Renters (Reform) Bill

Written evidence submitted to the Renters (Reform) Bill Public Bill Committee by the Nationwide Foundation (RRB35)

About the Nationwide Foundation

 

1. The Nationwide Foundation is an independent national charity which seeks to bring about a housing system that provides more decent and affordable homes for those in need. We aim to influence systemic changes to the housing system by supporting, testing and evidencing solutions.

2. One of the Foundation’s key focuses is transforming the private rented sector (PRS) so that it provides more decent, secure and affordable homes, particularly for vulnerable renters. For the past ten years, we have funded and supported research and projects which aim to transform the PRS and improve the lives of renters. We are partners in and have funded the Renters Reform Coalition, a coalition of twenty leading housing and homelessness organisations.

3. Since 2019 the Nationwide Foundation has funded the five-year RentBetter study which seeks to understand whether and how private renting reforms introduced in Scotland since 2017 are having the desired impact on renters by increasing security of tenure, empowering tenants, protecting against excessive rent increases, and improving renters' overall experience. Waves 1 and 2 of the research have provided evidence on the impact of tenancy reforms in Scotland, and how the Renters (Reform) Bill can be strengthened to better protect renters in England. [1]

Executive Summary

 

4. The Nationwide Foundation has been working for a long time towards tenancy reform that will provide increased security and rights for 11 million renters in England. We believe that a system that works for both tenants and landlords is a healthy system, and we know there are many excellent landlords out there who take providing a home seriously and support this legislation.

5. The Nationwide Foundation’s focus is on protecting vulnerable private renters and this legislation is a step in the right direction to reducing the harm the system is currently inflicting on vulnerable tenants.

6. The Nationwide Foundation welcomes the end of section 21 evictions and urge government to implement this element of the legislation as soon as possible.

7. The Nationwide Foundation believes that the new mandatory no-fault repossession grounds introduced in the legislation are open to abuse by a minority of landlords, who can use the grounds untruthfully in retaliation for renters asking for repairs or challenging poor practice. The evidence on tenancy reform in Scotland, where similar mandatory no-fault grounds were introduced, shows that this is the case. [2]

8. The Nationwide Foundation therefore believes that the Renters (Reform) Bill should be amended to:

8.1. Require landlords to provide sworn statements to the court regarding their intention to move themselves or a family member in if using the new mandatory repossession ground 1, or evidence that the sale process is underway for landlords using the new sale repossession ground 1A.

8.2. Prohibit landlords from re-letting the property for a year following the eviction of tenants using either grounds 1 or 1A.

8.3. Provide a clear legal mechanism for tenants to seek redress if they are evicted using grounds 1 or 1A and then the property is re-let.

9. We believe that these amendments to the Renters (Reform) Bill will go a long way in protecting renters against revenge evictions and drive up the confidence of tenants be able to ask for repairs or make a complaint.

10. The Nationwide Foundation welcomes the property portal and believes this can drive considerable improvements for tenants, landlords, and local authorities.

11. The Nationwide Foundation believes that the property portal has the potential to significantly minimise enforcement problems if it requires that landlords are not legally able to let a property until the property is independently certified as safe. Therefore the Renters (Reform) Bill should be amended to require that an independent property assessment is completed on a property and uploaded to the portal before it is let out. The independent property assessment would confirm compliance with safety standards such as the Housing Health and Safety Standards Rating or Decent Homes Standard, and any other relevant checks at the property. Independent property assessments which proactively ensure landlord compliance with relevant safety regulations will significantly reduce the enforcement burden on local authorities and will always be better for tenants, who can be confident that they won’t move into an unsafe property.

12. The Nationwide Foundation believes that local authorities require increased resourcing for the legislation to be successful. Legislative changes, particularly on standards, are only relevant if enforced properly.

13. The Nationwide Foundation welcomes the new Ombudsman, and believes that it, if well implemented, can drive improvements for tenants and landlords.

Protecting vulnerable renters from unfair evictions using new mandatory grounds

 

14. Protecting vulnerable renters through this legislation is paramount. While the Renters (Reform) Bill will and should increase protections for all renters, government should be mindful that those who need increased rights and protections most are vulnerable renters. They are more likely to be housed by unscrupulous landlords and their lack of consumer power means they have greater fear of an expensive house move if they are evicted after asking for repairs.

15. RentBetter research in Scotland, carried out by Indigo House and funded by the Nationwide Foundation, found that vulnerable tenants have not benefitted in the same way as their better off peers from tenancy reform. When the equivalent of section 21 evictions in Scotland were removed, some landlords found that they could continue to carry out revenge evictions by abusing the new sales and landlord moving in grounds.

16. For instance, RentBetter researchers spoke to a private renter called Luke who lived in a property with rats and maggots falling through the kitchen ceiling. The property was let on a private residential tenancy, Scotland’s new open-ended tenancy following their rental reforms. The landlord refused to address the issue for months despite requests by his tenant, but was forced to remove the dead rats and maggots after Luke took his case to the Scottish Tribunal. Shortly after winning the case, Luke was evicted from his home with the landlord using the new mandatory repossession ground for sale. Soon after Luke moved out, the property appeared back on the market and was re-let.

17. We know that vulnerable renters are the ones who suffer most if there aren’t sufficient safeguards around new mandatory no-fault repossession grounds.

18. For the Renters (Reform) Bill to benefit vulnerable renters, the Bill needs amending to protect against unscrupulous landlords abusing the new mandatory no-fault grounds to evict renters who challenge poor practice or ask for repairs.

19. To use grounds 1 and 1a, landlords should be required to provide evidence that they are selling or moving back in.

19.1. To use the moving in ground (ground 1), the landlord or family member should provide a sworn statement to the Court setting out their intention to move into the property. Sixteen weeks after possession is granted, they should provide a further statement to the court, showing that they have used the ground as intended or justifying that they had changed their intentions and why.

19.2. To use the sale ground (ground 1a), landlords should provide objective evidence that the sale process has begun, for example, evidence that an agent has been instructed, or the appropriate documentation for marketing drawn up.

20. Landlords who evict tenants using the new selling or moving back in grounds should be prohibited from re-letting the property for a year following the eviction of tenants. The current three months is not sufficient to act as a meaningful disincentive to landlords. A year’s prohibition from re-letting the property is required to prevent some landlords from dishonestly using the new grounds.

21. The Bill should be amended to provide a clear legal mechanism for tenants to seek redress if they are evicted on one of the new mandatory repossession grounds and then the property is re-let. This should be an existing redress mechanism such as a Rent Repayment Order, and will empower tenants to enforce their rights, and disincentivise landlords from dishonestly using the new grounds.

22. Good landlords doing the right thing, which is the majority of landlords, would not be affected by amendments to the Bill along these lines.

The Private Rented Sector Database

 

23. The provisions set out in the Bill to establish a private rented sector database (also known as a property portal) are strongly welcomed by the Nationwide Foundation. We believe this will create an essential tool for driving up PRS standards, improving landlord compliance, supporting enforcement teams, and supporting landlords to understand their rights and responsibilities.

24. The Nationwide Foundation has been calling for something akin to the property portal for many years. We funded a research report called the ‘The Evolving Private Rented Sector’ which was published in 2018 by Julie Rugg and David Rhodes. [3] We support the recommendations within this report regarding the functioning of the private rented sector database. It called for landlords to be required to register a property on a database in order to let their property, for the database to be accessible to tenants, and for the database to record breaches of regulation by landlords.

25. Based on that research, we believe that the Renters (Reform) Bill should be amended to require an independent property assessment to be completed on all properties before they are let out. The independent property assessment would confirm compliance with safety standards such as the Housing Health and Safety Standards Rating or Decent Homes Standard, and any other relevant checks at the property. It would be a requirement of registration on the property portal that an independent property assessment is submitted, meaning the property could not be legally let out before the assessment had taken place. This independent property assessment has also been referred to as an ‘MoT’-style property licence or inspection, and further detail on its operation can be found within the Rugg and Rhodes report. [4]

26. By requiring an independent property assessment, the burden of compliance would shift from over-stretched local authorities to landlords and the property portal. Importantly, this will act as an alternative to increased funding for local authority enforcement.

27. In addition to the above, we believe the Bill should be amended to require appropriate information to be on the database, including:

27.1. Contact and address details of landlords and agents, and details of each of their properties.

27.2. Details of past enforcement action against landlords and agents, as well as Rent Repayment Orders and banning orders.

27.3. Eviction notices (and therefore the use of eviction grounds), enabling easier identification of instances where there may have been abuse of the grounds.

27.4. Up-to-date information about the rents charged for properties.

27.5. Basic safety information, including a gas safety certificate, Electrical Installation Condition Report (EICR) and proof of smoke and carbon monoxide alarms, and be joined up with the Government’s register of Energy Performance Certificates (EPCs).

28. Including details of eviction notices served at each property and up-to-date information about the rents would support local authority enforcement, provide consumer choice for tenants, and allow a greater understanding of the private rented sector and affordability.

Enforcement

 

29. The Nationwide Foundation believes that proper enforcement of any new regulation is fundamental to the Bill’s success. Legislative changes, particularly on standards, are only relevant if enforced properly.

30. The RentBetter research on tenancy reforms in Scotland demonstrated that even if legislative change happens, it has limited effect without proper enforcement. Tenants living in poor housing still struggled to access local authority enforcement when their complaints about repairs were not dealt with. Landlords were not therefore incentivised to complete repairs and tenants continued to live in poor conditions without any other recourse to address their problems. In addition, compliant landlords queried the value of more laws when there was already inadequate enforcement, pointing to the need for existing enforcement mechanisms to target resources on non-compliant landlords.

31. Currently, enforcement in the private rented sector in England is often inconsistent, ineffective and hard for tenants to access. Examples of this are provided in a report by Greater Manchester Law Centre and Greater Manchester Tenants Union (the Foundation funds a project by Greater Manchester Tenants Union). [5]

32. For instance, Greater Manchester Tenants Union supported a renter called Irie who was living with her two children in a property with severe disrepair: there was no hot water because hazardous gas appliances had been turned off, a serious leak into her bathroom, mould and damp throughout the property, and a rat infestation. She complained to her local council about this disrepair, but struggled to get them to take any action. When they did visit the property two months after the call, they only informally asked the landlord to complete repairs and did not carry out any formal enforcement action. The property was never properly repaired.

33. Local authorities must therefore have proper resourcing and skills to be able to enforce the law.

The Ombudsman

 

34. The Nationwide Foundation welcome provisions to introduce a PRS Ombudsman. If successfully delivered, we believe this will widen tenants’ access to redress.

35. Our RentBetter research on tenancy reforms in Scotland investigated the effectiveness of Scotland’s First Tier Tribunal, which is a comparable formal avenue of redress for tenants. The findings from this research tell us that the Ombudsman in England must be properly resourced, straightforward to access, and set up to encourage tenant and landlord engagement. It should also not compromise on the ability of tenants to use the legal system to get justice.

Notice periods

 

36. The Foundation believes that the Renters (Reform) Bill should be amended to provide four months’ notice to tenants when they are evicted on the new mandatory no-fault eviction grounds, rather than two months’ notice proposed in the current version of the Bill.

37. Particularly for vulnerable renters with less market power, finding a suitable new home is extremely difficult and two months is simply not long enough.

Periodic tenancies

 

38. The Foundation welcomes the introduction of periodic tenancies as a method for the government to deliver on its promise to rebalance the relationship between tenants and landlords and provide consumer protection to tenants. It is a critical part of the package of reforms and as such must not be removed from the legislation.

Protected period

 

39. Renters should be protected from eviction under new mandatory eviction grounds for the first two years of a tenancy, rather than the six months proposed at present, which is no better than the status quo where tenants have a tenancy with a minimum length of six months.

In-tenancy rent rises

 

40. To prevent backdoor evictions through unaffordable rent increases, the Bill should be amended to include a cap on in-tenancy rent increases at the lowest of either inflation or wage growth.

Discretionary grounds

 

41. Courts should be given maximum discretion to identify if there are good reasons why an eviction should not take place. The advantage of discretionary grounds is that the Court is empowered to consider all the circumstances of a case. All possession grounds should be made discretionary.

42. Short of this, some element of discretion should be introduced for those possession grounds where it will be most effective.

42.1. The Bill should be amended to allow suspended possession orders where a tenant is in rent arrears (grounds 8 and 8A).

42.2. The Bill should be amended to apply a ‘Greater Hardship’ test where the landlord seeks to evict due to selling or moving in Grounds 1 or 1A.

Changes to anti-social behaviour repossession ground

 

43. The Nationwide Foundation believes that possession grounds for anti-social behaviour should not be amended. The proposed replacement within ground 14 of ‘likely to’ with ‘capable of’ creates too broad a definition of anti-social behaviour.

44. Tenants falling into this category could easily include victims of domestic abuse, tenants with mental health problems, and tenants in shared houses. This ground could lead to a serious increase in the eviction of very vulnerable people.

Impact of reform on PRS supply

 

45. The most recent English Housing Survey data shows that the PRS has grown since 2019 despite reforms like increased stamp duty and the end of buy-to-let mortgage relief, and despite landlords knowing that tenancy reform is coming.

46. While it is true that some landlords are under increased pressure because interest rates have increased dramatically since 2022, these challenges are financial and are not the result of any forthcoming tenancy reform.

47. The growth of the PRS in England suggests that most homes being sold by a landlord are being bought by another landlord.

48. Where landlords sell up, the primary concern should be for tenants who will face a particularly stressful search for a new place to live. If higher interest rates are likely to prompt more sales, this underlines the need for better protections for tenants affected, such as longer notice periods.

Replication of Scottish reforms

 

49. The Foundation has been asked by the committee to provide evidence regarding any areas where we believe it is beneficial that the Renters (Reform) Bill does not replicate Scottish tenancy reform.

50. In comparison with the Scottish Landlord Register, the Private Rented Sector Database has the potential to be more accessible to renters, who at present rarely use the Scottish register as they are not aware of it.

51. In comparison with the Scottish Tribunal, the Ombudsman has the potential to be more accessible to renters.

For further information please contact:

Joshua Davies, P rogramme M anager for Transforming the Private Rented Sector at the Nationwide Foundation

joshua.davies@nationwidefoundation.org.uk

Hannah Slater, E xternal A ffairs M anager at the Nationwide Foundation

hannah.slater@nationwidefoundation.org.uk

November 2023