The Renters Rights Bill has started moving again through the Parliamentary process after a bit of a hiatus. This post looks at the report on the committee stage, and the third reading.

The proceedings (which you can watch online here and read in Hansard here started at 14.14 and ended at 19.00. A long time.

My young dog was so outraged that I was ignoring him for such a long time that he managed to chew up and disembowel a lap tray I had bought my husband as a Christmas present. By the time I noticed, there were small polystyrene balls all over the carpet and we had to shut him in the kitchen while we picked up what we could and hoovered up the rest.

He didn’t like that.

But then, I suppose I am lucky to be able to have a dog at all.

There were sad stories given in the debate by MPs about constituents who had been refused permission for family pets and emotional support animals for their sick children, some of whom had to be put down after forced moves. Not to mention all the heartrending tales of families evicted after many years and being unable to find anywhere else suitable to live.

Landlords who provide decent homes for families and who look after them properly should be very proud of themselves and the service that they give.

But back to the report and debate.

Introduction to the debate

It started with the minister, Matthew Pennycook, discussing the bill and the various government amendments (many of which were technical and minor in nature) which had already been made (note that I will only be referring here to amendments which affect the private rented sector):

• An amendment to ground 6A which provides for the Judge to require landlords to pay compensation to tenants where the tenants are being evicted due to the landlord’s fault – for example, if they have been refused an HMO license.
• Exempting assured tenancies in London from the 90-day rule if tenants leave before 90 days, the landlord will not be found to have provided temporary sleeping accommodation.
• An amendment clarifying the types of accommodation which need to meet the decent homes standard.

The Minister then went on to discuss the new amendments made during the committee stage:

Prohibition of rent payments in advance of the tenancy

New clauses 13 and 14. Rent in advance of the tenancy start will be limited to one month’s worth of rent. This is to prevent tenants from being excluded from accommodation by demands for high levels of rent in advance. This is particularly unfair if the accommodation turns out to be in poor condition.

Clause 14 will amend Schedule 1 of the Tenant Fees Act 2019, making payments of rent in advance over the allowed amount a prohibited payment. This would make landlords and letting agents subject to Local Authority enforcement action and a fine of up to £5,000.

Clause 13 will amend the Housing Act 1988 to prohibit rent in advance other than save as allowed (one month before the tenancy starts and then on a regular basis according to the period of the tenancy). Note that this does not affect landlords requiring the payment of monthly rent during the tenancy being paid at the start of the relevant period rather than at the end (as is the common law rule).

If tenants want to pay rent in advance, though, the amendment does not prohibit this. The prohibition is against landlords asking for it.

The amendment will mean that tenants cannot be required before the tenancy to pay more than:

• A holding deposit of 1 weeks worth of rent (which must be refunded or put towards the rent as agreed within the time limit)
• The deposit of up to 5 weeks worth of rent (or the fee for an alternative scheme should the tenant prefer this), and
• The first month’s rent (or four weeks’ worth if the rent is weekly).

Limit on signing student tenancy agreements

This means that the new ground 4A for evicting students who outstay will not be available if the tenancy is agreed more than 6 months before the date of occupation.

However, note that as this possession ground is limited to HMOs, non HMO student accommodation will have no reason to comply.

In any case, the main problem worrying student landlords is not students overstaying (most are only too happy to leave at the end of the academic year) but students being able to give two months’ notice and leave early.

Guarantors for family members not to be liable after the tenant’s death

This was prompted by a case where the family of a student who took his own life were forced to pay rent on his student accommodation after his death.

The amendment provides that any guarantee clause providing for rent after the death of a tenant, where the tenant is a ‘family member’ will be of no effect.

‘Family member’ will include spouses, civil partners and cohabitees of the guarantor, children, grandchildren, parents, grandparents, siblings nieces or nephews, uncles or aunts and cousins.

Guarantors by non-family members will continue to apply. Note, however that this is an insurable loss which may be a better way for landlords to protect against this situation.

Database and Redress scheme fees

The basis on which these are to be calculated has changed so they can include ‘all relevant costs’, although we are told that fees must be ‘reasonable and proportionate’. Further details will be set out in delegated legislation.

Rent Repayment orders

These are to be strengthened further, making it clear that orders can be made against any landlord in the chain, irrespective of who rent is paid to by tenants.

Amendments to Ground 7

This is the ground landlords can use to evict occupiers after the death of the tenant. This amendment removes the possibility of using Ground 7 where the person who inherits was residing in the property, except where the deceased person had themselves inherited the dwelling or where the tenancy is a “special tenancy” (for example, for supported or temporary accommodation).

Amendments to clause 30

This removes the first option discussed in my blog post here.

Points raised in the debate:

There were numerous references to military accommodation which is not currently within the scope of the act. Many MPs feel it should be but the Minister disagreed saying it is something for the MOD to deal with.

David Simmons (the Shadow Housing minister) was concerned about the bill taking away ‘landlords’ opportunity to make allowances for financially riskier tenants, such as those with a poor credit record, through rent in advance or other safeguarding arrangements that give the landlord confidence that they will not lose out. This could lock financially vulnerable people out of the rental market. He expressed concern about how Local Authorities’ enforcement action would be resourced.

He also stated that after the next election (assuming presumably it is won by the Conservatives), they would ‘put things right for landlords and tenants’.

Gideon Amos for the Lib Dems said that they supported the ‘key principle’ of the bill, namely ending no-fault evictions. They were concerned, however that the same possession laws that Purpose Built Student Accommodation (PBSA) enjoy should extend to ‘off street student accommodation’. Bearing in mind that some 31% of properties on the Accommodation for Students website are not HMOs.

He, along with other MPs during the debate, also wanted landlords to be obliged to give permission for home adaptations for disabled tenants where a home assessment has been carried out.

They would limit rent in advance of a tenancy to two months rather than one month.

They are concerned about second homes and short lets, which in many areas are depriving local residents of somewhere to live.

Florence Eshalomi is the Chair of the Housing, Communities and Local Government Committee. She supported the bill, saying that unjustified evictions and big demands for rent in advance, which are driving tenants into debt, must stop. One in six private renters are relying on credit to make ends meet.

She, along with other MPs, was also concerned that referring rents to the First Tier Tribunal would not give enough protection against oppressive rent increases as the ‘market rent’ depended on the rents set by landlords.

Jeremy Corbyn was concerned about landlords taking action before the bill became law, including evictions. However, the minister said that, regrettably, there was no way that they could prevent ‘bad practice’ before the bill is in place.

Jeremy Corbyn also pointed out the lack of proper advice for tenants due largely to the reduction in legal aid funding.

Points made, concerns expressed, and requests for further measures by other MPs (many of whom were tenants) included:

• A request for a review of the Bill’s impact on the housing market after a year
• Concern about landlords’ names and addresses being included in the landlord’s register and, therefore in the public domain
• Further changes to prevent discrimination, such as scrapping right-to-rent checks and reforming the laws around guarantors more generally.
• The need for Local Authorities to be properly funded so they will be able to carry out enforcement work
• Tenants should have the right to withhold rent when repairs are not carried out within appropriate timescales
• Rent controls (numerous MPs called for these), which we were told are an established part of private renting in 16 European countries
• Help for disabled tenants, 19% of whom live in the private sector, when they require adaptations, as the Equality and Human Rights Commission is not effective, and it is difficult for tenants to appeal a refusal
• Restrictions on when landlords can ask for a guarantor, e.g. when referencing shows that tenants can afford the rent, when housing benefit or the housing element of universal credit is to be paid direct to the landlord or where the landlord has relevant insurance cover
• Concern that there is insufficient help for tenants to navigate the tribunal system

Perhaps one of the most interesting (for landlords) contributions was from Mike Reader MP (Northampton South Labour) who is a landlord who said:

I can tell hon. Members that, in my experience, evidence from across the world shows that similar regulations have not prevented growth in the private rented sector. To take Ireland, for example, it introduced protected tenancies way back in 2004, but that sector has doubled and it continues to grow and thrive with those controls in place. Looking at Germany, Australia, Sweden and across the developed world, we see that rebalancing between landlords and tenants has meant that private rented sectors have flourished. The reality is that countries with strong regulation on rental standards have seen faster growth than those that do not have it.

Let me clear: this Bill is pro-market, not anti-landlord. It will help create a more stable rental sector in which good landlords can thrive and bad landlords are held to account. This is good for tenants, it is good for responsible landlords and it is good for our economy.

I am sure we all hope that is the case.

The Minister sums up

At the end of the debate the Minister responded to some of the questions and arguments made. Here are some of the points he made:

With regard to the Shadow Minister’s concern that landlords would have inadequate protection if rent in advance was abolished, he said:

Landlords will continue to be able to take a holding deposit of up to one week, a tenancy deposit of five or six weeks’ rent and up to one month’s rent in advance before a tenancy has begun. They will also be free to undertake the necessary referencing and affordability checks to give them confidence that a tenancy is sustainable for all parties. If and when they are not satisfied by the outcomes of pre-tenancy checks, options are available to tenants and landlords to ensure that rent in advance need not be used—requesting a guarantor or engaging in landlord insurance, for example.

So far as fixed terms are concerned, he said

fixed terms mean that tenants are locked into tenancy agreements without the freedom to move should their personal circumstances change, and compel tenants to pay rent regardless of whether a property is fit to live in, reducing the incentive for unscrupulous landlords to complete repairs. For that reason, the Government remain firmly of the view that there is no place whatsoever for fixed terms of any kind in the new tenancy regime that the Bill introduces.

So far as short lets and second homes are concerned, the government is aware of the problem and is looking at alternative ways of dealing with it. They are not ‘kicking it into the long grass’

The government are not going to delay in introducing the bill but are aware that

court readiness is essential to the successful operation of the new system. That is why my officials and I are working closely with the Minister for Courts and Legal Services and her team to ensure that the Courts and Tribunals Service is ready when the new tenancy system is brought into force.

On the question of rent control, he said

the Government sincerely believe that the introduction of rent controls in the private rented sector could harm tenants as well as landlords by reducing supply and discouraging investment. While I fully appreciate that there is a broad spectrum of regulation that falls under the title of rent control, there is, as we debated at length in Committee, sufficient international evidence from countries such as Sweden and Germany, cities such as San Francisco and Ontario, and the Scottish experience since 2017, to attest to the potential detrimental impacts of rent control. For that reason, we believe that we should proceed on the basis of the protections that the Bill provides against unreasonable within-tenancy rent rises, as well as wider action to improve affordability, not least support for the growth of the build-to-rent sector.

On the request to limit guarantors, he said

I appreciate fully that obtaining a guarantor can be difficult for some prospective tenants, and I understand the reasoning behind his amendment. However, I am also mindful that in some instances the use of guarantors can provide good landlords with the assurance necessary to let their properties to tenants who may otherwise find it difficult to access private rented accommodation. For example, there are those with a poor credit history—the kind of tenant who the shadow Minister worries our rent-in-advance amendments will harm. Having considered this issue in great detail, I ultimately concluded that limiting guarantors could inadvertently make life more difficult for certain types of renter. That said, I will keep the matter under review

On the proposal for Rent Repayment Orders where landlords fail to sign up to the Ombudsman and PRD database he said

we have significantly strengthened the RRO provisions in the previous Government’s Renters (Reform) Bill. However, I took the view that it would be inappropriate to extend rent repayment orders to non-criminal breaches …. Instead, local authorities will be able to issue civil penalties for the initial failures in question, with the possibility of higher financial penalties and RROs if landlords fail to sign up, having been fined.

So far as home adaptations for disabled tenants is concerned, he said that the Equality Act already covers this. Particularly as the bill removes the threat of retaliatory eviction.

Final matters

The government’s amendments were all passed (as expected), and the bill received its third reading.

It will now proceed to the House of Lords.

Further Information

Landlord Law will be running an online Renters Rights Bill  Conference in 11 and 12 March 2025 when the bill will be explained in detail.  Speakers include solicitors, barristers and other experts.

Find out more here.  Blog readers can get a 10% discount with coupon code TE43NQ92.

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