Renters' Rights Bill

Written evidence submitted to the Renters Rights’ Bill Public Bill Committee by the Nationwide Foundation (RRB51)

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 over 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-one leading housing and homelessness organisations.

3. Between 2019 and 2024, the Foundation funded the RentBetter study to investigate the impact of tenancy reforms introduced in Scotland in 2017, many of which mirror the proposed changes within the Renters Rights Bill. The research sought to understand whether and how the reforms have had the desired impact on renters by increasing security of tenure, empowering tenants, protecting against excessive rent increases, and improving renters' overall experience. [1]

4. The Nationwide Foundation welcomes the introduction of the Renters' Rights Bill, which will significantly improve conditions for millions of renters in the PRS in England. We are pleased that the proposed legislation builds on and goes further than its predecessor, the Renters (Reform) Bill, proposed under the previous government. We particularly welcome the ending of section 21 evictions as soon as possible, the introduction of open-ended tenancies and longer notice periods, the expansion of Rent Repayment Orders, and the introduction of a private rented sector database and PRS Ombudsman.

5. However, while there are many positive aspects of the Bill, there are key areas where we believe further amendments are necessary to ensure that renters, especially the most vulnerable, are sufficiently protected.

Security of tenure

Protection against retaliatory evictions and the abuse of mandatory grounds for possession:

6. We welcome the government’s intention to abolish section 21 evictions as soon as possible, removing the ability to of landlords to evict tenants without giving a reason. However, while these ‘no reason’ evictions will cease to exist, ‘no fault’ evictions will continue, specifically where landlords claim they need to sell the property or move back in.

7. We have significant concerns about the potential misuse of the new mandatory no-fault grounds for possession. Our research into the experience of tenants in Scotland shows that these grounds can be abused by landlords seeking to evict tenants who challenge poor practices or request repairs. The research found that in the case of at least one in five renters evicted by a landlord who said they intended to sell, the property was not ultimately sold.

8. For instance, our research highlighted the case of a tenant named Luke, who was forced to leave his home after taking his landlord to a tribunal over serious disrepair. Despite winning his case, the landlord used the mandatory ground for selling the property to evict him, only to re-let the property shortly afterwards. Such practices undermine tenancy reform and leave tenants vulnerable to retaliatory evictions.

9. In Scottish Law, landlords must provide objective evidence that they intend to sell when using this ground (‘pre-eviction evidence’). Despite this, the grounds continue to be abused. Therefore, we recommend that the Renters’ Rights Bill be amended to require landlords to provide objective and unequivocal evidence that they are genuinely selling the property or moving back in. For example, a landlord claiming to move into the property should provide a sworn statement to the court and follow up with proof that they have in fact taken residence after possession is granted.

10. In addition, the Renters’ Rights Bill should introduce an automatic right to non-payment of the last two months of rent where a tenant is being evicted under new no-fault grounds. In cases where the landlord is receiving rent directly from the Department for Work and Pensions, this compensation should be paid directly to the tenant. This provision would prevent abuse of the new grounds for eviction by encouraging landlords to only use these no-fault possession grounds when absolutely necessary, and in the case of Ground 1A, encourage landlords to sell with sitting tenants. It would also allow tenants to be better able to save for a deposit for a new tenancy during their notice period.

11. We welcome the expansion of Rent Repayment Orders to help tenants enforce their own rights and to provide a disincentive for landlords to circumvent the law.

Periodic tenancies and protection from eviction:

12. We fully support the introduction of periodic tenancies, which will provide tenants with greater security and flexibility. This is a key part of the government’s promise to rebalance the relationship between tenants and landlords. By ending fixed-term tenancies, tenants will no longer face the uncertainty of potentially being asked to leave when their tenancy ends. This will provide much-needed stability for tenants, particularly the most vulnerable.

13. However, we believe the government should go further to protect tenants from eviction in the first two years of their tenancy. A longer protected period would prevent landlords from serving no-fault eviction notices in the early years of a tenancy, ensuring that renters can feel secure in their homes.

In-Tenancy Rent Increases to prevent no-fault evictions:

14. We provide further evidence below regarding the deployment of in-tenancy rent increases in Scotland in relation to affordability. However, it is important to also understand the relevance of these measures as a means to improve security of tenure. Without limits to increases of rent within tenancies, landlords will continue to be able to carry out no-fault evictions by raising rents to unaffordable levels.

15. If a tenant challenges a rent increase in the Tribunal, the Bill introduces measures to prevent a landlord setting the rent higher than the ‘open market rent’. While this change is welcome, it will have very limited impact. Our RentBetter research showed that in Scotland under 1% of tenants had ever formally challenged a rent rise. The Tribunal is inaccessible to renters and so will not be a viable means to prevent excessive rent increases.

16. To prevent backdoor evictions through unaffordable rent hikes, we support a cap on in-tenancy rent increases. A cap tied to the lower of inflation or wage growth would provide tenants with stability and prevent landlords from forcing tenants out by increasing rents drastically.

Discretionary Grounds for Possession:

17. We strongly advocate for all grounds for possession introduced in the Bill to be made discretionary. This would allow the courts to take into account all relevant factors in a case, including the tenant’s circumstances, and would provide judges with the flexibility to avoid or delay evictions where appropriate. Discretionary grounds would be particularly important in cases involving vulnerable tenants, such as those with mental health issues or those who have fallen into temporary financial hardship. What’s more, similar reforms in Scotland made grounds for possession discretionary, and there is little evidence that such reforms worsened court backlogs.

Enforcement, regulation and understanding

18. For the government to have any chance of succeeding in its aim of rebalancing the private rented sector, it must ensure that renters can know and use their rights, and that the new regulations within the Bill can be properly enforced. There are a variety of measures both within the Bill and outside of it that, if delivered effectively and if working in conjunction together, can ensure the Bill fulfils its potential.

Strengthening Enforcement and Local Authority Resources:

19. The RentBetter research has produced clear findings that without a properly functioning system of measures to enforce the law in Scotland, legislative change has often had little impact on the lives of renters. Without effective enforcement, tenants living in poor conditions are frequently left without recourse to justice when landlords refuse to carry out repairs, and compliant landlords feel that non-compliant landlords are not being held accountable. Even if tenants know their rights, they struggle to obtain support or legal redress. Of the one thousand renters interviewed as part of the research, only 10 (1%) had ever contacted their local council enforcement team.

20. We recommend that the Bill includes provisions for additional ring-fenced resources for local authorities, particularly in areas with a high concentration of rental properties. While the government has committed to provide an increase of funding as a result of new burdens placed on local authorities, this will be insufficient in the face of the current significant underfunding of local authority PRS teams. A full review of local authority PRS enforcement funding is needed, taking into account the existing and new burdens on local authorities to enforce, the new mechanisms introduced by the Bill to support better enforcement, and the potential for innovation to support better enforcement.

21. We welcome provisions within the Bill to encourage collaboration of local authorities and to require local authorities to report on their enforcement activity.

Introduction of the private rented sector database:

22. We strongly support the Bill’s inclusion of a provision to establish a private rented sector database. This database is critical to raising standards in the PRS by improving transparency, landlord accountability, and the ability of local authorities to enforce regulations.

23. The database has strong potential to support better tenant access to and understanding of the sector, landlord knowledge of their role and responsibilities, and local authority ability to enforce effectively. It can only fulfil this potential if delivered effectively. To ensure it can deliver, we recommend that the Bill must direct what information the database should include.

24. The database should include more detailed information on properties, such as:

24.1. Full contact details of landlords and agents.

24.2. A history of enforcement actions against landlords and properties.

24.3. Copies of relevant safety documents (e.g., gas safety certificates, Electrical Installation Condition Reports, and Energy Performance Certificates).

24.4. Eviction and possession notices and up-to-date details of rent levels for greater transparency, offering more insight into the affordability crisis.

24.5. Information about the accessibility of properties.

25. These features will ensure that the database can be a robust tool for tenants, landlords, and local authorities, and it will enable more effective enforcement of PRS regulations. The Nationwide Foundation is funding further research into effective functioning of the database to support enforcement, and will update ministers and officials on this in early 2025.

Expansion of selective licensing:

26. Selective licensing schemes are a vital method of improving local authority enforcement, both by increasing resources to local authorities and ensuring local authorities can target enforcement efforts on high-risk areas. We are clear that the introduction of the Database does not mitigate the need for strong selective licensing; rather it should support and complement an expansion of selective licensing schemes.

27. The government should therefore support local authorities to deliver more and better selective licensing. Local authorities operating licensing schemes should be able to use licence conditions to improve housing conditions, the maximum duration should be extended to ten years, and the Secretary of State’s veto powers should be removed.

Introducing a PRS Ombudsman:

28. The creation of a PRS Ombudsman is welcome. This will offer tenants a formal route to seek redress when they experience problems with their landlords, without needing to resort to the courts. Our RentBetter research into changes in tenancy law in Scotland and the effectiveness of Scotland’s First Tier Tribunal suggests that ombudsman services are most effective when properly resourced, accessible, and equipped to handle a wide range of cases.

29. We recommend that the Ombudsman service in England adopts a similar approach to that in Scotland but should also be designed with accessibility in mind. Many renters, particularly those from vulnerable groups, may find it difficult to navigate formal systems of redress, so ensuring a straightforward, low-cost, and efficient process will be essential for success. Importantly, this system should also not compromise tenants’ ability to pursue legal action if necessary.

Tenant empowerment and awareness of rights:

30. For the Renters’ Rights Bill to be fully effective, tenants need greater awareness of their rights; the RentBetter research shows that it is one thing for renters to have rights, but another for them to know about and be able to use them. Many renters, particularly those who are part of vulnerable groups, are not well-informed about the protections available to them.

31. Legislative reform therefore needs to be part of a wider package that allows tenants to know and use their rights. The government must urgently set out what wider support it will provide to renters and what new funding will be provided to local authorities to properly enforce regulations.

Affordability

In-Tenancy Rent Increases to improve affordability:

32. Our RentBetter research in Scotland shows that rent stabilisation measures have had some positive impacts. Scottish legislation limited in-tenancy rent rises to a maximum of 3%. Prior to this legislation being introduced, our research shows that rent rises were on average higher than 3%. In-tenancy rent limits have therefore improved affordability for some sitting tenants, as well as increasing security as outlined above.

33. The government’s failure to introduce any similar measure for England means tenants are still at risk of excessive rent rises which leave them less able to pay their rent.

National Affordability Commission

34. The Bill will not address the significant affordability crisis in the private rented sector. In Scotland, our research found that none of the legislation introduced since 2017 had served to improve affordability as a whole.

35. We propose that the government should establish a National Rental Affordability Commission to investigate effective methods to make the private rented sector affordable.

36. It is also our view that to fix the affordability crisis in private renting, we need to look at the housing system beyond the PRS. To truly address affordability issues, more needs to be done to provide more genuinely affordable homes, including social homes, and we need a joined-up housing strategy that relates to and considers the housing system as a whole.

October 2024