Protecting rough sleepers and renters: Interim Report Contents

3Protecting renters

18.On 18 March, the Secretary of State announced that tenants across both the private and social rented sectors would not face eviction during the crisis.41 The Coronavirus Act 2020 amended the notice period for landlords seeking possession from two months to three months,42 and the courts issued Practice Direction 51Z which suspended all ongoing and any new housing possession claims for 90 days until 25 June, subject to review and extension.43 The Government has committed to explore the potential of expanding the pre-action protocol (PAP), used in claims by social landlords, to the private rented sector.44 The Government also raised the Local Housing Allowance rate to the 30th percentile.45 On a broader front, renters may benefit from the range of other coronavirus measures introduced by Government, including the Coronavirus Job Retention Scheme.

Legislating to prevent evictions

19.The measures are welcome, but as many submissions pointed out to us, the Government has not prevented tenants being evicted. From 25 June—or later if extended—there will be a cliff-edge when eviction proceedings can begin again. Shelter told us:

The current temporary suspension of evictions in the county court is the only significant protection for England’s 11 million private renters, the majority of whom are still at a perpetual risk of being evicted for no reason whatsoever, under Section 21 of the Housing Act 1988.46

As soon as courts begin processing possession claims once more, tenants can be evicted under section 21 of the Housing Act 1988, which requires no specific reason for possession, and under mandatory ground 8 of section 8 of the 1988 Act, because in these cases possession is mandatory as long as the correct procedure has been followed.47 Jamie Carswell of London Councils warned of councils facing a “tsunami”:

My colleagues, particularly in London, are filled with dread at the thought of facing a cliff edge when the evictions extension expires under the current emergency legislation. If we are not to face a tsunami of those who are served with a section 21 and then end up presenting themselves to their local authority in late June or early July, we need a way of removing that cliff edge and a series of measures to create a far more sustainable degree of security in the private rented sector.48

20.In response to this danger, the Government has proposed extending the pre-action protocol, currently applied to social landlords seeking possession, to the private rented sector. The Secretary of State told us this would put “a duty on the landlord to work in good faith with their tenant”, and that pre-action protocols would need to be complied with before rent arrears-based possession proceedings could commence.49 The Minister of Rough Sleeping and Housing told us the Department was “still in the scoping phase of trying understand [what is] deliverable that will be effective and do everything possible to encourage that early conversation between the landlord and the tenant”, adding later that the Government wanted to work within the existing framework of legislation, and noted that “non-compliance still results in a party being penalised”.50 Although the Minister is correct that breach of a PAP may be taken into account when a judge makes a decision about who pays legal costs—potentially meaning the landlord could be deprived or some or all of their costs—the tenant would nonetheless be evicted, as a court must give possession if the requirements of mandatory ground 8 or section 21 have been satisfied.

21.We received evidence which argued the pre-action protocol would not be sufficient to prevent evictions under section 21 or for a ground 8 rent arrears claim. Giles Peaker, a housing solicitor, told us in those circumstances that “failure to comply with a PAP simply cannot prevent a possession order being made, or indeed result in a delay to a possession order being made to any significant degree”.51 In a similar vein, Citizens Advice told us:

In theory, Courts should take into account whether this protocol has been followed when considering what orders to make in social housing. However, this only applies to discretionary grounds in practice. Private landlords rarely use only discretionary grounds–they may use either ground 8, section 8 of the Housing Act 1988 (a mandatory ground), or section 21, or both.52

22.We are wary of the Government reliance on conversations between landlords and tenants which have little legal force. Housing security for renters should not rest with individuals. The Government is already aware that tenants require greater security in the rental sector: it said as much in the Queen’s Speech background briefing notes on the planned Renters’ Reform Bill.53 Legislating to protect tenants from the minority of landlords lacking compassion does not invalidate the premise that most landlords behave in good faith; it protects those at the sharp edge of the crisis from facing homelessness.

23.At the moment, judges cannot exercise any such discretion for section 21 applications or mandatory ground 8 section 8 applications, as discussed. We append to this report an example Bill which would achieve the desired result. The Government should use this as a starting point for a short, focused Bill, and introduce it before Parliament as soon as possible to ensure it receives Royal Assent in advance of the 25 June.54 The Government will need to ensure it extends the same protection to the social rented sector, which would require similar amendments to rent arrears grounds under the Housing Act 1985.55

24.Unless the Government amends existing housing legislation, its plans to introduce a pre-action protocol to the private rented sector will be toothless and will fail to prevent a cliff edge of evictions once the moratorium on possession cases ends. We recommend the Government bring forward legislation to amend the 1985 and 1988 Housing Acts to allow judges to use discretion where a tenant is in rent arrears due to the coronavirus crisis for the next 12 months at a minimum. Discretion could include consideration of whether a pre-action protocol has been complied with. These amendments should be delivered through a short Bill—such as we have proposed—which must be introduced to Parliament as soon as possible.

Abolishing section 21

25.The Government already intends to abolish the use of ‘no fault evictions’ by removing section 21 of the Housing Act 1988 through the proposed Renters’ Reform Bill.56 John Hall, Director of Homelessness at MHCLG, told us that the Department was “committed to bringing forward the Renters’ Reform Bill as soon as we can”, but wanted to make sure “when we do the legislative change, it is the right one”.57

26.The abolition of section 21 was a common theme in the written evidence we received. The Chartered Institute for Housing called for the Government to tackle the insecure nature of private rented sector tenure by abolishing section 21 evictions “as the starting point for long-term reform” of the private rented sector.58 Shelter, the housing charity, said the Government has already accepted that “the relationship between landlord and tenant must be rebalanced” and it was essential that the Government followed through on its promise to improve security for private renters by scrapping section 21 evictions.59

27.As long as section 21 remains on the statute book, it will remain an option for landlords. The insecurity of tenants has been put into sharp relief by the coronavirus crisis, so it is important the Government moves the Renters’ Reform Bill up its legislative agenda. By amending the Housing Act 1988 to allow judges to use discretion for coronavirus-related rent arrears for 12 months, the Government creates breathing space to develop a Bill which has the support of both tenants and landlords. It is important that the Bill also delivers longer assured shorthold tenancies. We would welcome an early opportunity to consider the contents of such a Bill.

28.The Government must accelerate its plans to introduce the Renters’ Reform Bill to Parliament and abolish ‘no fault evictions’ under section 21 of the Housing Act 1988 within the next 12 months. By amending the Act to allow judges to exercise discretion, the Government will have time to deliver a Bill which provides greater security for tenants.

Local Housing Allowance

29.The Local Housing Allowance (LHA) rate determines the maximum financial support renters can claim in the private rented sector. In response to the crisis, the Government readjusted the LHA rate to the 30th percentile of local market rents from April for universal credit and housing benefit claimants, reversing the freeze on the benefit introduced in 2016.60 MHCLG estimated this was an additional £1bn of financial support and would benefit over 1m households, with claimants on average receiving £600 more a year.61 Jon Sparkes of Crisis said that “the local housing allowance [increase] overnight has made a difference, even under the most testing of circumstances”.62

30.The rise in the LHA rate was warmly welcomed in our written evidence, although several organisations called for the Government to go further. The National Residential Landlords Association, who represent around 80,000 private landlords, said many tenants were still concerned they will be unable to pay their rent despite the benefit safety net, and called for the LHA rate to be raised further to the 50th percentile.63 Generation Rent made the same recommendation, as well as calling for the household benefit cap to be lifted, citing Shelter research that found tenants in London may face shortfalls of over £1000 due to the cap.64 When we put this to the Minister, he rejected raising it to the 50th percentile, noting that if tenants still have a gap between rent and the LHA, the Government has increased the hardship fund and special housing payments.65 We note that many of the announcements by Government on the LHA rate do not include analysis of how many people have benefited from the change, and what gaps might still remain for renters. If it is the Government’s intention to ensure tenants can pay rents by subsidising their income through the benefit system, it must be aware if shortfalls exist and take further action.

31.The Government must ensure that the Local Housing Allowance (LHA) rate is set at a level that reflects real market rents and ensures those in need are able to afford properties in their areas. We call on the Government to guarantee that the LHA rate will be maintained at the 30th percentile long-term. We also ask the Government to conduct work on what the impact on renters and the wider rental market would be of raising LHA rates further.

41 Ministry of Housing, Communities and Local Government, Press release: Complete ban on evictions and additional protection for renters, 18 March 2020

42 Coronavirus Act 2020, s81 & Schedule 29

44 Ministry of Housing, Communities and Local Government, Press release: Complete ban on evictions and additional protection for renters, 18 March 2020

46 Shelter (IOC234)

49 Oral evidence taken on 4 May 2020, HC (2019–21) 302, Q103

51 Giles Peaker (IOC310)

52 Citizens Advice (IOC170)

54 If the Government extends Practice Direction 51Z, it would have more time, although the summer recess may shorten opportunities.

55 Giles Peaker (IOC310)

58 Chartered Institute of Housing (IOC160)

59 Shelter (IOC234)

61 Ministry of Housing, Communities and Local Government (IOC308)

63 National Residential Landlords Association (IOC127)

64 Generation Rent (IOC242)

Published: 22 May 2020