Renters (Reform) Bill

Written evidence submitted by Generation Rent to the Renters (Reform) Bill Committee (RRB18)

Generation Rent is the voice of private renters across the UK. We are a non-profit campaigning for every renter to live in a secure, quality and affordable home.

Executive Summary

0 - Overview - Generation Rent welcomes the Renters (Reform) Bill. It is a long-awaited and much needed piece of legislation. The intention of the Bill, a "rebalancing of the relationship between landlords and tenants" according to the government’s own White Paper A fairer private rented sector, is to be applauded but there is a risk that some aspects of the Bill could continue to undermine security of tenure. We outline these concerns and propose areas for amendment below.

1 - Court Reform and implementation delay - Generation Rent is disappointed by the proposal to delay the implementation of the abolition of Section 21 no-fault evictions until the court system has been reformed. We do not oppose court reform, but we reject the premise that it must be completed before Section 21’s abolition can be successfully implemented. Current data available from both England and Scotland (see point 1.2) suggests that removing Section 21 will not cause a significant increase in court activity.

2 - Section 21 Evictions and Tenancy Reform - This Bill sets out a comprehensive plan of reform, the most important of which is the abolition of Section 21 ‘no-fault’ evictions, which are a leading cause of homelessness. Section 21 is unfair and unsustainable, therefore the Bill must robustly prevent arbitrary evictions in order to Section 21, but the Bill contains loopholes and elements of continued insecurity which must be addressed to ensure that tenants are genuinely protected (see points 2.2 and 2.3).

3 - Property Portal - The proposed property portal will act as a national register of landlords, linked to rental properties. While Generation Rent welcomes this, specific enforcement measures (see point 3.2) are required in order for it to be an effective system, while there is scope for the portal to go further in collecting pertinent information.

4 - Rent Repayment Orders - Enforcement that compensates tenants will be vital to make a fairer Private Rented Sector and ensure that landlords are disincentivised from breaching the new eviction grounds and other regulations. Rent repayment orders (RROs) are an effective mechanism for this, and they should be included in the Bill for key offences (see point 4.2).

5 - Ombudsman, Decent Homes Standard and Improving Conditions - Generation Rent welcomes, in principle, a new Private Rented Sector Ombudsman. We eagerly await the details of this Ombudsman role, as well as the introduction of a Decent Homes Standard, which we are also awaiting confirmation on. Moreover, to give proper protections to private renters, who suffer disproportionately from damp and mould issues and fuel poverty, the Bill must include timescales for landlords to act on damp and mould in the style of ‘Awaab’s Law’, which has recently been introduced to the social housing sector only.

6 - Economic Evictions and Affordability - Economic evictions, where a landlord raises the rent so high that it forces the tenant out, remain possible under the current wording of this Bill. Therefore, a mechanism is required to limit in-tenancy rent increases to the lowest of inflation and wage growth, in order to give greater security to tenants and prevent homelessness.

7 - Students - Proposals to change the current stated intention of the Bill regarding students must be treated with caution. Any variation to the rights of student tenants must at a minimum be targeted to prevent arbitrary eviction by the back door on families containing one student, or other households outside of the intended remit.

8 - Discrimination - This Bill requires further changes to protect tenants who face discrimination based on our protected characteristics, benefit status, right to rent or care status.

9 - Energy Efficiency - In order to reduce fuel poverty and tackle the climate emergency, tenants must not be disincentivised from applying for government energy efficiency grants. The Bill should make sure that tenants can feel the benefit of home improvements without risk of eviction or a rent increase if the landlord chooses to cash in on the property post-upgrades.

10 - Pets - Generation Rent welcomes the provision that landlords cannot unreasonably withhold consent when a tenant requests to have a pet in their home.

Submission

1: Court Reform and Implementation Delay

1.1 Generation Rent opposes in the strongest possible terms the proposal to delay the implementation of the abolition of Section 21 evictions until court reform, as yet unspecified in timescale, has taken place. Removing Section 21 is the cornerstone of this legislation’s promise to rebalance the relationship between landlords and tenants and without doing so at the earliest opportunity, this Bill will not improve tenants’ situations. Tenants face so much insecurity when we complain about poor conditions, request repairs or try to put down roots in our communities while Section 21 evictions continue to exist. Any further delay condemns us to further insecurity, all the while Section 21 continues to be a leading cause of homelessness. [1]

1.2 We also reject the premise that the courts must be reformed for this legislation to be effective. The argument that landlords will struggle to gain possession of properties on a large scale because of delays in the court system in the absence of Section 21 is undermined by the Scottish experience, which suggests that tenants will not challenge a notice if we do not feel we have a case. Scottish Government data indicates that 204 eviction cases went to tribunal in May to November 2021, and 142 such cases in September 2019 to March 2020. [2] This is a very small proportion of the rental market, which suggests that post-reform we will continue to see many tenants moving out without challenging the notice.

1.3 Some landlords also argue that tenants in rent arrears will face County Court Judgments against us, from which they claim we are currently shielded by a preference from landlords to use Section 21. However, tenants already face these judgments under the current system. Courts made more possession orders under private sector Section 8 processes than Section 21 processes in the five years 2018-22, indicating that most rent arrears cases already go through Section 8. [3] We are therefore unlikely to see a dramatic increase in eviction-related court cases or County Court Judgments following the introduction of the measures in the Renters (Reform) Bill.

2: Section 21 Evictions and Tenancy Reform

2.1 Despite the Government’s manifesto promise to abolish no-fault evictions, the Bill proposes a number of grounds through which tenants can be removed from their homes through no fault of their own. These grounds include loopholes which could be exploited by landlords, meaning continued insecurity for tenants. Without changes, many if not all renters risk being no more secure in their home than they are now, meaning that the Bill will not achieve its stated aims. As such, Generation Rent proposes the following amendments.

2.2 The proposed two-month notice period for an evicted tenant to leave their home, and six-month initial protected period in which no eviction can take place, leaves renters evicted under any new legitimate no-fault grounds in the same practical position as we currently are under Section 21. The notice period should be a minimum of four months to give sufficient time for evicted tenants to find a new home. To strengthen security of tenure, the Bill should be amended to make tenants immune from no-fault evictions for at least the first two years in their home.

2.3 Enforcement against abuse of the new eviction grounds must be strong enough to deter landlords from falsely using no-fault grounds in order to avoid repair obligations or raise the rent. A three-month no letting period is not a substantial enough deterrent, especially as a significant number of landlords own their property mortgage-free and will not be so affected by the loss of income. [4] A twelve-month period would be more appropriate, and non-adherence with it should come with a rent repayment order (see point 4.1). The no-let proposals also only apply when the tenant has left voluntarily after being served a notice, and not after a court has awarded possession. This is a significant oversight as if the eviction is legitimate then there is no reason for a no-let period not to apply.

2.4 Furthermore, the Bill should be amended to protect tenants from the financial burden of an eviction which was no fault of their own. An unwanted move costs tenants £1700 on average, and if we are evicted through a landlord-need no-fault ground, we should not bear the burden of this cost. This is especially pertinent in the case of eviction for sale, where a landlord (if genuine in their intention to sell) will be receiving a significant windfall as a part of this sale, which far outweighs the cost of compensating the tenant for the significant inconvenience of being removed from their home. Generation Rent proposes the value of two months’ rent as a sufficient relocation payment, enacted through the non-payment of the final two months’ rental payments.

2.5 Introducing open-ended tenancies for all tenants is a vital part of the Bill that we welcome. Open ended tenancies give more security for tenants who wish to remain in their home and community for the long-term, without fear of being forced out at the end of a fixed term as is currently the case. Tenants do not usually wish to leave their homes within six months without a very good reason and therefore we do not see the need to introduce a minimum term for tenants.

2.6 Generation Rent shares the concerns of the Renters’ Reform Coalition regarding Ground 8A, which we believe is a heavy-handed and severe provision, which will almost certainly lead to unfair evictions. It will affect many tenants who, generally, pay their rent without difficulty. Between isolated periods of arrears, a tenant may be fully up to date with their rent and could have very quickly made up the arrears in full if they were given the opportunity. It does not take account of the reasons why a tenant would face delays in receiving a lump sum, accrue eight weeks’ arrear s or more and then be able to pay the arrears back in full. There are also acute concerns surrounding the disproportionate effect it will have on victims of domestic abuse. The existing Section 8 ground for eviction already provides for landlords to evict for rent arrears. In particular, Ground 10 already allows for landlords to evict tenants who have fallen into recurrent rent arrears at the discretion of the courts, which is a significantly more even-handed approach.

3: Property Portal

3.1 Under current proposals, the property portal is missing the opportunity to act as both an enforcement mechanism against landlord abuse of no-fault eviction grounds, and as a useful information hub to identify trends in the private rented sector.

3.2 The Bill should require landlords to be registered with the portal in order to serve a valid eviction notice, and the Bill should be amended in order to mandate that landlords must log eviction notices and outcomes on the property portal. These simple changes will incentivise all landlords to comply with registration to the portal. It will also assist local authorities in enforcing the no-let period associated with those evictions. For example, if an unscrupulous landlord were to evict a tenant on the basis of intention to sell the property but then sought to re-let it at a higher rate, logging that eviction on the portal would mean that the property would be clearly marked as unable to be rented out during the no-let period. This easy change would reinforce the protections tenants gain from the abolition of Section 21 evictions, as well as assist local authorities in their work and ensure that compliant landlords no longer share the housing market with their unscrupulous counterparts. The portal provides an excellent opportunity to record actual rents. Expanding its remit to require landlords to provide rental data, including serving of Section 13s (formal notice of a rent rise to a tenant), would create a new source of data on rents which could then be analysed. This recommendation was suggested by the Levelling Up, Housing and Communities Select Committee. [5] EPC information should also be available on the property portal to check property compliance and help to identify opportunities to reduce fuel poverty and tackle the climate emergency.

3.3 Landlord licensing is still required. The property portal is designed to work in conjunction with existing licensing schemes and it is good that the Bill has outlined it as such. The portal does not go as far as licensing when it comes to enforcing standards and protecting tenants from unsafe homes. The scope of licensing enables effective local authority standards enforcement and therefore must be protected even after the introduction of the portal.

3.4 Currently an eviction notice is only valid if a landlord has given their tenant: a written tenancy agreement; an Energy Performance Certificate; a Gas Safety Certificate (if there is a gas supply); an Electrical Safety Record; a government How to Rent guide; as well as information on where their deposit is protected. The Bill removes these except for the deposit requirement. It is already commonplace for landlords to fail to give these important documents to their tenants. Minority ethnic and lower-income renters in particular are already routinely not being given these documents by their landlords. [6] In the transition towards a fairer private rented sector, it is therefore vital that that the only incentive landlords have to provide tenants with these documents is not removed. The property portal offers a practical solution in ensuring that landlords must give their tenants these important documents in order to rent the property to them through it.

4. Rent Repayment Orders

4.1 Rent repayment orders (RROs) are an effective tool for two reasons. They compensate tenants for wrongdoing by their landlord and incentivise tenants to assist enforcement efforts to identify breaches when they occur. This is a system which is currently effective within landlord licensing schemes – in London between 2020 and 2022, local authorities took legal action against 167 rental properties for licensing offences, but in the same period there were 252 RROs relating to licensing, indicating that renters have an essential role in enforcement. [7] This Bill should be amended to employ RROs for the following scenarios.

4.2 RROs should be in place for tenants who have fallen victim to landlords who abuse the system by re-letting the property during its designated no-let period. This will disincentivise landlords from illegally employing a landlord-need eviction ground only to re-let the property within its no-let period.

4.3 Awarding RROs to tenants whose landlords are not compliant with the portal would drive up compliance with the scheme by giving tenants an incentive to check their landlord’s registration status, and as such specifically target criminal landlords while leaving good landlords unaffected. At present, this is proposed by the Bill but only where the landlord provides false information or repeatedly fails to register, dulling the incentive for tenants to report non-compliance.

4.4 Similarly, landlords who do not comply with the minimum energy efficiency standards should also be subject to a RRO, to ensure that the tenant is incentivised to report their illegal conditions and that we are sufficiently compensated for the hardship faced through higher energy bills. One in four private renters lives in fuel poverty, and almost one in 20 homes in the private rented sector are let out below the minimum energy efficiency standard of EPC F and G. This is an acute problem and one which requires a tenant-oriented solution. [8]

5: Ombudsman, Decent Homes Standard and Improving Conditions

5.1 Generation Rent supports the introduction of a Decent Homes Standard for the private rented sector and awaits details of its inclusion. One in four private renters (23%) lives in a non-decent home, and one in seven lives in a home with severe "Category 1" hazards. [9]

5.2 We also support, in principle, the introduction of an Ombudsman but require further detail to make an informed judgement. Its success depends on publishing decisions so that tenants can understand what types of problems are worth pursuing through the Ombudsman, and landlords can see that poor practices have consequences. Its powers to hold landlords to account must be clear and enforceable, with the required resources to effectively handle complaints and resolve disputes.

5.3 Fuel poverty, damp and mould are acute issues in the private rented sector. It is imperative that this Bill equalises the protections for private tenants to those of social tenants by introducing an equivalent of ‘Awaab’s Law’ (Social Housing (Regulation) Act 2023). It must contain fixed timelines for tangible action to be taken by the landlord when reports of dangerous damp and mould are made.

6: Economic Evictions and Affordability

6.1 Economic evictions, where a landlord asks for an unaffordable rent increase to drive a tenant out or discourage complaints, remain possible under the Bill in its current form. Therefore, the Bill must be amended to include a mechanism to limit in-tenancy rent increases. We propose that this limit is set at the lowest of either inflation or wage growth, to prevent unaffordable rent increases being used as a backdoor eviction method.

6.2 The First-tier Tribunal has a number of functions in the rental market, including determining rents where a tenant believes their landlord’s proposed increase is excessive. We oppose the departure from the White Paper position which would allow the tribunal to allow more than the landlord’s requested amount. This will disincentivise tenants from using this vital service.

6.3 More broadly, this Bill does not address the affordability of rented homes, which is another crisis tenants face. In September 2023, the Office for National Statistics rent index, which covers existing as well as new tenancies, recorded the highest rate of rent inflation since the series began in 2006, and rents now represent the highest ever proportion of wages. [10] Generation Rent research shows that last winter, paying the rent was the biggest concern of private renters and the cost-of-living crisis has only worsened in that time. [11]

6.4 Bidding wars, in which tenants are encouraged to outbid one another for access to a property, have increased seven-fold since 2018, with 21% of over 1,000 respondents to Generation Rent’s 2023 survey reporting this practice. Changes to this Bill to outlaw or discourage this practice should be explored.

7: Students

7.1 A specific ground for eviction in student tenancies has been planned and Generation Rent notes this with caution.

7.2 A mechanism which exempts student properties from the protections of the Bill would create a two-tier system which could leave students vulnerable to retaliatory eviction or trapped in unsafe homes. It could also render student tenancies more attractive to landlords, reducing supply to other tenants. Generation Rent supports students retaining the same rights as all tenants under the Bill.

7.3 Students are not a homogenous group with the same housing need. Any change to tenancies or eviction grounds must maintain obligations on landlords to prevent abuse and ensure students outside traditional student-only house shares get mainstream protections, with a clear and tight definition of which households are classified as ‘student’ under this system. Many students need to retain the flexibility of an open-ended tenancy because they are mature students, their courses do not run to traditional times, or they live with a non-student group (e.g. with their families). Amendments must not be allowed to permit arbitrary eviction by the back door of families containing one student, or other households outside of the intended remit. Given the nature of concerns, any changes must apply only to students living together in Houses in Multiple Occupation (HMOs); they must receive all the other protections afforded to tenants under the scope of the Bill, and any new eviction ground must be only enforceable around the cycle of the academic year.

7.4 If the government proposes amendments, these must set out tangible protections for student renters, including details around which tenants are to be classified as ‘student tenants’. Before doing so, the government must consult with student unions, student representative groups and other stakeholders, to identify any unintended consequences of singling out students for separate or reduced rights as tenants.

8: Discrimination

8.1 Consideration should be given to using the portal to better capture the experience of renters with protected characteristics and the discrimination that we face. How this could work while avoiding any unintended consequences should be the subject of government consultation with protected groups.

8.2 Generation Rent welcomes the proposal to formally ban the practice of ‘No DSS’ discrimination against tenants who receive benefits and we look forward to seeing the detail of this.

8.3 The Bill offers an opportunity to end discriminatory Right to Rent checks, currently enforced under the 2016 Immigration Act. Although landlords must not make assumptions about who has the right to rent, the Public Accounts Committee found that 25% of landlords were unwilling to let to non-British passport holders. [12] Moreover, the Joint Council for the Welfare of Immigrants (JCWI) found that it takes twice as long for BME and migrant peoples to find a home to rent compared to a white British person. [13] In practice, Right to Rent acts as a discriminatory barrier for many people who have the right to rent in England in accessing tenancies.

8.4 Care leavers face barriers to accessing a private tenancy because of the requirement of a guarantor, Generation Rent’s partnership with NYAS (National Youth Advocacy Service) has shown. Out of the 151 local authorities in England with a children’s social care department, Freedom of Information requests by the ‘Care Leaver Offer’ website showed that 91 (60%) will not act as a guarantor for care leavers wishing to access private renting. [14] Of those local authorities that do act as guarantors ‘in principle’, they often stipulate conditions to their support such as it being case-by-case, at senior management discretion, only if the care leaver is in higher education or for just a limited time after the young person has left care. We believe the Bill should be amended to set out a requirement for local authorities with corporate parenting duties to act as guarantors as and when care leavers seeking to rent a property need them.

9: Energy Efficiency

9.1 Generation Rent is disappointed by the government’s abandonment of proposals to raise the Minimum Energy Efficiency Standards (MEES) for private rented homes from Energy Performance Certificate (EPC) Band E to C. We believe that it is a vital measure to reduce both fuel poverty and carbon emissions while improving more than two million homes in England. [15]

9.2 In order to continue improving energy efficiency and ease the burden on landlords which was cited as the reason for halting the transition, new measures must be introduced to improve access to grants. To incentivise tenants to apply for these grants, we must be sure that we will feel the benefit of the improvements without risk of eviction or a related rent increase if the landlord chooses to cash in on the property post-upgrades, thus capturing the benefit intended for the tenant. Safeguarding tenants against these scenarios will benefit the landlord, who will have their costs of compliance with MEES offset by government and their asset improved, as well as the tenant who will have a safer home and make savings on their energy bills.

10: Pets

10.1 Generation Rent welcomes the provision that landlords cannot unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge unfair decisions.

Endnotes


[1] UK Government (2023) “ Mortgage and Landlord Possession statistics: July to September 2023 ” . Available at: https://www.gov.uk/government/statistics/mortgage-and-landlord-possession-statistics-july-to-september-2023 [Accessed 10th November 2023].

[2] Scottish Government (2021 ) “ A New Deal for Tenants – draft strategy: consultation ” . See Section 2.1 . Available at: https://www.gov.scot/publications/new-deal-tenants-draft-strategy-consultation-paper/pages/6/ [Accessed 10th November 2023].

[3] UK Government (2023) “Mortgage and Landlord Possession statistics: July to September 2023”. Available at: https://www.gov.uk/government/statistics/mortgage-and-landlord-possession-statistics-july-to-september-2023 [Accessed 10th November 2023]. The Ministry of Justice records 98 , 728 “Private Landlord” i.e. Section 8 possession claims in 2018-22 compared with 81,261 “Accelerated” i.e. Section 21 claims in the same period.

[4] UK Finance (2022) “Market Commentary – August 2022”. Available at: https://builtplace.com/market-commentary-august-2022/ [Accessed 10th November 2023]. See Figure 4. There are more than 5 million private rented homes in the UK but only approximately 2 million buy-to-let mortgages, according to UK Finance.

[5] Levelling Up, Housing and Communities Committee (2023) “Reforming the Private Rented Sector: Fifth Report of Session 2022-23”. Available at: https://committees.parliament.uk/publications/33924/documents/185831/default/ [Accessed 10th November 2023].

[6] Generation Rent (2023) “End Renting Inequality”. Available at: https://assets.nationbuilder.com/npto/pages/7817/attachments/original/1682694926/GR_End_Renting_Inequality_v6.pdf?1682694926 [Accessed 10th November 2023].

[7] Generation Rent 2023 analysis of data from First Tier Tribunal and Mayor of London’s rogue landlord database . Further details available on request.

[8] UK Government (2022) “English Housing Survey 2021 to 2022: headline report”. Available at: https://www.gov.uk/government/statistics/english-housing-survey-2021-to-2022-headline-report/english-housing-survey-2021-to-2022-headline-report [Accessed 10th November 2023].

[9] UK Government (2022) “English Housing Survey 2021 to 2022: headline report”. Available at: https://www.gov.uk/government/statistics/english-housing-survey-2021-to-2022-headline-report/english-housing-survey-2021-to-2022-headline-report [Accessed 10th November 2023]. Stock Annex Tables 2.3 and 2.4 .

[10] Zoopla (2023) “ Rental Market Report : September 2023 ”. Available at: https://www.zoopla.co.uk/discover/property-news/rental-market-report/ [Accessed 10th November 2023].

[11] Generation Rent (2022) “Paying rent is biggest concern for private tenants as half face hike”. Available at: https://www.generationrent.org/2022/12/19/paying-rent-is-biggest-concern-for-private-tenants-as-half-face-hike/ [Accessed 10th November 2023].

[12] UK Parliament (2022) “PAC: Private rented housing “failing far too often to provide safe and secure homes”. Available at: https://committees.parliament.uk/committee/127/public-accounts-committee/news/165326/pac-private-rented-housing-failing-far-too-often-to-provide-safe-and-secure-homes/ [Accessed 10th November 2023].

[13] JCWI (2023) “Right to Rent”. Available at: https://www.jcwi.org.uk/right-to-rent [Accessed 10th November 2023].

[14] Care Leaver Offer (2023) “Care leaver local offer: Compare Council Performance”. Available at: https://www.careleaveroffer.co.uk/ [Accessed 10th November 2023].

[15] Generation Rent (2023) “Energy Efficiency in the Private Rented Sector: Using tenancy reform to tackle fuel poverty and reduce carbon emissions”. Available at: https://www.generationrent.org/wp-content/uploads/2023/08/Energy-Efficiency-in-the-Private-Rented-Sector.pdf [Accessed 10th November 2023].

[15]

[15] 10 th November 2023

 

Prepared 15th November 2023