Renters (Reform) Bill (Sixth sitting)

Lloyd Russell-Moyle Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[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.

--- Later in debate ---

[Matthew Pennycook]

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

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

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

[Lloyd Russell-Moyle]

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

[Matthew Pennycook]

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

--- Later in debate ---

[Matthew Pennycook]

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

[Lloyd Russell-Moyle]

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

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

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

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

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

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

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

I, too, urge the Minister to accept the amendment. It is common knowledge that London is at the sharp end of the pressures in this respect, and the need for a more flexible approach is pressing.

The Government are missing a recognition that the private rented sector, and moves within it, are not as they were, as we touched on earlier. The profile of renters is now completely different compared with the situation a decade or two ago, so the needs of households need to be accommodated in the management of the sector. There are more families in the sector and, as my hon. Friend the Member for Brighton, Kemptown said, we need to ensure that families with children are given sufficient lead-in time to move their children between schools. For families with two or three children, that can involve finding a way of moving children in primary school and secondary school and between nurseries. These are major logistical tasks.

--- Later in debate ---

[Lloyd Russell-Moyle]

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

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

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

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

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

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

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

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

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

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

[Matthew Pennycook]

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

[Lloyd Russell-Moyle]

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

[Matthew Pennycook]

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

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

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

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

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

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

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

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

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

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

--- Later in debate ---

[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.

--- Later in debate ---

[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.

[Matthew Pennycook]

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

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

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

[Matthew Pennycook]

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

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

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

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

[Lloyd Russell-Moyle]

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

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

[Jacob Young]

indicated dissent.

[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.

--- Later in debate ---

[Matthew Pennycook]

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

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

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

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

[Lloyd Russell-Moyle]

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

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

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

[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.

--- Later in debate ---

[Matthew Pennycook]

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

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

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

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

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

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

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

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

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

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

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

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

[Lloyd Russell-Moyle]

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

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

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

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

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

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

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