price. If someone puts a section 13 down, it is a form of marketing what this property is now worth. The Minister is quite right that it is wrong to engage in unfair advertising practices. A section 13 is a form of advertising to a sitting tenant, to say, “I’m advertising that this is the rent that I now want.” To then change their mind via a tribunal is, in my view, unfair. I think the Minister probably gets that point, but I wonder whether it might be possible to change it through regulation, and advice to the courts and the tribunals. These things need to be considered, and the same goes for widening the scope of what the tribunals could push. I will not push my amendments now, but I hope the Minister will genuinely think about how we can increase the scope of what the courts can consider, so that rents are not always inflated up to the very highest level, but are fair for all our communities.
Matthew Pennycook
There were some points of interest raised in this debate that we will certainly come back to—I will check the transcript in relation to a couple of them—but I do not think they satisfy us sufficiently not to press these amendments.
On new clauses 58 and 59, I took the Minister to imply that bidding wars could fall under the category of false, misleading or essentially unfair practices—I think he mentioned dishonesty. I do not think he has given us a cast-iron commitment that bidding wars of any kind constitute an unfair practice. If they do, and the Government know that, why are they not taking action to stamp them out? Lots of people in cities and towns across the country, and certainly in my constituency, are being impacted financially by bidding wars. In some areas, they are extremely intense, and people end up paying huge amounts more than were initially advertised.
I agree with the Minister that advance rent should not be the norm. It seems to be somewhat the norm in many parts of the country. I am interested that he says there is a potential means of addressing this via the Tenant Fees Act 2019. It sounded to me like it may take quite a long time for the Government to bring forward any proposals in that regard. We will certainly not see advance rent stamped out any time soon. The Minister did not address my point on undue hardship. I absolutely realise—it was part of my remarks—that under the Government’s proposals, when a tribunal determines the rent, it will kick in from the point of determination. We think that vulnerable residents need a little more time to adjust and move out if they simply cannot afford those rents.
Finally, on the tribunal awarding rent levels in excess of what is asked for, I think the Government have got it wrong. The Minister referenced unspecified interests that the Government had heard lobbying from—I think he said, “We’d heard concerns.” Who from? I do not know. We can all take a guess who from. There were proposals in the White Paper, this being one of them, that we thought extremely sensible. He is right that some landlords may, having been told by the tribunal that they can increase the rent level even further than asked for, be good-natured enough to charge only the initial rate, but I cannot think that many of them would. They are, after all, running businesses. We need a measure—we will no doubt return to this at a later stage—to ensure that the rent level that the landlord asked for via section 13 is the maximum. In many cases it may reduce, but it should be the maximum that a landlord can ask for. On that basis, I am afraid that we will press our amendments 160 and 161 to a vote.
Jacob Young
I want to be absolutely clear: the Government’s position is that bidding wars are not illegal.
Matthew Pennycook
That was my understanding as well, so I am not sure what the Minister was saying about false, misleading or unfair practices. If that does not apply to bidding wars, it applies to something completely separate from what we are talking about, so he has convinced me that new clauses 58 and 59 are even more necessary than I thought. I thought there was a glimmer of hope there, but there clearly is not. We will press all our amendments to a vote.
Craig Tracey
My understanding from officials is that only the cost of the additional cover would be passed on. There is always potential for what the hon. Gentleman describes, though, so we do need to prevent it, because we want only the additional cost passed on. However, it comes back to the point that the landlord seems to be the best placed to take out that cover. It gets rid of a lot of the issues and means that the cover could start from day one.
I understand what the amendment is designed to do, but we need a bit more clarity. We do not want the unintended consequences that I have mentioned to prevent people from having a pet in their home, and the lack of insurance being blamed for that being the case.
Jacob Young
I thank the hon. Member for Greenwich and Woolwich for tabling the amendments, and I am glad that we are in agreement about the positive role that pets can play, especially his pup Clem—I wonder who that is named after. We know that pets can bring happiness to their owners and provide a vital source of companionship.
Clause 7 will help tenants to make their house a home by introducing a new implied term that strengthens their rights to pet ownership. In future, landlords will be required to consider each request for a pet on a case-by-case basis and will be unable to refuse a tenant’s request without a reasonable rationale. The clause also inserts new section 16A into the Housing Act 1988, setting out that the landlord has to respond to a tenant’s request to keep a pet within 42 days. The landlord can also request more information from the tenant within this time and will have a minimum of seven days to respond once the information is received. That will give landlords adequate time to consider a request, while preventing them from unfairly avoiding or delaying giving tenants a response.
I turn to amendments 183 to 187. Although I appreciate that tenants will want an answer to their request as quickly as possible, 14 days is simply too little. A landlord could easily be on holiday or in hospital, meaning that they would be in breach of the 14-day deadline. Forty-two days gives enough time for landlords to do more research and give due consideration to requests, but it prevents them from delaying indefinitely.
On new clause 63, we expect that the reforms will increase the number of pet-friendly properties from the outset, as landlords will know that they cannot unreasonably refuse a request once the tenant is in situ. There would therefore be little for landlords to gain if they sought to discriminate against pet owners prior to the tenancy starting. We believe that strengthening the rights of tenants within tenancies means that landlords will have more confidence to advertise properties as pet-friendly from the outset. We are bolstering that by allowing landlords to put an insurance policy in place or to ask the tenant to pay for insurance, so that they can recover the cost of any damage. We therefore do not think that legislation is required to achieve this change.
On amendment 182, I reassure the hon. Member for Greenwich and Woolwich that when a landlord gives permission for their tenant to keep a pet, it is an implied term of the tenancy that the tenant may keep the pet, so consent cannot be withdrawn. It is clearly important that tenants are aware of their rights, and we will seek to make that point clear in guidance.
I turn to insurance and the points made by my hon. Friend the Member for North Warwickshire. Clause 7 provides reassurance to landlords concerned about damage to their property by allowing them to require the tenant to take out insurance covering pet damage, or to be reimbursed for the cost of getting the insurance themselves. Clause 8 amends the Tenant Fees Act 2019 to allow landlords to require tenants with a pet to take out an insurance policy to cover pet damage. Separately, we will also amend the Tenant Fees Act 2019 so that landlords are able to charge the cost of an insurance policy covering pet damage back to the tenant. This will be delivered using an existing power in that Act, and we will bring forward the secondary legislation before the measures in the Bill are implemented.
I am aware of my hon. Friend’s concerns about the single insurance product that is available at the moment. I really do welcome the Labour party’s position on the open market—it is a new one. As has been discussed in Committee, we feel that the lack of products is a result of the fact that very few landlords currently accept pets, so there is simply no market for it. We do think that will change with the introduction of this legislation.
Mike Amesbury
With regard to passing on the costs of those insurance products once the market responds—as a social democrat, I make no apologies for using that phrase—how will we ensure that those costs are reasonable and transparent? There are lots of practices throughout the private rented sector where that is not the case.
Jacob Young
That is certainly a role the ombudsman can play, which brings me on to the point raised by the hon. Member for Greenwich and Woolwich as to whether a tenant requesting a pet could challenge the landlord’s decision. We feel that the ombudsman could play a role in that ahead of any court proceedings.
On new clause 64, tabled by the hon. Member for Greenwich and Woolwich, it would be unusual for an insurance policy to explicitly ban pets as a condition of insurance. It is much more likely that pet damage simply would not be covered. We are grateful to the hon. Gentleman for raising that matter, and we will consider whether further action is necessary in relation to the new clause.
On amendment 181, we must ensure that the Government are able to work flexibly with stakeholders and properly align our planned guidance with implementation. I am happy to commit on the record today to guidance being issued, but it is vital that the Government are not constrained by the imposition of an arbitrary deadline. In the light of those points, I kindly ask the hon. Member for Greenwich and Woolwich to withdraw the amendment.
Matthew Pennycook
I will not press the amendment to a vote. I welcome the clarification from the Minister about guidance being forthcoming and in a number of other areas. I think all our concerns could be addressed if we had greater clarity on what constitutes a reasonable refusal and the circumstances in which a landlord could draw upon that. As I said to the Minister, all I can see in the Bill is proposed new section 16A(1)(b) of the Housing Act 1988, which says thats
“such consent is not to be unreasonably refused by the landlord.”
We need to know whether there is only a very narrow set of circumstances where that can be drawn on by landlords, or a wider range. The 42-day period does not matter in some ways if tenants have robust assurance on the reasonable implied period. There will also be far fewer ombudsman cases if there is only a narrow range of grounds on which a pet can be refused. I urge the Minister to write to us, perhaps before Report stage, to give us a bit of clarification around the circumstances in which landlords can reasonably refuse that request. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clause 8 ordered to stand part of the Bill.
Clause 9
Duty to give statement of terms and other information
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss Government new clause 3—Duty of landlord and contractor to give statement of terms and other information.
Jacob Young
The Government are committed to ensuring that tenants and landlords are aware of their rights and responsibilities. Government new clause 3 will replace clause 9 and insert a new duty requiring landlords to provide tenants with a written statement setting out certain terms of their tenancy. Having terms in a written agreement or statement can help to avoid disputes. If things go wrong, they can provide effective evidence to resolve disputes, and they can provide valuable evidence if the landlord needs to evict an irresponsible tenant. Details of what must be included in the written statement will be set out in regulations made by the Secretary of State, and may include such information as the tenancy start date, rent level and landlord’s address, as well as the basic rights and responsibilities of both parties.
We know that the vast majority of good landlords already put tenancy terms in writing, and we want to formalise that good practice. For those landlords, we intend that there will be little practical difference between this new duty and the tenancy agreement that they already provide. Landlords will need to specify when certain grounds may be used to evict the tenant. These are predominantly specialist grounds, such as where the property is used for a specific purpose or connected to the tenant’s employment.
New clause 3 will help to ensure that all tenants and landlords, as well as those working for the landlord, are aware of their rights and obligations. I commend it to the Committee in place of clause 9.
Matthew Pennycook
Clause 9 would insert proposed new section 16D into the 1988 Act. It places a duty on landlords to provide the tenant, as the Minister made clear, with a written statement of terms and information on or before the first day of a tenancy. Landlords must state in the written statement of terms where they may wish to make use of any of the prior notice grounds 1B, 2ZA, 2ZB, 4, 5 to 5G or 18. Given that prior notice is currently required for use of possession ground 1, but the Government propose to remove that requirement from the new ground 1, may I press the Minister again to explain precisely why the Government believe that that change is necessary?
I would like to make some brief comments about Government new clause 3 and put a number of questions to the Minister about it. These are complex questions, so I have no issue with the Minister writing to me at a later date rather than answering now. New clause 3 replaces clause 9, thereby applying the provisions of the clause to landlords’ contractors as well as landlords; carving out certain tenancies by implication; and modifying specific provisions for certain tenancies. Leaving aside quite how the Government got themselves in the situation where they are replacing entire clauses in Committee, I would be grateful if the Minister clarified why the Government have alighted on applying these provisions to “contractors”, given that the standard term, both in plain English and in statute, is “agent”?
A whole series of further questions arises from the new clause. What is the definition of a contractor? Does it have to be a written contract? What happens if the information is not provided? Did the Government consider whether a rent repayment order might be appropriate in the circumstances, or whether a court should be given the power to order that it be provided? What if the contractor excludes liability for providing the material in question, given that we know that that happens in other instances, for example with letting agents excluding liability to tell the landlord about any relevant licensing schemes? I would appreciate any insight that the Minister can offer today into any of those points. As I say, I am more than happy to accept a written response to my detailed questions, if necessary.
Jacob Young
On the hon. Gentleman’s question about prior notice, we are making it a requirement of the new mandatory written statement of terms that landlords must warn their tenants where they may wish to rely on a certain grounds at the outset of the tenancy. If the landlord fails to comply with the mandatory written statement of terms, the tenant can seek redress and local authorities may issue fines.
Matthew Pennycook
But that does not apply to ground 1, does it? I am trying to understand the Government’s thinking on why they have removed the prior notice requirement on ground 1.
Jacob Young
I shall write to the hon. Gentleman on that point and on the other questions that he raised.
Question put and negatived.
Clause 9 accordingly disagreed to.
Clause 10
Other duties of landlords and former landlords
Helen Morgan (North Shropshire) (LD)
I beg to move amendment 132, in clause 10, page 13, line 11, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.
Lloyd Russell-Moyle
I rise to support the amendments tabled by our Front Benchers and to ask the Minister about holiday lets. The holiday or short-term let market is due to be regulated, so this is an opportunity for the Minister to explain to us how the Department foresees those regulations pairing with the property portal or the Bill.
If someone is not allowed to re-market their property, but they could market it for short-term let, the short-term let registration portal—I understand that the plan is for that to be separate—will need to interact with the other portal. The Minister might genuinely not mind that properties are being re-let as holiday rentals in the no-let period, but I suspect this is more a case of needing reassurance from him that that loophole will be closed in the regulations to prevent holiday lets. That seems simple, but we need that reassurance from the Minister so that we know that it will be squared off.
On the period that the property cannot be let for, some amendments have been tabled about the evidence that needs to be provided, but what is important here is that the landlord or family members moving in, or the intention to sell, should be genuine. At the moment, there do not seem to be protections to ensure that they are. One such protection would be ensuring that a landlord cannot benefit financially if they are not making a genuine application. Three months does not seem to cover that. Many properties are already empty for a number of months between tenancies for the landlord to make repairs and update the property. It is not unusual for that period to be one or two months.
Three months, therefore, does not seem to be particularly onerous on the landlord, so 12 months should be a possibility. If the Minister does not think that 12 months is appropriate, it may be useful for him to tell us how he thinks enforcement could be done beyond the three months—for example, if it were demonstrated that the landlord never intended to sell, but that only became apparent four months later. It may well be that a landlord has no real intention to sell but issues that particular ground, and the tenant, the local authority and others do not particularly raise eyebrows because it can take a number of months to get a property on to the open market.
People would not necessarily expect a property to be listed the day after the tenant is out, because the landlord will want to tart it up and ensure that it looks its best for the estate agent’s photos. They will want to ensure that they cover all the dodgy spots in the house. We have all done it when we have sold houses: we show the best side of the house that we can. We deep-clean the oven and do all that stuff, which takes a number of weeks, if not months, before we get the letting agent to come round, take pictures and let the property.
It is therefore not unusual for it to take three months before the property is on the market for sale, but in this case that does not come about because the landlord never really aimed to sell it. The danger is that, because the time has elapsed, they can just shove it back on the open market. If the Minister is going to say, “Actually, in those circumstances the landlord would have to demonstrate that they had had a reasonable change of mind because of material circumstances,” he needs to outline how that would be demonstrated. Otherwise, we would just wait, and there would be no evidence at all.
There are other amendments that would give those protections, but before we decide not to press the amendments that we are discussing, the Minister needs to explain that point. Otherwise, the only form of protection can be a prevention from letting for 12 months, or at least the forgoing of 12 months of rent—they are not necessarily the same thing.
Jacob Young
I thank hon. Members for their amendments. We are absolutely clear that any attempt to misuse these grounds will not be tolerated. That is why the Government’s amendments prohibit landlords from re-letting or re-marketing a property for three months after using the moving and selling grounds, and why we are prohibiting landlords from authorising a letting agent to re-market a property on their behalf for three months when they have used those grounds.
That three-month period represents a significant cost to landlords and will deter misuse of the grounds. It is significant enough to remove any profit that a landlord might make from misusing the grounds in order to re-let, for example, at a higher rent.
Lloyd Russell-Moyle
What is the average profit that someone makes when selling a property?
Jacob Young
I do not understand how the hon. Member could think that I would possibly know that right now.
Jacob Young
I will not give way again.
Amendments 132, 133, 140 and 141 seek to extend the three-month period to six or 12 months. That would be excessive and keep good properties sitting empty if a landlord’s circumstances changed. It is quite possible that a landlord might not be able to sell and might subsequently need to re-let. Amendment 142 would extend the no-let period to cases where the landlord has gone through the court process to obtain a repossession order. We feel that that restriction is unnecessary, as such a landlord will have proved to the court that their intentions are genuine.
Amendments 134 and 135 look to restrict a landlord from letting their property as a short-term let, as the hon. Member for North Shropshire said. It may be reasonable for a landlord to offer a property as a short-term or holiday let within the three months, for example if there is a long gap before a sale completes. However, I have heard her comments and those of the hon. Member for Greenwich and Woolwich, and I know that that is an issue in places such as Cornwall and Devon. I commit to working with the hon. Member for North Shropshire and others to address those points.
If a landlord tries to abuse the system, there are financial repercussions for breaches and offences. We are giving local councils powers to fine landlords up to £5,000 for minor breaches and up to £30,000 for serious offences. The Government think the amendments would cause unreasonable cost to landlords whose sale or plans to move into a property may have fallen through, through no fault of their own.
Turning to Government new clauses 4 and 5, I am grateful to the hon. Member for Greenwich and Woolwich for his questions and confirm that I will write to him on those points. The new clauses replace clause 10, retaining the policy intent in the original drafting but updating it to better reflect its intention. We are clear that any attempt to misuse the grounds will not be tolerated. That is why the Government new clauses prohibit landlords from re-letting or re-marketing a property for three months after using the moving and selling grounds, and why we are prohibiting landlords from authorising a letting agent to re-market the property on their behalf. The three-month period represents a significant cost to landlords and will deter misuse. I therefore commend new clauses 4 and 5, which will replace clause 10, to the Committee and ask hon. Members to withdraw their amendments.
Matthew Pennycook
I thank the Minister for that answer. On the length of the no-let period, I think there is just a genuine principled disagreement between the two sides of the Committee about whether the proposed three months will act as a deterrent. In all honesty, because this is a completely new system—although we have the Scottish experience to draw on—we have no evidence on either side to prove that that is the case, but we genuinely fear that three months is not enough to prevent misuse. I will therefore press amendment 140 to a vote.
On amendment 142, I will go back and check the transcript, but I am not convinced that I understood the Minister’s reasoning when he talked about the court knowing that the landlord’s intentions were genuine simply because, at the point of the notice’s being served, the re-let prohibitions apply. I still do not understand why the prohibition on re-letting should not apply in instances where the court has awarded possession. We still want the landlord not to re-let in that period under either scenario, so we cannot understand why one would be exempt and not the other.
Jacob Young
To reiterate my point, amendment 142 would extend the no-let period to cases where the landlord has gone to court to obtain a repossession order. We think that restriction is unnecessary because, if a landlord has gone to court and the judge has granted the possession order, the landlord has proved that their intentions are genuine on those grounds. That is why we feel the amendment is unnecessary.
Matthew Pennycook
I follow the Minister’s argument, but, under those circumstances, the no-let prohibition should apply from that point under that scenario, just as it would at the point when a notice is served.
Jacob Young
The hon. Gentleman’s argument would suggest that a landlord wanting to move into a property within five months would serve notice on their tenant, the tenant would have two months in the property and could then take the landlord to court because they wanted evidence, which could take six months—and he is suggesting an additional three months on top of that. Does he not see that that would be unfair to a landlord, in a genuine case?
Matthew Pennycook
No, I genuinely do not. In a case where a tenant has felt so strongly that they are potentially being evicted unlawfully that they have taken the matter all the way to the court, it is right that the no-let period should apply from the point that the award is granted. Again, that may be a point of genuine disagreement, but we will press amendment 142 to a vote.
Jacob Young
I beg to move amendment 19, in clause 11, page 14, line 24, leave out
“16E (inserted by section 10”
and insert
“16G (inserted by section (Landlords acting through others)”.
This amendment is consequential on NC4 and NC5. It updates the new section numbering to reflect the fact that those new clauses insert new sections earlier in the 1988 Act.
The Chair
With this it will be convenient to discuss the following:
Government amendments 20 to 25.
Amendment 163, in clause 11, page 15, line 14, leave out “£5,000” and insert “£30,000”.
This amendment would increase the maximum financial penalty that local authorities could levy against a landlord or former landlord that they are satisfied beyond reasonable doubt has contravened provisions contained in clauses 9 (inserted section 16D of the Housing Act 1988) or 10 (inserted section 16E).
Government amendments 26 to 41.
Amendment 164, in clause 11, page 17, line 22, leave out “£30,000” and insert “£60,000”.
Government amendments 42 to 49.
Clause stand part.
Government amendments 51 to 54.
Clause 12 stand part.
Government amendments 55 to 59.
Clause 13 stand part.
Jacob Young
As I made clear when I spoke on clause 10, the Government will not tolerate any abuse of the new system. Clauses 11 and 12 give local housing authorities the power to fine the minority of landlords who break the rules, as well as introducing new financial penalties and criminal offences for repeated wrongdoing. Clause 13 provides that those criminal offences do not bind the Crown, although it will be possible for councils to issue fines to private landlords. Under that new provision, local housing authorities will be able to fine landlords and former landlords up to a maximum of £5,000 for less serious and initial breaches of the new tenancy system, including failing to follow process when evicting a tenant and trying to offer a fixed-term tenancy. To be clear, £5,000 is the maximum that a landlord can be fined, rather than the norm.
We expect local authorities to be reasonable, and we are issuing guidance that they must have regard to when issuing fines. We are exploring a national framework for setting fines to ensure a consistent approach. This will ensure that penalties are proportionate to the severity of the breach of conduct, and that local authorities impose them accordingly. If landlords deliberately and seriously flout the new rules, local housing authorities will be able to fine them up to £30,000, or choose to prosecute them, including for re-letting or re-marketing a property within three months of using possession grounds for sale and occupation, or knowingly or recklessly misusing a ground for eviction. Repeated breaches will also be met with those higher fines.
Amendments 163 and 164, tabled by the hon. Member for Greenwich and Woolwich, would increase the maximum fine for initial or less serious breaches from £5,000 to £30,000, and the potential fine for repeated breaches and serious offences from £30,000 to £60,000. I would like to reassure him that multiple fines can be issued where a landlord has committed more than one breach. We will issue guidance to support councillors in making enforcement decisions, but we think that the maximum fines that the amendments would introduce are disproportionate to the severity of the breach or offence. The fines proposed by the hon. Member are out of step with other housing enforcement, such as the existing measures for breaches and offences under the Tenant Fees Act 2019 and the Housing Act 2004. Given the substantial fines that can already be levied repeatedly under the legislation, I ask him not to press his amendments to a Division.
The Government amendments extend the prohibited activities to those acting on a landlord’s behalf. That means that local housing authorities can impose penalties on all relevant persons who breach the rules, not just landlords. That includes those with formal relationships, such as letting agents, and more informal relationships. The amendments apply the penalties to those people.
The Government amendments also further strengthen rules against landlords and agents. Instead of demonstrating that a tenant left a property as a result of receiving an improper notice, local authorities will simply have to prove that a tenant left within three months after receiving the notice. That will make it easier for local authorities to take action against the minority of landlords who break the law.
I commend the Government amendments to the Committee and ask the hon. Member for Greenwich and Woolwich to withdraw his amendments.
Matthew Pennycook
I rise to speak to amendments 163 and 164. As the Minister has just set out, clause 11 inserts four new sections into the Housing Act 1988, setting out the financial penalties and offences he has referred to for breaches of the prohibitions in clause 10, including those relating to mandatory grounds 1 and 1A, which we have just discussed, and for not providing for a written statement of terms, as required by clause 9.
Clause 11 raises for the first time the crucial issue of enforcement, which arises in relation to a number of the prohibitions and requirements in the Bill, including those I just mentioned. It is obviously preferable to ensure that there are sufficient incentives in place to encourage landlords to comply with the various requirements in the Bill, and that abuse of possession grounds is identified before eviction takes place. It is, however, inevitable that some landlords will fail to comply with the requirements in the Bill, including the requirement to provide a written statement of terms and conditions to the tenant on or before the first day of a tenancy, and that there will be misuse of possession grounds 1 and 1A that are identified after an eviction has taken place.
The Government are currently proposing two means by which redress might be secured in those circumstances. First, they are proposing to enable the new ombudsman to award compensation to the wronged tenant. Secondly, as the Minister made clear, they are giving local authorities the power to impose financial penalties if the relevant authority is satisfied beyond reasonable doubt that a landlord or former landlord has contravened provisions contained in clauses 9 or 10, or if a landlord or former landlord is guilty of an offence but is not prosecuted.
I note and welcome the Minister’s comments, in terms of the Government’s intention to look at developing a national framework that might ensure that those fines are properly co-ordinated across the country. We will come on to consider whether those two means of redress could be supplemented by others when we address the issue of whether tenants themselves should be allowed to seek compensation for an abuse of possession grounds by means of a rent repayment order, as provided for by our new clause 57.
Amendments 163 and 164 are probing amendments that are designed to facilitate a debate on whether the amounts that the Government have chosen as the maximum financial penalties that a local authority can impose—namely £5,000 for a contravention and £30,000 for an serious offence—are sufficient. Notwithstanding the point that the Minister has just made—and it is useful to have clarification that multiple fines can be levied—we are concerned that the maximum levels are insufficient.
It is our contention that the type of unscrupulous landlord that might seek to abuse ground 1 or 1A to evict a tenant who has made a legitimate complaint—the rectification of which, if it is a serious hazard, may cost them tens of thousands of pounds—is unlikely to be deterred by the prospect of a fine of £5,000 or less. That is assuming that the local authority has the capacity and capability to investigate and enforce it. The Minister was also very clear that £5,000 is the maximum; the Government do not wish for it to be the norm. Similarly, a fine of £30,000—or less—for an offence strikes us as far too low to act as a serious deterrent.
Amendments 163 and 164 would raise the maximum financial penalty that local authorities could levy from £5,000 to £30,000 in instances where the provisions contained in clauses 9 or 10 were contravened, and from £30,000 to £60,000 where an offence has been committed. We have proposed those higher figures, very deliberately, on the basis that £30,000 mirrors the current maximum financial penalty for housing offences, and by doubling the maximum financial penalty for an offence to reflect the severity of that outcome. I hope that the Minister might go away and reconsider whether the maximum levels that the Government have chosen are sufficient to act as the deterrent that I think we both absolutely wish to see.
Clause 12, which is grouped with these amendments, requires a local housing authority to issue a notice of intent before imposing a financial penalty on a person under two of the new sections—16F and 16H—inserted into the 1988 Act by clause 11. It requires them to do so within six months of collecting sufficient evidence or, if the conduct is continuing, during the period that it continues within or within six months of it ending.
The clause further specifies that after a landlord has been issued with a notice of intent as required, a landlord will have the opportunity to make representations to the authority, which will then decide whether to issue the fine. What is more, even after an authority has heard representations and has still decided to impose a financial penalty, clause 12 gives the sanctioned party a right to appeal to the tribunal.
I ask the Minister—particularly in the light of the Government’s having resisted our efforts to strengthen the Bill to ensure that the replacement possession regime cannot be so easily abused—why the Government have provided landlords, who, let us remember, a local authority is satisfied beyond reasonable doubt have contravened provisions contained in clauses 9 or 10, with a series of opportunities to evade a financial penalty.
Jacob Young
I am grateful to the hon. Member. I did not quite catch his question, so, if it is fine with him, I will write to him on that point. I apologise, because I did not quite follow it.
Jacob Young
I know that the Opposition have a few questions about the clause, so I will allow them.
Matthew Pennycook
I bridle slightly at the use of the word “allow”. [Laughter.] I have two questions for the Minister in relation to this clause. Under the provisions of the Housing Act 1988, landlords of assured tenancies are currently required to pay the tenant’s reasonable moving expenses when they are awarded possession under ground 6, relating to redevelopment, or ground 9, where suitable alternative accommodation is available. This clause restricts that requirement solely to registered providers of social housing.
The Bill’s explanatory notes simply state:
“When the Bill takes effect, all landlords will use assured tenancies, so this provision is necessary to ensure only private registered providers of social housing are required to pay removal expenses.”
From our point of view, that does not explain why the Government believe it is necessary to remove the existing requirement for landlords to pay the tenant’s reasonable moving expenses in instances where possession has been gained under grounds 6 or 9. I would be grateful if the Minister could respond to the following questions: first, why do the Government no longer believe it is reasonable to pay for a tenant’s removal costs in cases under ground 6, where substantial redevelopment cannot take place with the tenant in situ, or ground 9, where suitable alternative accommodation has been identified? Secondly, why do the Government believe it remains appropriate for providers of social housing to cover those costs, if it is now judged inappropriate that private landlords should have to do so?
Jacob Young
I am grateful to the hon. Gentleman for his questions. We think it is an unfair burden to ask private landlords to pay for removal costs, which prevent them from redeveloping and ensuring that good-quality housing stock is available on the market. The purpose of the current requirement is to ensure that social tenants are paid moving costs when a social landlord is using grounds that help them to manage their stock—that is, redeveloping a property and moving tenants into suitable alternative accommodation. It would be unfair to place that burden on private landlords if it were applied to them and widened to include all no-fault grounds: for example, a landlord might find themselves in financial difficulties and need to sell or move into a property. I hope that answers the hon. Gentleman’s questions, but if he wants to reply, he can do so.
Matthew Pennycook
I am still not clear why it is deemed appropriate under those two specific grounds for assured tenancies—as is currently the case—but not under the new system. However, I am not going to press the matter any further.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Clause 18
Accommodation for homeless people: duties of local authority
Question proposed, That the clause stand part of the Bill.
Jacob Young
I am grateful for the hon. Gentleman’s comments. The reforms in the Bill will remove fixed-term tenancies and section 21 evictions. The changes mean that we also need to amend part 7 of the Housing Act 1996 to make sure that councils’ statutory homelessness duties align. Clause 18 makes three changes to homelessness legislation.
First, the clause makes changes to how local authorities discharge their main housing duty. One of the ways in which local authorities may currently bring their main housing duty to an end is by making an offer to a tenant of a suitable private rented sector tenancy with a fixed term of at least 12 months. With the removal of fixed-term tenancies, section 193 of the Housing Act 1996 is amended to refer instead to an “assured tenancy”.
Secondly, the clause amends section 193C of the Housing Act 1996, relating to what happens when a person owed either the prevention or relief duty deliberately and unreasonably fails to co-operate with the local authority. If the local housing authority is satisfied that the applicant is, first, homeless; secondly, eligible for assistance; thirdly, has a priority need; and fourthly, is not intentionally homeless, the applicant is still owed a duty to be accommodated. However, that duty is currently a lesser one than the main housing duty. The lesser duty is to offer a fixed-term tenancy of at least six months, as opposed to the period of at least 12 months required under the main duty. With the repeal of fixed-term tenancies, the lesser offer is redundant and removed by the clause.
Thirdly, subsection (4) repeals section 195A of the Housing Act 1996, which is the duty in homelessness legislation
“to offer accommodation following re-application after private sector offer.”
It is known more commonly as the “reapplication duty”. The reapplication duty is a homelessness duty that offers accommodation following a reapplication after a private sector offer, where the applicant becomes homeless again within two years and reapplies for homelessness support. The duty applies regardless of whether the applicant has priority need. It was introduced to respond to concerns that, due to the short-term nature of assured shorthold tenancies, applicants who accept a private rented sector offer may become homeless again within two years and no longer have the priority need.
The increased security of tenure and removal of section 21 evictions through this Bill means that the reapplication duty will no longer be relevant. The amendment will streamline the management of reapproaches, and make sure that all applicants are treated according to their current circumstances at the point of approaching. There will be no differential treatment between those placed in either private rented or social housing accommodation.
Amendments 178 and 179 seek to broaden the scope of those threatened with homelessness, and thereby owed the prevention duty, to all those who have been served with a valid section 8 eviction notice that expires within 56 days, and to remove the option for local authorities to limit the assistance under the prevention duty to 56 days.
These amendments would prevent a local authority from using its judgement as to whether there is a risk and from deploying its resources to cases where there is a more imminent risk of homelessness. If the amendments were accepted, they could result in local authorities having cases open for a long time. Requiring local authorities to accept a duty in such circumstances, with no time limit, would create significant resourcing pressures. That would ultimately be to the detriment of those seeking homelessness support if local authorities were overwhelmed and unable to manage their increase caseload.
Local authorities are experienced at identifying when someone is threatened with homelessness, as opposed to arbitrary requirements that do not account for individual circumstances.
Lloyd Russell-Moyle
The Minister must acknowledge that local authorities will push lots of constituents back to the very last statutorily permitted minute because their resources are so pressured. That often makes the situation worse: it is saving a penny here, but losing a pound down the road.
Homelessness duties are mixed and varied. Some of them, with early intervention, can mean re-placing in the private sector—that actually does not cost the local authority very much. Without providing a clear duty, many officers will go to councillors saying, “You need to push the policy back to the statutory minimum, because we cannot do anything else. That is all we can do at the moment.” Those conversations are happening in every council. Surely the Minister recognises that without clear statutory guidelines on when they need to intervene, councils at the moment, I am afraid, will not.
Jacob Young
I thank the hon. Gentleman, although I do not think his intervention directly addresses the amendment. The amendment would put more burden on local authorities. For example, if I was served a section 8 notice, I would not need to be covered under the homelessness prevention duty, because just me and my partner would be involved. We do not have any dependants, and would probably find it quite easy to find a new property. It is important that we do not overburden local authorities unnecessarily, as these amendments would.
Lloyd Russell-Moyle
The duty does not mean a requirement for a place for every person; it means that there is a duty to analyse the need of the person, assess their ability to access the market and provide access into the market in different ways. If the Minister was involved, the duty would be for the council to point him in the direction of private letting agents; to ensure that he was able to search properly; and to monitor and ensure that he was getting on with that properly.
The duty is rather light-touch. The danger is that if we do not provide a duty that everyone comes through, including light-touch people—of course, no one has to go to their local authority, so they could just divert that if it was the Minister anyway—the most vulnerable people will not come at all until it is too late. Does the Minister recognise that vulnerable people tend to come only when it is too late if they feel that there is not an earlier duty?
Jacob Young
I understand the hon. Gentleman’s point. That is why we have said, in various discussions throughout the debate, that forms will be provided to people when they are served with such an order. They will be pointed in the right direction. That addresses the hon. Gentleman’s concerns, rather than forcing everyone to be considered under the duty, no matter how light-touch—[Interruption.] I do not think that I need Redcar and Cleveland Council to be worried about me.
Jacob Young
I will end that point there.
Government new clause 7 delivers a technical change that will ensure that a tenancy granted in carrying out a local authority homelessness duty to provide interim accommodation cannot be an assured tenancy, other than in the circumstances allowed for. There is an existing provision in the Housing Act 1996 that already provides an exemption to that effect; however, it does not encompass all instances where the local authorities have an interim duty or discretion to provide temporary accommodation, as section 199A is not included. The new clause remedies that. It allows private landlords who provide local authorities with temporary accommodation to regain possession of their property once the local authority’s duty to provide it ceases. That will ensure that local authorities can continue to procure interim temporary accommodation to meet their duties.
I commend the new clause to the Committee, and I ask the hon. Member for Weaver Vale not to press the Opposition amendment.
Mike Amesbury
It is essential that the prevention duty is extended here. The Renters (Reform) Bill is supposed to be about homelessness prevention. Local authorities use their discretion, as my hon. Friend the Member for Brighton, Kemptown said. I will not press the amendment.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mr Mohindra.)
Tuesday 28th November 2023
(5 months ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 28 November 2023 - (28 Nov 2023)
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Matthew Pennycook
It is a pleasure to continue our proceedings with you in the Chair, Mr Gray.
Clause 19 makes a number of amendments to chapter 4 of part 6 of the Housing Act 2004, the effect of which is to ensure that the requirement for landlords and letting agents to place deposits in a Government-approved tenancy deposit protection scheme is maintained in relation to new assured tenancies and tenancies that were assured shorthold tenancies immediately before the extended application date. Currently, any section 21 notice served on a tenant may be invalid if the deposit requirements are not adhered to, but the clause will ensure that, if landlords take a deposit and do not fulfil the relevant statutory requirements, they cannot be awarded a possession order on any of the grounds set out in the amended schedule 2 to the Housing Act 1988.
On the surface, the clause appears simply to apply the existing tenancy deposit requirements to the new tenancy system that will apply whenever chapter 1 of part 1 of the Bill comes into force. However, there is an important difference between the requirements, which speaks to our wider concern about future landlord compliance with the regulatory obligations that have developed around section 21 notices over the course of the 35 years in which the present tenancy system has been in place. We will explore those wider concerns in more detail when we debate our amendment 176 to clause 34.
With regard to tenancy deposit requirements, the main difference between how the relevant protection rules apply to the existing system and how the Government propose that they will apply to the new one is that, under the Bill, they must be adhered to before a court will award possession, rather than, as now, when a notice is served. Put simply, instead of the landlord having to protect a deposit within 30 days of receipt and provide the prescribed information about how that will be achieved before the notice is served, the Bill will allow them to do either of those, or return the deposit, at any time up to the court hearing date.
From a tenant’s perspective, that situation strikes us as a less stringent application of the requirements than we currently have in relation to assured shorthold tenancies. Taken together, amendments 170 to 172 would ensure that landlords must protect deposits with an authorised scheme and provide prescribed information in connection with it before a notice for possession is served rather than doing so, or repaying a deposit, at any time up to a court making an order for possession. I hope that the Minister will consider accepting the amendments.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
It is a pleasure to see you in the Chair again, Mr Gray. I thank the hon. Gentleman for tabling amendments 170 to 172, which seek to change the requirement that landlords must comply with the deposit protection rules before a court can order possession. The amendments would require landlords to comply with the deposit protection rules both before serving a tenant with notice and at the time of the possession hearing. If those conditions are not met, courts could not make a possession order.
The Bill already protects tenants from landlords who are not complying with existing tenancy deposit rules, because clause 19 requires landlords to comply with deposit protection rules before a court may make an order for possession. That will impact only on those landlords who are not complying with existing tenancy deposit rules. If the landlord has stored the deposit correctly in one of the prescribed schemes and has complied with all the applicable rules, the measures in the clause will not hinder or delay the possession process. Landlords will also be able to rectify the problem before the case reaches the court, ensuring that those provisions will not trip them up if they have made an honest mistake. Because we recognise that some possession cases are too critical to delay, that will not apply to the grounds relating to antisocial behaviour.
The aim of our measures in clause 19 is therefore not to prevent or frustrate possession, but to ensure that tenancy deposits are protected for the benefit of the tenant. The hon. Member’s amendments would simply act as another administrative trap that good-faith landlords could fall into. The Bill already ensures that deposits will be protected, while giving landlords sufficient time to comply with the rules before the case reaches the court. I therefore ask the hon. Member to withdraw his amendment.
Matthew Pennycook
I welcome the Minister’s response. What I remain unclear about—if he wishes to clarify this, I will happily allow him to intervene—is whether, in the Government’s view, the change is a less stringent application of the requirements that currently apply to assured shorthold tenancies. That is all we are seeking to probe, and if the Minister can reassure me on that point I will withdraw the amendment.
Jacob Young
The existing possession restrictions have made the possession process more complex for all parties, and we do not feel that they are an effective way to ensure that tenants are living in safe and decent homes during a tenancy. That is part of the reason for the changes.
Matthew Pennycook
I do not know about other members of the Committee, but from the reasons that the Minister stated, I take it that the change is a less stringent application. I will not press the amendment to a vote at this point, but we may return to this issue, and we will discuss another amendment that we have relating to preconditions and requirements of the Bill around section 21 notices. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 ordered to stand part of the Bill.
Clause 20 ordered to stand part of the Bill.
Schedule 2
Consequential amendments relating to Chapter 1 of Part 1
Amendment made: 60, in schedule 2, page 77, line 13, at end insert—
“7A In section 39 (statutory tenants: succession) omit subsection (7).
7B In section 45 (interpretation of Part 1), in subsection (2) omit ‘Subject to paragraph 11 of Schedule 2 to this Act,’.
7C In Schedule 2 (grounds for possession), omit Part 4.
7D In Schedule 4 (statutory tenants: succession), in Part 3, omit paragraph 15.”—(Jacob Young.)
This amendment makes changes to the 1988 Act which are consequential on the changes to the regime for prior notice for some grounds for possession.
Schedule 2, as amended, agreed to.
Clause 21 ordered to stand part of the Bill.
Clause 22
Penalties for unlawful eviction or harassment of occupier
Amendment made: 61, in clause 22, page 28, line 4, at end insert—
“(10) In this section and Schedule A1, ‘local housing authority’ means a district council, a county council in England for an area for which there is no district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.”—(Jacob Young.)
This amendment defines “local housing authority” for the purposes of section 1A of, and Schedule A1 to, the Protection from Eviction Act 1977.
Clause 22, as amended, ordered to stand part of the Bill.
Clause 23
Meaning of “residential landlord”
Matthew Pennycook
Part 2 of the Bill concerns landlord redress schemes and the private rented sector database. We welcome part 2 and the Government’s intention to use its clauses to bring the private rented sector within the purview of an ombudsman and to establish a new property portal, including a database of residential landlords and privately rented properties in England. As the Committee will know, two letting agent redress schemes already exist, but the case for bringing all private landlords within the scope of one, irrespective of whether they use an agent to provide management services on their behalf, is compelling and has existed for some time.
The Government first announced their intention to explore options for improving redress in the housing market in late 2017, and in 2019 committed themselves to extending mandatory membership of a redress scheme to all private landlords through primary legislation. Much like the abolition of section 21, a statutory single private rental ombudsman has been a long time in the making. There are myriad issues with the ombudsman that lie outside the scope of the Bill, not least how the Government will address its role within what is already a complicated landscape of redress and dispute resolution; there are already multiple redress schemes and tenants already have recourse to local authorities, the first-tier tribunal, a deposit protection scheme and ultimately to the courts.
However, we support the principle of bringing the private rented sector within the scope of a single ombudsman. If the ombudsman covering the private rented sector, whoever it ultimately is, makes full use of the powers available to it and is well-resourced, and if the potential for confusion and perverse incentives that might result from multiple schemes is addressed, that should ensure that tenants’ complaints can be properly investigated and disputes can be resolved in a timely, more informal manner. That would help to ease the pressure on local authorities and the courts.
In contrast to the proposal for an ombudsman covering the private rented sector, the commitment to introduce a new digital property portal was made only last year in the White Paper. Nevertheless, we strongly support it. Indeed, I would go so far as to say—I have done so on previous occasions—that we believe a well-designed, resourced and properly enforced portal has the potential to utterly transform the private rented sector and the experience of tenants within it.
We want the Bill to deliver a property portal that makes it easier for landlords to understand and demonstrate compliance with their existing obligations and evolving regulations; which empowers tenants by rendering transparent the rental history of landlords; and which enables landlords to be held to account by those they are renting to. We also want the property portal to help local authorities with enforcement against non-compliant landlords and to monitor and crack down on the minority of rogues in the sector.
We are concerned that chapter 2 of part 2 of the Bill, which deals with landlord redress schemes, is arguably too prescriptive, and that chapter 3 of part 2, which deals with the private rented sector database, are not nearly prescriptive enough. Fundamental to the operation of both measures is the question of which tenancies fall within their scope. As a means to probe the Minister on this issue, we tabled amendment 173, which would extend the definition of residential landlord to include park home operators, private providers of purpose-built student accommodation and property guardian companies. Each of those was explicitly referenced in the White Paper with regard to the schemes. I will make some brief comments on each to explore how the Government might define the scope of the private rented sector database and landlord redress scheme provisions via regulations in due course.
When it comes to residential park home operators, the Government’s October 2018 review of the legislation in this area found that some site operators
“continue to take unfair advantage of residents, most of whom are elderly and on low incomes.”
Furthermore, the Government said in their 2019 report, “Strengthening Consumer Redress in the Housing Market”:
“Currently, if a site operator fails to meet their contractual obligations a resident has little recourse except via the First-tier Tribunal, and those who rent directly from the site operator also lack access to redress. We are satisfied that there is a gap in redress services for park home residents and are committed to extending mandatory membership of a redress scheme to all residential park home site operators.”
When it comes to purpose-built student accommodation, the 2019 report also stated:
“Responses highlighted a gap in redress provision amongst students living in purpose-built student accommodation run by private companies.”
While the majority of such private companies have signed up to a code of practice administered by Unipol, the Government nevertheless made clear that private providers of purpose-built student accommodation, as opposed to educational establishments that provide student accommodation, should come within the scope of a redress scheme. When it comes to property guardians, recent reports in the press have highlighted rising instances of misconduct on the part of some property guardian companies that operate through licences to occupy rather than tenancies, which provide significantly fewer protections.
Research conducted by Sheffield Hallam University, commissioned by the Department and published last year, found that most property guardians
“reported very poor conditions, with properties frequently described as deteriorating and susceptible to adverse weather conditions. Local authorities also reported poor conditions in properties they had inspected. Persistent issues with damp and mould were very commonly reported, including damp from flooding, faulty plumbing and leaking roofs.”
That research also found that local authority enforcement teams are not routinely reviewing, inspecting or enforcing standards in guardian properties. There would therefore appear prima facie to be a strong case for including property guardians as well as park home sites and purpose-built student accommodation within the scope of the ombudsman and property portal as a means of increasing enforcement action and driving up standards.
It may well be the case that the Government fully intend to include each of those within the scope of the ombudsman and the private rented sector database in chapters 2 and 3 of part 2 when they introduce the relevant regulations and to provide access to redress for residents living in each type of accommodation, but we would appreciate a degree of clarity from the Government so that we can understand how extensive the operation of both schemes should be. I look forward to the Minister’s response.
Jacob Young
I thank the hon. Member for moving amendment 173, which proposes to expand the scope of the mandatory landlord redress scheme, which I will now refer to as the ombudsman, and the database, which I will now refer to as the portal. Specifically, the amendment would expand the ombudsman and portal to include park homes and dwellings occupied under licence, such as private purpose-built student accommodation and buildings occupied under property guardianship schemes.
Clause 23 sets out the tenancies that will fall within the scope of the ombudsman and the portal. It currently provides that they will capture assured and regulated tenancies, which make up the great majority of residential tenancy agreements in England, so under the clause the majority of landlords of private tenancies in England will initially need to be registered with the ombudsman and the portal.
We want to ensure that the introduction of the ombudsman and the portal is as smooth as possible, so tenants and landlords will need to have clarity over their rights and responsibilities. The issues that affect students, property guardians and park home owners can often be quite different from those faced by the majority of those in the private rented sector. Given those differences, it is reasonable to first apply the ombudsman membership requirements to the majority of private landlords. That will mean that all initial landlord members will be subject to the same expectations. We can then consider expanding the remit of the ombudsman to more specialised accommodation.
The clause also gives the Secretary of State the power to make regulations to amend the definitions and change the letting arrangements that would be captured by the requirements. We intend to use the regulations to potentially include different types of letting arrangements in future. I assure the hon. Member that we will continue to engage with the sector, and that we have the flexibility to determine the best course of action following such engagement. I therefore ask him to withdraw the amendment.
I turn to Government amendments 62 to 64. The current definition of “dwelling” would potentially preclude shared accommodation from being brought into scope. The amendments change the definition of “dwelling” that could be used in future so that shared accommodation may be included. In addition, clause 23 provides clarity on the meanings of private “residential landlord”, “relevant tenancy” and “dwelling” for the purposes of determining which tenancies are within the ambit of the private landlord ombudsman and the portal. Ministers will be able to make regulations to allow for divergence between the scope of the ombudsman and the portal. That will ensure that each scheme can retain full autonomy and operate independently in the future.
Matthew Pennycook
That was a very helpful clarification from the Minister. I take it from his answer that, although the Government are quite rightly focused on bringing assured and regulated tenancies within the scope of the ombudsman and the portal to cover the majority of private landlords, they are open to considering how their remit and scope may expand in the future to cover important other types of tenancy, as I have described. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 62, in clause 23, page 32, line 5, leave out from second “building” to “it” in line 6.
This amendment removes words that are no longer needed as a result of Amendment 64.
Amendment 63, in clause 23, page 32, line 7, leave out
“so occupied or intended to be so occupied”.
This amendment removes words that are no longer needed as a result of Amendment 64.
Amendment 64, in clause 23, page 32, line 8, at end insert—
“(ia) so that it includes a building or part of a building, and anything for the time being included in the meaning of “dwelling” by virtue of sub-paragraph (i), which is occupied or intended to be occupied as a dwelling that is not a separate dwelling,”.—(Jacob Young.)
This amendment allows the power to amend the definition of "dwelling" that applies for the purposes of Part 2 of the Bill to be used so as to add to that definition places that are not occupied as a separate dwelling. This will enable the power to be exercised to bring shared living accommodation within the definition of "dwelling".
Clause 23, as amended, ordered to stand part of the Bill.
Clause 24
Landlord redress schemes
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I rise to support my hon. Friend the Member for Greenwich and Woolwich and to speak to amendment 196, which stands in my name.
Amendment 196 aims to include deposits as an area that the ombudsperson can overview, and it touches on my hon. Friend’s point. The deposit schemes are three in number, which causes great problems for many constituents. Most believe that they will never get their deposit back, because they know that their landlords can run rings around the respective deposit schemes.
The outcomes of deposit scheme disputes are not published; they are secret. There is no precedent set when a scheme determines that a particular action puts someone at fault, and there is no cross-referencing between schemes. A constituent could be treated in one way under one scheme and a completely different way under another, even though the scenarios are exactly the same. It is a complete mess, and most other countries have one deposit protection scheme. I am not proposing that—that is outside the scope of the Bill—although I would love the Minister to look seriously at this when the deposit scheme licences come up. The New South Wales model is much more efficient and involves one scheme, the profits of which are rather large and pay for all legal aid in New South Wales. Early estimates of what would happen in Britain show that the amount raised would far exceed the cuts made to housing legal aid previously. There would be some real wins if the Minister got to grips with that.
My amendment 196 would at least allow for an appeal process. If someone does not believe that the deposit schemes have come to a fair and just conclusion, they can go to the ombudsperson for determination—that is important, because the ombudsperson’s deliberations would be public, which would allow the schemes to take into account what they were each doing—just as we would have to go through a local council complaints system, but can then go to the Local Government and Social Care Ombudsman if we feel there is a problem.
I would expect most complaints to still be resolved within the deposit schemes. However, where there is disagreement and the threshold of going to court is too high, and where maladministration, which is the main part of an ombudsperson’s remit, can also be identified, the ombudsperson can redress that and then publish their findings, and we can ensure harmonisation in the deposit system, which does not currently exist.
If we do not explicitly identify deposit schemes as falling within scope, there is a danger that the anomalies in the deposit system will never be addressed. I therefore hope that the Minister will give me some reassurance that there is an intention to address these problems with deposit schemes, where judgments are sealed and there is no idea of the outcome. It is also important, in relation to the property portal, for residents to know whether the landlord routinely—or every time—keeps the deposit. That would show a pattern of behaviour, which would be important information for tenants. Bringing it within the purview of this Bill is therefore also important.
Jacob Young
Amendment 174 would legally oblige the Government to make regulations requiring residential landlords to be members of a landlord redress scheme, rather than giving the Government the discretion to do so. The Government are committed to requiring private landlords to be members of an ombudsman, and a binding obligation is not required on the face of the Bill. We have taken powers in the Bill to allow the Government to ensure that the ombudsman is introduced in the most effective way, and with the appropriate sequencing.
Amendment 196 would require the ombudsman to handle complaints about tenancy deposits. It would be unwise to list in the Bill specific issues that the ombudsman can or cannot look at. The ombudsman would need the flexibility to consider any complaint duly made, but also to direct a tenant elsewhere if more appropriate. As tenancy deposit schemes already provide free alternative dispute resolution, the ombudsman may decide that the case is better handled elsewhere, but it will ultimately depend on the circumstances of each case. The ombudsman will have the final say on jurisdiction, subject to any agreement with other bodies.
We have made provision under clause 25 to enable the ombudsman to publish a Secretary of State-approved code of practice, which would clarify what the ombudsman expects of its landlord members. The ombudsman scheme will also provide more clarity about the circumstances in which a complaint will or will not be considered. I therefore ask the hon. Member for Brighton, Kemptown not to press his amendment.
As discussed, clause 24 provides the Secretary of State with powers to set up a mandatory redress scheme, which all private residential landlords of a relevant tenancy in England will need to join. We intend for the scheme to be an ombudsman service, and will look to require former landlords, as well as current and prospective landlords, to remain members after their relevant tenancies have ended, for a time specified in secondary regulations.
Members have asked for clarity about who the new PRS landlord ombudsman will be. No new ombudsman can be selected until after regulations have been laid following Royal Assent, but we can show the direction of travel. We have listened to the debates and the evidence given to this Committee, and our preferred approach at this time is for the existing housing ombudsman service to administer redress for both private and social tenants. As an established public body already delivering redress for social tenants, the housing ombudsman is uniquely positioned to deliver the private sector landlord redress scheme. Having one provider for all social and private renting tenants would provide streamlined and simple-to-use redress services for complainants.
To be clear, we are not ruling out the possibility of delivering through a different provider; we are still in the early stages of designing this new service. We now intend to explore how best to deliver on our ambition for a high-quality, streamlined and cross-tenure redress service.
To address the point that the hon. Member for Greenwich and Woolwich made about multiple redress schemes, the intention is to approve a single ombudsman scheme that all private landlords will be required to join. However, allowing for multiple schemes in legislation offers the Government flexibility, should the demand for redress prove too much for a single provider to handle effectively. I hope, on that basis, that the hon. Member will withdraw his amendment.
Matthew Pennycook
That is useful clarification from the Minister. Based on the assurances he has given, I do not intend to press amendment 174 to a Division. I understand fully, with the caveats that he has just given, what he is saying about a single ombudsman. We would welcome the Government’s preferred approach—for the housing ombudsman to take on responsibility for the private rented sector. The Landlord and Tenant Act 1985 does not distinguish between tenures, and we think that the ombudsman is probably best placed to provide that service and to do so quickly.
I would push back slightly against what the Minister said about how the clause is drafted, purely because, in a sense, it diverges from precedent. Most other Bills that we have looked at are very clear about establishing a single body and not being too prescriptive about how it operates. The Government have taken a different approach here. The Minister has given as one reason for doing so that the ombudsman might be overwhelmed by demand. Our response would be that we should ensure that the ombudsman that is given responsibility is properly resourced and adequately supported to do its job, rather than contemplate setting up additional redress schemes. However, it has been useful to hear the Government’s response, so we will not push the issue any further at this stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 ordered to stand part of the Bill.
Clause 25 ordered to stand part of the Bill.
Clause 26
Financial penalties
Matthew Pennycook
In precisely the same way that amendments 163 and 164, which we debated previously, sought to raise the maximum financial penalty that local authorities could levy where the provisions in clauses 9 or 10 were contravened or an offence committed, amendments 165 and 166 seek to raise the maximum financial penalty in respect of breaches relating to the requirements in clause 24 to be a member of an approved or designated redress scheme—that is, the ombudsman.
If the ombudsman is to cover all private landlords who rent out property in England, as I think every member of the Committee would wish, the penalty for not complying with mandatory membership must be sufficiently severe to act as a deterrent. We have tabled these amendments because we remain unconvinced that a £5,000 fine for a breach and a £30,000 fine as an alternative to prosecution will deter the minority of unscrupulous landlords who wish to evade regulation from failing to join. We urge the Government once again to reconsider.
Jacob Young
As the hon. Gentleman has mentioned, we discussed related points in earlier debates. His amendments 165 and 166 relate to the requirement for landlords to be members of the Government-approved redress scheme, which we intend to run as an ombudsman service, and a ban on marketing a property where a landlord is not registered with such a scheme. Our proposed fine regime is fair and proportionate. A £5,000 fine will be enough to deter non-compliance for most, yet fines of up to £30,000 are also possible if non-compliance continues. The legislation allows for fines to be imposed repeatedly every 28 days after a penalty notice has been issued. For repeat breaches, local housing authorities can also pursue prosecution through the court, which carries an unlimited fine. This escalating procedure gives our new ombudsman the necessary teeth for maximum compliance without making the fines unnecessarily excessive. I therefore ask the hon. Member to withdraw his amendment.
Matthew Pennycook
I will withdraw the amendment, as I made clear, but there is a point of difference here. We do not believe these fines will be enough. I take on board, as I have previously, the Minister’s point that repeat fines can be levied. For us, these fines are important because of their deterrent effect in cautioning landlords away from ever contemplating a breach or repeat offences. The maximum fine level also has implications for enforcement more generally, which we will debate in due course. In this instance we are probing the Government on the maximum levels, so I do not intend to push the amendment to a Division.
The Chair
On a slight technicality, the Member is seeking the leave of the Committee to withdraw the amendment. Other members of the Committee may press it to a Division if they wish to, although in this case they do not.
Amendment, by leave, withdrawn.
Clause 26 ordered to stand part of the Bill.
Clause 27
Offences
Jacob Young
I beg to move amendment 65, in clause 27, page 38, line 23, leave out subsection (9).
This amendment removes provision that is no longer needed as a result of NC19.
The Chair
With this it will be convenient to discuss the following: 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 24 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 39 (3) Active landlord database entry”
Clause stand part.
Government amendment 68.
Government new clause 19—Rent repayment orders for offences under sections 27 and 48.
New clause 57—Extension of rent repayment orders—
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 9, 10, 24 or 27 of the Bill.
Jacob Young
Clause 27 sets out when a person will be liable for a criminal offence under the redress clauses. The provisions cover landlords who repeatedly fail to sign up with the ombudsman and persons of business who repeatedly market the property of an unregistered landlord. They will specifically include those who breach the same regulations after a previous conviction or who have received a financial penalty for breaching the regulations within the previous five years. These offences will not carry a custodial sentence, but can be subject to an unlimited fine.
Matthew Pennycook
My hon. Friend makes a very good point, which pre-empts one that I am about to make. We think that rent repayment orders can and do provide an incentive for landlords in these areas.
We believe, specifically when it comes to new clause 57, that allowing the tribunal to make rent repayment orders for these additional specific breaches would provide an additional incentive for landlords to comply with the relevant duties, requirements and prohibitions, and enable wronged tenants to be compensated for any losses incurred. Extending rent repayment orders to the relevant requirements of clause 39, for example, would be a powerful stimulus for landlord portal registration, because it would become the norm for tenants to check whether their landlord or prospective landlord was compliant.
Conversely, if the entitlement to apply for a rent repayment order were to apply to the relevant requirements of clause 39, it would provide tenants with a compelling reason to visit the portal, to learn about their rights and access information and resources they might not otherwise come across until the point they had a serious complaint or were engaged in a dispute with a landlord. This example also illustrates how an extension of rent repayment orders could alleviate some of the burdens that would otherwise fall on local authorities as the only mechanism to enforce, by means of financial penalties and criminal offences, a number of the breaches in the Bill to which they currently do not apply.
In the scenario I have outlined, tenants incentivised by the potential to apply an RRO to a landlord who was not compliant would act as an intelligence-gathering mechanism for local authorities, helping them to identify unregistered properties that they might otherwise struggle to locate and register. Put simply, as Dr Henry Dawson said to the Committee in the evidence session on 14 November:
“Using rent repayment orders incentivises tenants to keep an eye on landlords.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 60, Q74.]
The Minister may assure me that the regulations to come may provide for rent repayment orders in relation to clauses 24 and 39(3). If that is the case, we would welcome it, but I would much prefer him to accept the new clause and expand the use of rent repayment orders in the Bill to encourage compliance and give tenants the means to secure, for themselves, redress for poorly behaving landlords. I look forward to the Minister’s response.
Jacob Young
The purpose of rent repayment orders is to provide an effective means through which tenants can hold criminal landlords to account and receive due remedy. Extending rent repayment orders to cover non-criminal civil breaches would mean landlords could be ordered to pay up to two years’ worth of rent for a relatively minor non-compliance. We think that this would be disproportionate. We think that scarce court time should be focused on dealing with serious offences rather than more minor breaches. For first and minor non-compliance, with provisions in the Bill there will be several means of redress and enforcement, including the ombudsman and civil penalties of up to £5,000, but I am happy to continue this conversation with the hon. Member for Greenwich and Woolwich further.
Matthew Pennycook
I welcome the Minister’s response. There may be a difference of principle here, in that we feel quite strongly, actually, that rent repayment orders should be extended to non-criminal civil breaches of requirements set out in the Bill. I take the Minister’s point about this being an excessive response to landlord non-compliance for first or minor breaches. I say to him that perhaps the Government could explore a grace period as the schemes are being introduced, where landlords are not caught within an extended rent repayment order scheme, or some sort of get-out from first or minor offences.
We are trying to address a way, once the scheme is bedded in and landlords—without committing a criminal offence—are regularly not complying with mandatory membership of the ombudsman or registering with a portal, for landlords to be further incentivised, so that tenants are aware of their rights and hold their landlords to account. This may be an issue that we will come back to, but I very much welcome the Minister’s assurance that we will continue the dialogue on this point.
Amendment 65 agreed to.
Clause 27, as amended, ordered to stand part of the Bill.
Clause 28 ordered to stand part of the Bill.
Clause 29
Guidance for scheme administrator and local housing authority
Amendment made: 66, in clause 29, page 39, line 4, leave out “in England”.—(Jacob Young.)
This amendment leaves out words which have no legal effect because a “local housing authority” as defined by clause 57(1) could not be situated outside of England.
Question proposed, That the clause, as amended, stand part of the Bill.
Jacob Young
Clause 29 allows the Secretary of State to issue or approve guidance on effective working between local councils and the ombudsman, who will run the only approved or designated landlord redress scheme. Both must have regard to any guidance published under provisions in this clause. We have designed the guidance alongside local councils and the ombudsman. Local councils and the ombudsman will have different but complementary roles and responsibilities in the private rented sector. We intend for the guidance to provide clarity on a range of situations where communication and co-operation between councils and the ombudsman would be advantageous or necessary. We also want it to set out roles and responsibilities for when a tenant complains about a problem that both the ombudsman and local councils can help to resolve.
Matthew Pennycook
We agree that the new or expanded ombudsman, with responsibility for dealing with complaints from tenants in the private rented sector, will have to work effectively with local authorities given the latter’s enforcement role. When the new ombudsman has been established, a complaint from a tenant concerning the breach of a regulatory threshold will be able to be made either directly to the ombudsman or to the local authority that would have the power to take enforcement action to bring the landlord in question into compliance with the said regulations, and if they fail to do so, to sanction them. There is therefore a clear risk not only that the role of the ombudsman vis-à-vis local authorities is not clearly delineated, but that tenants themselves will be confused about which body it is appropriate to approach in any given circumstance.
This issue was raised during the progress of the Social Housing (Regulation) Act 2023 because there is a general issue about how the ombudsman relates to local authorities. Given the Minister’s indication that the Government’s preferred approach is to have that ombudsman take on a responsibility for the private rented sector, I think—if anything—this point becomes more pertinent. The Government acknowledge, as is clearly stated in the explanatory notes accompanying the Bill, that the new ombudsman and local authorities must have “complementary but separate roles.” I put this point to the housing ombudsman, Richard Blakeway, in one of our evidence sessions two weeks ago. He replied that
“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.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 28, Q28.]
It is crucial that guidance on how local authorities and the ombudsman will work together to resolve complaints, including how they share information and how each signpost to the other where appropriate, is fit for purpose. The clause allows for such guidance to be published, and I would be grateful if the Minister, either now or in writing, could perhaps give us a little more insight into how the Government will ensure that the roles of the two are separate but complementary, as the Government have indicated they must be.
Jacob Young
Redress and enforcement achieve different but complementary outcomes. Local councils enforce regulatory standards. Ombudsman schemes are not enforcement or regulatory bodies but instead protect consumer rights by providing redress, in this case where a landlord has failed to adequately deal with a legitimate complaint. Where the complaint from a tenant concerns the breach of a regulatory threshold, local councils may take enforcement actions to bring the landlord or property into compliance with the regulations and use their discretion to sanction landlords. In such circumstances, tenants will be able to complain to both the council and the ombudsman. The local council will address the regulatory breach and the ombudsman will provide redress for the tenant. I hope that that reassures the hon. Gentleman.
Question put and agreed to.
Clause 29, as amended, accordingly ordered to stand part of the Bill.
Clause 30
Interpretation of Chapter 2
Matthew Pennycook
The clause removes the jurisdiction of the housing ombudsman service over private residential landlords and the private rented sector housing activities of social housing providers. I simply want to ask the Minister, given his announcement today about the housing ombudsman being the Government’s preferred provider of private rented sector redress, whether the provisions of this clause are still necessary, as the Government have made it clear that they intend the existing ombudsman to extend its remit to cover the private rented sector. Will the Government review the clause in the light of that announcement?
Jacob Young
Any social housing redress scheme approved under the Housing Act 1996 provides redress services for the private rented tenancies of social landlords. An approved social redress scheme can also provide redress to tenants of private landlords who choose to join voluntarily. Currently, only one approved social housing redress scheme is administered by the housing ombudsman service.
Once brought into force, the clause will remove the private rented sector activities from the general jurisdiction of any approved social housing scheme. The clause will also stop any social housing redress scheme accepting relevant private landlords as voluntary members in relation to their private sector interests. However, the clause allows a social housing redress scheme to retain some jurisdiction over private rented sector activities if agreed with the Secretary of State. It does not prevent one organisation, such as the housing ombudsman, from administering both social and private redress schemes through a single, joined-up service. The clause will ensure that tenants who complain under the joined-up service are treated in exactly the same way as others who rent in the same sector.
The Bill provides a mechanism to bring the clause into force, but only once the new private rented sector ombudsman scheme is established. That will prevent disruption to members of existing schemes and avoid gaps in redress for tenants. If the hon. Member for Greenwich and Woolwich has further questions, I am happy to write to him.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
The database
Matthew Pennycook
I beg to move amendment 175, in clause 32, page 40, line 18, at end insert—
“(ba) details, which may include copies, of all notices seeking possession served by the residential landlord in respect of each dwelling of which he is the landlord, and”.
This amendment would require the database to record details of notices of possession served by a landlord in respect of each dwelling of which they are the landlord.
Matthew Pennycook
In the debate on our amendment 173 to clause 23, I remarked on the concern among Opposition members of the Committee that, in contrast to chapter 2 of part 2 concerning the ombudsman, chapter 3 of part 2 concerning the private rented sector database is not nearly prescriptive enough.
To be clear, when it comes to establishing a private rented sector database and developing the new digital property portal service that it will support, we do not wish to tie the Government’s hands too tightly. We believe it is right that much of the detail is put in regulation at a later date: how the database will be operated and overseen; how entries are verified, corrected and removed; what the registration fees are and how they will be collected; and how information on the database is shared with third parties. However, we also believe that certain requirements of the functioning of the portal should be placed on the face of the Bill.
In our view, such requirements should include one for landlords to submit key information on their history and for that information to be publicly available so that tenants may make informed decisions when entering into a tenancy agreement and hold their landlord to account. Key information might include details of past enforcement action taken against a landlord or an agent representing them; any rent repayment, banning or management orders made against them; rent levels for the property over time in the form of past section 13 notices; and details of notices of possession served to previous tenants.
Amendment 175 would add to the Bill a requirement for
“the database to record details of notices of possession”
—as one example—
“served by a landlord in respect of each”
of their dwellings let. As I said, we feel strongly that the Bill should be amended to guarantee a minimum set of expectations for the database and the new digital property portal service; the amendment would go some way to ensuring that is the case. I look forward to hearing the Minister’s thoughts on it.
Jacob Young
Clause 32 provides for the establishment and operation of the portal, as we have been discussing. With access to a comprehensive and standardised dataset on private rented sectors across England, local authorities will be best equipped to develop and implement their enforcement strategies. By requiring landlords to undertake a registration process, as provided by clause 34—which I will turn to in due course—the portal will help them to meet standards within the private rented sector by making them aware of their legal requirements.
With legislative backing and clear duties on users, a portal with entries for private landlords and dwellings will support a much richer understanding of the private rented sector and assist the Government in developing targeted policy. As such, the portal will be key to the successful implementation and enforcement of the wider reforms legislated for in the Bill.
Clause 33 sets out who can be the portal operator; a role required to create and maintain a working database of private landlords and their properties. The operator can appointed by the Secretary of State or a person arranged by the Secretary of State. The Government envisage the portal will be centrally co-ordinated by a single operator. Our legislation allows for the portal to be operated by the Department or to arrange for an alternative, such as a public body, to take on that responsibility.
I thank the hon. Gentleman for his Amendment 175. This would require landlords to record their use of possession grounds, under section 8 of the Housing Act 1988, on the property portal. To ensure the portal maintains the flexibility to meet the future needs of the sector, it is necessary that we use regulations to prescribe the information it collects, rather than including these in the Bill.
We intend for the portal to be a source of basic information about properties and their health and safety compliance. This legislation also allows for the ability to record tenancy-related issues, such as details of possession notices. We will consider the matter of recorded possession notices on the portal ahead of passing regulations, and carefully consider the balance of benefits and burden on landlords and local authorities when deciding what information to record. We will continue to work with stakeholders to assess the merits of information requirements, ahead of introducing any regulations. I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
That is a helpful response. I took from it that the Government are considering including a history of past possession notices granted to a landlord. That is very welcome.
We tabled this amendment because it gets to the heart of how the new portal will operate. It could be a source of very basic information about a property, and whether it is strictly compliant with health and safety standards. We would hope the Government—the noises the Minister has made indicate they might—will take a more expansive view of how the property portal might work. Namely, that it will give tenants, as consumers, real power, because of the transparency and the amount of information recorded, to be able to know whether the tenancy agreement they are prospectively entering into is good for them, and whether the landlord is a good-faith landlord—as we know the majority are—or potentially an unscrupulous landlord. I welcome the indications the Minister has given, and look forward to debating—whether between us, or with other Ministers—the regulations in due course. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
Clause 34
Making entries in the database
Jacob Young
I thank the hon. Member for moving amendment 202. As I have said in response to earlier amendments, we will consider these points and others ahead of the regulations on what information is to be recorded on the portal. Our aim is to create a database that is future-proofed and responsive to the needs of the sector now and in future. Tenancy deposit schemes already provide free alternative dispute resolution with respect to deposit deductions. As I say, we will take all the hon. Member’s points and others into consideration when developing the portal and the regulations.
Lloyd Russell-Moyle
As I take it, the Minister has agreed that he will consider including disputes. That is a separate point from whether they are part of the ombudsperson; it is about whether their own processes and outcomes are being recorded properly. I will not push the amendment to a vote, but I do hope that the Minister will keep us in touch with his thinking as matters progress.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
I beg to move amendment 176, in clause 34, page 41, line 33, at end insert—
“(3A) The regulations must provide for the following information or documents to be provided to the database operator as part of the process of creating entries on the database—
(a) an address, telephone number and email address for the residential landlord;
(b) an address, telephone number and email address for all managing agents engaged by the residential landlord;
(c) details of every dwelling that is being let by the residential landlord;
(d) evidence that the residential landlord has supplied a copy of the ‘How To Rent’ booklet to each relevant tenant;
(e) the rent that is currently being charged in respect of every dwelling that is being let by the residential landlord;
(f) details of any enforcement action that a local housing authority in England has taken against the residential landlord;
(g) details of any banning orders that have been made against the residential landlord pursuant to Chapter 2 of Part 2 of the Housing and Planning Act 2016;
(h) in respect of every dwelling that is being let by the residential landlord, copies of the documents required by:
(i) Regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012;
(ii) Paragraph(s) 6 and/or 7 of Regulation 36 of the Gas Safety (Installation and Use) Regulations 1998;
(iii) Regulation 3 of the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020;
(iv) Regulation 4 of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015;
(i) details of whether the dwelling house is required to be licenced under Part 2 (Houses in Multiple Occupation) or Part 3 (Selective Licensing) of the Housing Act 2004”
This amendment would ensure that a number of the regulatory obligations that built up around section 21 notices are maintained by means of the database following the removal of section 21 of the Housing Act 1988.
We discussed, in relation to amendment 175, the fact that we believe that certain requirements relating to the functioning of the portal should be placed in the Bill. In speaking to amendments 170 to 172 to clause 19 in relation to deposit protection, I briefly touched on the fact that a number of regulatory obligations that have developed around section 21 notices over the 35 years for which the present system has been in place will fall away when it is abolished at the point at which chapter 1 of part 1 of the Bill comes into force.
The preconditions and requirements that have built up around section 21 notices, which presently prevent landlords from using the no-fault eviction process unless they can show compliance, include providing copies of gas safety certificates; providing copies of energy performance certificates; providing copies to each tenant of the ever-evolving how-to-rent booklet; and showing evidence of complying with the licensing requirements for houses in multiple occupation. There are no provisions in the Bill to ensure that landlords will have to continue to meet these and other regulatory obligations as a precondition of operating under the new tenancy system.
We fear that that will leave under-resourced local authorities—or tenants themselves, through the pursuit of civil claims—as the only means of enforcing these important statutory duties. We believe that compliance should instead be achieved by making it mandatory for landlords to submit the relevant information and proof of compliance to the database operator as part of the process of creating entries on the database. Amendment 176 would ensure that that is the case in respect of a wide range of existing regulatory obligations. We urge the Minister to accept it.
Jacob Young
I thank the hon. Member for moving amendment 176, which would require certain information to be recorded on the property portal. I very much agree with the sentiment of it; we already intend to record much of that information on the portal. Alongside basic personal and property details, we intend to require landlords to supply evidence that health and safety standards are being met within their rental property. This is likely to include the selected information that landlords are currently legally obliged to provide to tenants, such as gas safety certificates.
To ensure that the portal maintains the flexibility to meet the future needs of the sector, it is necessary that the information it collects be specified in regulations, rather than in the Bill. I therefore ask the hon. Member to withdraw his amendment.
Jacob Young
I commend the clauses to the Committee. I am interested to hear the thoughts of the hon. Member for Greenwich and Woolwich.
Matthew Pennycook
I have two brief questions for the Minister in relation to this group of clauses. I am more than happy for him to write to me on these points, as they are quite niche.
First, the powers under clause 38 will be used to set fees in relation to registration on the database. Clause 38(5) allows for all or part of the amount received in fees to be paid to local housing authorities or into the Consolidated Fund. Is the implication of the inclusion of this provision in the Bill that the Government expect there to be a surplus from fees collected by the database? If so, why do the Government not believe, given that they are the relevant enforcement body, that any available funds should be allocated to local authorities alone rather than central Government?
Secondly, we take it from the nature of the charging regime that the Government hope the database will be financially self-sufficient. However, the work needed to maintain and verify entries on the database will be onerous, and the start-up costs could be significant. Can the Minister provide any detail at this stage as to what the Government expect the resourcing requirements of the database to be? Can he provide assurances as to how its implementation and running costs will be met?
Jacob Young
In answer to the hon. Member’s question about landlords having to pay to join the service, we intend to fund the service through fees charged to private landlords when they register on the portal. We will take steps to ensure that these costs remain reasonable, proportionate and sustainable. The new service will bring substantial benefits to landlords as well as tenants, providing a single source of information about their legal responsibilities and helping them to showcase their compliance. It will also support local councils to enforce against unscrupulous landlords, who undercut the responsible majority.
On resourcing for local authorities, the information recorded on the portal will save local authorities time when enforcing health and safety standards in the PRS. Our research has shown that locating landlords and properties takes up a significant proportion of local authorities’ resources. Additionally, we are undertaking a new burdens assessment and will ensure that additional burdens created by the new system are fully funded.
Question agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clauses 36 to 42 ordered to stand part of the Bill.
Clause 43
Access to the database
Lloyd Russell-Moyle
I beg to move amendment 195, in clause 43, page 48, line 32, at end insert—
“(f) tenants and prospective tenants of a relevant property and all other properties linked to the unique identifier of the landlord with whom they are proposing to or have signed a tenancy agreement.”
This amendment would ensure that tenants and prospective tenants have access to information held in the database relating to the landlord of the relevant property.
Lloyd Russell-Moyle
The Bill contains a list of organisations and agencies that will have access to the portal. Tenants are not included in that list. I hope that that is because they have access through some other means, or that the Minister will stand up and say, “Don’t worry, you’ve missed it—it’s in x, y and z.” But my reading is that there is no presumption that tenants and presumptive tenants will have full access to all the information about the house they are moving into and its landlord.
We have heard in evidence that it is important that tenants have the information before they sign a contract. Any effective free market has to be based on the knowledge of the person who is making a choice to purchase something. The tenant is clearly one such person, so the tenant needs to know the background of the person and the quality of the house before they sign.
It might be that the Government plan for such information to be public—that would mitigate the need for the amendment—but I worry that some information will be public and some redacted, particularly information on house prices, former house prices and rental prices. That kind of information should be made available to the tenant. Tenants and prospective tenants should have full, unredacted information about the house and the landlord of the property that they are in or want to be in. I seek reassurances from the Minister on the matter.
Jacob Young
I thank the hon. Gentleman for his amendment, which relates to the publicly available information on the property portal. One of our core objectives is to enhance the information available to tenants so that they can make more informed choices and have a better renting experience. As I have said, we are carefully considering what information will be available to tenants via the portal, but it is likely to include information about property standards. We also intend to publish information about certain relevant offences committed by landlords. As I have set out, we believe that outlining what information is available to tenants through regulations will allow us to respond to changes in the market and to remain sensitive to landlords’ privacy rights. We have the power to amend what information is accessible by tenants in the future if doing so would benefit the operation of the sector.
Lloyd Russell-Moyle
The Minister is talking about what he expects will be available to tenants. Could he outline what he expects might not be available to tenants, so that I can understand his thinking on the other side?
Jacob Young
Specifically on the question of a landlord’s privacy, there will be some information that is relevant for a local authority to know about a landlord but not necessarily relevant for a tenant to know about a landlord. As I say, such things are best set out in regulations.
Lloyd Russell-Moyle
Can the Minister give examples of what that information would be? That would help to flesh out what we are talking about.
Jacob Young
I am not in a position to give an example today. If an example comes to mind, I shall write to the hon. Gentleman with it.
Ms Karen Buck (Westminster North) (Lab)
I just want to press the Minister on this point. It is right that there is an issue about balance, but by asking the Committee to accept that the detail will be brought forward in regulations—without our having any idea of where the balance might lie and what kind of exceptions we are talking about—the Minister is asking us to approve the clause rather in the dark.
Jacob Young
I reject the suggestion that the Committee is being asked to approve the clause in the dark. Obviously, any regulations will come before the House will be debated at that time. These things could breach someone’s human rights or affect their ability to protect their own data, therefore it is right that we properly consider them once we know what the portal actually looks like, and we have information recorded on it and so on.
I encourage the hon. Member for Brighton, Kemptown to withdraw his amendment. A landlord’s national insurance number or date of birth, for example, is key information that should remain private to a landlord and is not necessarily for tenants’ viewing. I respect the hon. Member’s points and the issues that he raised; as I say, we will consider them fully when we come to make regulations after Royal Assent.
Lloyd Russell-Moyle
It might be understandable if, for example, the landlord’s day of birth was redacted on Companies House but the month and year were shown. If we had no national insurance numbers, but we had a contactable address where that person could be found—not necessarily their home address, but a non-PO box address—that might, again, be acceptable.
The Government need to be clear in their intention that this is about privacy grounds only where necessary for the safety and functioning of a landlord, and not about withholding information that would be useful for the tenant in reaching out to the landlord. I will withdraw the amendment, but I expect the Minister to provide some more details in writing about what will be excluded.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 ordered to stand part of the Bill.
Clauses 44 to 46 ordered to stand part of the Bill.
Clause 47
Financial penalties
Matthew Pennycook
Amendments 167 and 168 would raise the maximum financial penalty that local authorities can levy when there has been a breach of a requirement imposed by clause 39 for private landlords to be registered on the database before they can market, advertise or let associated dwellings, or an offence has been committed under clause 48.
I intend to speak to the amendments only briefly, as we have already debated the issue of maximum financial penalties on two occasions. Suffice it to say that the Opposition remain of the view that the Government should reconsider the proposed maximum limits of £5,000 and £30,000 respectively, on the grounds that fines of up to those levels are unlikely to act as an effective deterrent. I come back to this point briefly because it has a direct bearing on the ability of local authorities to finance enforcement activity, an issue that we will debate shortly in relation to clauses 58 to 61. That is why the Local Government Association supports the amendments.
I remind the Minister that the amendments would bring the maximum financial penalties in line with others that can be issued by enforcement authorities against landlords who breach the legislation, for example in respect of the Leasehold Reform (Ground Rent) Act 2022.
I do not want to press the point, and I do not necessarily expect a response from the Minister, but we urge the Government to reconsider.
Jacob Young
I thank the hon. Gentleman for tabling the amendments. As he says, we have discussed these points a few times.
Our proposed fines regime is fair and proportionate. Fines of up to £30,000 are possible if non-compliance continues. The legislation allows fines to be imposed repeatedly every 28 days; and for repeat offences, local housing authorities can pursue prosecution through the courts, which carries an unlimited fine. This escalating procedure will give local authorities the ability to effectively enforce the requirements of the new property portal, without fines being excessive. The Department will issue guidance to local authorities to help them to make use of the new fine-setting powers. I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 47 ordered to stand part of the Bill.
Clause 48
Offences
Jacob Young
I beg to move amendment 71, in clause 52, page 55, line 5, after “section” insert “(Financial penalties),”
This amendment provides for the provisions about financial penalties in Schedule 3 of the Bill to apply in relation to penalties under NC10, which relates to discriminatory practices in relation to the grant of tenancies, as well as in relation to penalties under Part 2 of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Government motion to transfer clause 52.
Government amendments 72 to 75.
Schedule 3.
Government amendments 80, 104 and 106.
Government motion to transfer clause 56.
Government amendments 113 and 125 to 129.
Government new clause 8—Prohibition of discrimination relating to children.
Government new clause 9—Prohibition of discrimination relating to benefits status.
Government new clause 10—Financial penalties.
Government new clause 11—Discriminatory terms in a tenancy relating to children or benefits status.
Government new clause 12—Terms in superior leases relating to children or benefits status.
Government new clause 13—Terms in mortgages relating to children or benefits status.
Government new clause 14—Terms in insurance contracts relating to children or benefits status.
Government new clause 15—Power of the Secretary of State to amend Chapter 2A to protect persons of other descriptions.
Government new clause 16—No prohibition on taking income into account.
Government new clause 17—Interpretation of Chapter 2A.
Government new clause 47—Power of Welsh Ministers to make consequential provision.
Government new clause 48—Prohibition of discrimination relating to children or benefits status: Welsh language text.
Government new clause 49—Prohibition of discrimination relating to children or benefits status: English language text.
Government new clause 50—Amendment of short title of the Renting Homes (Fees etc.) (Wales) Act 2019.
Government new clause 51—Regulations under sections 8C and 8J of the Renting Homes (Fees, Discrimination etc.) (Wales) Act 2019.
Government new clause 52—Amendments of the Renting Homes (Wales) Act 2016 regarding discrimination.
New clause 61—Ending blanket bans on renting to families with children or those in receipt of benefits—
“The Secretary of State may, by regulation, specify behaviour which, for the purposes of Part 4, Equality Act 2010, shall be considered unlawful discrimination unless the contrary is shown.”
This new clause would ensure that blanket bans on renting to families with children or those in receipt of benefits are presumed to be unlawful discrimination unless proved otherwise.
Jacob Young
Blanket bans on letting to families with children or people who receive benefits have no place in our modern housing market. We agree that landlords and agents must not discriminate on that basis, and should fairly consider individual prospective tenants. Our package of amendments and new clauses prohibits landlords from discriminating against families with children or people who receive benefits in England and Wales. The blanket ban measures respond to calls for additional safeguards for some of the most vulnerable renters, while confirming that landlords can ensure that a tenancy is affordable, and that they retain the final say on whom they let to.
Matthew Pennycook
Clause 52 simply provides local authorities with the power to impose financial penalties on those who do not meet the requirements of the private rented sector database, as set out in clause 39, or an offence relating to it, as set out in clause 48.
The large group of Government amendments and new clauses that we are considering with this clause add proposed new chapter 2A to part 1 of the Bill. It includes several new clauses, commenced by regulations made by the Secretary of State, that seek to prohibit discriminatory practices associated with children and benefits status in relation to the grant of tenancies, as the Minister made clear. Incidentally, proposed new chapter 2B will provide for the same clauses to apply in Wales, pending commencement by order of Welsh Ministers.
Without question, we welcome the intent behind the amendments and new clauses. As I am sure the Minister can see, we have consistently expressed concern since the Bill’s publication that the commitment in the White Paper to ban so-called “No DSS” or “No kids” practices was not on the face of the Bill. The Government deserve credit, as they do for deciding to extend a decent homes standard to the private rented sector and for seeking to make these important changes through this Bill rather than separate future legislation.
The case for prohibiting “No DSS” and “No kids” practices is indisputable. All renters should be treated fairly in their search for a safe, secure, decent, and affordable place to call home, regardless of whether they are in receipt of benefits or their family circumstances. Yet in addition to the various informal barriers to renting privately that we know exist, some of which we debated when considering advanced rent payments in relation to clause 5, there is incontrovertible evidence that some landlords and agents acting on behalf of landlords actively discourage, or even prevent, people in receipt of benefits or with children from renting their properties.
We know that some landlords refuse to allow benefit claimants to even view an affordable property or to consider them as a potential tenant, and prospective renters across the country will be familiar with messages in property adverts such as “No DSS”, “No benefits”, “Working households preferred” or “Professional tenants only”. The scale of this discrimination is almost certainly significant. Successive YouGov surveys of private landlords in England have made clear not only that a comfortable majority of them prefer not to rent to people in receipt of benefits but that a significant minority operate an outright ban. Outright bans on renters with children may be less prevalent, but they are still extremely commonplace. The result is that hundreds of thousands of families have been unable to rent a home that they wanted and could afford, simply due to their benefit status or because they have children.
As we have touched on numerous times during the Committee’s proceedings, the number of such families in the PRS has increased markedly over recent decades, with woefully inadequate social housing supply and rising house prices making private renting the only option for many families, including working families with children. Of course, such discrimination does not affect all people equally. The reality, particularly in hot, competitive rental markets, is that women, disabled households and people of colour will be disproportionately affected by it. For example, we know that the overwhelming majority of single parents receiving housing benefit are female. I grew up in one of those households; the challenges they face daily are considerable enough without having to navigate discriminatory and potentially unlawful policies in the private letting industry.
Whether they are the result of landlords’ misperceptions, of frustrations with the workings of the benefit system or of ill-informed advice from letting agents, blanket bans of the kind in question are simply unacceptable. They are not only unacceptable but almost certainly already unlawful by virtue of the premises provisions in the Equality Act 2010, which provide for a prohibition against discrimination in letting, managing or disposing of premises. However, although a number of court rulings have confirmed that rejecting tenancy applications because of an applicant’s benefit status or family circumstances is a breach of the 2010 Act, proving discrimination is incredibly difficult. As a result, despite the growing body of case law, “No DSS” and “No kids” practices remain widespread.
The Government amendments in this group perfectly demonstrate the nature of the problem. They specify discriminatory practices that are already unlawful under part 4 of the Equality Act 2010. Indeed, Government new clauses 8 and 9 even mirror the language of the Equality Act—“provision, criterion or practice”—in relation to discriminatory practices, yet they do nothing to clarify that the various practices are henceforth always to be deemed discriminatory. As such, although we welcome the motivation behind the Government amendments in attempting to provide for a strict prohibition of such practices, we are concerned that they will not achieve that objective, because, although they will have the effect of removing terms discriminating against benefit claimants and families with children from contracts, they will not prevent the underlying discrimination from occurring in practice.
What we propose, by way of our new clause 61, is that the weaknesses of the various Government amendments in question are resolved by ensuring that the underlying conduct is clearly unlawful by making it a breach of the Equality Act 2010. Our new clause is aimed at prohibiting indirect discrimination and discrimination arising from disability, by giving the Secretary of State the power to define, by regulation, what behaviour is, for the purposes of part 4 of the 2010 Act, considered to be unlawful discrimination unless the person accused of discriminating can prove the contrary. It would remove, for example, the need for a female prospective private renter to prove that a “No DSS” blanket ban had a disproportionate impact on her as a woman. It would mean that, in any court proceedings, the first threshold stage would always be passed unless the landlord in question could convince the court that the ban had no discriminatory impact—which, of course, would never happen.
By forcing landlords to prove that some objective justification exists for refusing to rent to people in receipt of benefits or with children in order to advertise or market a property on the basis of a “No DSS” or “No kids” ban, our amendment would have the effect of ensuring that such discriminatory practices were finally banned in practice, because the number of privately rented properties where there could be such an objective justification is tiny.
I hope the Minister will respond to this amendment in the spirit in which it is intended—namely, as a constructive means of compelling the Government to consider whether their proposed new chapter 2A to part 1 of the Act may fall short in practice. I look forward to the Minister’s response.
Jacob Young
I am grateful to the hon. Member for tabling new clause 61. As I set out earlier, we agree that blanket bans against letting to families with children or to people who receive benefits have no place in our modern housing market. That is why our amendments to the Renters (Reform) Bill make express provisions to ensure that landlords and agents cannot discriminate on that basis.
Our measures take direct action to address blanket ban practices in the private rented sector, and our targeted approach tackles both overt and indirect practices. We have designed our enforcement approach with the tenants that are most vulnerable to this type of discriminatory practice in mind, and we understand that their priority is finding a safe and secure home in the private rented sector. Unlike the provisions in the Equality Act 2010, we are giving local councils investigatory and enforcement powers to tackle unlawful blanket ban practices. Tenants will not have to shoulder the burden of taking their complaint to court; local councils will be enabled to take swift and effective enforcement action. We think that it is right that prohibitions on blanket bans in the private rented sector are part of the Renters (Reform) Bill and that they are incorporated into the enforcement framework, rather than the Equality Act 2010.
I say to the hon. Gentleman that we are of one mind when trying to stop these blanket bans, so I am happy to have further conversations with him to that effect. I therefore ask him to withdraw his amendment.
Matthew Pennycook
I absolutely agree with the Minister that we are of one mind in wanting to ensure that these blanket bans are prohibited: he is right that they have no place in our modern housing market. However, we remain concerned—I do not think that the Minister addressed the specifics of our new clause—that the Government’s amendments will not achieve that objective. As I said, although they will have the effect of removing, from contracts, terms discriminating against benefits claimants and families with children, they will not, in practice, prevent that underlying discrimination from occurring.
We feel very strongly about this issue. If the Government do not get this right and these practices are not abandoned, we will have to return with a future piece of legislation to ensure that they are prohibited in practice. For that reason, we will seek to press the new clause to a Division at the appropriate time.
Amendment 71 agreed to.
Clause 52, as amended, ordered to stand part of the Bill.
Ordered,
That clause 52 be transferred to the end of line 30 on page 57.—(Jacob Young.)
This amendment is consequential on Amendment 71 which expands clause 52 so that it is no longer limited to penalties under Part 2 of the Bill. This amendment moves clause 52 into Part 3 of the Bill (enforcement authorities). Part 3 is expected to be added to so as to include other provision about enforcement generally. Clause 52 is expected to form its first Chapter.
Schedule 3
Financial Penalties
Amendments made: 72, in schedule 3, page 78, line 8, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 73, in schedule 3, page 80, line 20, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 74, in schedule 3, page 80, line 25, after “section” insert “(Financial penalties),”.
This amendment is consequential on Amendment 71.
Amendment 75, in schedule 3, page 80, line 33, at end insert—
“(ca) the activities of a superior landlord in relation to such a tenancy,”.—(Jacob Young.)
This amendment ensures that the proceeds of financial penalties imposed under clauses 26 and 47 can be applied towards meeting enforcement costs relating to superior landlords as well as immediate landlords.
Schedule 3, as amended, agreed to.
Clause 58
Enforcement by local housing authorities: general duty
Jacob Young
I beg to move amendment 76, in clause 58, page 57, line 35, after second “of” insert “, or an offence under,”.
This amendment ensures that the duty in clause 58(1) does not prevent a local housing authority from taking enforcement action in respect of an offence under the landlord legislation which occurs outside of its area.
The Chair
With this it will be convenient to discuss the following:
Government amendments 77, 78, 81 and 82.
Clause stand part.
Government amendments 83 to 85.
Clauses 59 and 60 stand part.
Government amendments 86 to 91.
Clause 61 stand part.
Government amendments 92, 93 and 95.
Government new clause 22—Enforcement by county councils which are not local housing authorities: duty to notify.
Government new clause 23—Duty to report.
Jacob Young
I am interested to hear the thoughts of the hon. Member for Greenwich and Woolwich.
Matthew Pennycook
Part 3 of the Bill concerns the enforcement authorities, and clause 58 is the key clause. It imposes a new duty on local authorities to enforce, by means of financial penalties or by instituting offence proceedings, prohibitions of the landlord legislation in their areas. Subsection (4) sets out the definition of “landlord legislation”, referring to sections 1 and 1A of the Protection from Eviction Act 1977 and chapter 1 of part 1 of the Housing Act 1988. Neither of those are new, obviously, but local authorities have never had a duty to enforce them before, and the 1977 Act will require a different approach from the police to unlawful evictions. It also refers to the whole of part 2 of the Bill—all the prohibitions relating to the ombudsman and the property portal. By any definition, that constitutes a significant array of new regulatory and enforcement responsibilities for local authorities to meet.
Various proposals in the Bill could, if they work well, make local authority enforcement of prohibitions of the landlord legislation in their areas easier. The new ombudsman has the potential, for example, to provide an alternative route for dispute resolution and a distinct and effective route to redress when it comes to breaches of prohibitions relating to the misuse of possession grounds and for not providing a written statement of terms, thus ensuring that local authorities are not the only enforcement body for such contraventions. Similarly, the new private rented sector database has the potential, for example, to allow local authorities to far more easily identify poor-quality and non-compliant properties and who owns them, thus addressing a key barrier for local authorities when it comes to enforcing standards.
Matthew Pennycook
Can the Minister also give us a clearer view of the Government’s view of the future of selective licensing following the Bill’s enactment, given that such schemes are crucial sources of local authority funding in a number of areas? I look forward to the Minister’s response to those points.
Jacob Young
I am grateful to the hon. Member for Greenwich and Woolwich for speaking to his amendments, and to the hon. Member for Westminster North for her comments. We expect the vast majority of landlords to do the right thing and meet their new legal responsibilities but, as ever, a minority will fail to do so. The Government are committed to supporting local authorities and taking proactive enforcement against this minority of landlords.
Clause 58 will place a new duty on every local housing authority in England to enforce the new measures in their area. When considering enforcement, local authorities will be able to use a civil penalty as an alternative to a criminal prosecution for an offence, allowing them to decide the most effective method of enforcement in each case.
Government amendments 78, 81 and 82 will extend the power in clause 58, though not the duty, to enforce the landlord legislation to county councils in two-tier areas in England. While local housing authorities have a duty to enforce the landlord legislation in their areas under clause 58, there may be some instances where breaches and offences are better pursued by the authority responsible for trading standards. For example, in relation to advertising a property to rent, county councils also have this responsibility. In this Bill, we make a distinction between less serious breaches of the legislation and more serious offences. Government amendments 76, 83, 84 and 85 strengthen clause 58 to ensure that the ability of a local housing authority to take enforcement action outside its local area extends to offences as well as breaches.
Clause 59 will further support effective enforcement by ensuring that the local authorities are fully aware of the enforcement action in their areas that is going to be taken by a different authority, and of the final results of such action. This will facilitate local authorities to take cross-border enforcement action, and deliver greater efficiency and enable local authorities to provide the most complete case to the courts.
Clause 60 will allow the Secretary of State to appoint a lead enforcement authority for the purpose of provisions in the landlord legislation, which includes many of the provisions in this Bill. We plan to carefully consider whether having a lead enforcement authority for any of the provisions in the landlord legislation will be beneficial. We plan to engage with local authorities and other stakeholders to establish this.
Clause 61 sets out the various duties and powers of a lead enforcement authority. The principal duty is to oversee the operation and effective enforcement. This includes the duty to provide advice to local authorities about the operation of the legislation and may include information relevant to the enforcement of specific cases.
Government amendments 86 to 91 will ensure that a lead enforcement authority’s duties and powers provided in the Bill to help local housing authorities are extended to county councils in England that are not local housing authorities. Government amendments 92, 93 and 95 ensure that county councils in England that are not local housing authorities are required, when requested, to report to a lead enforcement authority, in the same way that a local housing authority is on the exercise of its functions. New clause 22 will ensure that enforcement action is not duplicated when those county councils that are not also local housing authorities take enforcement action in relation to landlord legislation. Government amendment 77 ensures that new provisions of the new clause 22 are referenced in clause 58, which is the clause that encloses the duty to enforce on local housing authorities.
Finally, new clause 23 will place a duty on local authorities to supply data to the Secretary of State in relation to the exercise of their functions—I believe that point was mentioned by the hon. Member for Greenwich and Woolwich—under part 2 of this Bill, and other relevant legislation as and when it is requested. In order to evaluate the impact of our reforms and understand the action that local authorities are taking against the minority of landlords who flout the rules, it is vital that the Secretary of State is able to seek regular and robust data from local authorities. My officials will work with local authorities to agree a data reporting framework that is rational, proportionate and helpful to both local and central Government, and in line with other similar data collections. With their input, we will undertake a new burdens assessment and fully fund any additional costs generated to fulfil this duty. I hope that addresses the points raised in Committee.
Amendment 76 agreed to.
Amendments made: 77, in clause 58, page 57, line 38, after first “authority)” insert—
“, (Enforcement by county councils which are not local housing authorities: duty to notify)(3) (enforcement by county council in England which is not a local housing authority)”.
This amendment is consequential on NC22.
Amendment 78, in clause 58, page 57, line 38, at end insert—
“(3A) A county council in England which is not a local housing authority may—
(a) enforce the landlord legislation;
(b) for that purpose, exercise any powers that a local housing authority may exercise for the purposes of enforcing that legislation.”
This amendment confers a power to enforce the landlord legislation on county councils in England which are not local housing authorities and for that purpose enables such councils to exercise powers equivalent to local housing authorities.
Amendment 79, in clause 58, page 58, leave out lines 1 to 3.
This amendment removes the definition of “local housing authority” for the purposes of Part 3 of the Bill. It is consequential on Amendment 107 which inserts a definition of “local housing authority” for the purposes of the Bill as a whole.
Amendment 80, in clause 58, page 58, line 4, at end insert—
“(za) Chapter 2A of Part 1 of this Act,”.
This amendment adds the new Chapter expected to be formed of new clauses relating to discriminatory practices in relation to the grant of tenancies to the definition of “the landlord legislation” in clause 58.
Amendment 81, in clause 58, page 58, line 9, leave out “a local housing authority”.
This amendment is consequential on Amendment 78.
Amendment 82, in clause 58, page 58, line 10, leave out “that authority”.—(Jacob Young.)
This amendment is consequential on Amendment 78.
Clause 58, as amended, ordered to stand part of the Bill.
Clause 59
Enforcement by local housing authorities: duty to notify
Amendments made: 83, in clause 59, page 58, line 16, after second “of” insert “, or an offence under,”.
This amendment ensures that a local housing authority notifies another local housing authority if it proposes to take enforcement action in respect of an offence under the landlord legislation which occurs in the area of that other authority.
Amendment 84, in clause 59, page 58, line 23, after “breach” insert “or offence”.
This amendment is consequential on Amendment 83.
Amendment 85, in clause 59, page 58, line 27, after “breach” insert “or offence”.—(Jacob Young.)
This amendment clarifies that a financial penalty imposed under the landlord legislation may also relate to an offence under that legislation.
Clause 59, as amended, ordered to stand part of the Bill.
Clause 60 ordered to stand part of the Bill.
Clause 61
General duties and powers of lead enforcement authority
Amendments made: 86, in clause 61, page 59, line 30, leave out “local housing” and insert “relevant local”.
This amendment requires a lead enforcement authority to provide information and advice to county councils in England which are not local housing authorities.
Amendment 87, in clause 61, page 59, line 35, leave out “local housing” and insert “relevant local”.
This amendment provides for a lead enforcement authority to disclose information to county councils in England which are not local housing authorities for certain purposes.
Amendment 88, in clause 61, page 60, line 1, leave out “local housing” and insert “relevant local”.
This amendment provides for a lead enforcement authority to issue guidance to county councils in England which are not local housing authorities.
Amendment 89, in clause 61, page 60, line 4, leave out “Local housing” and insert “Relevant local”.
This amendment requires county councils in England which are not local housing authorities to have regard to guidance issued by a lead enforcement authority under subsection (4) of clause 61.
Amendment 90, in clause 61, page 60, line 14, leave out “local housing” and insert “relevant local”.
The amendment provides for a direction given under subsection (7) of clause 61 to relate to county councils in England which are not local housing authorities.
Amendment 91, in clause 61, page 60, line 16, at end insert—
“‘relevant local authority’ means—
(a) a local housing authority, or
(b) a county council in England which is not a local housing authority;”.—(Jacob Young.)
The amendment defines “relevant local authority” for the purposes of clause 61.
Clause 61, as amended, ordered to stand part of the Bill.
Clause 62
Enforcement by the lead enforcement authority
Amendments made: 92, in clause 62, page 61, line 1, leave out “local housing” and insert “relevant local”.
This amendment requires a county council in England which is not a local housing authority to report at the request of a lead enforcement authority on the exercise of the county council’s functions under the provisions for which the lead enforcement authority is responsible.
Amendment 93, in clause 62, page 61, line 3, leave out “local housing” and insert “relevant local”.
This amendment is consequential on Amendment 92.
Amendment 94, in clause 62, page 61, line 5, at end insert—
“(7) The powers of a local housing authority referred to in subsection (1)(b) include the power to authorise persons to exercise powers of officers under sections (Power of local housing authority to require information from relevant person) to (Investigatory powers: interpretation) (see section (Investigatory powers: interpretation)(2)).
(8) Section (Suspected residential tenancy: entry without warrant)(7) is to be read, in relation to an officer of a lead enforcement authority, as if—
(a) the reference to a deputy chief officer whose duties relate to a purpose within subsection (1)(b) of that section were a reference to—
(i) a person who is employed by, or acts on the instructions of, the body which is the lead enforcement authority and has overall responsibility for the exercise of the functions of that body in that capacity (‘the head of the lead enforcement authority’), or
(ii) a person who is employed by, or acts on the instructions of, the lead enforcement authority, and has been authorised by the head of the lead enforcement authority to give special authorisations within the meaning of section (Suspected residential tenancy: entry without warrant), and
(b) paragraph (b)(ii) were omitted.”
This amendment is consequential on other new clauses which provide for investigatory powers of local housing authorities. It deals with how the references to officers of a local housing authority are to apply in the case where the powers of a local housing authority are to be exercised by a lead enforcement authority.
Amendment 95, in clause 62, page 61, line 5, at end insert—
“(9) In this section ‘relevant local authority’ has the same meaning as in section 61.”—(Jacob Young.)
This amendment defines “relevant local authority” for the purposes of clause 62.
Ordered, That further consideration be now adjourned. —(Mr Mohindra.)
Tuesday 28th November 2023
(5 months ago)
Public Bill CommitteesRenters (Reform) Bill 2022-23 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 28 November 2023 - (28 Nov 2023)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Chair
With this it will be convenient to consider the following:
Government amendments 112, 115 and 116.
Government new clause 20—Decent homes standard.
New clause 60—Extension of Awaab’s law to the private rented sector—
“(1) Section 10A of the Landlord and Tenant Act 1985 is amended as follows.
(2) Omit subsections (1)(b) and (6).
(3) In subsection (7), omit the definitions of ‘low-cost home ownership accommodation’ and ‘social housing’.”
This new clause would require private landlords to deal with hazards affecting their properties.
Government new schedule 1—Decent homes standard.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
It is a pleasure to see you in the Chair, Ms Fovargue.
Everyone deserves to live in a safe and decent home. It is completely unacceptable in this day and age that people are forced to live in homes that do not meet basic standards of decency. There is already a decent homes standard for social housing that has been successful in improving housing conditions. Since the standard was last updated in 2006, the level of non-decency in social housing has fallen from 29% to 10%, but there is no equivalent standard for the private rented sector, and homes in that sector are more likely to be non-decent.
Of the 4.6 million households that rent privately, 23% live in properties that would fail the decent homes standard that currently applies to social housing. That is around 1 million homes. That is why we committed in the levelling-up White Paper to halving the number of non-decent rented homes by 2030 and, in the “Fairer Private Rented Sector” White Paper, to introducing a legally binding decent homes standard in the private rented sector for the first time. It is also why we have tabled the Government amendments, which will allow Ministers to set a new standard to apply the private rented sector and for it to be enforced.
It is imperative that we get the content of the new standard right and that we ensure that it is both proportionate and fair. We are working closely with a range of stakeholders to co-design the standard and make sure the balance is right for landlords and tenants. For most PRS properties, our expectation is that the landlord will not need to do any additional work to meet the decent homes standard beyond what is needed to meet existing requirements and keep their properties in a good state of repair. We will provide further details on our proposals for the standard in due course.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to continue our deliberations with you in the Chair, Ms Fovargue.
Clause 63 is a short and straightforward clause that would require the Secretary of State to prepare a report that sets out the Government’s policy on safety and quality standards in relation to supported housing and temporary accommodation and to publish it within one year of the day on which the measure comes into force. The group of Government amendments we are considering with the clause, which are intended to replace it entirely, will extend part 1 of the Housing Act 2004, which relates to housing conditions, to cover temporary accommodation, and provide for regulations to specify new requirements that will form part of a decent homes standard that applies to temporary accommodation, supported exempt accommodation and rented property more generally. We welcome both the intent and the design of the amendments.
The private rented sector is manifestly failing to provide safe and secure homes for all those who live in it. We fully accept that the absolute number and proportion of poor-quality private rented homes continues to fall—albeit steadily rather than drastically—as part of a half-century, if not longer, of improvement in housing standards. However, it remains the case that some of the worst standards in housing are to be found in the private rented sector. It should be a source of real shame for the Government that after they have been in office for 13 years, an estimated one in four homes in the private rented sector—the Minister made it clear that that equates to around a million properties—do not meet the decent homes standard, and one in 10 has a category 1 hazard that poses a risk of serious harm.
For the considerable number of private tenants who are forced to live in substandard properties—those who wake up every day to mould, vermin or dangerous hazards—what should be a place of refuge and comfort is instead a source of, at best, daily unease and, at worst, torment and misery. More must be done to bear down decisively on this problem. Measures designed to drive up standards in the sector should be enacted as a matter of urgency.
As I made clear during the debate on clause 52, the Government deserve appropriate credit for seeking to introduce a decent homes standard that covers the private rented sector through this Bill rather than through separate future legislation. We believe that Government new clause 20, new schedule 1 and the related amendments are well drafted and that they have the potential to tackle the blight of poor-quality homes in local communities and ensure that renters have safer and better homes to live in; however, I would like to take this opportunity to put to the Minister several questions about those provisions.
My first question concerns enforcement. A decent homes standard that covers the social rented sector has been in place since 2001, yet we know that far too many social tenants still live in damp, cold and mouldy properties that harm their health and their life chances. Indeed, that was one of the chief reasons why the Government felt it necessary to enact the Social Housing (Regulation) Act 2023. That demonstrates that over the 22 years of the decent homes standard’s existence, although it has led to some improvements it has not been enforceable in the social rented sector. That experience suggests that introducing a decent homes standard covering the private rented sector will not achieve its objectives unless it is properly enforced.
Given that the Government intend, by means of new schedule 1, which amends part 1 of the Housing Act 2004, for enforcement of the new standard in the PRS to be undertaken using the same powers as the regime for the housing health and safety rating system, it should be a relatively straightforward matter for local authorities. However, local authorities’ ability to do so successfully depends in practice on their capacity and capabilities. As we debated just prior to the break, in relation to clauses 58 to 61, a great many authorities are struggling when it comes to resources and skills. Will the Minister provide more detail on what steps, if any, the Government intend to take, in addition to the various proposals in the Bill, to ensure that local authorities can appropriately enforce the application of the decent homes standard to the private rented sector where it is not already being met?
My second issue concerns the nature of the standard itself. The Government consulted on the introduction and enforcement of a decent homes standard in the private rented sector in England late last year, and the responses to that consultation obviously fed into the Government amendments we are considering. However, the Government have also committed themselves to a more fundamental review of the standard at some unspecified point in the future. Will the Minister confirm whether that commitment remains in place? If so, will he give us some idea of when that more fundamental review, presumably across both the social rented and private rented sectors, might begin?
The third issue relates to the current enforcement regime for the housing health and safety rating system. The regime is primary means by which local authorities can tackle poor property conditions and compel prompt action from landlords who do not fulfil their responsibilities to provide homes free from dangerously hazardous conditions. We take it from the Government amendments that while the new decent homes standard for the private rented sector will be located in part 1 of the Housing Act 2004, it will not necessarily be the same thing as the HHSRS, which is also in part 1 of that Act. We will presumably need to wait for secondary legislation to work out how, if at all, the decent homes standard and the HHSRS differ, but their workings will need to complement each other.
In answer to a written question that I tabled on 2 May, the then Housing Minister confirmed that a review of the HHSRS, including the statutory operating and enforcement guidance, was under way. Given the obvious implications of that answer for the functioning of the new decent homes standard introduced by this group of Government amendments, will the Minister tell us whether that review has concluded, as the decent homes consultation suggested? If it has, when did it conclude, when will the results be published, and does it remain the Government’s view that any changes will require further legislation? The status and outcome of the review of the HHSRS and its associated statutory, operating and enforcement guidance are important because that guidance is applied when local authorities consider using their statutory powers to remedy defective housing conditions, including and especially damp and mould.
That brings me to our new clause 60. When the Social Housing (Regulation) Act 2023 was on Report, the Government tabled and passed, with our support, amendments designed to force social landlords to investigate and fix damp and mould-related health hazards within specified timeframes, with the threat of legal challenge if they do not, owing to the insertion of an implied covenant into tenancy agreements. The provisions were termed Awaab’s law because they were a direct response to the untimely death of two-year-old Awaab Ishak from respiratory arrest, as a result of prolonged exposure to mould in the rented Rochdale Boroughwide Housing property in which he and his family lived. Although enactment of the new requirements is dependent on secondary legislation, with the consultation having closed last week we are hopeful that the necessary statutory instrument will soon be forthcoming. We look forward to its enactment so that social landlords who continue to drag their feet over dangerous damp and mould will face the full force of the law.
New clause 60 would simply extend Awaab’s law to the private rented sector by amending the relevant section of the Landlord and Tenant Act 1985, and the reasoning behind that is straightforward. The Government were right to introduce Awaab’s law in the social housing sector, but the problem of debilitating damp and mould, and landlords who fail to investigate such hazards and make necessary repairs, is not confined to social rented homes.
A Citizens Advice report published in February made it clear that the private rented sector has widespread problems with damp, mould and cold, driven by the poor energy efficiency of privately rented homes—an issue that we are minded to raise later in the Bill’s proceedings. The report went on to evidence the fact that 1.6 million children in England currently live in cold, damp or mouldy privately rented homes. In the face of such a pervasive problem, we can think of no justification whatsoever for restricting Awaab’s law purely to the social housing sector. We hope that the Government will agree and accept new clause 60, because we can think of no reason whatsoever why they would resist doing so.
Before I conclude, I want to touch briefly on a final issue in relation to this group of amendments. We welcome the inclusion of supported exempt accommodation in a decent homes standard and part 1 of the Housing Act 2004. We believe that will resolve an issue of concern that we flagged in the Social Housing (Regulation) Bill Committee—namely, the loophole that exists, and is being exploited by unscrupulous providers, as a result of non-profit-making providers of supported exempt accommodation being able to let properties at market rents that are eligible for housing benefit support, on the basis that “more than minimal” care, support or supervision is being provided, without those properties coming within the scope of consumer regulation.
The inclusion of temporary accommodation is also welcome, but it is slightly more problematic, because local authorities are responsible both for enforcing part 1 of the Housing Act 2004 and for procuring sufficient temporary accommodation to meet their duty to prevent and relieve homelessness. As such, while there may not be a legal conflict of interest, there is certainly a potential practical conflict of interest, as local authorities will be forced to weigh the case for any potential enforcement action, outside the scope of the contract in question, against the need to retain private landlords as an ongoing source of desperately needed temporary accommodation. It is for precisely that reason that we tried to convince the Government, in the Social Housing (Regulation) Bill Committee, to have temporary accommodation regulated by a third party, such as the Regulator of Social Housing.
The Government amendments will undoubtedly help to improve the quality of some temporary accommodation, and the inclusion of temporary accommodation in a decent homes standard and part 1 of the Housing Act 2004 is to be welcomed for that reason. However, we encourage the Government to consider whether they might go further. For example—here, I again commend my hon. Friend the Member for Westminster North for her Homes (Fitness for Human Habitation) Act 2018—could the Government extend section 9A of the Landlord and Tenant Act 1985 to also cover properties occupied under licences as homelessness temporary accommodation? I would welcome the Minister’s thoughts on that, and I look forward to his response to new clause 60 and all the other issues that I have raised regarding this group of amendments.
Jacob Young
Let me address the hon. Gentleman’s point about local authorities and their ability to enforce. We will establish a new duty on landlords to ensure that their properties meet the decent homes standard. For landlords who fail to take reasonably practicable steps to keep their properties free of serious hazard, local councils will be able to issue fines of up to £5,000. That will encourage those landlords who do not already do so to proactively manage their properties, which will allow local councils to target their enforcement more effectively on a small minority of irresponsible and criminal landlords.
We will also explore requiring landlords to register compliance with the decent homes standard on the property portal. That will support local councils in identifying non-decent properties to target through their enforcement activity. As I have already said in response to different parts of the Bill, we will also do a full new burdens assessment for local authorities, and where there is a new burden, they will be resourced to fund that.
On the hon. Gentleman’s questions about the HHSRS review, the simple answer is that we will publish that in due course. Secondary legislation obviously needs to coincide with that, so I do not have anything further to add at this point. However, I am happy to write to him in further detail on that. Similarly, I will commit to writing to him on on the DHS review too.
Jacob Young
The hon. Member is trying to press me for a specific timeframe, but I am unable to give him that commitment today.
I thank the hon. Member for Greenwich and Woolwich for tabling new clause 60. The tragic case of Awaab Ishak’s death has thrown into sharp relief the need for the Government to continue our mission to rebalance the relationship between landlords and tenants in this country. It is right that all tenants across both sectors should expect safe and decent homes from their landlords. However, our focus for the private rented sector is to strengthen the enforcement of standards by local housing authorities, as well as introducing new means of redress through the PRS ombudsman.
We do not consider it to be of interest to private rented sector tenants to introduce a further route for potential litigation and enforcement. Private tenants already have rights when it comes to repairs in their home and the safety of their home. Private landlords are required to make sure that their homes are free from the most serious health and safety hazards. If hazards are present, the local housing authority can issue an improvement notice requiring them to be remedied within a specific time. Landlords who fail to comply can be prosecuted or fined up to £30,000. Additionally, if tenants consider that their rented home is not fit for human habitation, they can seek remedy through the courts under the Homes (Fitness for Human Habitation) Act 2018, to which the hon. Member for Greenwich and Woolwich referred.
Our focus is on strengthening the new system through the Bill. As I have just set out, we intend to introduce a decent homes standard in the private rented sector for the first time. The Government’s amendment to introduce the relevant provisions will place a stronger duty on landlords to keep their properties free from serious hazards, and allow local housing authorities to take enforcement action if private rented homes fail to meet decent homes standards. Through the Bill, we are also introducing a private rented sector ombudsman, which will be able to help private tenants to resolve repair issues quickly and for free if their landlord has not acted appropriately to remedy an issue within a reasonable timeframe.
Through existing legislation and new measures introduced by the Bill, private rented sector landlords will be held to account for providing safe and decent homes, and for providing timely repairs. We do not consider that it would be in the interest of private rented sector tenants to introduce a further route for potential litigation.
Ms Karen Buck (Westminster North) (Lab)
Before the Minister sits down, will he deal with the issue of licences? Those of us who deal with a large number of people in homeless accommodation know that those in temporary accommodation, whose accommodation is held under licence, often endure the worst conditions of all, and very little of this legislation currently applies to them. Will he bring something forward?
Jacob Young
I am happy to have that conversation with the hon. Lady and the hon. Member for Greenwich and Woolwich at a later date. If there are specific points that I have not addressed, I am happy to write to her, but I ask the hon. Member for Greenwich and Woolwich to withdraw the new clause.
Matthew Pennycook
I welcome that response from the Minister. With regard to Government amendments, I thank him for what he said about the HHSRS and the more fundamental review of the decent homes standard across both tenures. If he has any further detail on that, I would welcome it. I particularly welcome the implied suggestion that the registration of a decent homes standard, when it is forthcoming, will form part of what is required for landlords to submit on the portal. That is a very good idea, and in that way we could help to drive up standards by making it part of the general information that needs to be submitted as part of registration with the database. That is very welcome.
On Awaab’s law and new clause 60, I have to say to the Minister that he gave a particularly unconvincing answer. I entirely understand that when it comes to standards, the Government’s focus is on the measures in the Bill. We all want to see local authorities able to enforce properly, and we all want to see the ombudsman provide a mechanism for redress. However, I still fail to understand—I do not think the Minister responded to this point—why the Government believe that Awaab’s law is appropriate for the social rented sector, but not for the private rented sector.
Matthew Pennycook
I will just make this point. The Minister said that the Government do not think it is of interest to tenants; I would be very interested to know what surveys the Government have done of tenants to find out their views on this matter, because I am certainly not aware of any such evidence. I think it would be of real interest to tenants if their landlords could be forced to respond within specific timeframes to sufficiently serious cases of damp and mould, as Awaab’s law provides for the social rented sector, with the threat of legal challenge as a stock response. I am happy to give way, but I find the Minister’s arguments on this point quite unconvincing. If these measures are appropriate for the social rented sector, with all the other measures in place in that sector, they should be appropriate for the private rented sector.
Jacob Young
I simply say to the hon. Gentleman that there is an obvious difference between a large social housing sector landlord, which has maintenance teams that can quickly act to address an issue, and an individual landlord, who may have only one or two properties, and may not have a wealth of skill behind them to address such issues in the timeframes that we hope to set out for social landlords. As I said, local authorities can request timely changes to properties.
Matthew Pennycook
I thank the Minister for that answer. I fully accept that there is a difference between a large registered social landlord, and a mum-and-dad landlord, who might own only one or two buy-to-let properties. However, we should not therefore say that it is acceptable for the kinds of cases that Awaab’s law would cover, if extended to the private sector, to go on unchallenged. I am not satisfied that there are existing powers to challenge those cases. If there were such powers in the social rented sector, the Government would not have needed to bring forward Awaab’s law. Actually, if the Government were properly resourcing local authorities to enforce, Awaab’s law might not be necessary, but the Government deemed it necessary in the social rented sector.
As the Bill demonstrates, the difference between the private rented sector and the social sector will break down to some extent, whether as a result of the ombudsman, who will cover both sectors, or other measures. We think the law should cover both sectors, and I find the Minister’s response unconvincing. I will press new clause 60 to a Division.
Matthew Pennycook
I beg to move amendment 169, in clause 67, page 62, line 21, at end insert—
“, save that section 2(b) comes into force on the day on which this Act is passed only to the extent that it repeals section 21 of the Housing Act 1988; such repeal will not affect the validity of any notices served under that provision on or before the day on which this Act is passed and the provisions of that section will continue to apply to any claims issued in respect of such a notice”.
This amendment would ensure that the abolition of section 21 evictions would come into force on Royal Assent, with saving provisions for any notices served before that date.
In opening the Committee’s fifth sitting for the Opposition, I set out in exhaustive detail our concerns about the huge uncertainty that surrounds the implementation of chapter 1 of part 1 of the Bill as a result of the Government’s recent decision to tie the implementation of the new tenancy system directly to ill-defined court improvements. As I argued, because of the Government’s last-minute change of approach, private tenants have no idea when the new tenancy system will come into force. They do not even know what constitutes the requisite progress on court reform that Ministers deem necessary before the new system comes into force.
At that point in our proceedings, I put three questions to the Minister. First, do the Government believe that the county court system for resolving most disputes between landlords and tenants is performing so badly that reform is a necessary precondition of bringing chapter 1 of part 1 into force? Secondly, if the Government’s view is that reform of the court system is absolutely necessary prior to chapter 1 coming into force, what is the precise nature of the improvements that are deemed to be required? Thirdly, what is the Government’s implementation timeline for those court improvements? The Minister’s terse response to the clause 1 stand part debate provided no convincing answers whatsoever to those questions; indeed, he failed to respond to almost all the detailed and cogent points of concern raised by Opposition Members in that debate. I hope that he will take the opportunity to respond to them in debate on this amendment, and thus provide the Committee with the assurances that were sought, but not secured, earlier in our proceedings.
Toward the end of the debate on clause 1 stand part, I put a question to the Minister about clause 67. I asked why the two-stage transition process that the clause provides for, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, does not afford the Government enough time to make the necessary improvements to the courts. The Minister’s reply was:
“We will come on to that point when we discuss clause 67.”––[Official Report, Renters (Reform) Public Bill Committee, 21 November 2023; c. 159.]
Well, here we are, Minister, and we would still like to know not only why the Government believe that court reform is a necessary precondition of enacting chapter 1 of part 1, what improvements they believe are necessary, and the timeline for their implementation, but why the two-stage transition process that this clause facilitates is not sufficient to get the job done. We really do deserve some answers from the Government today.
I remind the Committee that clause 67 would give the Government an incredible amount of leeway on when the new system comes into force. It allows Ministers to determine an initial implementation date at any point after Royal Assent, after which all new tenancies will be periodic and governed by the new rules, and also to determine a second implementation date, which must be at least 12 months after the first, after which all existing tenancies will transition to the new rules. Although we want firm assurances that the two-stage process will not be postponed indefinitely pending unspecified court improvements, we take the view that the proposed two-stage process is the right approach. It would clearly not be sensible to enact the whole of chapter 1 of part 1 immediately on Royal Assent. Additional time will be required for, for example, new prescribed forms for the new grounds for possession.
However, landlords and tenants need certainty about precisely when the Government’s manifesto commitment to abolish section 21 no-fault evictions will be enacted. Amendment 169 seeks to provide that certainty. It would ensure that section 21 of the Housing Act 1988 was repealed on the day that the Bill received Royal Assent, with saving provisions for any notices served before that date, so that they remain valid and of lawful effect. By ensuring that section 21 is repealed on the day the Act is formally approved, we would prevent a significant amount of hardship, and the risk of private tenants being made homeless. We urge the Government to accept the amendment.
I want to press the Minister on a final point that I raised about clause 67 during our clause 2 stand part debate. As is clearly specified in guidance published by the Government, they propose a minimum period of 12 months between the first and second implementation dates, but there is no maximum period, so the Bill would allow for all new tenancies to become periodic, but then there could be an extensive period—perhaps even an indefinite one—before existing tenancies transitioned to the new rules.
We believe that the Bill should specify a maximum, as well as a minimum, amount of time between the first and second implementation dates. The Minister agreed to write to me on that issue, but unless I have missed some correspondence, that has not been directly addressed in any of the letters I have received thus far. I would be grateful if he could give me a commitment today that the Government will revisit this issue before Report. Otherwise, we will be minded to return to it then.
Jacob Young
On the hon. Gentleman’s final point, I fully accept his desire for a maximum period. The reason we have not set a maximum is to give us as much flexibility as possible. There is no real incentive for a landlord today to try to get around the system. Were a landlord to introduce a new three-year fixed-term tenancy agreement to try to game the system and avoid the six or 12-month time limit, that would simply block the landlord, and they would not be able to use the powers that section 21 affords them currently. That would be restrictive to that landlord as well as to the tenant, so we do not see a situation where a landlord would try to subvert the rule.
Matthew Pennycook
That is an interesting point. Let me probe the Minister on it. There is no maximum period for the implementation of the second date—in other words, there is no period by which the Government have to have brought forward the date when all existing tenancies are converted. Is he saying that between the first implementation date and the second, when all existing tenancies remain as is, other measures in the Bill will apply to them? That is the logic of his argument about landlords not gaming the system. I do not think we are talking about landlords gaming the system; we are talking about the Government having too much leeway to postpone the conversion of existing tenancies to the new system.
Jacob Young
The vast majority of fixed-term tenancies will be a 12-month agreement, so they would naturally roll on to being a periodic tenancy at the end of that fixed-term agreement. It is unrealistic to expect there to be tenancy agreements that are longer than three years, so they would all naturally convert to this new system anyway. We want to create a gradual process for all tenancies to join the new system; otherwise, it would cause confusion and perhaps overload the portal. If that does not satisfy the hon. Gentleman, I am happy to write to him setting that out further.
On amendment 169, I understand that the hon. Gentleman’s intention is to gain more clarity on the timeline for implementation of our reforms. However, the amendment would mean that on the day of Royal Assent, section 21 would be removed immediately. There would be no transition period; no time, once the final detail of the legislation was known, to make sure the courts were ready for the changes; and no time for the sector to prepare.
As we have said a number of times in Committee, these are the most significant reforms of the private rented sector in 30 years, and it is critical that we get them right. I am as wedded to ensuring that section 21 is abolished at the earliest opportunity as the hon. Member is, in order to provide vital security for tenants, but we have to ensure that the system is ready.
It might be helpful for me to explain how we are improving the courts, and what needs to happen to prepare the courts for the new tenancy system. Court rules and systems need updating to reflect the new law; there is no way that this can be avoided. Furthermore, we have already fully committed to a digital system that will make the court process more efficient and fit for the modern age. Let me reassure the Committee that we are doing as much as possible before the legislative process concludes. The design phase of our possession process digitisation project is under way, and has more than £1 million of funding. That will pave the way for the development and build of a new digital service.
We are also working to tackle concerns about bailiff delays, including by providing for automated payments for debtors. That will reduce the need for doorstep visits, so that bailiffs can prioritise possession enforcement. We are going further with the Ministry of Justice and His Majesty’s Courts and Tribunals Service in exploring improvements to bailiff recruitment and retention policies; we touched on that. It would simply be a waste of taxpayers’ money to spend millions of pounds building a new system when we do not have certainty on the legislation underpinning it. That is why we will set out more details and implementation dates in due course.
Let me be clear that this is not a delaying tactic. There are 2.4 million landlords. Urban and rural landlords, their representatives and business tell us that they have concerns about delays in the courts. We cannot simply ignore that. We have always been clear that implementation would be phased, so that the sector has time to adjust, and we committed to giving notice of the implementation dates in the White Paper last year.
Mike Amesbury
How many people and families does the Minister think will be evicted while they wait for reform of the courts, or wait for them to go digital by default? What is the timescale for digital by default? There are literally hundreds of families a day being evicted through section 21 no-fault evictions; the numbers are starting to go through the roof. That is a massive cost to the state and taxpayers.
Jacob Young
Of course it is, and I entirely accept the hon. Gentleman’s point. However, every one of the 11 million renters in this country has a landlord. We have had representations from all the organisations representing the 2.4 million landlords in this country saying that they are concerned about the courts. Trying to introduce a new system and overriding the concerns of landlords would be unwise.
Matthew Pennycook
The Minister says that this is not a delaying tactic. I take him at his word. Will he therefore explain why the two-stage transition process provided for by the clause does not provide the Government with enough time to make the necessary improvements? He said that the improvements are already under way, and that huge progress is being made in a number of areas. Why is that not enough time for him to say, “By the second implementation date, we will have got the courts to where they need to be, and we can give tenants the assurance that the new system will be in place at that point”?
Jacob Young
As I have outlined, we need to give time for the courts to improve. We need to give them the space to do that. I do not think that the measures in the Bill mentioned by the hon. Gentleman are adequate to do that. However, if there is another mechanism for us to ensure that the courts are prepared before the implementation of the Bill, I am happy to discuss that with him further. I remind all hon. Members that this is the biggest change to the sector in a generation; it is important that we take the time to get it right. The Government are ensuring that we have a smooth transition to the new system, and I therefore ask the hon. Gentleman to withdraw his amendment.
Matthew Pennycook
I thank the Minister for that response. That is probably the most detail we have had on what the Government see as the necessary court improvements, but, to be frank, it is not enough detail. There are no metrics in there by which we can measure the reform that he talked about.
The Minister mentioned that the Government want the reforms introduced at the earliest possible opportunity. We have heard that they are targeting bailiff delays, processes and the new digital system. I take it from his response that the implementation of an entirely new digital system relating to possession grounds is a prerequisite to enacting part 1 of chapter 1. However, there is still too much uncertainty about what constitutes a necessary reform, and we are not convinced that the two-stage transition process provided for by the Bill does not afford the Government enough time to get the courts to a point at which we can introduce the new system. Indeed, in the evidence sessions, we heard different points of view on whether we had not better introduce the measures in the Bill and then see how the courts respond to the new system before phasing it in, so we remain unconvinced.
There is a fundamental point of difference between us on the abolition of section 21. We are deeply concerned about the number of people put at risk of homelessness while the Government have delayed bringing the legislation forward. We are deeply concerned about the additional people who will be at risk of homelessness, and who will be made homeless, while the Government get on with court improvements that, frankly, should already have been delivered, so that the Bill could be ready to go. We very much feel that tenants and landlords need certainty about precisely when section 21 will be abolished, so I will press the amendment to a vote.
Question put, That the amendment be made.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
I was going to apologise to the Committee for the slightly obscure nature of my new clause, but after all that, I think it is the Minister who should be apologising for tabling so many Government new clauses to the Government’s own Bill. Perhaps he will do so when he stands up.
New clause 53 is very consciously a probing amendment, in so far as it seeks to ascertain whether there are any safeguards against what we believe might constitute a potential loophole in Bill that could be exploited by unscrupulous landlords.
Clause 14 sets out rules about the period of notice that a tenant can be required to provide when they wish to end an assured tenancy. Specifically, it provides that a tenant’s notice to quit relating to an assured tenancy must be given not less than two months before the date on which the notice is to take effect. That two-month period is intended, rightly, to provide landlords with sufficient time to re-let the property as required. However, the two-month default period of notice can be set aside where both parties agree as much in writing, whether in the tenancy agreement or in a separate document.
There may be entirely legitimate reasons for individual landlords and tenants to agree a shorter notice period. However, we are concerned that some tenants might find themselves informally pressured to agree a shorter notice period in writing as a precondition of being granted a tenancy. For many landlords, there will be absolutely no incentive to agree a shorter notice period than the two-month default; after all, they are likely to need much of that time, if not all, to re-let their property. However, it is entirely conceivable that unscrupulous landlords, particularly in hot rental markets, would have every incentive to get a sitting tenant out as quickly as possible after the point at which that tenant had given a notice to quit, because they will have no trouble in rapidly re-letting their property, probably at a far higher rent level.
We are therefore worried that the freedom for landlords and tenants to agree notice periods shorter than two months in writing could be used to the detriment of tenants—particularly vulnerable tenants, who in all likelihood will not be aware that two months is the default period and who might come under considerable pressure from their landlord to agree to a shorter period. New clause 53 seeks to protect such tenants by simply requiring the court to authorise any agreement in writing that provides for a notice period shorter than the two-month default. I look forward to the Minister’s response.
Jacob Young
I apologise to members of the Committee for how long it took to get through all those new clauses. However, I do not apologise for the new clauses themselves, because they strengthen the Bill and give additional rights to tenants and landlords under it. I am very proud that we have been able to add them.
I thank the hon. Gentleman for moving new clause 53, which would prevent landlords and tenants from agreeing contract clauses that override statutory provisions protecting tenants’ rights unless a court has preauthorised it.
Subsection (1) is an unnecessary provision. It is already the case that contractual clauses cannot affect statutory rights unless legislation expressly so allows. This is a long-standing principle of our legal system.
Subsection (2) would give the courts the power to authorise the waiver of tenants’ statutory rights under the Bill. That could have unintended consequences. More importantly, subsection (2) would weaken tenants’ rights. It would allow a judge to authorise the waiver of the rights that the Bill grants them. We do not think that this is appropriate or required.
Matthew Pennycook
I note the Minister’s criticism of the new clause as drafted, but does he recognise the point it seeks to raise: the concern that vulnerable tenants might come under pressure from a landlord to agree in writing to a shorter notice period that they may not necessarily want but that comes as a precondition of the tenancy? Notwithstanding his concerns about our new clause, will the Government give some more thought to whether it is a potential weakness of the Bill and how that might be addressed?
Jacob Young
I am happy to give the matter more thought in conversation with the Opposition. We intend to give tenants as much information as possible about their rights. That has been discussed at numerous points during the Committee’s consideration. I hope he will consider that assurance sufficient to withdraw his new clause.
Matthew Pennycook
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 56
Extending discretion of court in possession claims
“(1) The Housing Act 1988 is amended as follows.
(2) In Section 9 subsection (6)(a), after ‘Schedule 2 to this Act’ insert ‘, except for grounds 6A, 8 and 8A,’”.—(Matthew Pennycook.)
This new clause would extend the discretion of the court to adjourn proceedings, and stay, suspend or postpone any orders made, to cases where possession is sought under grounds 6, 8, and 8A.
Brought up, and read the First time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
In considering the replacement possession regime that the Bill will introduce, we have been at pains to convince the Government that the courts should be given a greater measure of discretion than the Bill currently provides for. Whether it is through allowing for a very limited amount of discretion in relation to mandatory grounds 1, 1A and 6A so that judges could consider whether the tenant would suffer greater hardship as a result of the possession order being granted, or through seeking to make new ground 8A entirely discretionary rather than mandatory, we believe in principle that we should be putting more trust in the judgment of the court to determine whether to make an award, taking into account all the circumstances that are pertinent in any given case.
In the Committee’s proceedings, we have deliberately not made the case for every possession ground to be discretionary. We take the view that there are some limited circumstances in which it is appropriate for landlords to have the certainty of a mandatory ground to regain possession of their property. However, as things stand, we do not believe that the Government have the balance right when it comes to the amount of discretion that the courts have been afforded in relation to the new possession regime.
New clause 56 is a final attempt to convince the Government to incorporate an additional element of discretion into the new system. It would extend the discretion of the court to adjourn proceedings and to stay, suspend or postpone any orders made to cases where possession is sought under grounds 6, 8 and 8A. In so doing, it would give the courts appropriate flexibility to cater for the circumstances where the ground is already made out, but either it is right to give the tenant more time or there is a way to resolve the dispute that does not involve the tenant losing his or her home.
Currently, for all mandatory grounds for possession, once the ground is made out, the court has no choice but to make an order, and it takes effect 14 days after the date on which it is made. Judges have a limited ability to postpone an order, but only up to six weeks from the date made and only where there would otherwise be exceptional hardship as a result. In short, the court has extremely limited flexibility.
Yet there might be extremely compelling circumstances in relation to individual ground 6 possession proceedings, where a judge might want to make an order that takes effect at a date later than six weeks thence. Take, for example, circumstances in which a landlord could not start to develop until two or three months after the hearing. A judge with the discretion provided for by new clause 56 could postpone the order until around the time at which the development could begin, giving the tenant more time to find a new home and providing the landlord with additional rent or income.
Similarly, in individual ground 8 and 8A possession proceedings, the courts currently have no flexibility to make an order suspended. Providing them with that discretion, as new clause 56 would, would allow judges to suspend an order upon terms that might allow for the outstanding arrears to be repaid under an agreed realistic payment plan, and within a timely manner.
The court could not make such a suspended order on a whim or with the mere hope of repayment without any evidence to provide reasonable reassurance that the rent would be repaid, as Liz Davies KC made plain in her evidence to the Committee on 16 November. By providing the courts with the discretion to suspend an order made in those circumstances, we would be helping both tenant and landlord: the tenant because they get to remain in their home rather than be evicted with four weeks’ notice, and the landlord because the arrears owed would have been paid off. If the tenant were to break the terms, then the landlord would still have the right to arrange for bailiffs to start the eviction process.
New clause 56 would simply give the courts the opportunity to exercise a measure of discretion in circumstances in which they were convinced that that was the right course of action, rather than constraining them, as the Bill currently proposes, in relation to mandatory possession grounds. As James Prestwich of the Chartered Institute of Housing said in evidence to the Committee two weeks ago:
“It is important that we are able to trust judges to make informed decisions based on the evidence of the case”.––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 74.]
That is all that this new clause seeks, in relation to a discrete number of mandatory grounds for possession. I do not hold out much hope, but I hope that the Minister will consider accepting it.
Jacob Young
I thank the hon. Member for moving new clause 56, which would allow the courts to adjourn a possession claim, stay or suspend enforcement of a possession order, or delay the enforcement of an order made under ground 6A, 8 or 8A.
Ground 6A covers situations in which evicting the tenants is the only way for the landlord to comply with enforcement measures such as banning orders; we have already discussed that issue at length earlier in our debates. Delaying enforcement action will therefore mean that the tenant continues to live in an unsafe or overcrowded property, or that the landlord fails to comply with the law. That is not an acceptable situation for either party.
Nor is it fair to ask landlords to bear significant arrears for longer, as applying the new clause to grounds 8 or 8A might. These mandatory grounds already set a high bar for eviction. Asking landlords to bear the cost of significant arrears for longer puts them under unsustainable financial pressure. The Government believe that the new clause strikes an unfair balance that will ultimately hurt tenants. I therefore ask the hon. Member to withdraw the motion.
Matthew Pennycook
I thank the Minister for his response. I do not intend to labour the point at any length, as we have discussed the matter on a number of occasions. I think that there is a clear difference of principle as to the amount of discretion that the courts are afforded regarding mandatory possession grounds. We think that they require a bit more flexibility to be able to exercise their judgment when there are compelling circumstances. The Government clearly do not, but I think we may return to the issue at a later stage. I beg to ask leave to withdraw the motion. 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 24 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 39 (3) Active landlord database entry”
Clause, by leave, withdrawn.
New Clause 57
Extension of rent repayment orders
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
—(Matthew Pennycook.)
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 9, 10, 24 or 27 of the Bill.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Lloyd Russell-Moyle
I beg to move, That the clause be read a Second time.
I am speaking to the new clause to push back a bit on the idea that the courts should not have discretion about some of the grounds. The harm caused to an individual by their being moved out of a property could be far greater than any advantage for someone moving into it. A relative of someone who is ill might have another house for a period of time, for example. Rather than there being two months’ notice, the courts should be given the discretion to decide, “You’re undergoing cancer treatment. Your relative has somewhere to live for six months, and that should be grounds for a delay of six months.” Such discretion should be permitted to the courts. Discretion is permitted in some cases: courts can rule in favour of deferred possession in other areas, but not when it comes to issues involving the non-discretionary grounds.
We have had this debate before. The Minister will respond, but I hope he is open to thinking about how the courts can be involved in areas where there can clearly sometimes be exceptional circumstances. At the moment, it is just a case of the courts asking whether the form has been filled in correctly. That does not do justice to our judges and lawyers, who usually get these things right.
Jacob Young
New clause 67 would make all grounds discretionary. That would remove any certainty for landlords that they could regain possession if they were seeking to sell or move in. Even more seriously, landlords would not even be guaranteed possession if their tenant was in a large amount of arrears, or had committed serious crimes. That could fatally undermine landlords’ confidence in the process for recovering possession.
In last week’s debate, we talked about getting the balance right between tenant security and a landlord’s ability to manage their properties. Where grounds are unambiguous and have a clear threshold, they are mandatory. That includes where a landlord has demonstrated their intention to sell, or a tenant has reached a certain threshold for rent arrears.
However, we completely agree that in more complex situations it is important that judges should have the discretion to decide whether possession is reasonable. Hon. Members talked last week about ground 14—the discretionary antisocial behaviour ground, which is one of those where judicial discretion is required and will remain so. The Government think the new clause strikes an unfair balance that will ultimately hurt tenants, and I ask the hon. Gentleman to withdraw it.
Lloyd Russell-Moyle
There remain many grounds that should involve more discretion. For example, rather than compliance with enforcement action being non-discretionary, there should be a discussion. If a landlord has been found guilty of not meeting the standards required, why should that automatically—just ticking the box—mean that the tenant is punished? Surely judges should be able to have some discretion on that ground. ‘Qualifying residential premises Section 2B(1)’; ‘Relevant tenancy Section 2B(2)’; ‘Social housing Section 2B(2)’; ‘Supported exempt accommodation Section 2B(2)’; ‘Type 1 requirement Section 2A(3)(a)’; ‘Type 2 requirement Section 2A(3)(b), and
Equally, there are many reasons why a wider discretion will be important when it comes to grounds for redevelopment; otherwise, there is a danger of abuse. I would like the Government to go away and think about how those thresholds are at least being met in respect of some of the grounds—not all of them, necessarily. How do we ensure that courts do not end up just going through a tick-box exercise? I totally understand the Government’s concerns about security in the sector, so I will not press the new clause to a vote. However, I do expect the Government to come back with some greater clarity on the guidelines that they will be giving to courts to ensure that the provisions are not just tick-box exercises and therefore abused by landlords. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Schedule
Decent homes standard
“Part 1
Amendments of Housing Act 2004
1 The Housing Act 2004 is amended as follows.
2 (1) Section 1 (new system for assessing housing conditions and enforcing housing standards) is amended as follows.
(2) In subsection (3)(a), omit ‘hazard’.
(3) In subsection (8), after ‘This Part’ insert ‘, except so far as it relates to the requirements specified by regulations under section 2A,’.
3 (1) Section 4 (inspections by local housing authorities) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If a local housing authority consider as a result of any matters of which they have become aware in carrying out their duty under section 3, or for any other reason, that it would be appropriate for any residential premises in their district to be inspected with a view to determining—
(a) whether any category 1 or 2 hazard exists on the premises, or
(b) in the case of qualifying residential premises, whether the premises meet the requirements specified by regulations under section 2A,
the authority must arrange for such an inspection to be carried out.’
(3) In subsection (2)—
(a) omit the ‘or’ at the end of paragraph (a), and
(b) after that paragraph insert—
‘(aa) in the case of qualifying residential premises, that the premises may not meet the requirements specified by regulations under section 2A, or’
(4) After subsection (5) insert—
‘(5A) Regulations made under subsection (4) by the Secretary of State may also make provision about the manner of assessing whether qualifying residential premises meet the requirements specified by regulations under section 2A.’
(5) In subsection (6)—
(a) omit the ‘or’ at the end of paragraph (a), and
(b) after that paragraph insert—
‘(aa) that any qualifying residential premises in their district fail to meet the requirements specified by regulations under section 2A, or’
(6) In the heading, omit ‘to see whether category 1 or 2 hazards exist’.
4 (1) Section 5 (general duty to take enforcement action) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If a local housing authority consider that—
(a) a category 1 hazard exists on any residential premises, or
(b) any qualifying residential premises fail to meet a type 1 requirement,
the authority must take the appropriate enforcement action in relation to the hazard or failure.’
(3) In subsection (2)(c), for ‘a hazard’ substitute ‘an’.
(4) In subsections (3) to (6), after ‘hazard’ (in each place) insert ‘or failure’.
(5) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
5 In the heading to section 6 (how duty under section 5 operates in certain cases), omit ‘Category 1 hazards’.
6 After section 6 insert—
‘6A Financial penalties relating to category 1 hazards or type 1 requirements
(1) This section applies where—
(a) a local housing authority is required by section 5(1) to take the appropriate enforcement action in relation to—
(i) the existence of a category 1 hazard on qualifying residential premises other than the common parts of a building containing one or more flats, or
(ii) a failure by qualifying residential premises other than the common parts of a building containing one or more flats to meet a type 1 requirement, and
(b) in the opinion of the local housing authority it would have been reasonably practicable for the responsible person to secure the removal of the hazard or the meeting of the requirement.
(2) When first taking that action, the local housing authority may also impose on the responsible person a financial penalty under this section in relation to the hazard or failure.
(3) In subsections (1) and (2), “the responsible person” is the person on whom an improvement notice may be served in accordance with paragraphs A1 to 4 of Schedule 1 in relation to the hazard or failure.
(4) For the purposes of subsection (3)—
(a) it is to be assumed that serving such a notice in relation to the hazard or failure is a course of action available to the authority, and
(b) any reference in paragraphs A1 to 4 of Schedule 1 to “the specified premises” is, in relation to the imposition of a financial penalty under this section, to be read as a reference to the premises specified in the final notice in accordance with paragraph 8(c) of Schedule A1.
(5) In subsection (4)(b), “final notice” has the meaning given by paragraph 6 of Schedule A1.
(6) The amount of the penalty is to be determined by the authority but must not be more than £5,000.
(7) A penalty under this section may relate to—
(a) more than one category 1 hazard on the same premises,
(b) more than one failure to meet type 1 requirements by the same premises, or
(c) any combination of such hazards or failures on or by the same premises.
(8) The Secretary of State may by regulations amend the amount specified in subsection (6) to reflect changes in the value of money.
(9) Schedule A1 makes provision about—
(a) the procedure for imposing a financial penalty under this section,
(b) appeals against financial penalties under this section,
(c) enforcement of financial penalties under this section, and
(d) how local housing authorities are to deal with the proceeds of financial penalties under this section.’
7 (1) Section 7 (powers to take enforcement action) is amended as follows.
(2) In subsection (1), for ‘that a category 2 hazard exists on residential premises’ substitute ‘that—
(a) a category 2 hazard exists on residential premises, or
(b) qualifying residential premises fail to meet a type 2 requirement.’.
(3) In subsection (2)(c), for ‘a hazard’ substitute ‘an’.
(4) In subsection (3)—
(a) after ‘hazard’ (in the first place) insert ‘or failure to meet a type 2 requirement’, and
(b) after ‘hazard’ (in the second place) insert ‘or failure’.
(5) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
8 In section 8 (reasons for decision to take enforcement action), in subsection (5)(a), omit ‘hazard’.
9 (1) Section 9 (guidance about inspections and enforcement action) is amended as follows.
(2) In subsection (1)(b), omit ‘hazard’.
(3) After that subsection insert—
‘(1A) The Secretary of State may give guidance to local housing authorities in England about exercising their functions under this Chapter in relation to—
(a) assessing whether qualifying residential premises meet the requirements specified by regulations under section 2A, or
(b) financial penalties.’.
10 In the heading of Chapter 2 of Part 1 (improvement notices, prohibition orders and hazard awareness notices), omit ‘hazard’.
11 (1) Section 11 (improvement notices relating to category 1 hazards: duty of authority to serve notice) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
serving an improvement notice under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (3)(a), after ‘exists’ insert ‘, or which fail to meet the requirement,’.
(5) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(6) In subsection (5)(a), for the words from ‘that’ to ‘but’ substitute ‘that—
(i) if the notice relates to a hazard, the hazard ceases to be a category 1 hazard;
(ii) if the notice relates to a failure by premises to meet a type 1 requirement, the premises meet the requirement; but’.
(7) In subsection (6), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(8) In subsection (8)—
(a) after ‘hazard’ (in the first place) insert ‘or failure’, and
(b) after ‘hazard’ (in the second place) insert ‘or secure that the premises meet the requirement’.
(9) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
12 (1) Section 12 (Improvement notices relating to category 2 hazards: power of authority to serve notice) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may serve an improvement notice under this section in respect of the hazard or failure.’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(5) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
13 (1) Section 13 (Contents of improvement notices) is amended as follows.
(2) In subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (b), after ‘exists’ insert ‘or to which it relates’.
(3) In subsection (5), after ‘hazard’ insert ‘or failure’.
14 In section 16(3) (revocation and variation of improvement notices)—
(a) after ‘hazards’ (in the first place) insert ‘or failures (or a combination of hazards and failures)’, and
(b) in paragraph (a), after ‘hazards’ insert ‘or failures’.
15 (1) Section 19 (change in person liable to comply with improvement notice) is amended as follows.
(2) For subsection (2) substitute—
‘(2) In subsection (1), the reference to a person ceasing to be a “person of the relevant category”—
(a) in the case of an improvement notice served on a landlord or superior landlord under paragraph A1(2) of Schedule 1, is a reference to the person ceasing to hold the estate in the premises by virtue of which the person was the landlord or superior landlord, and
(b) in any other case, is a reference to the person ceasing to fall within the description of person (such as, for example, the holder of a licence under Part 2 or 3 or the person managing a dwelling) by reference to which the notice was served on the person.’
(3) In subsection (7), for ‘or (9)’ substitute ‘, (9) or (10)’.
(4) After subsection (9) insert—
‘(10) If—
(a) the original recipient was served as a landlord or superior landlord under paragraph A1(2) of Schedule 1, and
(b) the original recipient ceases as from the changeover date to be a person of the relevant category as a result of ceasing to hold the estate in the premises by virtue of which the person was the landlord or superior landlord,
the new holder of the estate or, if the estate has ceased to exist, the reversioner, is the “liable person”.’
16 (1) In section 20 (prohibition orders relating to category 1 hazards: duty of authority to make order) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
making a prohibition order under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (3)—
(a) in paragraph (a), after ‘exists’ insert ‘, or which fail to meet the requirement,’, and
(b) for paragraph (b) substitute—
‘(b) if those premises are—
(i) one or more flats, or
(ii) accommodation falling within paragraph (e) of the definition of ‘residential premises’ in section 1(4) (homelessness) that is not a dwelling, HMO or flat,
it may prohibit the use of the building containing the flat or flats or accommodation (or any part of the building) or any external common parts;’.
(4) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(5) In subsection (5), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(6) In the heading, after ‘hazards’ insert ‘and type 1 requirements’.
17 (1) Section 21 (prohibition orders relating to category 2 hazards: power of authority to make order) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may make a prohibition order under this section in respect of the hazard or failure.’
(3) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(4) In the heading, after ‘hazards’ insert ‘and type 2 requirements’.
18 (1) Section 22 (contents of prohibition orders) is amended as follows.
(2) In subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (b), after ‘exists’ insert ‘or to which it relates’.
(3) In subsection (3)(b), after ‘hazards’ insert ‘, or failure or failures,’.
19 (1) Section 25 (revocation and variation of prohibition orders) is amended as follows.
(2) In subsection (1), for the words from ‘that’ to the end substitute ‘that—
(a) in the case of an order made in respect of a hazard, the hazard does not then exist on the residential premises specified in the order in accordance with section 22(2)(b), and
(b) in the case of an order made in respect of a failure by premises so specified to meet a requirement specified by regulations under section 2A, the premises then meet the requirement.’
(3) In subsection (3)—
(a) after ‘hazards’ (in the first place) insert ‘or failures (or a combination of hazards and failures)’, and
(b) in paragraph (a), after ‘hazards’ insert ‘or failures’.
20 In the italic heading before section 28, omit ‘Hazard’.
21 (1) Section 28 (hazard awareness notices relating to category 1 hazards: duty of authority to serve notice) is amended as follows.
(2) For subsections (1) and (2) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
serving an awareness notice under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).
(2) An awareness notice under this section is a notice advising the person on whom it is served of—
(a) the existence of a category 1 hazard on, or
(b) a failure to meet a type 1 requirement by,
the residential premises concerned which arises as a result of a deficiency on the premises in respect of which the notice is served.’
(3) In subsection (3)(a), after ‘exists’ insert ‘, or which fail to meet the requirement,’.
(4) In subsection (4)—
(a) after ‘exists,’ insert ‘or which fail to meet the requirement,’, and
(b) in paragraph (a), after ‘hazard’ insert ‘or failure’.
(5) In subsection (5), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 1 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(6) In subsection (6)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
(7) In subsection (8), for ‘a hazard’ substitute ‘an’.
(8) At the end insert—
‘(9) A notice under this section in respect of residential premises in Wales is to be known as a “hazard awareness notice”.’
(9) In the heading—
(a) omit ‘Hazard’, and
(b) after ‘category 1 hazards’ insert ‘and type 1 requirements’.
22 (1) Section 29 (hazard awareness notices relating to category 2 hazards: power of authority to serve notice) is amended as follows.
(2) For subsections (1) and (2) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 2 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 2 requirement, and
(b) no management order is in force in relation to the premises under Chapter 1 or 2 of Part 4,
the authority may serve an awareness notice under this section in respect of the hazard or failure.
(2) An awareness notice under this section is a notice advising the person on whom it is served of—
(a) the existence of a category 2 hazard on, or
(b) a failure to meet a type 2 requirement by,
the residential premises concerned which arises as a result of a deficiency on the premises in respect of which the notice is served.’
(3) In subsection (3), for ‘a hazard’ substitute ‘an’.
(4) In subsection (4), for the words from ‘to’ to the end substitute ‘to—
(a) more than one category 2 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
(5) In subsection (5)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
(6) In subsection (8), for ‘a hazard’ substitute ‘an’.
(7) At the end insert—
‘(9) A notice under this section in respect of residential premises in Wales is to be known as a “hazard awareness notice”.’
(8) In the heading—
(a) omit ‘Hazard’, and
(b) after ‘category 2 hazards’ insert ‘and type 2 requirements’.
23 (1) Section 30 (offence of failing to comply with improvement notice) is amended as follows.
(2) In subsection (2), after ‘hazard’ insert ‘or failure’.
(3) In subsection (3), omit ‘not exceeding level 5 on the standard scale’.
(4) in subsection (5), after ‘hazard’ insert ‘or failure’.
24 In section 32 (offence of failing to comply with prohibition order etc), in subsection (2)(a), omit ‘not exceeding level 5 on the standard scale’.
25 In section 35 (power of court to order occupier or owner to allow action to be taken on premises), for the definition of ‘relevant person’ in subsection (8) substitute—
‘“relevant person” , in relation to any premises, means—
(a) a person who is an owner of the premises;
(b) a person having control of or managing the premises;
(c) the holder of any licence under Part 2 or 3 in respect of the premises;
(d) in the case of qualifying residential premises which are let under a relevant tenancy, the landlord under the tenancy and any person who is a superior landlord in relation to the tenancy.’.
26 (1) Section 40 (emergency remedial action) is amended as follows.
(2) For subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) they are further satisfied that the hazard or failure involves an imminent risk of serious harm to the health or safety of any of the occupiers of those or any other residential premises, and
(c) no management order is in force under Chapter 1 or 2 of Part 4 in relation to the premises mentioned in paragraph (a)(i) or (ii),
the taking by the authority of emergency remedial action under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
(3) In subsection (2), after ‘hazard’ insert ‘or failure’.
(4) In subsection (4), for the words from ‘of’ to the end substitute ‘of—
(a) more than one category 1 hazard on the same premises or in the same building containing one or more flats,
(b) more than one failure to meet type 2 requirements by the same premises or the same building containing one or more flats, or
(c) any combination of such hazards and failures—
(i) on or by the same premises, or
(ii) in or by the same building containing one or more flats.’
27 In section 41 (notice of emergency remedial action), in subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
28 In section 43 (emergency prohibition notices), for subsection (1) substitute—
‘(1) If—
(a) the local housing authority are satisfied that—
(i) a category 1 hazard exists on any residential premises, or
(ii) any qualifying residential premises fail to meet a type 1 requirement, and
(b) they are further satisfied that the hazard or failure involves an imminent risk of serious harm to the health or safety of any of the occupiers of those or any other residential premises, and
(c) no management order is in force under Chapter 1 or 2 of Part 4 in relation to the premises mentioned in paragraph (a)(i) or (ii),
making an emergency prohibition order under this section in respect of the hazard or failure is a course of action available to the authority in relation to the hazard or failure for the purposes of section 5 (category 1 hazards and type 1 requirements: general duty to take enforcement action).’
29 In section 44 (contents of emergency prohibition orders), in subsection (2)—
(a) after ‘hazard’ (in each place) insert ‘or failure’,
(b) after ‘hazards’ insert ‘or failures’, and
(c) in paragraph (a), after ‘exists’ insert ‘or to which it relates’.
30 In section 49 (power to charge for certain enforcement action)—
(a) in subsection (1)(c), for ‘a hazard’ substitute ‘an’, and
(b) in subsection (2), for ‘a hazard’ substitute ‘an’.
31 In section 50 (recovery of charge under section 49), in subsection (2)(b), for ‘a hazard’ substitute ‘an’.
32 In section 54 (index of defined expressions: Part 1)—
(a) at the appropriate places insert—
Section 2B(1)’;
Section 2B(2)’;
Section 2B(2)’;
Section 2B(2)’;
Section 2A(3)(a)’;
Section 2A(3)(b)’
(b) in the entry for ‘Hazard awareness notice’, in the first column, omit ‘Hazard’ (and, accordingly, move the entry to the appropriate place).
33 (1) Section 250 (orders and regulations) is amended as follows.
(2) After subsection (2) insert—
‘(2A) The power under subsection (2)(b) includes power—
(a) to provide for regulations under sections 2A and 2B(3) to apply (with or without modifications) in relation to tenancies or licences entered into before the date on which the regulations come into force;
(b) for regulations under section 2B(3)(b) to provide for Part 1 to apply in relation to licences with such modifications as may be specified in the regulations.’
(3) In subsection (6), before paragraph (a) insert—
‘(za) regulations under sections 2A and 2B(3),’
34 Before Schedule 1 insert—
‘Schedule A1
Procedure and appeals relating to financial penalties under section 6A
Notice of intent
1 Before imposing a financial penalty on a person under section 6A a local housing authority must give the person notice of the authority’s proposal to do so (a “notice of intent”).
2 The notice of intent must be given before the end of the period of 6 months beginning with the first day on which the authority has evidence sufficient to require it to take the appropriate enforcement action under section 5(1) in relation to—
(a) the existence of the category 1 hazard, or
(b) the failure to meet the type 1 requirement.
3 The notice of intent must set out—
(a) the date on which the notice of intent is given,
(b) the amount of the proposed financial penalty,
(c) the reasons for proposing to impose the penalty,
(d) information about the right to make representations under paragraph 4.
Right to make representations
4 (1) A person who is given a notice of intent may make written representations to the authority about the proposal to impose a financial penalty.
(2) Any representations must be made within the period of 28 days beginning with the day after the day on which the notice of intent was given (“the period for representations”).
Final notice
5 After the end of the period for representations the local housing authority must—
(a) decide whether to impose a financial penalty on the person, and
(b) if it decides to do so, decide the amount of the penalty.
6 If the local housing authority decides to impose a financial penalty on the person, it must give a notice to the person (a “final notice”) imposing that penalty.
7 The final notice must require the penalty to be paid within the period of 28 days beginning with the day after that on which the notice was given.
8 The final notice must set out—
(a) the date on which the final notice is given,
(b) the amount of the financial penalty,
(c) the premises—
(i) on which the authority considers a category 1 hazard exists;
(ii) which the authority considers fail to meet a type 1 requirement,
(d) the reasons for imposing the penalty,
(e) information about how to the pay the penalty,
(f) the period for payment of the penalty,
(g) information about rights of appeal, and
(h) the consequences of failure to comply with the notice.
Withdrawal or amendment of notice
9 (1) A local housing authority may at any time—
(a) withdraw a notice of intent or final notice, or
(b) reduce an amount specified in a notice of intent or final notice.
(2) The power in sub-paragraph (1) is to be exercised by giving notice in writing to the person to whom the notice was given.
Appeals
10 (1) A person to whom a final notice is given may appeal to the First-tier Tribunal against—
(a) the decision to impose the penalty, or
(b) the amount of the penalty.
(2) An appeal under this paragraph must be brought within the period of 28 days beginning with the day after that on which the final notice is given to the person.
(3) If a person appeals under this paragraph, the final notice is suspended until the appeal is finally determined, withdrawn or abandoned.
(4) An appeal under this paragraph—
(a) is to be a re-hearing of the authority’s decision, but
(b) may be determined having regard to matters of which the authority was unaware.
(5) On an appeal under this paragraph the First-tier Tribunal may quash, confirm or vary the final notice.
(6) The final notice may not be varied under sub-paragraph (5) so as to impose a financial penalty of more than the local housing authority could have imposed.
Recovery of financial penalty
11 (1) This paragraph applies if a person fails to pay the whole or any part of a financial penalty which, in accordance with this Schedule, the person is liable to pay.
(2) The local housing authority which imposed the financial penalty may recover the penalty, or part of it, on the order of the county court as if it were payable under an order of that court.
(3) In proceedings before the county court for the recovery of a financial penalty or part of a financial penalty, a certificate which is—
(a) signed by the chief finance officer of the authority which imposed the financial penalty, and
(b) states that the amount due has not been received by a date specified in the certificate,
is conclusive evidence of that fact.
(4) A certificate to that effect and purporting to be so signed is to be treated as being so signed unless the contrary is proved.
(5) In this paragraph “chief finance officer” has the same meaning as in section 5 of the Local Government and Housing Act 1989.
Proceeds of financial penalties
12 Where a local housing authority imposes a financial penalty under section 6A, it may apply the proceeds towards meeting the costs and expenses (whether administrative or legal) incurred in, or associated with, carrying out any of its enforcement functions under Part 1 of this Act, the Renters (Reform) Act 2024 or otherwise in relation to the private rented sector.
13 Any proceeds of a financial penalty imposed under section 6A which are not applied in accordance with paragraph 12 must be paid to the Secretary of State.
(1) In paragraph 12, the reference to enforcement functions “in relation to the private rented sector” means enforcement functions relating to—
(a) residential premises in England that are let, or intended to be let, under a tenancy,
(b) the common parts of such premises,
(c) the activities of a landlord under a tenancy of residential premises in England,
(d) the activities of a superior landlord in relation to such a tenancy,
(e) the activities of a person carrying on English letting agency work within the meaning of section 54 of the Housing and Planning Act 2016 in relation to such premises, or
(f) the activities of a person carrying on English property management work within the meaning of section 55 of the Housing and Planning Act 2016 in relation to such premises.
(2) For the purposes of this paragraph ‘residential premises’ does not include social housing.
(3) For the purposes of this paragraph “tenancy” includes a licence to occupy.’
35 (1) Schedule 1 (procedure and appeals relating to improvement notices) is amended as follows.
(2) Before paragraph 1 insert—
‘Service of improvement notices: qualifying residential premises which fail to meet type 1 and 2 requirements
A1 (1) This paragraph applies instead of paragraphs 1 to 3 where—
(a) the specified premises are qualifying residential premises by virtue of section 2B(1)(a), (b) or (c), and
(b) an improvement notice relates to a failure by the premises to meet a requirement specified by regulations under section 2A (whether or not the notice also relates to a category 1 or 2 hazard).
(2) Where the premises are let under a relevant tenancy, or are an HMO where at least one unit of accommodation which forms part of the HMO is let under a relevant tenancy, the notice must be served on the landlord under the tenancy unless—
(a) the tenancy is a sub-tenancy, in which case the notice may instead be served on a superior landlord in relation to the tenancy if, in the opinion of the local housing authority, the superior landlord ought to take the action specified in the notice;
(b) the premises are a dwelling which is licensed under Part 3 of this Act, or an HMO which is licensed under Part 2 or 3 of this Act, in which case the notice may instead be served on the holder of the licence if, in the opinion of the local housing authority, the holder ought to take the action specified in the notice.
(3) Where sub-paragraph (2) does not apply in relation to the premises and—
(a) the premises are supported exempt accommodation, the notice must be served on the authority or body which provides the accommodation;
(b) the premises are accommodation falling within paragraph (e) of the definition of “residential premises” in section 1(4) (homelessness), the notice must be served on any person who has an estate or interest in the premises and who, in the opinion the local housing authority, ought to take the action specified in the notice.’
(3) In paragraph 5(1), for ‘1 to’ substitute ‘A1 to’.
(4) In paragraph 12—
(a) in sub-paragraph (1), after ‘hazard’ insert ‘or failure’, and
(b) in sub-paragraph (2)(b), for ‘a hazard’ substitute ‘an’.
(5) In paragraph 17, after ‘hazard’ (in each place) insert ‘or failure’.
36 (1) Schedule 2 (procedure and appeals relating to prohibition orders) is amended as follows.
(2) In paragraph 1—
(a) after sub-paragraph (2) insert—
‘(2A) Where the specified premises are qualifying residential premises which—
(a) are let under a relevant tenancy, or
(b) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
the authority must also serve copies of the order on any other person who, to their knowledge, is the landlord under the tenancy or a superior landlord in relation to the tenancy.’, and
(b) in sub-paragraph (3), after ‘(2)’ insert ‘or (2A)’.
(3) In paragraph 2—
(a) for sub-paragraph (1) substitute—
‘(1) This paragraph applies to a prohibition order where the specified premises consist of or include—
(a) the whole or any part of a building containing—
(i) one or more flats, or
(ii) accommodation falling within paragraph (e) of the definition of “residential premises” in section 1(4) (homelessness) that is not a dwelling, HMO or flat, or
(b) any common parts of such a building.’
(b) after sub-paragraph (2) insert—
‘(2A) Where the specified premises consist of or include qualifying residential premises which—
(a) are let under a relevant tenancy, or
(b) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
the authority must also serve copies of the order on any other person who, to their knowledge, is the landlord under the tenancy or a superior landlord in relation to the tenancy.’,
(c) in sub-paragraph (3), after ‘(2)’ insert ‘or (2A)’, and
(d) in sub-paragraph (4), after ‘(2)’ insert ‘, (2A)’.
(4) In paragraph 8—
(a) in sub-paragraph (1), after ‘hazard’ insert ‘or failure’, and
(b) in sub-paragraph (2)(b), for ‘a hazard’ substitute ‘an’.
(5) In paragraph 12, after ‘hazard’ (in each place) insert ‘or failure’.
(6) In paragraph 16(1)—
(a) omit the ‘or’ at the end of paragraph (b), and
(b) at the end of paragraph (c) insert ‘, or
(d) in the case of qualifying residential premises which—
(i) are let under a relevant tenancy, or
(ii) are an HMO where at least one unit of accommodation which forms part of the HMO is let on a relevant tenancy,
any person on whom copies of the improvement notice are required to be served by paragraph 1(2A) or 2(2A).’
37 (1) Schedule 3 (improvement notices: enforcement action by local housing authorities) is amended as follows.
(2) In paragraph 3, after ‘hazard’ (in each place) insert ‘or failure’.
(3) In paragraph 4, after ‘hazard’ (in both places) insert ‘or failure’.
Part 2
Amendments of other Acts
Land Compensation Act 1973
38 (1) Section 33D of the Land Compensation Act 1973 (loss payments: exclusions) is amended as follows.
(2) In subsection (4)—
(a) in paragraph (b), after ‘hazard’ insert ‘or type 1 requirement’, and
(b) in paragraph (c), after ‘hazard’ insert ‘or type 2 requirement’.
(3) In subsection (5)—
(a) in paragraph (a), after ‘hazard’ insert ‘or type 1 requirement’, and
(b) in paragraph (b), after ‘hazard’ insert ‘or type 2 requirement’.
Housing Act 1985
39 In section 269A of the Housing Act 1985 (appeals suggesting certain other courses of action), in subsection (2)(c), for ‘a hazard’ substitute ‘an’.
Housing and Regeneration Act 2008
40 In section 126B of the Housing and Regeneration Act 2008 (functions of health and safety lead), in subsection (3)(b)(ii), after ‘hazards’ insert ‘and type 1 and 2 requirements’.
Deregulation Act 2015
41 In section 33(13) of the Deregulation Act 2015 (preventing retaliatory eviction: definitions), in the definition of ‘relevant notice’—
(a) in paragraph (a), after ‘hazards’ insert ‘and type 1 requirements’, and
(b) in paragraph (b), after ‘hazards’ insert ‘and type 2 requirements’.
Housing and Planning Act 2016
42 In section 40(4) of the Housing and Planning Act 2016 (offences under sections 30(1) and 32(1) of the Housing Act 2004), after ‘on’ insert ‘, or a failure to meet a requirement by,’.
Tenant Fees Act 2019
43 In Schedule 3 to the Tenant Fees Act 2019 (financial penalties), in paragraph 12(1), after paragraph (c) insert—
‘(ca) the activities of a superior landlord in relation to such a tenancy,’.”—(Jacob Young.)
This new Schedule contains amendments of Part 1 of the Housing Act 2004 that provide for the enforcement of requirements imposed by regulations under new section 2A of that Act, inserted by NC20. The Schedule also allows financial penalties to be imposed for certain breaches of Part 1 of that Act, and makes consequential amendments of other Acts.
Brought up, read the First and Second time, and added to the Bill.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Jacob Young
Ms Fovargue, I would like to put on record my thanks to you and the other Chairs of this Bill Committee; to all the Clerks and parliamentary staff; and to the many other people who have worked hard on this Bill, including all my officials and my private office, who have had to get up to date with this Bill in a matter of weeks.
I thank all members of the Committee, including Opposition Members, for their constructive dialogue. We have had some robust debate on several measures, but I hope we can all agree that these are important reforms—the first in a generation—for landlords and tenants. I look forward to further engagement with all hon. Members as the Bill progresses through its remaining stages.
Matthew Pennycook
Ms Fovargue, may I take the opportunity to put on record our thanks to you and your colleagues in the Chair for overseeing our proceedings? I also thank our exemplary Clerks for all their assistance; the Doorkeepers and Hansard reporters for facilitating the Committee’s work; and officials in the Department and our own staff for the support that they have provided. Finally, I thank the Minister—as well as the occasional Government Back Bencher who has defied the orders of the hon. Member for South West Hertfordshire and contributed to our debate. [Laughter.] There has been the odd robust exchange, but none has been uncivil, and we appreciate the spirit in which consideration of the Bill has taken place.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Wednesday 24th April 2024
(4 days, 5 hours ago)
Commons ChamberRenters (Reform) Bill 2022-23 Read Hansard Text Watch Debate Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
17:26 - The House divided: - Ayes: 283 / Noes: 143 - Question accordingly agreed to.
17:41 - The House divided: - Ayes: 287 / Noes: 144 - Question accordingly agreed to.
18:03 - The House divided: - Ayes: 158 / Noes: 282 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Renters (Reform) Bill 2022-23 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following: 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 48 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 69 Active landlord database entry”. “1, 1A, 1B, 2, 2ZA, 2ZB, 4A, 6, 6A four months beginning with the date of service of the notice 5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”.
Government new clause 30—Assessment of operation of possession process.
Government new clause 13— Sections 1 and 2: effect of superior leases.
Government new clause 14—Powers of Secretary of State in connection with Chapter 1.
Government new clause 16—Power of Welsh Ministers to extend protection to persons of other descriptions.
Government new clause 17—Power of Secretary of State to extend protection to persons of other descriptions: Wales.
Government new clause 18—Prohibition of discrimination relating to children or benefits status: Scotland.
Government new clause 19—Terms in standard securities relating to children or benefits status: Scotland.
Government new clause 20—Terms in insurance contracts relating to children or benefits status: Scotland.
Government new clause 21—Power of the Scottish Ministers to extend protection to persons of other descriptions.
Government new clause 22—Interpretation of Chapter 4A.
Government new clause 23—Power of Scottish Ministers to make consequential provision.
Government new clause 24—Power of Secretary of State to extend protection to persons of other descriptions: Scotland.
Government new clause 25—Landlord redress schemes: no Crown status.
Government new clause 26—Other amendments in connection with landlord redress schemes.
Government new clause 27—Commencement.
Government new clause 28—Application of Chapter 1 of Part 1.
Government new clause 29—Assured agricultural occupancies: opting out etc.
Government new clause 31—Local Commissioners’ investigation of complaints by persons who are not tenants.
Government new clause 32—Unlicensed HMOs and houses: offences.
Government new clause 33—Service of improvement notices on landlords and licensors.
Government new clause 34—Rent repayment orders: liability of directors etc.
Government new clause 35—Report on certain matters relating to tenancy reform.
Government new clause 36—Report on provision of residential tenancies.
New clause 1—Repeal of requirement for selective licensing—
“Part 3 of the Housing Act 2004 (Selective licensing of other residential accommodation) is repealed.”
This new clause would remove the ability of local housing authorities to designate areas as subject to selective licensing.
New clause 2—Expanding the remit of rent repayment orders to company directors—
“In section 249A of the Housing Act 2004, after subsection (1) insert—
‘(1A) If a local housing authority believes that a relevant housing offence has been committed by a body corporate, it may impose a financial penalty on—
(a) a director, manager, secretary or other similar officer of the body corporate, or
(b) a person purporting to act in such a capacity,
if it is satisfied, beyond reasonable doubt, that the offence was committed with the consent or connivance of that person, or that the offence was attributable to any neglect on the part of that person.’”
This new clause would enable local housing authorities to impose financial penalties on certain individuals when it believes a housing offence has been committed by a body corporate.
New clause 3—Evidence to consider when granting possession order for anti-social behaviour—
“In section 9A of the 1988 Act, after subsection (2) insert—
‘(3) In considering evidence of conduct the court may consider evidence provided by way of hearsay and that evidence will be admissible without notice or permission of the court notwithstanding any rule of the court or the common law.’”
This new clause would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of anti-social behaviour.
New clause 5—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.
New clause 6—Requirement to state the amount of rent when advertising residential premises—
“(1) A landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.
(2) A letting agent acting on behalf of a landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.”
This new clause would require landlords or persons acting on their behalf to state the proposed rent payable in the advertisement for the premises.
New clause 7—Not inviting or encouraging bids for rent—
“(1) A landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(2) A letting agent acting on behalf of a landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(3) Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent.”
This new clause would prevent landlords or persons acting on their behalf from inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises.
New clause 8—Limit on amount of rent that a residential landlord can request in advance—
“In Schedule 1 to the Tenant Fees Act 2019, after paragraph 1(8) insert—
‘(9) Where rent is payable in advance, the maximum that may be charged is equivalent to the amount specified in paragraph 2(3).’”
This new clause would ensure that the maximum amount of rent that could be lawfully requested by a residential landlord in advance of a tenancy commencing would be 5 weeks’ rent for tenancies of less than £50,000 per annum and to 6 weeks’ rent for tenancies over £50,000 per annum.
New clause 10—Extension of Awaab’s law to the private rented sector—
“(1) Section 10A of the Landlord and Tenant Act 1985 is amended as follows.
(2) Omit subsections (1)(b) and (6).
(3) In subsection (7), omit the definitions of ‘low-cost home ownership accommodation’ and ‘social housing.’”
This new clause would require private landlords to deal with hazards affecting their properties.
New clause 11—Ending blanket bans on renting to families with children or those in receipt of benefits—
“The Secretary of State may, by regulation, specify behaviour which, for the purposes of Part 4, Equality Act 2010, shall be considered unlawful discrimination unless the contrary is shown.”
This new clause would ensure that blanket bans on renting to families with children or those in receipt of benefits are presumed to be unlawful discrimination unless proved otherwise.
New clause 12—Discrimination relating to care-leaver status—
“(1) The provisions of this section apply to individuals who are—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(2) A relevant person must not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) on the basis that the individual meets either of the criteria set out in subsection (1), prevent the person from—
(i) enquiring whether the dwelling is available for let,
(ii) accessing information about the dwelling,
(iii) viewing the dwelling in order to consider whether to seek to rent it,
(iv) entering into a tenancy of the dwelling, or
(b) apply a provision, criterion or practice in order to make care leavers less likely to enter into a tenancy of the dwelling than people who are not care leavers.
(3) Subsection (2) does not apply if the relevant person can show that the prospective landlord of the dwelling, or a person who would be a superior landlord in relation to the dwelling, is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy from being a care-leaver,
and the conduct is a means of preventing the prospective landlord from breaching that term.
(4) Conduct does not breach the prohibition in subsection (2) if it consists only of—
(a) one or more of the following things done by a person who does nothing in relation to the dwelling that is not mentioned in this paragraph—
(i) publishing advertisements or disseminating information;
(ii) providing a means by which a prospective landlord can communicate directly with a prospective tenant;
(iii) providing a means by which a prospective tenant can communicate directly with a prospective landlord, or
(b) things of a description, or things done by a person of a description, specified for the purposes of this section in regulations made by the Secretary of State.”
New clause 37—Extension of rent repayment orders—
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 11, 12, 48 or 69 of the Bill.
New clause 38—Continuing ability of tenants to sublet—
“(1) In any lease of residential property which is not by virtue of this Act an assured tenancy—
(a) any provision which restricts subletting to assured shorthold tenancies shall be interpreted to refer to assured tenancies; and
(b) any provision which would make the grant of an assured tenancy a breach of that provision shall be void unless—
(i) that provision is an absolute prohibition against subletting; or
(ii) the lease has less than seven years unexpired.
(2) Any provision which requires the consent of a landlord or other person to the grant of a subtenancy shall be interpreted so that consent may not be refused on the grounds that the subtenancy is an assured tenancy or on the grounds of any statutory provision of that tenancy.”
This new clause seeks to ensure that persons who are tenants under a long lease can continue to sublet residential premises in circumstances where they were previously permitted to do so under the long lease on the basis that the sublease was an assured shorthold tenancy.
New clause 39—Payment of relocation payment to tenant—
“In the Housing Act 1988, after section 11 insert—
‘11A Payment of relocation payment in certain cases
(1) Where a landlord issues a notice of proceedings for possession of a dwelling-house on any of the grounds in Schedule 2 to this Act (except Ground 7A or Ground 14) within two years of the start of the tenancy, the landlord shall pay a relocation payment to the tenant.
(2) A relocation payment shall be an amount equivalent to—
(a) one month’s rent in the case of an order for possession on Ground 1 or Ground 1A;
(b) two months’ rent in the case of an order for possession on any other ground.
(3) The relocation payment shall be made no less than two weeks before the date specified in the notice of proceedings for possession.’”
This new clause would require landlords to pay a “relocation payment” to tenants when evicting them from their property within two years of the start of the tenancy, except on the grounds of crime and antisocial behaviour.
New clause 40—Guarantor to have no further liability following death of tenant—
“(1) Subject to subsection (3), a guarantee agreement relating to a relevant tenancy ceases to have effect upon the death of a relevant tenant.
(2) Upon the death of a relevant tenant the guarantor in respect of a relevant tenancy shall incur no further liability in relation to matters arising under the tenancy.
(3) Nothing in this section shall affect the liability of a guarantor in relation to matters which arose before the date of the death of the relevant tenant.
(4) In assessing any liability under subsection (3), account shall be taken of any tenancy deposit paid in respect of the tenancy.
(5) Where there is more than one relevant tenant, this section shall apply only upon the death of both or all of the tenants.
(6) In this section—
‘guarantor’ means a person who enters into a guarantee agreement in relation to a relevant tenancy;
‘guarantee agreement’ means a contractual promise (whether incorporated in or separate from the tenancy agreement) to indemnify or compensate a relevant person in respect of an obligation under the tenancy if the tenant fails to perform or comply with the obligation;
‘relevant tenancy’ has the same meaning as in section 36, and ‘relevant tenant’ is to be interpreted accordingly;
‘tenancy deposit’ has the same meaning as in section 212(8) of the Housing Act 2004.”
This new clause would mean that guarantors in relation to a tenancy have no liability for future matters arising from the tenancy after the tenant has died.
New clause 41—Prohibition of requirement for rent guarantors—
“(1) A relevant person may not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) require the provision of a rental guarantor or an equivalent upfront payment;
(b) let the relevant tenancy on the basis of being offered a rental guarantor or an equivalent payment by a prospective tenant.
(2) For the purposes of this section, ‘relevant person’ and ‘relevant tenancy’ have the meanings given in section 36 of this Act.”
This new clause would prohibit landlords from requiring prospective tenants to provide rent guarantors or equivalent upfront payments, and prohibit them from prioritising prospective tenants who offer them over those who do not.
Government amendments 200 to 205 and 57.
Amendment 14, in clause 3, page 3, leave out lines 21 to 23 and insert—
Government amendments 56, 58 and 59.
Amendment 15, page 3, line 33, 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.”
Government amendment 206.
Amendment 21, in clause 6, page 7, line 4, at end insert—
“13B Recovery of rent
(1) Any increased rent which is paid otherwise than in accordance with section 13 or section 13A is recoverable from the landlord by the tenant as a debt claim in the courts.
(2) The Secretary of State may, by regulations, provide for such claims to be recoverable by proceedings in the First-Tier Tribunal, rather than the courts.”
This amendment would ensure that in instances where a private landlord increases the rent without issuing a section 13 or section 13A notice the tenant can seek to recover costs through a debt claim in the court. It also provides the government with the power by regulation for such claims to be recoverable by tribunal.
Government amendment 207.
Amendment 261, in clause 7, page 8, line 2, at end insert—
“(c) in paragraph (c), at end insert—
‘and,
(d) that it was financed or part-financed by a means-tested grant’.”
This amendment will prevent rents from being increased by a tribunal as a consequence of improvements to properties that have been financed or part-financed by a means-tested grant.
Amendment 22, page 8, line 9, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Amendment 13, page 8, line 20, at end insert—
“(c) no more than the rent proposed by the landlord in the notice served on the tenant under section 13 of the 1988 Act.”
This amendment would mean that the rent payable after a tribunal determination can be no higher than the rent initially proposed by the landlord in the notice served on the tenant.
Amendment 23, page 9, line 5, at end insert
“which must be no earlier than two months following the date of determination”.
This amendment would ensure that in cases of undue hardship tenants would have a minimum of two months from the date of determination before a new rent became payable.
Amendment 24, page 9, line 6, leave out subsection (4) and insert—
“(4A) A date specified under subsection (3)(b) must be no earlier than the date on which the determination becomes final, with a decision only becoming final on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.”
This amendment would remove the requirement for a date determined by a court for rent to become payable in cases of undue hardship to not be later than the date of the determination.
Amendment 31, in clause 9, page 9, line 29, leave out “42nd” and insert “28th”.
This amendment would ensure a landlord gives or refuses consent in writing within 28 days of the request being made.
Amendment 32, page 9, line 30, at and insert—
“(d) the landlord may not review or withdraw consent once given.”
This amendment ensures that a tenant may keep a pet for the duration of their tenancy once consent has been given.
Government amendments 60, 208, 61, 209, 63, 210, 62 and 211.
Amendment 38, in clause 12, page 14, line 18, at end insert—
“(g) unreasonably refuse home adaptations for the purposes of a disabled person's access to or usage of the home.”
Amendment 11, page 14, line 21, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 64.
Amendment 1, page 14, line 26, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 65.
Amendment 2, page 14, line 28, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendments 66, 67 and 212.
Amendment 3, page 15, line 15, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.
Amendment 35, page 15, line 15, leave out “three” and insert “twelve”.
This amendment would extend the restricted period in relation to a tenancy in relation to which Ground 1 or 1A in Schedule 2 is relied on from three to twelve months.
Amendment 36, page 15, line 17, leave out subsection (b).
This amendment would ensure that the restricted period is as specified in (8)(a) in all circumstances.
Government amendments 68 to 75, 213, 214, 195, 215 to 217 and 76.
Amendment 6, in clause 17, page 25, line 18, after “given” insert
“not earlier than four months after a tenant first occupies the premises and”.
This amendment would mean that tenants cannot give notice to quit until they have resided in the property for at least four months.
Government amendments 77 to 80, 218 to 220 and 81 to 85.
Amendment 43, in clause 29, page 32, line 23, leave out “section 27 or 28” and insert
“sections 27, 28 or [Discrimination relating to care-leaver status]”.
Amendment 44, in clause 30, page 34, line 21, at end insert—
“(5) A term of a relevant tenancy or regulated tenancy is of no effect so far as the term makes provision (however expressed) prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(6) Subsection (5) does not apply if the landlord or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit the tenant from being a relevant or former relevant child.
and the provision in the tenancy is a means of preventing the insured from breaching that term.”
Amendment 45, in clause 31, page 35, line 12, at end insert—
“(4A) A term of a lease of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a tenant under that or any inferior lease to prohibit a sub-tenant under a relevant tenancy or regulated tenancy from prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(4B) Subsection (4A) does not apply if the landlord under the lease or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a sub-tenant from being a relevant or former relevant child.
and the provision in the lease is a means of preventing the insured from breaching that term.”
Amendment 46, in clause 32, page 35, line 30, at end insert—
“(3) A term of a mortgage of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a mortgagor to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Amendment 47, in clause 33, page 36, line 2, at end insert—
“(2A) A term of a contract of insurance to which this section applies is of no effect so far as the term makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Government amendments 86 to 113, 115 and 116.
Government motion to transfer clause 40.
Government amendment 117 and 118.
Amendment 39, in clause 42, page 54, line 1, after “section 1” insert—
“(a) omit subsection (3);
(b) in subsection (3A) omit ‘the landlord of a residential occupier or an agent of the landlord’ and insert ‘a person’;
(c) after subsection (3B) insert—
‘(3BA) For the purposes of this subsection, services which are reasonably required for the occupation of the premises as a household include, but are not limited to—
(a) water,
(b) gas,
(c) electricity, and
(d) electronic communications networks and services’;
(d) omit subsection (3C);
(e)”.
This amendment would amend the offence of unlawful eviction and harassment of the occupier of a property under the Protection from Eviction Act 1977 so that the offence can be committed by any person (not just the landlord of their agent), and define the services with which interference can constitute an offence.
Amendment 40, page 55, line 2, at end insert—
“(3A) In section 3A, after subsection (9) insert—
‘(10) In any proceedings under any of the relevant statutory provisions in this Act, it shall be for the accused to prove that the tenancy or licence is excluded by virtue of subsections (2) or (3) above.’
(3B) After section 4 insert—
‘4A Rebuttable presumption of landlord
(1) In any action under Part 1 of this Act (including where a Financial Penalty Notice (FPN) is issued) there is a rebuttable presumption that the person to whom the residential occupier pays rent or other payments in respect of occupation of a dwelling is the landlord of the property.’
(3C) After section 7 insert—
‘7A Notification by the police
(1) Where a constable has reasonable cause to believe that an offence under the Protection from Eviction Act 1977 has occurred the constable must within 24 hours notify the authority named in section 6 as responsible for prosecution of offences in the area with the following information—
(a) the address where the alleged offence has happened;
(b) if known, the name of the landlord;
(c) if known, the name of the residential occupier;
(d) any facts known to the constable about the alleged offence.
(2) A police force has the power to assist an authority included in section 6 in the exercise of their functions under this Act.’”
This amendment would amend proceedings for offences under the Protection from Eviction Act 1977, so that it must be proved that a tenancy is an excluded tenancy, that there is a rebuttable presumption that the person to whom a tenant paid their rent is the landlord, and that the police must inform the relevant local authority when they suspect offences under the 1977 Act to have been committed.
Government amendments 119 to 121.
Amendment 4, in clause 45, page 59, line 36, after “landlord” insert
“who is not otherwise a member of an independent redress scheme approved by the Secretary of State.”
This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 45 if they are not already a member of another independent redress scheme which has been approved by the Secretary of State.
Government amendments 122 to 134.
Amendment 27, in clause 53, page 67, line 18, at end insert—
“(ba) details, which may include copies, of all notices seeking possession served by the residential landlord in respect of each dwelling of which he is the landlord, and”.
This amendment would require the database to record details of notices of possession served by a landlord in respect of each dwelling of which they are the landlord.
Amendment 42, in clause 55, page 68, line 27, at end insert—
“(ba) require the provision of information about the accessibility of the dwelling,”.
Amendment 12, page 68, line 33, at end insert—
“(2A) Regulations under subsection (1) must require—
(a) the energy performance certificate relating to a registrable dwelling to be provided to the database operator; and
(b) details of the energy performance certificate to be recorded in a dwelling entry in the database.”
This amendment would require Energy Performance Certificates in relation to relevant dwellings to be provided to the database operator and details to be recorded in the database.
Government amendments 135 to 137.
Amendment 37, in clause 76, page 84, line 34, at end insert—
“(e) any accommodation which is provided by the Defence Infrastructure Organisation to service individuals and families.”
This amendment would ensure that accommodation rented from the Defence Infrastructure Organisation by service individuals and families is subject to the Decent Homes Standard.
Amendment 7, page 85, line 26, leave out clause 78.
Amendment 41, in clause 78, page 86, line 4, after “(order),” insert—
“(a) in subsection (1), before ‘The First-tier Tribunal’ insert ‘Apart from offences for which subsection (1A) applies,’;
(b) after subsection (1) insert—
‘(1A) The First-tier Tribunal may make a rent repayment order if satisfied on the balance of probabilities that the landlord has committed an offence under section 1(2), (3) or (3A) of the Protection from Eviction Act 1977 (whether or not the landlord has been convicted).’;
(c) at the end of subsection (3) insert—
‘(d) section 46A (where an order is made against more than one landlord or there has been a previous order)’;
(d)”.
This amendment would lower the level of proof required in proceedings for a Rent Repayment Order in the First-tier Tribunal to the balance of probabilities for offences under the 1977 Act.
Government amendments 196, 138 and 139, 197, 140 to 144, 221, 145 and 146, 222 and 147 to 151.
Amendment 8, in clause 116, page 111, line 19, leave out “subsection (2)” and insert “subsections (1A) and (2)”.
This amendment is consequential on Amendment 9.
Amendment 28, page 111, line 19, at end insert
“, save that section 2(b) comes into force on the day on which this Act is passed only to the extent that it repeals section 21 of the Housing Act 1988; such repeal will not affect the validity of any notices served under that provision on or before the day on which this Act is passed and the provisions of that section will continue to apply to any claims issued in respect of such a notice”.
This amendment would ensure that the abolition of section 21 evictions would come into force on Royal Assent, with saving provisions for any notices served before that date.
Amendment 9, page 111, line 19, at end insert—
“(1A) Prior to laying regulations under subsection (1) the Secretary of State must commission and publish a review into the operation of residential possession proceedings in the County Courts used by residential landlords and tenants and the enforcement of possession orders.”
This amendment would require the Secretary of State to publish a review of the operation of residential possession proceedings before determining the commencement date for the provisions of Chapter 1 of Part 1.
Government amendments 152 to 157.
Government new schedule 1—Amendments in connection with landlord redress schemes.
Government amendment 223.
Amendment 48, in schedule 1, page 114, line 10, leave out “6 months” and insert “one year”.
Amendment 255, page 114, line 10, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 224.
Amendment 49, page 115, line 8, leave out “6 months” and insert “one year”.
Amendment 256, page 115, line 8, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 225.
Amendment 33, page 115, line 32, leave out sub-paragraph (a) and insert—
“(a) the landlord who is seeking possession intends to—
(i) sell a freehold or leasehold interest in the dwelling-house 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;
(ii) re-let the dwelling house to another tenant pursuant to a Rent to Buy Agreement; or
(iii) retain and convert the home to rented housing on either an affordable or market rent basis;”.
This amendment covers the full scope of reasons that private registered providers of social housing may wish to use the new ground for possession 1B for to offer properties to another tenant.
Government amendment 158.
Amendment 34, page 116, line 12, leave out sub-paragraph (b) and insert—
“(b) allows the tenant to rent the dwelling house for a period stated in the agreement, which is not less than 5 years or, for dwelling houses in Greater London, 10 years from the beginning of the tenancy so as to enable the tenant to save for a deposit and, over time, purchase their first home.”
This amendment would ensure the wording for the definition of “Rent to Buy Agreement” at sub-paragraph (b) is an accurate reflection of the Rent to Buy product and is in line with the Capital Funding Guide.
Amendment 29, page 116, line 29, after “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.
Government amendments 159 and 160.
Amendment 30, page 117, line 5, 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.
Government amendments 161, 163 and 164, and 226.
Amendment 5, page 118, line 4, after “HMO” insert
“or is occupied by one or two students”.
This amendment would mean that the ground for possession for student properties could also be used for properties occupied by just one or two students, which would not otherwise be considered as HMOs.
Government amendments 227 to 229.
Amendment 260, page 118, line 12, at end insert—
“(ca) the tenancy agreement was not signed earlier than March of the year in which the tenancy commenced.”
This amendment would end the pressure for joint tenancies to be signed too early in the academic year, committing students to accommodation before they are ready.
Government amendments 165 to 174, 230, 175 and 231 to 234.
Amendment 52, page 122, line 34, leave out “of an intention” and insert—
“that the landlord may intend”.
Amendment 53, page 122, line 35, at end insert—
“or the Court is of the opinion that it is just and equitable to dispose of the requirement to serve a written statement.”
Amendment 50, page 123, line 3, leave out lines 3 to 9.
Amendment 51, page 125, line 13, at end insert—
“Ground 6AA
A relevant social landlord granted a tenancy of the dwelling house to the tenant as temporary decant accommodation in order to demolish their original home in the context of re-development and the landlord seeking possession requires vacant possession of the dwelling house because—
(a) the landlord has served the tenant with notice that the new home is ready to move into, or
(b) the temporary use of the accommodation has otherwise come to an end.”
Amendment 16, page 125, leave out line 17.
This amendment would retain the existing 12-month period within which the landlord can initiate proceedings on this ground for possession.
Amendment 55, page 125, line 17, at end insert—
“(ab) At the end of the second unnumbered paragraph, insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
Amendment 17, page 125, line 18, 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.
Amendment 18, page 125, line 30, leave out paragraph 23.
This amendment would remove the new ground for possession for repeated rent arrears.
Amendment 19, page 125, line 30, 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).
Amendment 257, page 126, line 12, at end insert—
“23A In Ground 12, after ‘performed’ insert ‘provided that failure to carry out this obligation could—
(a) be reasonably expected to have a material adverse effect on the safety, health, or lives of any residents in that property or adjoining property; or
(b) cause material damage to the property not contemplated in any form of property safety deposit scheme relating to the tenancy.’”
This amendment would amend Ground 12 (possession due to failure to carry out an obligation of the tenancy) so that a tenant cannot be evicted if the obligation does not pose serious risk to the wellbeing of the tenants or the property (such as putting a poster in a window or putting washing on display).
Amendment 20, page 126, line 14, leave out paragraph 24.
This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.
Government amendments 235 and 236, 176 and 177, 237, 178 to 181, 238, 182 to 184, 245, 258, 246 and 247, 198 and 248 to 253.
Amendment 25, in schedule 2, page 128, line 29, leave out “omit subsection (5)” and insert
“for subsection (5) substitute—
(5) A person is also threatened with homelessness if—
(a) a valid notice has been given to the person under section 8 of the Housing Act 1988 in respect of the only accommodation the person has that is available for the person’s occupation, and
(b) that notice will expire within 56 days.”
This amendment would maintain the homelessness prevention duty owed by local authorities to persons who have received a notice to vacate a property and would extend it to notices for possession issued under section 8 of the Housing Act 1988.
Government amendment 239.
Amendment 26, page 129, line 1, leave out “omit subsection (6)” and insert
“for subsection (6) substitute—
(6) But the authority may not give notice to the applicant under subsection (5) on the basis that the circumstances in subsection (8)(b) apply if a valid notice has been given to the applicant under section 8 of the Housing Act 1988 that—
(a) will expire within 56 days or has expired, and
(b) is in respect of the only accommodation that is available for the applicant’s occupation.”
This amendment would ensure that the homelessness prevention duty owed by a local authority cannot end whilst a valid notice under section 8 of the Housing Act 1988 has been issued in respect of the only accommodation available to that person.
Government amendments 240, 254, 259, 185, 241, 186, 242, 187, 199, 243, 188 to 192, 244 and 194.
Jacob Young
I am delighted to bring the Renters (Reform) Bill back to the House on Report. I express my gratitude to Members across the House for their contributions on Second Reading and in Committee, and for their continued engagement throughout. I thank my predecessors, my hon. Friend the Member for Walsall North (Eddie Hughes), whose Parliamentary Private Secretary I had the privilege of being as he steered the White Paper, and my hon. Friend the Member for Redditch (Rachel Maclean), whose Whip I had the privilege of being as she steered the Bill on Second Reading. I have seen the Bill at every stage of its formation, and I can say to the House that the Bill we are discussing today would not have been possible without their hard work and dedication. I also pay tribute to the hon. Members for Greenwich and Woolwich (Matthew Pennycook) and for North Shropshire (Helen Morgan) for their constructive engagement and commitment to seeing the Bill delivered, so that its benefits can be realised.
The Bill will create a fairer private rented sector for both landlords and tenants, delivering on the Government’s 2019 manifesto commitment. The Bill brings in the most significant reforms for the sector in over 30 years. It will abolish section 21 of the Housing Act 1988 and bring in new decency standards, giving England’s 11 million tenants more certainty of secure and healthy homes. It will mean that tenants will be supported to hold down jobs in their local area, children to stay in the same school, and households to put down roots in their communities. Alongside abolishing section 21, we are strengthening and expanding landlord possession grounds, including stronger protections against antisocial behaviour. Combined with our reforms to ensure a modern court system, that will ensure that landlords retain confidence in getting back their properties when they need to, safeguarding their investment.
The new private rented sector ombudsman will resolve tenants’ disputes and support landlords in handling complaints effectively. That will help to avoid disagreements escalating unnecessarily to the courts, saving both landlords and tenants time and money. Our new property portal will make landlords’ responsibilities clear in one place and support tenants to make more informed choices. We are also providing stronger protections for renters with pets, recognising the joy that pets can bring. However, the Bill must strike a balance between delivering that security for tenants and fairness to landlords.
Caroline Lucas (Brighton, Pavilion) (Green)
This morning, the Secretary of State had the brass neck to suggest that to keep his promise to outlaw no-fault evictions before the next election it is now down to the House of Lords to get on with it. Will the Minister tell us which is more disingenuous: the five years we have been waiting for the Government to keep their promise, or the blatant concessions to the significant numbers of Conservative MPs who are landlords, who have been gifted what amounts to an indefinite delay to the ban on no-fault evictions?
Jacob Young
As I said, we introduced the White Paper in 2022. We published the Bill just last year in 2023, and we are taking it forward today to abolish section 21. She talks about Conservative Members. I can tell her—she will not read this in the newspapers—that I have been lobbied by Members on both sides of this House to ensure that the reforms work effectively. That is what the changes that we are making today on Report will do. They will bring balance to the Bill, delivering security for tenants and, as I said, fairness to landlords. The amendments will ensure that the new tenancy system works effectively.
Feryal Clark (Enfield North) (Lab)
Since the Government promised to outlaw section 21 evictions in 2019, more than 2,000 people in Enfield have been subject to no-fault evictions, costing the council millions of pounds to rehouse them. The Minister talks about fairness to landlords, but does he recognise the cost to renters, and indeed to local authorities through temporary accommodation?
Jacob Young
I absolutely accept that there is a cost. What I would say is that a system that does not work for landlords will not benefit tenants, and a system that does not benefit tenants will not benefit landlords in the long run either. We have to find a balance in the Bill. That is what our amendments will deliver. The amendments we introduced in Committee include expanding the range of factors that a judge must consider when evicting antisocial tenants, providing stronger protections for landlords and neighbourhoods against unacceptable behaviour. We also added a new ground for possession to protect the functioning of the student market and ensure that students’ landlords can continue to evict in line with the academic year.
Turning to housing quality, although the vast majority of landlords provide warm and decent homes, some fall short of that standard. It is unacceptable for any tenant to live in damp, cold or dangerous housing. For that reason, we introduced measures in Committee to apply and enforce a decent homes standard in the private rented sector for the first time. That new standard, which we are designing with landlord and tenant groups, will be set out in secondary legislation. We also introduced measures to outlaw deeply unfair blanket bans on renting to those with children or those in receipt of benefits in England and Wales. Those practices have no place in a fair and modern housing market.
Mr Clive Betts (Sheffield South East) (Lab)
Will the Minister assure us that proper energy efficiency standards will be contained in the decent homes standard? Otherwise, tenants will still be living in damp and cold homes because they will be unable to afford to heat them.
Jacob Young
I commit to working with the Chair of the Levelling Up, Housing and Communities Committee, and indeed with all Members of the House, to ensure that the decent homes standard provides for decent homes of the kind that he describes.
This is the first time we have applied the decent homes standard to the private rented sector, and we have to get it right. In order to target the minority of unscrupulous landlords, in Committee we also gave stronger powers to local councils, and we strengthened rent repayment orders. That will help to ensure effective and proportionate enforcement of the new system.
Let me turn to the Government amendments that we have tabled on Report. They respond to concerns from Members, constituents, and tenant and landlord groups, ensuring security for tenants while giving confidence to good landlords and supporting the private rented market. Several Members from across the House have played a direct role in helping us to ensure that the Bill works as effectively as possible for all those who live and work in the private rented sector. I of course include in that my hon. Friends the Members for Totnes (Anthony Mangnall) and for Northampton South (Andrew Lewer) for their continued engagement and constructive dialogue on the measures in the Bill.
Ms Karen Buck (Westminster North) (Lab)
I am listening to the Minister carefully. From his contribution, we would not think that there was any controversy at all about the position we have got to with the legislation. If everything is so wonderful, why have all the key housing charities and organisations in the field withdrawn their support for the Government?
Jacob Young
They have not withdrawn their support. I accept their disappointment with some of the amendments tabled on Report, but they have also endorsed some of them, including one that I know is very close to the hon. Lady’s heart in relation to expanding the homelessness prevention duty, which has the support of organisations such as Crisis, the homelessness charity. We will continue to work with everyone across the sector to ensure that the Bill is effective when it goes to the other place.
Turning to the amendments, I will address them thematically, starting with our tenancy reform measures. Government new clause 15 will ensure that a tenant’s notice to quit cannot expire within the first six months of the tenancy unless the landlord has agreed that it can expire sooner, thus increasing the amount of time a tenant must remain in a property at the start of the tenancy from two to six months. The change ensures that landlords are able to recover the costs of replacing tenants and will prevent tenants from using PRS properties as short-term or holiday lets.
Once the six-month initial period of commitment has ended, the tenancy will continue as a normal periodic tenancy, so after the six-month period tenants will need to give only two months’ notice. That ensures that tenants will retain the flexibility to end tenancies when their circumstances change or when a landlord does not fulfil their responsibilities. This measure strikes the right balance between providing landlords with the confidence they need to operate within the PRS and ensuring a fairer, simpler tenancy system.
In addition, the Government are exploring potential exemptions to the rule, such as the death of a tenant, domestic abuse or significant hazards within the property. Today I met the Domestic Abuse Housing Alliance to reaffirm our intention on the exemption and make clear that victims of domestic violence will be better protected by these reforms.
Government amendments 239 and 240, which I have just mentioned to the hon. Member for Westminster North (Ms Buck), will give tenants certainty that the homelessness prevention duty will be owed when a valid section 8 notice is served. I pay particular tribute to my hon. Friend the Member for Harrow East (Bob Blackman) for his contributions on this topic, ensuring that his landmark Homelessness Reduction Act 2017 continues to be effective. The prevention duty will apply where the date specified in the notice is within 56 days and the duty may not be ended simply because the 56 days has passed. This means that households can continue to receive support while the threat of homelessness remains. Mindful that that will broaden the scope of the prevention duty, we will carry out a new burdens assessment and provide funding for local authorities for any additional costs.
Alongside expanding the homelessness prevention duty, let me take this opportunity to restate our position on another important issue. The statutory homelessness code of guidance, which local authorities must have regard to, states that authorities should not consider it reasonable for a homeless applicant to remain in the property until a court issues a bailiff warrant or writ to enforce a possession order. We have heard anecdotal evidence that some local authorities are encouraging tenants on a blanket basis to remain in a property until the bailiffs are at the door. That is wrong. Doing so creates further delays in possession, penalises landlords, who have a legal right to their property, can be stressful for the tenant and, in the long run, is not beneficial for them at all. The guidance is clear on the importance of early prevention: authorities should contact landlords at an early stage to understand the circumstances of an eviction and establish what steps can be taken to prevent homelessness.
The Government are also working to ensure that families can move out of temporary accommodation and into stable accommodation, as well as reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place. That is why we are investing more than £1.2 billion in the homelessness prevention grant over the next three years, including a £129 million top-up for the homelessness prevention grant for 2024-25, as part of an unprecedented £2.4 billion to tackle homelessness and rough sleeping.
It is expected, furthermore, that the £1.2 billion local housing fund will enable councils in England to obtain better-quality temporary accommodation for those owed a homelessness duty, providing a lasting affordable asset. It is expected to provide around 7,000 homes by 2026, to ease local homelessness pressures, reduce spending on unsuitable bed and breakfast accommodation and provide safe and sustainable housing for local communities.
Government amendments 64 to 75 extend the restrictions on re-letting and marketing a property following the use of the moving in and selling grounds to cover licences to occupy as well as tenancies. This will mean that landlords and people acting on their behalf, such as letting agents, will be prohibited from letting or marketing a property as a short-term or holiday let following the use of those grants. I thank my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for North Shropshire for raising this matter in Committee. The change closes a loophole in the no re-letting period and helps to ensure that the balance between long-term and shorter-term lets remains stable.
I turn now to Government amendments to the possession grant, starting with the student market—I know this is an issue close to the heart of my hon. Friend the Member for Loughborough (Jane Hunt). As I have said, in Committee the Government introduced a new ground for evicting full-time students, to maintain a yearly churn of student housing. Since introducing that ground, we have heard concerns that the ground would not apply when students are living in smaller properties or in houses of multiple occupation on individual contracts.
Government amendments 226 to 228 expand the circumstances in which the student ground can be used. Landlords will be able to ensure that properties rented to students, whether they are living individually, in pairs or in larger shared housing, will be vacated in the summer, as long as all the tenants on the tenancy agreement are students. To protect tenants, we have strengthened the requirement for landlords to provide notice to the tenant at the outset of the tenancy that the ground may be used to evict them. Possession will not be possible using this ground unless written notice has been given by the landlord at the beginning of the tenancy.
Government amendment 158 will extend ground 1B to allow social landlords to re-let their property to a different tenant on rent-to-buy terms, protecting the supply of such properties. The grant will be available only after the sitting tenant’s discounted rent period has ended and they have been offered the chance to purchase the property. I thank the National Housing Federation for raising this issue.
Government amendments 175 and 184 insert a new possession ground 5H into schedule 2 to the Housing Act 1988, which will allow private registered providers of social housing and charities to continue to operate schemes sometimes known as stepping-stone accommodation. We are keen to support those schemes, which help those who have struggled to access the private rented sector, and I am grateful to Centrepoint and the Mayor of the West Midlands, Andy Street, for drawing that point to my attention. I thank Andy Street for all he is doing to support such organisations.
Government amendments 198 and 199 and new clause 29 serve to replicate an existing mechanism that allows landlords of qualifying agricultural workers to provide assured shorthold tenancies rather than more secure assured agricultural occupancies. The amendment was the main ask of the Country Land and Business Association and is vital to maintaining the supply of homes for rural workers by protecting the status quo. It will ensure that opted-out agricultural occupancies under the old system will continue to be opted out when they transition to the new tenancy system.
Leaseholders have raised the issue that many leaseholder agreements restrict sub-letting on assured shorthold and fixed-term tenancies. Amendments including Government amendments 160 to 164 and new clause 13 will address that ask by ensuring that sub-leases made under those agreements can continue unabated under the new tenancy system and that new agreements can be made if they were previously permitted. We have drafted the provisions very carefully to ensure that superior landlords and leaseholders have corresponding rights and responsibilities, as they did under the previous system.
Government new clauses 18 to 24 extend to Scotland the provisions outlawing blanket bans on letting to tenants in receipt of benefits or with children, in consultation with the Scottish Government. They do so in a broadly similar way to those in England and Wales, with adjustments to align with the Scottish enforcement framework, demonstrating a cross-nation commitment to tackling discrimination in the private rented sector.
In part 2 of the Bill we have made technical amendments to our redress clauses, including ensuring that the PRS landlord ombudsman can co-operate with other dispute resolution services. The amendments will ensure that the ombudsman operates effectively. Although no final decision on the ombudsman provider has been made, our amendments would also allow the housing ombudsman service to effectively administer private landlord redress alongside social redress.
A key driver in having a single ombudsman to resolve private landlord-tenant disputes is making the service simple to use. I reiterate to hon. Members that the Government are absolutely committed to minimising costs and streamlining new requirements for landlords. Our ambition is that fees for the PRS landlord ombudsman will be low cost and will represent value for money for landlords, similar to those for the housing ombudsman, where membership costs for social landlords were just £5.75 per unit in 2023-24. I also reaffirm our commitment to aligning the ombudsman and property portal, with the ambition being that landlords will need to input their details only once in order to be compliant with both services.
Let me turn to enforcement of the new system. We introduced measures in Committee to ensure that all landlords involved in criminal rent-to-rent arrangements can be held to account, including superior landlords where they are aware of illegal activity. Government new clause 32 ensures that superior landlords are liable for the Housing Act 2004 offences of failing to hold the correct licence for a property. Government new clause 33 seeks to ensure that landlords and superior landlords can, where appropriate, be served with improvement notices requiring the removal of hazards. Those changes close loopholes, ensuring that local councils can continue to hold the correct landlord to account to ensure that their properties are safe and well managed.
Jeff Smith (Manchester, Withington) (Lab)
If the Government are putting all that money in and doing all this planning, why can the Minister still not give us a date for when it will happen?
Jacob Young
As I have just said, we have always been clear that we will abolish section 21 when we are confident that the county court system is ready. I cannot give the hon. Gentleman a date today because I cannot say until we are confident that the county court system is ready, but as I have said, we are investing £1.2 million for HM Courts and Tribunals Service to deliver the new process. It is important for him to recognise that if the court system is not ready when we make this change—the biggest change in 30 years—it will not benefit tenants. It will not benefit landlords, but it will certainly not benefit tenants.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I welcome new clause 30, because the reality is that county courts are already under very great pressure indeed. However, carrying out the assessment will itself bring a cost and, of course, Ministry of Justice budgets are already strained. What steps will be taken to support the Ministry of Justice and the Lord Chancellor with the cost of carrying out that important assessment?
Jacob Young
My hon. and learned Friend is absolutely right. We have committed to making the assessment, so we will ensure that the relevant funding is in place. I have said that we have invested £1.2 million for HM Courts and Tribunals Service to deliver a new end-to-end online possession process, but I am pleased also to confirm to him today that we are investing a further £11 million this financial year to deliver a new digital system.
Mr Betts
The Minister has tried to blame the Levelling Up, Housing and Communities Committee for this delay by saying that we noted that there was a problem in the courts, which would need to be ready to deal with the extra work caused by the abolition of section 21. However, the Government have had five years to sort the courts out and get them working properly. Surely that has been planned for right from the last election. On the Select Committee asking for improvements to the courts, I just point out that we asked for a specialist housing court—a bit like a small claims court—that could process things more quickly. We did not ask for that in our report last year; we asked for it in 2018, and the Government rejected it.
Jacob Young
I think I have been quite clear that it is important that we see that the courts are ready for these reforms. The Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), is here on the Front Bench with me. He and the MOJ are working at pace to ensure that the courts are ready for the reforms we are introducing. The hon. Member for Sheffield South East (Mr Betts) asks about a specialist housing court. We do not believe that that is the best way to improve the court process for possession—a view shared by the judiciary who responded to our call for evidence.
Neil O’Brien (Harborough) (Con)
The Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts), rightly said that this should have happened five years ago, but I gently say that in those five years we have had the coronavirus pandemic, which is the main thing that has slowed down the process of improving the courts. I strongly encourage the Minister not to rush into doing this prematurely, because it would benefit neither tenants nor landlords if he did.
Jacob Young
I do not think that it will surprise you, Madam Deputy Speaker, to learn that I entirely agree with my hon. Friend, whom I thank for making those points.
Government new clause 30 will enable the Government to assess the effect that our new tenancy system is having on county courts before our reforms are rolled out more widely, giving us confidence that the sector is ready. I am happy to share with colleagues that we are exploring whether serious eviction cases, such as for antisocial behaviour, can be prioritised in court listings. We will consult on options following Royal Assent.
Dominic Raab (Esher and Walton) (Con)
I recently met Rentstart, a homelessness organisation with a great track record of working with landlords and getting the homeless into rented accommodation. It is slightly concerned that the changes might undermine its relationship with landlords, which it uses to facilitate the finding of homes for many vulnerable constituents and other people who have come into the constituency. In relation to the assessment that new clause 30 would bring about, what reassurance can the Minister give such organisations?
Jacob Young
The assessment is there purely to determine the timeliness of possession proceedings. In addition, we must acknowledge that there are other barriers to possession, such as the role of local authorities and bailiffs in the process. I hope that that is what the assessment is able to draw out. On Rentstart in my right hon. Friend’s constituency, I do not believe that our reforms will affect its relationships with landlords, but I am more than happy to meet him and Rentstart to understand its concerns more clearly and see if we can do anything to address them.
Government new clause 35 requires the Government to arrange for a review of the new tenancy system, in particular the impact of removing fixed terms and the operation of grounds for possession. That review will be carried out by an independent person, who will produce a report of their findings. The new clause requires the Government to lay the report before Parliament within 18 months of the earliest date on which the new tenancy system is applied to existing tenancies. We recognise that removing fixed terms is a significant change for the sector, and the review will explicitly consider the impact of the change. It will also consider how comprehensive and fair the reformed grounds for possession are, as well as the extent to which they are operating effectively, so that all parties can have confidence in them.
As I have said, the new tenancy system is a huge change for the sector—the biggest in 30 years—and it is right that we commit in legislation to reviewing its impact and implementation, and that we consider whether changes are needed based on real-world evidence. That will ensure that the system works as well as possible for all parties in the long term.
Wera Hobhouse (Bath) (LD)
I have mentioned several times in debate, and in a useful meeting that I had with the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), who is here, that there is a need to amend the Protection from Eviction Act 1977 at the same time, because there is a danger that frustrated rogue landlords will refer back to that legislation, which is very badly understood and not well enforced by the police and local authorities. Will the Minister say a few things about that?
Jacob Young
I am more than happy to address those points before the end of the debate, but I think that I have written to the hon. Lady about them. If I have not, I will ensure that I do in order to be clear about the amendments she has tabled.
Government new clause 36 places a duty on the Secretary of State to produce an annual report to Parliament on the stock of residential tenancies in the private rented sector. That report will need to be provided in the five years after the Bill receives Royal Assent. Reports under that duty would cover, but not be limited to, an analysis of the number, location and size of private rented sector properties. The new clause ensures that regular analysis of such information is available for scrutiny and debate.
I am aware that several Members have raised concerns about the interaction between the property portal and the role of selective licensing. The two systems have separate, distinct purposes: the portal will gather data on private rented sector ownership and property standards in England, providing an information source for local authorities to have oversight of the whole private rented sector in their area. It will help landlords to understand their legal obligations and will give tenants the information they need to make informed choices. Meanwhile, selective licensing provides local housing authorities with the powers to license privately rented properties within a designated area to address specific local issues, including poor housing conditions and high levels of antisocial behaviour or crime. While there will be overlap with data gathered through the portal, the information required for licences in these areas will be specific to the issue being tackled and will support more intensive enforcement action in the areas that need it most.
We do not want to see selective licensing abolished, but we do want to ensure that our reforms are streamlined and that burdens are minimised for landlords and local authorities. That is why I am committing to a review of selective licensing and the licensing of houses in multiple occupation to consider how we can reduce burdens and make the system more effective for landlords, tenants and local authorities. I am keen to work closely with Members and the wider sector on this issue, and will provide further details in due course.
I have sat on many Bill Committees in this House, and have now been privileged to lead my first Bill Committee, facing the hon. Member for Greenwich and Woolwich. He has been a great person to work with and has sought at every opportunity to make sure the Bill works and is effective. I said to him in Committee that we would listen to suggestions for how we can improve the Bill, and we are doing so today. For tenants, we are expanding the homelessness prevention grant and closing loopholes in the system; for landlords, we are introducing an initial six-month tenancy and giving them certainty that our reforms will work. The Bill delivers on our manifesto commitments: it gives tenants security and landlords fairness. Our amendments continue to strike that balance, and I commend them to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the shadow Minister, I remind colleagues that if they wish to intervene on a speech, it is important that they have been in the Chamber since the beginning of the speech, just in case the important point they wish to raise has already been addressed. It is also important that they stay for the duration of the speech, in case other colleagues then refer to the important point that they have raised. I clarify that because we may have a longer speech from the shadow Minister, and people may wish to intervene, so I thought it would be helpful to remind colleagues of those rules.
Mr Betts
I think the reality is that local authorities are generally short of resources right through, as the Committee’s recent report on local authority funding—again, it was unanimously agreed—showed. Because of the demands of social care on local authority budgets, other services are often cut even more than the mainstream. We have previously looked at trading standards and consumer protection, which are an important element—the hon. Member is absolutely right—and I hope that they will be factored in when we have the new burdens discussions.
There are some things that the Minister could resolve fairly quickly. He referred to the important role that the ombudsman can play in resolving disputes. There is sometimes a bit of a conflict between whether someone goes to the ombudsman or to the courts—sometimes, the ombudsman will not deal with a case if it is in the courts. It would be helpful to clarify those issues. But why does he not just decide that the housing ombudsman, who currently deals with social housing issues, will also deal with private sector housing? He should make that decision. Again, if the ombudsman is to have that responsibility, it needs to gear up by starting to recruit more staff and getting in resources to be able to do it. It is a simple decision. He has not ruled it out, but he has not ruled it in. Can we not just do it? It seems obvious. Why set up another body, which would have to start from scratch, when the ombudsman has the skills to do it? Those skills are slightly different in some cases, but why not let it get on with that, and tell it now that it will have that job to do?
I have a couple of other points. The property portal is a really welcome development. We know that when someone is trying to track down a landlord—it is often a local authority, which wants to serve a notice on them—suddenly, the ownership of the property moves, and a different member of the family becomes an owner, or a different company is set up. To know who owns the property, information will have to be given to the property portal, along with all other information about the property. That is a really important step forward, as well as making sure that the portals are digitised so that the information can be kept up to date simply.
I welcome the Minister saying that selective licensing and the property portal are not the same thing, with the property portal to be there for all properties. Selective licensing—it is in the name—will be there for some properties. When there is a review of selective licensing and the relationship with the property portal, will the proposals come back to the House for consideration at some point? I want reassurance on that. Many of us support selective licensing, which we see operating against the worst landlords and the worst properties, and we hope that there will not be a diminution of those powers and responsibilities that would weaken what it can achieve.
Jacob Young
I can certainly commit to working with the hon. Member and his Committee when we are at the point of making a decision on where we go after such a review. I completely agree that selective licensing has its role—it is not overtaken by the property portal—but we must ensure that the two work together.
Mr Betts
That is a helpful assurance, which I accept, and I think he has already given assurance of similar collaboration on the decent homes standard, which is appreciated.
Finally, I come specifically to some complicated amendments that I have tabled—I admit that they even confuse me on occasions—which are about the powers that social landlords have when they come to regenerate areas. The Committee has heard some pretty awful examples of poor properties in the social housing sector, and we have been critical. However, often it is not an individual property that is the problem, but properties in deck-access blocks built in the ’60s, ’70s or ’80s. The property has reached the end of its life and people do not like living there: it might have damp or other problems, such as antisocial behaviour. The management costs are high and the cost of regeneration, making it fit for purpose and bringing it up to decent homes standards, is so great that it is not worth spending the money. In some cases demolition and rebuild is needed, and in others substantial regeneration and improvement is needed, and that means the tenants have to move out.
In those cases, social landlords need to be certain that they have the power to require tenants to move, because in a block of properties of 100 residents, 95 of them will probably be terribly enthusiastic about moving out, particularly if they are going to get a new or refurbished home, but the other five might dig their heels in and try to stick it out, holding up the whole scheme. The Minister believes that social landlords have the power to do that under existing legislation. I have tabled amendment 52 and the related amendments because the National Housing Federation is concerned that social landlords think they have powers, but they do not exist where the initial tenancy with their secure tenant was set up by a nomination from a local authority. It is a complicated legal issue, but an important one.
Jacob Young
The hon. Gentleman makes legitimate points, and I am more than happy to meet him and the National Housing Federation.
Jacob Young
As I said in my opening speech, we are exploring expediting possession for serious antisocial behaviour claims. I am happy to work with my hon. Friend on how we go about that and ensure that it happens before these reforms are fully implemented.
Anthony Mangnall
The Minister will find in this part of my speech we will be agreeing vehemently, although the latter part of my speech might not be so agreeable. I am grateful to him for his intervention; I always welcome the opportunity to work with him.
Likewise, in the case of rent arrears, it cannot be acceptable to have a system that allows rent arrears to continue to build for seven months. The amendment would make good on the Government’s commitment that the justice system is fully prepared for the impact of the end of section 21. Again, I am grateful that the Government have decided to accept the point in principle and introduce proposed Government new clause 30, which mirrors my amendment 9, which was supported by so many colleagues. I therefore withdraw amendment 9.
Proposed new clause 1, the repeal of requirement for selective licensing, under my name, would remove the ability of local housing authorities to designate areas as subject to selective licensing. The Bill provides the Secretary of State with the power to develop a new property portal that all landlords would have to join to demonstrate to prospective tenants that the properties they rent meet all required standards. It would be effectively a national licensing scheme. As selective licensing deals only with management quality and not property standards, the changes in the Bill are likely to do more than selective licensing to improve properties.
Since councils will be able to use the portal to access information on all private rented properties and landlords operating in their area, and in view of plans for a decent homes standard for the sector, local selective licensing schemes will be made redundant. In Wales, the introduction of landlord registration led to the end of almost all selective licensing, so it is unlikely that local authorities would pursue costly and complex schemes in future. I take on board the Minister’s comments in his opening remarks.
Selective licensing is an additional cost to landlords, in addition to the property portal and redress scheme. Landlords should not have to be regulated twice and pay twice for much the same thing. Proposed new clause 1 would scrap selective licensing schemes for private rented housing when the property portal goes live. Having both would not enhance protections for tenants, but merely be a duplication. Scrapping them would remove an unnecessary layer of bureaucracy and cost for landlords. I am grateful for the Minister’s opening remarks. I will take the Government at their word that the Dispatch Box commitment to conduct a review of selective licensing will take place at the earliest opportunity.
My new clause 3 would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of antisocial behaviour. It is vital that, when section 21 ends, swift and effective action can be taken against tenants committing antisocial behaviour who cause misery for so many neighbours and fellow tenants. To support this, the Government have changed the wording of the discretionary ground to repossess a property due to tenant antisocial behaviour—ground 14. They clarify that any behaviour “capable” of causing “nuisance or annoyance” can lead to eviction. Previously, it was behaviour “likely” to cause a problem.
However, that is not the true problem. The current problem, which is not dealt with by the Bill, is that the main evidence of nuisance is provided by neighbours, as they are closest to the person involved. The changes to the definition of nuisance do not alter the fact that evidence of behaviour needs to be provided, and that will still come from neighbours. However, in so many instances, neighbours are reluctant to attend court and give evidence, in part because the slow speed of the court system means that they will be forced to live near the person that they have reported or helped to evict for several months afterwards.
A better solution would be to allow landlords to use evidence of problematic behaviour that is provided by neighbours complaining by text or email to the landlord or the letting agency. This evidence is not currently admissible, and the courts cannot give sufficient weight to it when deciding whether the tenant is committing antisocial behaviour. This amendment would allow for such evidence to be used by the courts.
In the negotiations and discussions that we had in the run-up to this debate, the Minister’s Department and his civil service team were extremely helpful in highlighting Civil Procedure Rule part 33.3 in relation to
“circumstances in which notice of intention to rely on hearsay evidence is not required.”
Again, the comments made by the Minister are welcome, although I hope his Department will follow this up with the Ministry of Justice. I therefore withdraw new clause 3.
Amendment 5 covers houses of multiple occupancy relating specifically to students. This would mean that the ground for possession for student properties could also be used for properties occupied by one or two students, which would not otherwise have been considered as HMOs.
Ending fixed-term tenancies will be problematic for the student housing market—it would be problematic for the whole Bill—which operates on a yearly cycle, from one academic year to another. Although the Government have recognised that by allowing fixed-term agreements to continue in purpose-built student accommodation, it will not apply, as I understand it, to traditional off-street private-rented housing, often rented to those in their second or third year of studies. This is a concern shared by many in the industry and, indeed, by the Levelling Up, Housing and Communities Committee, which has noted:
“Currently, the proposal is to include this part of the PRS in the tenancy reform, but we conclude that abolishing fixed-term contracts could make lettings to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies.”
I hope that I have quoted the Select Committee report accurately.
A Government amendment to the Bill made at Committee stage established a new ground for possession—ground 4A—to protect the student housing market. This is to be welcomed. It will ensure that landlords can guarantee that most student properties will be available for each academic year, but it will not protect all student housing. The new ground will cover only houses of multiple occupation; it will not apply to those properties occupied by one or two students. This oversight would be rectified by my proposed amendment. Again, I thank the Government for recognising this and introducing their own amendments 226 and 228, which have addressed that problem.
As I come to my concluding remarks—at last—I wish to make some comment on amendment 10, which has not been selected.
Jacob Young
I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement throughout the Bill’s passage. I will respond to some of the issues raised during the debate, but I might not be able to respond to all of them in the time remaining.
I will start by addressing the points made by the hon. Member for Greenwich and Woolwich (Matthew Pennycook) and the amendments tabled by the Opposition. As I said in my opening speech, I thank him and others on the Labour Front Bench for their continued engagement and their support for the Bill. I believe that we share the ambition to see the Bill on the statute book as soon as possible.
New clause 10 would extend Awaab’s law to the private rented sector. The tragic and avoidable death of two-year-old Awaab Ishak is the most shocking reminder of the danger of damp and mould. I am clear that no tenant should have to live in dangerous housing conditions, but our approach to tackling this issue must reflect the differences between the social and private rented sectors. Awaab’s law was designed for social housing. Most social landlords manage large portfolios and have dedicated repair and maintenance teams, enabling them to tackle issues to specific timeframes. In contrast, the vast majority of private landlords own a small number of properties, with 82% of landlords having fewer than five properties and 43% owning just one.
The Bill takes a different and, I believe, more suitable approach to ensuring that private tenants have safe homes. It gives councils powers to immediately fine private landlords up to £5,000 if their properties are dangerously unsafe. It also introduces a decent homes standard for the first time and a new means of redress through the ombudsman. We will publish statutory guidance for councils on enforcement, and we will explore how this guidance can strengthen the onus on private landlords to deal promptly with tenant complaints about hazards, including for larger institutional private landlords that may have resources similar to those of social landlords. Amendment 28, which the hon. Gentleman spoke to, would remove section 21 immediately upon Royal Assent. This would mean there is no transition period, as is currently planned, leaving no time at all for landlords, letting agents, tenant groups and local authorities to adjust to the new system. There would be no time to conclude the necessary secondary legislation, leaving the statute book a confusing mess.
Importantly, without having the new possession grounds in place, amendment 28 would prevent landlords from regaining possession of their property even where they have a legitimate reason to do so, which the new grounds reflect. Landlords could not repossess to sell their property or to deal effectively with antisocial behaviour or repeat rent arrears. Most concerningly of all, temporary and supported accommodation would not have access to the critical new grounds, which would have an immediate impact by clogging up those sectors.
Although it might seem appealing and sound good to say, “Let’s just abolish it on Royal Assent,” amendment 28 would create chaos in the sector. It is far better for tenants and landlords alike if we ensure that the change happens in an orderly way. For those reasons, I ask the hon. Gentleman not to press his amendment.
Amendment 37, tabled by the hon. Member for North Shropshire (Helen Morgan) and given voice today by the hon. Member for Twickenham (Munira Wilson), seeks to bring accommodation provided by the Defence Infrastructure Organisation into scope of the decent homes standard. I make it clear that everyone deserves a safe and decent home, none more so than the heroes who serve in our armed forces. Although 96% of service family accommodation already meets the decent homes standard, bringing such accommodation within scope could provide a further safeguard to ensure that all service personnel and their families have a home of the quality they deserve. We therefore strongly agree with the intent of the amendment.
Service family accommodation has unique features, however, including a significant portion being located on secure military sites where there will be issues around security and access for inspections. This would create a challenge in applying and enforcing the decent homes standard. The Government intend to ensure that service accommodation meets the decent homes standard, while recognising that work is needed to determine the appropriate monitoring and reporting arrangements given the unique nature of this accommodation. My Department will therefore work closely with the Ministry of Defence to explore these challenges and how we can best ensure that there are strong safeguards for service personnel and their families that work effectively in practice.
I assure the hon. Members for Twickenham and for North Shropshire that we are seriously considering this issue, and that the Minister for Defence Procurement and I intend to meet the hon. Member for North Shropshire in the coming weeks to discuss these issues in more detail before the Bill is in Committee in the Lords. I therefore ask her not to press her amendment.
New clause 12 and amendments 43 to 47, tabled by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), seek to extend the core blanket ban provision in chapter 3 to care leavers. I am grateful to him for raising the important issue of care-experienced young people’s ability to rent a home in the private rented sector. The Government have already reserved a power in the Bill to extend blanket ban provisions to additional cohorts in future, should we find evidence that it is needed. This power could be used to extend the provisions to care-experienced people if evidence suggests that it would be effective.
Helping care leavers to make a successful transition from care to independence is a priority for this Government, and we recognise that care leavers can face significant barriers to securing and maintaining affordable housing, including providing a guarantor or rent in advance. We are already seeking to improve care leavers’ access to housing, as set out in the “stable homes, built on love” strategy, which sits alongside existing duties owed to care leavers by local councils as corporate parents.
Furthermore, we understand that at least 78 councils have passed motions granting care leavers the same protected characteristic status as other cohorts under the Equality Act 2010 in their local area. I am happy to continue working with my hon. Friend the Member for East Worthing and Shoreham to hear the challenges that care-experienced people face and how we can make private rented accommodation more accessible to them.
I can confirm to my hon. Friend that the measures to prohibit blanket bans on the basis that a child will live with or visit a person at a property include foster children and, in response to the hon. Member for Twickenham, kinship carers. Landlords and letting agents will not be able to discriminate against potential tenants on the basis that they foster children. No further legal provisions are needed to do this. More broadly, during this spending review we are investing over £36 million in a foster carer programme and a foster carer recruitment and retention programme. That is the largest ever investment in fostering in England. For that reason, I ask my hon. Friend to withdraw his amendment.
New clause 39, proposed by my hon. Friend the Member for Dover (Mrs Elphicke), effectively requires landlords to compensate tenants when using any possession grounds found in schedule 2 of the Housing Act 1988 within two years, other than ground 7A or ground 14. While I appreciate the intent behind my hon. Friend’s amendment, I do not agree that landlords should be made to pay compensation to tenants when they have a legitimate reason to evict. Landlords looking to move into or sell their property, or dealing with tenants in rent arrears, may find themselves to be in financial difficulty too, and the change proposed by the amendment could exacerbate that.
Amendment 257 seeks to tighten the breach of tenancy grounds, so that a tenant can be evicted if the tenancy breach impacts the wellbeing of other tenants or neighbours, or could cause material damage to the property beyond what would be covered by a tenancy deposit. As I have indicated to my hon. Friend the Member for Dover previously, I am sympathetic to the intention behind her amendment but it could have adverse consequences. For example, significant breaches of a tenancy agreement, such as subletting, may not lead to an eviction if they were proven to not have a material impact on other housemates or immediate neighbours.
I am also concerned about the impact on existing contracts, signed between landlord and tenant on the basis that this ground would be available. I assure my hon. Friend that ground 12 is discretionary, meaning that a judge will consider whether the ground has been met and whether the possession is reasonable in each case. We therefore think it is unlikely that a tenant would be evicted for minor breaches. I will seek to clarify in guidance when this ground ought to be used. I am happy to explore what more could be done in legislation to ensure tenants are not unfairly evicted for minor and unfair breaches to their tenancy agreement. For those reasons, I ask my hon. Friend to withdraw her amendment.
Turning to proposed new clause 40, the hon. Member for Dulwich and West Norwood (Helen Hayes) set out a deeply moving and tragic case in her consistency. I am grateful to her for meeting me yesterday to discuss the case. New clause 40 would prevent guarantors being held liable for rent after a tenant’s death. The hon. Lady has campaigned on the issue for some time and I appreciate her work on it. By moving to a system of periodic tenancy, tenants and their estates will no longer be locked in after the first six months. In the event of a bereavement, the tenant’s representative would be able to serve two months’ notice to end the tenancy and end the guarantor’s liability. Attempts to hold a guarantor liable for rent past the end of the tenancy would be in breach of the Tenant Fees Act 2019 and a landlord could be fined for doing so. I am aware that our new six-month term may mean guarantors being held liable for longer. That is why we have committed to looking at an exemption where a tenant tragically dies, as I discussed with hon. Lady yesterday, so that a notice can be served in the usual way. For that reason, I ask the hon. Lady to withdraw her amendment.
Turning to the points made by my hon. Friend the Member for Totnes (Anthony Mangnall), in his speech he acknowledged that the Government have accepted not one but almost all his amendments. I regret that he still feels opposed to the Bill overall, but I hope he will reconsider his position having listened to the debate and heard the significant changes we have made. He mentioned Margaret Thatcher’s reforms of the 1980s. Her reforms sought to smash a disastrous system of sitting tenants, where landlords were blocked from moving into or selling their homes, or were forced to let their properties below market rents. Our reforms build on her reforms. Landlords will still have a mandatory right to move into or sell their homes. Nothing in our Bill introduces rent caps, despite calls from Opposition parties and the Mayor of London.
Five years ago, the late James Brokenshire, as Secretary of State for Housing, Communities and Local Government, promised that we would abolish section 21 evictions. Eight months later, every English Member of this House stood on manifestos to abolish section 21. In 2022, we published the White Paper into how we would reform the tenancy system. In 2023, we brought forward this Bill, which gave the White Paper legislative form. And today, we have the opportunity to move forward a Bill that strikes the right balance between security for tenants and fairness for landlords.
For tenants, this Bill abolishes section 21 evictions and moves to a more flexible system of periodic tenancies for all. It applies a new decent homes standard to the private rented sector for the first time and outlaws blanket bans on tenants with children, or those on benefits. It gives renters a legal right to request a pet. It also expands the homelessness prevention duty to protect vulnerable tenants. Together, these changes will give tenants the opportunity to put down roots in their communities, their children in local schools and to live in a secure home.
For landlords, the Bill strengthens possession grounds, giving landlords certainty that they can get their property back. It provides stronger protections in cases of antisocial behaviour and repeated non-payment of rent, and protections for the student market and rural communities. Tenants will have to give two months’ notice to leave a tenancy instead of one, and we are making improvements to the court system to ensure that they can properly support the new system.
The new private rented sector ombudsman will also help prevent issues escalating to the courts, offering quicker and cheaper resolution to disputes. And the new property portal will provide a one-stop shop for landlords to understand requirements and to demonstrate compliance.
Above all, the Bill delivers for landlords and tenants, because it drives out the bad actors in the system. That is what we aim to do—to build a sector that gives tenants security and protections, and landlords fairness, not pitting one against the other, but working with both to drive out the bad actors.
This Bill is the culmination of years of work in a sector that has not seen meaningful change in three decades. I ask all Members to join me and back the Bill tonight.
Question put, That the clause be read a Second time.
Jacob Young
I beg to move, That the Bill be now read the Third time.
This Bill is an opportunity for us to improve the life chances of millions of private renters across the country, and I hope that we have also given reassurance to the millions of good landlords who endeavour to provide homes for those who rely on the private rented sector. When the Government set out their levelling-up missions in 2022—as the Levelling Up Minister, I feel this keenly—we made a clear commitment to halve the number of poor-quality homes by 2030 to
“Restore a sense of community, local pride and belonging especially in those places where it has been lost.”
When housing is secure and safe, it is the launch pad for rich and fulfilled lives and gives people
“a place they’re truly proud to call home”.
This Bill marks the biggest change to the sector in more than 30 years. Rightly, Members have pressed the Government to ensure that it strikes the right balance, improving the sector for all while ensuring that no party is unduly burdened either by cost or by process. I believe that the Bill now strikes that balance, and I am proud to have taken it through the House as my first Bill as a Minister. I should add that taking it over 24 hours before the beginning of the Committee stage was an added excitement that I shall not forget. Let me again pay tribute to my predecessors, my hon. Friends the Members for Walsall North (Eddie Hughes) and for Redditch (Rachel Maclean).
At this point, I invite the hon. Member for Brighton, Pavilion (Caroline Lucas) to intervene, if she wishes to do so.
Caroline Lucas
I am grateful to the Minister. As he knows, I tried to intervene earlier during his summing-up speech. I merely wanted to pursue the point about rent tribunals that I made in my initial intervention. In the White Paper, the Government said that they were going to prevent tribunals from increasing rents beyond the amount that landlords initially asked for when they proposed a rent increase. Why have the Government gone back on that? Why do they now envisage a scenario in which someone could go to a tribunal and end up with a higher rent than the one against which they are appealing? That is surely a massive disincentive.
Jacob Young
Large rent increases should not be used as a back-door method of eviction, but it is crucial that landlords are able to increase rents in line with market levels to maintain investor confidence. We have listened to concerns, and we think it fair that the tribunal is not limited when determining that market rent. This means that, as the hon. Lady said, the tribunal has the freedom to make full and fair decisions, and can continue to determine the market rent of a property. I understand the hon. Lady’s concerns, but it is important that all our measures are proportionate and that we do not allow the tribunal to become overburdened by too many complaints. I therefore think that this is a necessary safeguard.
Caroline Lucas
The Minister is being very generous in giving way. I am not the only person to have said that it should not be possible for rents to rise in these circumstances; the Government’s own White Paper said it only a short time ago. I wish that the Minister would address the point about the disincentive. If a tenant knows that by going to a tribunal they could end up with a higher rent than the one against which they are appealing, surely that will be a massive disincentive.
Jacob Young
Obviously, in a number of areas we have listened to the sector and moved on from the White Paper. The hon. Lady’s point is legitimate, but the reason the tribunal is able to set a rent that is above the landlord’s initial request, and to set a market rent, is that we want to ensure that it is not overburdened with repeat requests that challenge rent increases that are perfectly reasonable.
Sir Geoffrey Clifton-Brown
Surely the whole point of a tribunal is for the tribunal judge to set what he thinks is a fair market price. It might go up, it might go down or it might stay the same, but that is the whole point of a tribunal.
Jacob Young
I entirely agree with my hon. Friend, and that is why we have acted in this way.
We have heard from Members in all parts of the House, and I thank them all for their contributions during the Bill’s passage. They have worked collaboratively and diligently to ensure that this important legislation becomes law. I want to record my thanks to all my officials—I cannot name them all, but a few of them are Leah, Guy, Steph and Ross—as well as those in my private office team and the Clerks. I thank Members on both sides of the House, notably my hon. Friends the Members for Northampton South (Andrew Lewer) and for Totnes (Anthony Mangnall), for all their work, and of course I thank those in the Government Whips Office. Above all, I thank all the groups that I have had the pleasure of meeting as they represent the interests of both tenants and landlords across the wider sector.
I hope that our colleagues in the other place will take the collaborative approach that has been taken in this House, and will pass the Bill with the speed that it now deserves to give certainty and security to landlords and tenants throughout the country.
Jacob Young
With the leave of the House, I would just like to confirm to my hon. Friend the Member for Christchurch (Sir Christopher Chope) that we do not intend to introduce any sort of rent controls.
Question put and agreed to.
Bill accordingly read the Third time and passed.