Matthew Pennycook MP: speeches 2024

Speeches

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q Would you accept the corresponding argument from the other side that there are already very low numbers of tenants taking their cases to tribunal, and that if each of those tenants is looking at potentially one, two or three months’ worth of arrears if they challenge a rent increase and fail, that will act as a powerful disincentive against anyone going to tribunal at all? Ben Beadle: But that rent will not be applied until the date of the hearing, as I understand it, so although I understand the counter-argument, Minister, the point is that you could actually challenge a rent increase. You serve your two months’ notice; you challenge it; you wait for the tribunal to deal with it; you have your hearing cleared; and the landlord either gets it or the amount gets lowered, but that money is then not backdated.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q To pick up the point made by the previous witnesses, we took the view, which is quite finely balanced, that the potential disincentives to landlords of losing potentially up to three months’ rent increase—though we want to bring the tribunal process timelines down—could be accommodated by the sector, as opposed to tenants being disincentivised to take the case to tribunal in the first case by having the rent increase kick in from the point that the section 13 notice was served. You heard the concerns from the previous witnesses about how that would operate and the unfairness of that. With your experience, how would you say the new system would operate? We have been very clear that we want more tenants to take challenges to tribunal, though we do not want the tribunal overwhelmed. What would you say to the charge that the decision the Government have made, to put the point of payment when the tribunal makes its determination, will see a flood of cases come in and all advice groups will tell tenants to take every single rent increase to tribunal? Tarun Bhakta: We are often accused of plotting to tell everyone to take things to court. We do not think that would be the case. As you say, we want more tenants to be able to challenge their rent increase at tribunal because, particularly in the last couple of years, we have seen extremely large rent increases for tenants during tenancies. The reason we do not think there will be a flood of cases to the tribunal and the reason we would not advise tenants to do that is that, if you look at this evidence, there is very little that the tribunal is able to do at present to address those large rent increases. We would not advise tenants to simply delay the inevitable, because, looking at the data, a large rent increase is somewhat inevitable—it might not be the exact rent increase the landlord asked for in the section 13 notice, but there is strong evidence that the tribunal will permit a very large rent increase.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q Thank you both for coming to give evidence to the Committee. Can I pick up on two points? The first is on rent increases. The Government have been very open that we have no plans to implement rent controls, and we have been clear about our reasons why. I take the point that you might have a different view, but we will set that to one side for the moment. What are your concerns around how the process in the Bill could be used by landlords as an effective section 21 by the back door? Perhaps we can have a bit of an exchange about this, but why do you think it does not provide that protection against unreasonable, within-tenancy rent increases? Tarun Bhakta: It is difficult to set that to one side, so you will forgive me if I do not.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q I have three questions, starting with court improvements. There is a shared understanding between the sector and the Government that ensuring that the Courts and Tribunals Service is prepared for the implementation of the new tenancy regime is essential. You all know that we took issue with the previous Government’s legislation, which made the tenancy regime hostage to unspecified court reforms. You mentioned investment, and I wanted to press you on precisely the type of improvements you want to see. You know that, together with colleagues in the Ministry of Justice, we are already taking forward improvements towards digitising the court possession process. What are the metrics you want to see in that process as improvements? On the understanding that —I think you will accept this—not every section 21 notice will read across to a section 8, so there will potentially be a bit of an increase, what do we need to see on the section 8 side and the tribunal side to ensure that the system is fit for purpose at the point that we switch it on? Ben Beadle: I have a couple of things to say on this, Minister. I agree that court reform has been almost like the Colonel’s secret recipe—nobody quite knows what is in it or what it looks like. It is incumbent on us to define what “the courts are ready” means in practice. For us, there are two or three areas that could be improved. First, we are getting many reports of applications that are made to the court actually running out of time because they have not been processed in time. You have the admin part of the sausage factory at the beginning, because it is not so much about the number of judges. I sit as a magistrate and I often sit around waiting for cases to come to me and to be input into the new common platform. There are delays built into the administrative process that cause frustration. The other issue we have seen is the wait for a bailiff. Once you have patiently waited for your court hearing date and you have possession, that will be what it will be, but waiting for a bailiff can take months in some areas. Sometimes there are really poor excuses—earlier this year, we saw the stab-proof vests not being available. If it is a high-risk area, you need somebody waiting out in the car and somebody on the door. London is predominantly a high-risk area, which is why we see such slow eviction timescales. Personally, we want to prevent evictions. Landlords do not go around evicting tenants willy-nilly, but when they have a legitimate case, we do expect it to be dealt with expediently. To me, court reform looks like sifting the cases more appropriately and more speedily; digitising that process so you see the ping and the pong of the evidence going backwards and forwards; and, when you get possession, an automatic link to the bailiff, rather than having to reapply. Those are three tangible things. Ultimately, though, it is seven months at the moment, and it needs to be lower.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  That issue is highlighted in the report. Tom Darling: Yes. Our view would be that where these systems have worked, they have been part of a broader strategy that sets a clear direction for both tenants and landlords. I am sure you will have other landlord organisations here today that will talk about the need for certainty. There definitely has not been that in Scotland. There has been political instability and the chopping and changing of policy every couple of years, essentially—from the 2017 reforms to the pandemic freeze, the rent cap and now moving to a system of between-tenancy rent controls, and the latest political instability. I am sure landlord organisations will tell you that that makes it very difficult to have any certainty about what you are doing with rent levels in the future. We would argue that if a Government with a big majority early on in their term set a clear direction on what the policy would be, landlords would be able to deal with that. You see that in European countries where there are big landlords who do just fine under systems where there are rent caps.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q One final question, just so that I have understood your concern. Do you question whether the tribunal has the expertise to look at all of the sources of data and evidence that are out there in relation to rents, and to make a fair assessment about market rent? Tom MacInnes: I do not know whether it is about expertise, but it is simply an observation of what always happens—it tends to end up on the high side. What the rates are is just so contested.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q Richard, thank you for your time this morning. I have put it to other witnesses that, in general, the potential of the database and the ombudsman to make a real difference as part of the new system is often underplayed and I do not think it gets enough attention. You rightly made the point that there is a spectrum between “must” and “could”, but the intention is very clear, on the tenant side, to provide access to services to deal with complaints, and there is potential on the landlord side around landlord-initiated mediation and the role the ombudsman could play there. Can you give us your best sense of how much the new PRS ombudsman could alleviate pressures on other parts of the system, including the courts? I have a follow-up question; I will ask them in one go, Mr Betts, and leave more time for others. We have been very clear already that the new ombudsman will need to work collaboratively with others to resolve complaints and that will be set out in statutory guidance. What do you think needs to be included in that guidance to ensure, in particular, that the ombudsman is working effectively with local authorities? Richard Blakeway: Those are really important questions. The Bill introduces a new framework of rights and responsibilities for both landlords and tenants and, as you set out, the ombudsman service—whoever is appointed as the ombudsman—plays a part in that. I would say as an aside very early on that I welcome the Government’s recognition of the strategic benefits of bringing together the social rented sector and the private rented sector, particularly given the common body of existing and new legislation that is tenure blind and speaks to both the private and rented sector, whether that is the existing Landlord and Tenant Act or the potential to extend Awaab’s law and the decent homes standard. I think there is a real benefit to system coherence and the right relationships, as you highlight, and also to making sure that benefits do not unintentionally fall in the wrong place, by appointing the housing ombudsman as the provider of redress. I think there are three key relationships. There is the lead enforcement body, and working out the role of that body. In particular, looking at clause 109, information sharing between the ombudsman service and the lead enforcement body will be vital, so codifying that role will be important. There is the tribunal, which we have alluded to. One of the really important pieces of work is to develop, very early on—I would have thought in advance of any statutory instruments—a draft scheme for the ombudsman service, and to collaborate with a number of bodies, including the courts, on what is in the scheme and therefore the decisions that the ombudsman might take, and what is outside it and clearly rests with the courts. I have given the example of section 13. The ombudsman could potentially play a role in looking at aspects of section 13, which might relieve pressure on the courts. There is then the relationship with local authorities and enforcement. On the database itself, I think there has to be a decision about who owns the database and is going to provide it—whether it sits with the Department or the lead enforcement agency, for example—and the pace at which it could be developed to support the introduction of the redress service. One of the other areas to consider, where there may be a pressure that emerges in the system—a pressure that I think the legislation recognises but could go further to address and relieve—is enforcement. The Government have rightly indicated that there is concern around compliance with ombudsman remedies. There was a survey in, I think, 2018 that showed 46% of private landlords not complying. At the moment, the Bill includes a kind of last resort to try to enforce compliance, which would be introduced later through statutory instruments. I wonder whether consideration should be given to bringing that forward, so that compliance issues are not having to be directed towards local authorities, and creating pressures there. I also wonder whether the legislation could go further by, for example, amending clauses 66 and 96 to include rent repayment orders as part of non-compliance with ombudsman decisions. The Bill is rightly clear that if a landlord does not sign up to the ombudsman service then it could be subject to a rent repayment order, but it is silent on whether a landlord that is non-compliant with the ombudsman’s decisions should also be subject to a rent repayment order. I think that if you were to introduce that, that would strengthen compliance and reduce the need to direct things around the system to try to address them.

• 22 Oct 2024 · Renters' Rights Bill (First sitting) · Hansard source

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  Q Given the time we have left, can I move us on? An important element of the Bill that often gets overlooked is rent repayment orders. We had quite a sensitive discussion on this matter under the previous Government’s Renters (Reform) Bill, but my experience has been that enforcement is particularly effective where you have local authorities geared up and tenants able to exercise their rights through rent repayment orders. Can you offer a general comment on whether you think we have gone far enough in trying to expand and strengthen the rent repayment order arrangements under the Bill? Tom Darling: I am happy to answer that. We were very supportive of the expanded use of rent repayment orders when we worked on the previous Government’s Bill. They are a great opportunity for tenants to avail themselves of the possibility for compensation. Some of the awards that have been increased by the Government would potentially be life-changing amounts of money for most renters. Half of renters have no savings; as a renter and someone who is very much not on the frontlines of this crisis, I try to keep that in mind the whole time. If you are getting a big award in terms of compensation of one or two years of rent repayment, because your landlord has done wrong, that is a potentially life-changing sum of money, so we are very supportive of that. I think you are right to identify that enforcement works best when the tenant is incentivised to work with the landlord. That works best when the problem is ongoing and the tenant is in situ in the tenancy. One of the problems we have with the new eviction grounds—we have seen this with the poor enforcement of the new tenancy regime in Scotland—is that when the tenant moves on from the tenancy it is hard to motivate them to follow up and check that the eviction was legitimate. Our concern is that to properly enforce the system, tenants almost need to be motivated by a sort of righteous anger to get back at their landlord. That is one of the reasons why we think post-eviction evidence should be required from the landlord, and potentially no-fault eviction compensation too, where the tenant does not have to pay the last two months of rent before they leave. That way, there will be a broader-based disincentive for landlords to use those grounds. For the vast majority of tenants, after they have been evicted, they just want to move on with their lives, and they are not thinking about their previous landlord or previous home, or checking Rightmove to see whether the landlord has re-let the property and fraudulently used that eviction ground. Ben Twomey: I completely support the call from Tom for no-fault eviction compensation. That would recognise the harm of no-fault evictions to tenants, which I think every MP here has recognised, and try to disincentive the use of any new grounds of no-fault eviction. On the rent repayment orders, I will quote the late, great Simon Mullings, a housing expert who gave evidence to the Renters (Reform) Bill Committee, and who would have been here had he not sadly passed away very recently. He talked about an “army” of tenants who could be ready to enforce the legislation. That only works if it is really clear what their rights are and the route to achieving the compensation or repayment of rent is straightforward. There is another area that could be strengthened. At the moment, if a landlord is not registered with the database or the ombudsman—the redress scheme—they need to have repeat offences before a rent repayment order is available. If I, as a tenant, found that my landlord was not registered, I would have to challenge that, wait for the local authority to make warnings based on what I had said, and then continue to live in the home, feeling probably much less secure than I previously did, without receiving a rent repayment order. If we want to make sure that landlords are not punished because they were not aware of their obligations, perhaps a smaller rent repayment order would at least give some incentive to a tenant to raise the issue on that first offence. More thought needs to be given to how to stop rent-hike evictions that could happen later, because a rent hike, being an eviction by the back door, could be another way in which I as a tenant or someone else pursuing that would feel insecure, were we to come into conflict with the landlord.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Melanie, can I address a specific question to you about suppliers? There has been a lot of discussion today about the mismatch between supply and demand. We have touched on the provisions in the Bill about how tenants can challenge within-tenancy rent increases and so on. In terms of overhauling the private rented sector, the Bill is part of a wider transformation of the housing system that we want to carry out. There is absolutely a chunk of private renters, particularly in the bottom half of the market, who should be in social rented housing, and we want to build more of that, but we also want to grow future supply in the PRS. What do you think the Bill will do specifically to build-to-rent providers? Do you think they will accommodate themselves to these changes? Are there lingering concerns that you think will impact on investment in that future supply and professionalising the private rented sector as we grow it? Melanie Leech: The first thing to say, as you know, is that institutional investment into the build-to-rent sector specifically is a growing part of the housing supply mix. It is bringing in genuinely additional investment, because it is the type of investment that does not typically invest in build to sell—you have people wanting to use large amounts of capital to generate secure income streams so that they can match against pension liabilities, insurance liabilities and so on. Probably the key word in that is “secure”. Anything that damages investors’ confidence that the income they will get from their investment is at risk will undermine our potential to unlock investment into homes and the rental sector. Currently, the peak year for build-to-rent delivery was 15,000 homes. We think that you can double that to 30,000 homes, with the right conditions, and some of my members would go further and say that you can double that again. We are looking at an investment stream that could be a very significant part of helping to deliver the Government’s aspirations to build more homes. What I have already talked about, in terms of the ability of the courts to cope with the reforms, is an important indicator of confidence. Investors will look at that and think, “This changes the basis on which I have invested. It makes it more difficult for me to manage the property efficiently.” I think the issues around rent determination also have that potential, so there is nervousness around needing to use section 13 and rent increases. There is a suspicion that tenants have nothing to lose by challenging any rent increase, so it is about getting the framework right around how we define what an unreasonable rent increase might be and how we manage those cases that might come before tribunals. There are some issues around that that we would like to see more clarity around and redressed. In general, we are really supportive, because in the part of the market that I represent the decent homes standard already would not cause us an issue in terms of implementation and so on. We are trying to raise standards in the private rented sector, and we are raising standards in the private rented sector, but the key thing is to implement the reforms in a way that does not undermine investor confidence, so that we do not inhibit the supply of homes.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q While I have got you on that point, we heard from Ben Beadle earlier a view that landlords would adapt to the date payable of a rent when challenged—I think this is what he implied—by changing the point at which they serve their section 13 notices to perhaps account for that lead-in time. What would you expect to see? Would annual increases be standard or given at a particular time? How do you think that the sector, build-to-rent and the more typical cottage landlords would adapt to that change? Melanie Leech: This is pure speculation, because I have not asked members this question. History suggests that once legislation is passed, those affected by it figure out the best way to protect their interests in the light of the new framework, so I would broadly expect that to happen. But if we are asking ourselves how we get back to a position where investors can have confidence, we should probably ask ourselves why we are asking that question in the first place. We should be creating a framework within which investors can have that confidence. For example, some of the nervousness will be around the fact that, if you have a litigious tenant who takes you to the tribunal and ultimately to the courts over a rent increase, and the decision goes in the landlord’s favour, you have still lost several months. You cannot backdate the reasonable rent increase for which you have just won the court’s authority, so you have lost a lot of money in terms of both the rent accruing and the amount of time you have to spend going through that process. Let us just remind ourselves that when I talk about landlords here, I am primarily talking about pension funds and insurance funds, so it is our money. Timothy Douglas: I think that is the point. While we need supply—and we need supply from all sources—landlords in the private sector are a broad community. The bulk of private rented sector landlords have one, two or three properties. What is disincentivising investor confidence is not necessarily the competence of this Bill, but the sector would welcome a review of all taxes and costs that have impacted private landlords in the past five years. We have seen the reduction in mortgage interest relief, the 3% additional surcharge when you buy a rented property, tinkering with capital gains tax—some are taxed as businesses while some are not—and changes to the wear and tear allowance. If we really focus and want to be sensible about incentivising landlords and the investment community, we have to shine a spotlight on taxes and costs. Alongside this legislation, we need to enact the registration requirements in the Levelling-up and Regeneration Act 2023 on short-term lets as well. Otherwise, we are going to see a further exodus of landlords to the short-term lets market, which is less regulated and has fewer controls in place. We need to build more social homes. Ultimately, as you will know, Minister, our argument remains that we need to retain fixed-term tenancies as an option. They give the landlord and the tenant a guarantee of the length of time they will be there and the rent that they will pay. Families renting with children near schools, as well as nurses who have placements, are coming to our agents saying that they want to know how long they are going to be in situ. As I say, we need to provide long-term tenancy options for those who want them and ensure that people do not go to the unregulated short-term lets market.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q I would argue that we are giving students special treatment. To be entirely candid, I took some time to come to a view on what we should do in this area. We want students to benefit from the new system, but it has unique characteristics and we want to protect the supply of student accommodation. I do not know whether you are familiar with the previous Government’s Bill, but we have narrowed the grounds for possession in an attempt to capture a typical student and not a non-typical student—say, an adult learner with children who is living in a more non-typical student property. Do you think we have that right? Are there any ways in which you would tweak it? If we were looking to take action on sign-ups in advance, what is a reasonable period when landlords should be able to ask students to sign up in advance that does not, as you say, force them all to sign up far too early and in ways they may regret or have to re-examine? What is an appropriate period in which a sign-up would be reasonable? Lastly, do you understand why the sign-up arms race, as I might put it, has developed? It is hard to find an explanation for why all landlords are locked into a cycle of earlier and earlier sign-ups; it seems to have developed organically. Could you outline why you think that problem has arisen in the first place? Victoria Tolmie-Loverseed: To take the first point, in the Bill you have proposed ground 4A for possession of student tenancies. That is definitely a helpful addition and we were glad to see it brought forward. However, at the moment it is just for HMOs, which we assume is deliberate wording, so it is for properties with larger groups of three or more people living in them, and you have excluded one and two-bedroom properties. We think that will result in a loss of smaller properties from the student housing sector. The sector is quite particular. These properties have been set up close to universities, and the businesses are run in a particular way. I can understand why you might think that one and two-bedroom properties would perhaps have more mature students or students with families living in them. Often they do, but the reason why all students rent all properties in the student market is to do with them being at university. Generally, they are in that city and living in that housing only because they are at a university nearby. We think that excluding one and two-bedroom properties is problematic, because they are quite a big part of the market—more than you would think; it is not just mature students or students with families. A national advertising platform called Accommodation for Students has given us some data on this, and 31% of the properties listed on its website nationally are one and two-bedroom off-street houses. If you were to lose that amount of property from the student market, that would be problematic. I think that is likely, because if you are in a one or two-bedroom property and you can have an indeterminate tenancy and give notice at any point, you may give notice in January when there is no demand for students, and that property will end up leaving the cycle of the student market and going into the professional market. The average is 31% across the Accommodation for Students website, but in some locations it is even higher. In Newcastle and Preston, over 50% of the properties advertised are one and two beds, so it is not just mature students; it is younger undergraduates who are living in those types of houses because they suit their needs and they are available. Losing them would be very problematic over time and would reduce the supply of housing available to students. The second part of your question was about cooling-off periods and early renting. Why does it happen? I think it is a mixture of things. Students want to secure a nice house, so they go out early and try to beat the rest of the market. In some cities, there are shortages of accommodation because student numbers have increased considerably over recent years, and there is a cap on the amount of off-street housing that there can be because of planning—article 4 direction—so we are not making any more shared student housing. Students are aware that there is a shortage, and if they want to get the house that they want, they will try to get out there earlier and earlier to beat the market. That is why it happens, but it is really problematic, so we would like it to not happen. We have suggested that if you could say to students that they could cancel that agreement up to four months before the tenancy was due to begin, it would stop early renting. There would be nothing in it for landlords to try to get properties signed earlier and earlier, because students would be able to drop out. We do not think that would be problematic. It will not be an issue for landlords as the properties will still be let, but hopefully it would stop the silliness.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q That is very useful. I have one final question. The previous Government did this as well, but the case for a specific ground for possession to ensure that the cyclical nature of the student market continues arose from engagement that said that we had to treat this differently. We do not have much data, and I wonder if you have any from your experience or what you pick up on anecdotally. How often do you think the ground for possession would actually be used? If I am being entirely candid, in my mind I can imagine it sitting there and maybe being of use on the odd occasion, but broadly I do not think that students overstay. Am I right in thinking that? Victoria Tolmie-Loverseed: No, they do not at all. It is not a problem. No-fault evictions are very rarely, if ever, used in the student housing market, because the need is cyclical, and generally most students will very happily move out when their tenancy is finished. I think it would be used very rarely, but it sends a useful signal that it is time to think about leaving. The real issue for me, and the more problematic thing that will stop the cyclical nature of student housing, is the ability of students to give two months’ notice. I understand not wanting to treat students differently from the rest of the market, but the need for housing is so tied to the particular reason of being at university. Most landlords deal with their tenancies on the basis of 12 months, and they set their rents on an annual basis. If you say, “Your tenant is able to give notice, and they might choose to leave in April or May,” those landlords will respond to that and think, “I will have to increase my rent, because I have an annual rental figure that I need.”

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Their yields are quite generous as they are, compared with what is normal. Victoria Tolmie-Loverseed: I do not have a tiny violin for landlords, but I am just saying what we think is likely to happen. It is a commercial operation and landlords need to cover their costs, and we think that if landlords perceive more risk they will seek to put up rents. Your previous witness talked about the situation in Scotland. One of the things we would really like the Government to do before going much further is an impact assessment on the student market, particularly looking at Scotland, because the evidence there about student homelessness as a result of the tenure changes is compelling. The Government in Scotland have a committee looking at how they can tackle the issue of student homelessness, and I think that is a bit of a warning for us all that we could very well be in that place in a couple of years’ time if we do not think about the student market, its particular characteristics and what it needs.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Would you accept that this is less of a problem if we are confident that the 12-month no re-let period is enforceable? Then, in a sense, there is a serious disincentive for landlords to act spuriously. Giles Peaker: Yes, hence my talking earlier about the reason to fill in the gap between the notice seeking possession or the court order, and potential enforcement, which is a bit of a lacuna at the moment.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Thank you.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Sorry to pull you up, but we have not consulted on it yet. We have not told you what it consists of yet; you are pre-empting it. Is it the principle? Judicaelle Hammond: No, it is not the principle. The issue at the moment is that what we have got, which is the decent homes standard that applies to the social sector, would not work in the private rented sector in the rural context. The other thing that we do have, however, is the housing health and safety rating system and, indeed, the minimum energy efficiency standards. We reckon that that probably covers the ground, but it absolutely needs to be enforced. I think you have already got levers there. That is what we would say.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Any more for any more? Liz Davies KC: I have two points. It is excellent that you have prevented bidding wars. Clause 4, I think, is about advance rent, and we were just discussing this outside. You cannot prevent bidding wars without also having a limit on advance rent of one month, because otherwise, you have outlawed bidding wars but the landlord will then be happily prepared to let to the tenant who is robust enough to be able to offer six months’ rent in advance, rather than one month’s rent. You get back to tenants’ financial circumstances in bidding—so that point is about advance rent. The other point is smaller and more technical, and is on the subject of homelessness. Because you are taking out assured shorthold tenancies from the homelessness regime, which allows local authorities to find people private rented sector tenancies, and you have done a lot of drafting amendments to take out the words “assured shorthold”, you have also taken out a mechanism in the Housing Act 1996 that currently allows a homeless family—where they are given an assured shorthold tenancy and that ends within two years—to reapply as homeless and where they do not have to show a priority need. It helps to deal with the revolving door of homelessness, potentially in the private rented sector. You have abolished that—I imagine inadvertently, because you are taking out the words relating to assured shortholds. However, I would suggest that you try to get that back in, so that in the more unusual cases—once this Bill has gone through—if a homeless person is given an assured tenancy in the private rented sector and it comes to an end within two years, they will be able to come back to the homelessness authority. It is section 195A of the Housing Act 1996.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Yes, that is very useful. Thank you. Anna Evans: In terms of the differences between your Bill and the private residential tenancy, I have to confess that I am not an expert on your Bill, so I cannot answer that in detail, but I can say that the PRT is an open-ended tenancy. It has no fixed-term period. There is the eradication of eviction with no grounds. Eviction proceedings are simplified to 18 statutory grounds and there has to be a reason—what are the grounds for eviction? There are extended notice periods and also a phased implementation. I think that is a key point. A lesson that the current Housing (Scotland) Bill is looking at is whether short assured and assured tenancies should actually just be terminated now because there has been long enough. There is still a good proportion of assured tenancies in existence—we estimate probably about 20%. Short assured tenancies are certainly less secure, so one lesson would be that if you are changing, do not do it over seven years; do not delay.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Thank you all for coming to give us your expert opinion. I have two questions, one specific and one general. First, to follow up on grounds 1 and 1A, I understand the general push for all grounds to be discretionary, but we took a view that these should be mandatory, in terms of getting that balance right. But I very much hear the points being made about evidential requirements. Could I ask you to draw out a bit further how you expect this to work? In a sense, when we talk about discretionary grounds, we are always told, “Let’s trust judges”—that was certainly the case with the previous Bill. In a sense, what we intend to do here is trust judges’ judgment on whether those grounds have been used appropriately, and we would expect the type of evidence that they look at to include things like a letter instructing solicitors or an affidavit. But do you not expect the courts to operate in that way on the basis of the Bill? Do you expect them to act in a more light-touch way, as you have suggested? It is not usual practice for Governments to force the courts to consider certain types of evidence, and if that is the case—if you accept that—where do we go to try to influence the courts to look at certain categories of evidence, to ensure that these grounds are being used appropriately? Giles Peaker: In terms of how you can specify things, to some degree, it is a question of wording. Grounds 1 and 1A are expressed as an intention, and if the intention is there, the ground is made out. If a landlord has written to the court to say, “I intend to sell”, it seems quite difficult for the court to go behind that, unless the tenant has evidence to the contrary. So partly it is around language. Intention—settled intention—needs looking at. But with different wording, a different evidential requirement may well follow—so potentially, as you say, the landlord would have to evidence engagement with an estate agent or a solicitor on a sale, or would need evidence from the relative who was intending to move in, to the same effect.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Given the time, I will ask you a more general question. Do you think—it sounds like you do—that the Bill broadly strikes the right balance and properly delivers for renters? Are there any omissions, things you would like us to address or parts of the Bill you think we need to look at more carefully? Anny Cullum: One area our Members feel particularly strongly about that could be strengthened in the Bill to ensure that it delivers the change we all want to see is measures against illegal evictions. It will be wonderful when section 21 is banned, but we know that there are lots of landlords who issue section 21 eviction notices in response to tenants complaining, because they do not want to maintain their properties. For that unscrupulous group, we are worried that illegal evictions might take the place of section 21 evictions once section 21s are banned. We feel that the Bill could go further to make sure that this is not an easy option for them to take. Hardly any cases of illegal eviction ever make it to court. Safer Renting data showed that there were 26 prosecutions in 2022—the year we have the most recent data for—but it knew about 9,000 cases of illegal eviction. Even when illegal evictions get to court, the fines are £1,000. That is less than my monthly rent. It is not a deterrent for the average landlord. We would like to suggest some changes to make sure that this is not used as a back door to get around the legislation. We would like to see local councils given a statutory duty and the funding to investigate all cases of illegal eviction. Recently we had a member in Leeds whose landlord kept issuing false eviction notices—ones that he could not go to his local council to ask for support with, so he stayed there. The landlord used many different underhand ways to try to force him out, including sending men with knives to cut the wires in his house so that he did not have any electricity. He has been on the phone for hours to his council and the police, and they have not been very helpful. We want to see those bodies empowered with both the duties and the money to act for tenants. Police forces need more training. I have supported tenants who landlords have tried to intimidate out of their house. The police do not seem to know that this is a criminal offence or that they have the ability to act on it, so it would be good if there was training on that. We would also like it to be made easier for people and councils to take these criminal cases forward. It can be quite hard to meet the evidence threshold needed to get a rent repayment order, so we would like to see changes there, which I have laid out in our written evidence. We would also like the civil penalty notices that councils can use to be raised to up to £60,000. I know that sounds high, but being forced out of your home with your family is a horrendous thing to happen to anyone. We want to ensure that this is treated with the seriousness that it deserves. Illegals eviction is one area that my members asked me to speak about. I have also spoken about landlord licensing. A further issue is rent in advance. We are overjoyed that this Bill will end bidding wars, which is something we have campaigned for in different places across the country. We have tried to get agents themselves to pledge not to do it and then mystery shopped them to make sure that they are not. But if you allow agents and landlords at the start of a tenancy to ask, “How many months up front can you give me? Someone else said they could give me a year”, that is another form of bidding war, just at a different point of the process. We conducted some research at the start of this month and found that benefit claimants were three times more likely to be asked for a year’s rent up front than people not claiming benefits. We are pleased that the Government are keen to crack down on discrimination in the private rented sector against people on low incomes, but this is one way that it is happening and we feel that the Bill could do more on that issue. I have two more areas that my members want me to speak to, if that is okay.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q So I think it would be worth teasing something out, because it was an interesting report. To touch on what you just said, I took from the report that the tenancy reform in Scotland seven years ago had a number of benefits for tenants, but it has not adversely affected landlords. As you say, the system has bedded in and they have adapted to it. The shadow Minister said that this is largely the same set of reforms that happened in Scotland, so could I encourage you to touch on any differences between the approach we are taking in this Bill and the Scottish experience? Could you then perhaps touch a bit more on the specific impact of the rent control measures in Scotland—which we are not proposing—on that supply issue? I recognise that there is a wider supply question about the housing market in Scotland more generally, but what did your research suggest was the impact of the rent control measures that were introduced in Scotland? Anna Evans: I will take the rent control issue first. This was nothing to do with private residential tenancy; it was the result of emergency legislation on the cost of living, which was brought in in 2021-22. That brought in a rent increase freeze and then rent increase caps. If we look at the data following that on rent increases, there are arguments around this, but basically average rent increases have not frozen or been curtailed. Some would certainly argue that rent increases in Scotland have been greater than what you could see across the UK. We should remember—I was looking at evidence on this earlier—that landlords, certainly in Scotland, usually increase rents at a change of tenancy, not on an annual basis. What happened when rent control came in, with a range of other pieces of legislation and regulation, was that it became more of a hostile environment—that is what landlords are saying—and so as a result, they tended to hike rents up more at a change of tenancy. But we have found that most landlords want good, stable tenants for a long time. Most actually do not increase rents during a tenancy, but only take the opportunity to increase rents at a change of tenancy, and because of the environment and the hostility that they were feeling, they thought they had better increase rents at change of tenancy. Does that answer your question on rent control?

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q In response to the previous Government’s White Paper, “A fairer private rented sector”, you questioned whether we should look to introduce a decent homes standard to the private rented sector. Is that still your view and, if so, could you elaborate on why? Judicaelle Hammond: Yes, sure. I think it needs updating because it was designed for problems in the social sector. It might or might not be applicable to the private rented sector. It also does not deal very well with older properties, which is the vast bulk of what our members have. To judge the private rented sector against the decent homes standard as it currently is would be, I think, misleading, and it would have all sorts of unintended consequences. For example, in small cottages in rural areas, there are typically very small kitchens and so on. They would not necessarily fit, and it would destroy the character if you were to change that—

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q We have spoken about the database before. I think it has the potential to be an incredibly powerful tool on a number of fronts to the benefit of tenants but also local authorities in bearing down on more disreputable landlords, including criminal landlords. Can you give us a sense of what you think the sector needs in terms of detail coming through in secondary legislation for that database to be able to operate most effectively for local authorities? Dr Henry Dawson: The CIEH would be keen to be part of discussions with the Ministry of Housing, Communities and Local Government about the operation of that database. I note that quite a lot of the content in the Bill is to be delivered through secondary legislation, and if we could be part of the shaping of that legislation, it would be very welcome. Things that would make it more effective include ensuring local authorities’ ease of access to the records on the database; providing local authorities with broad enforcement powers that would allow things such as the provision of information from any person; and the ability readily to access records of other local authorities’ enforcement activities. These sorts of records make it much easier for us to co-ordinate our activity across different areas of the country. Having a single database operator, providing, as one of its functions, a source of advice in the industry would also provide us with a single point of information to refer people to when they come to us asking for support. That would alleviate a lot of the burden and the time our officers spend managing these requests for information. Therefore, we would not be relying on what are often chat forums and other informal information sources for our landlord operators to address problems on what is usually a responsive and as-and-when-they-occur basis. Eighty-five per cent of landlords in the sector own one to three properties. That is roughly half the sector’s total housing stock, so those are the landlords we need to focus on trying to support. Providing advice and guidance will be an invaluable function of the database operator.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q Can I challenge you on that point, because I have never understood it? Under the rolling, periodic tenancy system that we are introducing, a family that moves into a property can determine when they leave. As long as there is no antisocial behaviour, for example, they can decide when they leave, so they have all the advantages of a fixed-term tenancy. I am not picking up on this cry among tenants for fixed-term tenancies. Perhaps you can elaborate on where you are coming from on that point? What are the additional advantages that are not provided by this rolling, periodic system? Timothy Douglas: We have just been talking about the other side of the coin, which is investors.

• 22 Oct 2024 · Renters' Rights Bill (Second sitting) · Hansard source

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  Q That is very helpful. My second question is more general, which will give each of you the chance to range a bit more freely. I know that you were engaged with the previous Bill, so you will know the debates that took place. It was very much our intention with this Bill to address the various deficiencies, omissions and, critically, the loopholes that existed. It would be good to get your views on whether you think we have broadly done that, and if not, whether there are any remaining loopholes in the Bill that you can see more disreputable landlords trying to exploit. Justin Bates KC: I will go first, because this is what we spend our time talking about. Clause 30 is wholly defective and should not be allowed to stay in this form after the Bill Committee. It is a loophole. Clause 30 presently says that something will not be an assured tenancy under your new regime if it is for a tenancy of more than seven years. So I will grant you a tenancy of seven years and one day, and I will reserve to myself, as landlord, a landlord-only right to break, exercisable after six months on two months’ rolling notice. There you go: I have just recreated section 21 and there is nothing you can do about it. You need to look at clause 30 very carefully. The reason it is in there is to fix a different problem. It is there because certain shared ownership leases and certain long leases have accidentally ended up being treated as assured shorthold tenancies, so that is what you are trying to close. The better way to solve that problem is to amend schedule 1 to the Housing Act 1988, which is the main Act you are grappling with, to say that shared ownership leases cannot be assured tenancies, and that long leases for terms of more than 21 years—which is the normal definition of a long lease—cannot be assured tenancies. And then take clause 30 out, because what will happen—as sure as night follows day, and as the entire history of housing law since 1915 shows you—is that landlords will offer seven years plus a day with a landlord-only break, because this is not an area where there is equal bargaining power. It will be, “Take it or leave it, and I’ve just brought section 21 back in through the back door.” So please look very carefully at clause 30.