Renters’ Rights Bill

Lord Northbrook Excerpts

Tuesday 22nd April 2025 Lords Chamber

[Lord Northbrook (Con)]

Will the Minister deal with the points made by the noble Lord, Lord Carrington, about institutional investors and their reluctance to invest when there is a minimum tenancy of only two months, and about lenders who are not prepared to lend to the sector? Does she feel that the institutional investors are an important part of the sector or are they not relevant?

[Baroness Taylor of Stevenage (Lab)]

I responded to that in an answer I gave to the noble Lord, Lord Young, at Question Time. Yes, institutional investors are important, but it is important that we do not create an idea that these are two-month fixed tenancies; they absolutely are not. They are assured tenancies with a two-month notice period on the part of the tenant. Most tenants will not want to take up a tenancy and go through all the procedures they will need to—as I set out—just to have a tenancy for two months and then leave it. Most tenants want a long-term tenancy where the landlord maintains their property and they pay their rent on time. That is how the system works. I do not think it will deter institutional investors from having the confidence they should rightly have in investing in build to rent, or any other form of rental investment, as a good investment. It is a steady source of income and, with a tenant with an assured tenancy, they will be more assured of that, not less.

[Lord Northbrook (Con)]

I apologise; I failed to declare my interest as a private landlord of rental property in Hampshire.

[Lord Truscott (Non-Afl)]

My Lords, I thank all noble Lords who have taken part in this debate. Coming back to the point from the noble Lord, Lord Shipley, I am still concerned about the unintended consequences of parts of the Bill. I am not sure the Minister entirely convinced me on that, particularly on issues such as, for example, the move towards ultra-short lets that is taking place before our eyes. Some blocks of flats in London are 90% Airbnb. There is a big shift in the professionalisation of ultra-short lets. That is one impact of ultra-short periodic tenancies of two months that will be more or less impossible to police in large cities and resorts.

The noble Lord, Lord Marlesford, gave us the benefit of his 50 years’ experience in the PRS and expressed similar concerns. The noble Baroness, Lady Scott, and the noble Lord, Lord Shipley, asked the Minister what the rationale behind abolishing ASTs is. We heard some of the familiar arguments but, again, I was not entirely convinced. Domestic abuse is an extremely serious subject but I cannot imagine anyone who is in fear of their life checking their tenancy agreement before fleeing their abuser. I know the Minister mentioned one case, but the domestic abuse charities I spoke to say it is the abused person who flees, more or less at the drop of a hat, and the abuser who stays in situ.

A number of noble Lords expressed their disquiet about the abolition of fixed terms, not just in terms of flexibility—although there is an argument that asks whether we are saying that six months’ flexibility is so awful that we must have two months’ flexibility instead. Under assured shorthold tenancies, people can have a break clause of six months and can move out, which suits most people and has certainly been my experience. I am sure we will come back to this at a later stage.

The noble Lord, Lord Carrington, made some strong points about fixed terms as well, and made a powerful case for a six-month minimum, rather than two months, to give stability to both landlords and tenants. We should think not just about tenants’ rights, which are very important and an important part of the Bill, but about the impact on the market of introducing two-month tenancies. It is undoubtedly the case that, in a number of areas, people occupy what were previously long-term rentals for short-term purposes. We will come on to discuss Airbnb later but, for example, 40% of the properties in the village of Salcombe in Devon are Airbnb or equivalent. If you ask the people of Cornwall, you will find that they are losing a lot of long-term rentals to short-term holidaymakers, and all the rest.

The two are linked. This Bill will be linked to what is already happening to the housing market and what will happen in the future. Once you introduce two-month periodic tenancies, it will be almost impossible to police. How will you know whether someone takes on a tenancy in a city centre—for example, a tourist—stays for a month, not two months, and then moves out? Who will police it? I am concerned that there will be a huge shift to ultra-short tenancies, which will undercut the long-term rental market and impact primarily on people who need long-term rental homes.

We have had a good debate. No doubt the Committee will come back to this issue in future amendments but, for now, I beg leave to withdraw my amendment.