Examination of Witnesses

Renters (Reform) Bill – in a Public Bill Committee am ar 14 Tachwedd 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Ben Twomey and Sue James gave evidence.

Photo of Yvonne Fovargue Yvonne Fovargue Llafur, Makerfield 2:00, 14 Tachwedd 2023

We will now hear evidence from Ben Twomey, director of Generation Rent, and Sue James, chair of the Renters’ Reform Coalition. For this panel, we have until 2.30 pm. Can the witnesses please introduce themselves?

Ben Twomey:

Good afternoon, everyone. I am Ben Twomey, the chief executive of Generation Rent. We are a campaign group campaigning for private renters across the UK to make sure that every renter lives in a safe, secure, affordable and quality home.

Sue James:

I am Sue James, chair of the Renters’ Reform Coalition, which is a coalition of 20 organisations, including national charities, national organisations, think-tanks, renters and unions. My background is as a housing lawyer for 30 years, and I have been at the coalface of the possessions duty scheme for that time. I have worked out that in the past 10 years I must have represented on at least 5,000 cases, so I come with some experience of the courts system as well. At the moment, I am the chief executive officer of the Legal Action Group, a national charity that campaigns on access to justice.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

Thank you to the witnesses for coming to give evidence to us. I want to start off with possession grounds. We have heard from the Government, and from a number of the witnesses this morning, about the need to strike the right balance between the interests of landlords and the interests of tenants. What are your views on the new and revised possession grounds in that regard, and specifically the ones we have heard some concerns about: grounds 1, 1A, 6, 7, 8A and 14Q38 ?

Ben Twomey:

Thank you, shadow Minister. On the grounds, it is important to think about the question of what actually changes for the renter experience if the Bill passes in its current form. We welcome the Renters (Reform) Bill and think it is an important piece of legislation, but on some key areas not much will change.

The Government promised to abolish no-fault evictions. The Bill does not do that. It removes section 21 no-fault, or no-reason, evictions but introduces new no-fault grounds. Particularly on grounds 1 and 1A, which are where a landlord can move a family member in or may sell the property, it is important that we put ourselves in the renter’s shoes when that happens. A no-fault notice is given. That could happen to me or any renter across England. Right now, I could go home and find one of those notices on my doorstep. I would have to be out of my home within two months. Given the current economic climate, it is going to be difficult for me to find a new home quickly, so the risk of homelessness—no-fault evictions are one of the leading causes of homelessness—is very great.

In the current wording, that situation does not change for renters, and their experience does not change. A renter receives a no-fault notice and is out within two months. We think there should be better protections there. It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live. That saves the Government money because they do not then have to support people who are in temporary accommodation or are otherwise homeless. That is one of the key areas we want to change in respect of the grounds.

Similarly, I currently have a fixed-term contract that will move under the Bill to a rolling tenancy. The minimum fixed term is six months, and as soon as that ends I can receive a no-fault eviction. Within the rolling tenancy, under the wording of the Bill, once the six-month protected period ends, again, a renter can receive a no-fault eviction. It is important that there are better protections so that there is more security for renters. We say that period should move to two years instead.

Finally, on the no-let period, if the grounds are to be introduced, they need to be enforced. It needs to be clear that they cannot be abused by some landlords. At the moment, if someone says that they are moving a family member in or that they are going to sell the property, there are three months during which the property cannot be re-let. We think that should move to one year to make sure we rule out the idea that some landlords could still do retaliatory evictions or abuse the grounds in other ways. By moving that, we make sure that tenants have that greater protection and can enforce where local authorities may not be able to. If we can put that information on the property portal in the Bill, which we welcome, it will be much easier for tenants to play a role in the enforcement and scrutinise what is happening.

As I said, I could go home today and receive a no-fault eviction. The Bill could pass and I could go home and find one and the same thing could happen. I would be out within two months and it could happen after six months of my having a tenancy. That is a big problem. If you want to reduce one of the leading causes of homelessness and save the Government money in doing so, you need to address those factors.

Sue James:

What we are talking about today is someone’s home. Over the past 20 years we have seen a huge increase in families who are living in the private rented sector, and we are talking about having enough protection for them. The private rented sector has doubled in size, so we do need to pay attention to it.

At the moment, the new grounds are all mandatory grounds, and we say they should be discretionary grounds. We want the court to make an order that will take into account the circumstances of the tenant and of the landlord. Grounds 1A and 1B, as they are currently written in the Bill, will essentially be a back door for section 21. I agree with what Ben said about improving the notice periods that are outlined in the Bill.

We also have a problem with grounds 1A and 1B in relation to the evidence. At the moment, it does not look like the landlord will have to provide much evidence. We want that to be strengthened so that you would have to have evidence that the landlord required the property for a member of their family or wanted to sell it.

The problem also is that once a landlord takes possession on that basis, or tells the tenant that they are going to seek possession on that basis, you have just a three-month period in which they are not allowed to let. That needs to be much longer—at least a year—in order to protect the tenant from unscrupulous landlords taking back their premises. Three months is not a very long time at all.

The other issue relates to enforcement. Currently, that rests with the local authority and the ombudsman. The tenant must have the right to challenge that and to take action against the landlord, including when the landlord has taken possession in court, because at the moment it is only if the tenant voluntarily leaves. It needs to be a bit more joined up in terms of having that protection.

The biggest problem is ground 8, and ground 8A in particular. I know you heard some evidence on that this morning. It is a particular problem: basing it on three times in three years when someone is at least one day in arrears is going to cause grave hardship. It has a perverse incentive, because the final time that the tenant is in arrears, a possession order will be made and they will not have an incentive to make that payment. That seems really perverse. All of that needs to be discretionary. The court absolutely has to have a look at that.

Photo of Jacob Young Jacob Young Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

Q Thank you to the witnesses. You have mentioned aspects of the Bill that need to be strengthened; what aspects do you welcome or think of as helpful? How do you think the private rented sector supply might be impacted by the reforms?

Ben Twomey:

We absolutely welcome the end of section 21 no-fault evictions—it could not come soon enough. We were promised it some time ago. For renters, that is one of the biggest insecurities we face. That is why I talk about the experience needing to change for renters. In Generation Rent, we love it when renters are aware of their rights and when they know what the system is like, yet those renters who discover they have received a section 21 suddenly become aware that the rights they have do not mean much at all, because they will be out in no time and there is not much they can do to challenge it.

One of the saddest things I have heard from renters we support is that insecurity follows them into the next home. Even when they are trying to feel settled and comfortable and to build their lives again, they are in constant fear that another no-fault eviction notice could come. It needs to be really clear that the new no-fault grounds do not keep that insecurity in the system.

We welcome the end of section 21 and we welcome the property portal. It will be really good to finally have a register of landlords. We hope to be able to put things into that portal that are not yet in the Bill: we hope that we will be able to track evictions, so that they are enforceable around the no-let grounds, and that we will be able to look at actual rents and properly monitor what goes on. One of the big advantages of ending section 21 will be that finally a reason is given for every eviction, so we can understand when things start to go wrong that lead to homelessness. At the moment, quite a lot of guesswork is happening to prevent that problem.

We also welcome an ombudsman coming into the sector, to have an equivalence with the social housing sector. As much as possible, in any way we can, we think renters should have the same rights across social housing and private renting. When the experience can be very similar, and the risks, insecurity and unaffordability are still factors across the piece, there is no reason to have a two-tier system. In fact, I would go further and say that we will have reached our goal only when homeowners start to kick themselves and say they wished they were renting because there are so many rights available, so much security of tenure and so much flexibility, and because they have organisations such as mine and Sue’s to inform people. We look forward to working with the Government to see how that ambition can happen.

Sue James:

I agree. The property portal has such potential if we get the information in there right so that there is transparency around renting. That would be amazing. We absolutely love the fact that this has been brought in. There are some changes that we think need to be made. The fact that you are looking at delaying action on section 21 is something I would love to talk about, if you would like to hear that.

Photo of Lloyd Russell-Moyle Lloyd Russell-Moyle Labour/Co-operative, Brighton, Kemptown

I will ask two different questions, then. I will ask Sue about the delay that the Government propose with the courts. Earlier, we heard from the housing ombudsperson that he is willing to cover all of this, if the Government agreed, and that he could step in with transitional measures immediately on Royal Assent, so he was unclear about why there would need to be a delay on the abolition of section 21. Perhaps you could tell us why that is the case.Q

With Ben, I would like to probe no-fault evictions, which are very expensive for the person who is not at fault. They have to pay for removal costs, a new deposit and, very often, a month’s rent up front, which is very difficult for people. Are there any ways that could be ameliorated when it is no fault and the tenancy is being curtailed early, within two months?

Sue James:

Shall I go first? You also heard this morning that the Government need to hold their nerve, and I absolutely reiterate that. The Bill has been a long time coming, and we have a crisis out there. Colleagues of mine who are at law centres have queues of people coming to see them because of this, and we absolutely need to get it right.

The county court is not the experience I have been hearing about in some of these conversations. You heard this morning that the county court is pretty much getting it right: it is not one of the courts with a huge backlog of hearings and stuff like that. When you start a possession claim, there are fixed rules around that. The case has to be listed within eight weeks, and it is usually listed in six to eight weeks. You then have a hearing before a judge, so it is not actually taking that long. You have the hearing and the court has to apply strict criteria on whether it is just and proportionate, and whether there is a reasonable defence that can be pursued.

In the court, we have a fantastic duty solicitor regime that has just been improved to include benefits advice beforehand. So you already have judges who are experienced in housing, you have duty advisors who are very experienced in housing, and then you have income officers who are at the same courts all the time. You build these relationships, and as duty solicitor, you are working out a plan where you can get the arrears paid off and get the stuff sorted out. We now have crisis navigators in law centres, and they resolve the benefit issues that are sitting behind it. Of the rent-arrears cases I have ever seen, I would say that probably about 60% to 70% have been a benefit-related problem. I think those issues are different from the issues around the court.

The only thing that you could invest more in—well, obviously if we invested more in the court that is brilliant, but I do not think we need to wait for that—is the bailiffs and the end period. Sometimes, with a bailiff’s work, it can take up to eight weeks to fix a date. That is just about money. If you address that, you do not have these problems. That is why I am saying that discretionary is the way to go, because it provides fairness.

You already have a housing court sitting there. It could do with some tweaking, but you are already there with that. I think we are good to go. Given that section 21 is the biggest cause of homelessness, you would rebalance in the way that you want to, so I would say, “Hold your nerve and go with it.”

Ben Twomey:

I have two very quick points on the court reform before I go into your other question, Lloyd. First, in quarter 3, the latest data from the Ministry of Justice shows that the median time it took for a repossession case was about 22 weeks in both section 21 and in section 8. The idea that section 21 is much quicker is not true. With section 21, more people move out beforehand because there are fewer ways in which you can legitimately challenge it. There is a problem if you are setting up the court system to say that we want to basically stop tenants having their rights and a way in which they can challenge an eviction. That is a really important point: it does not actually lengthen the time that will be taken. That is not true.

Secondly, I will talk quickly about Jasmine, a renter who very recently challenged an eviction because she could not move in time. She was given two months to move under a section 21, but she could not move in time, so she challenged it and it took up the court’s time instead. If you extend the notice period to four months, that challenge would potentially never happen, the court never has to see Jasmine, she finds a new place and is comfortable and able to move out in good time. She is happy, and potentially the landlord is happy too.

On the cost of no-fault evictions for renters, we estimate that the average cost to a renter of an unwanted move is £1,700. For a renter to be able to save, it is really important that they are able to find some way in which, when the move is through no fault of their own, they can make those savings quicker in order to be out of the home. We think the best way to do that—rather than, for example, thinking about repayments from the landlord—is just to say that the final two months of renting will have no rent cost attached. The tenant then has time in that space to save in order to find a deposit and the first month’s rent, for example, and they are able to move out with the savings they have made because of the two months’ lack of rent.

It potentially means two months out of pocket for the landlord who has chosen to do a no-fault eviction, but if it is a no-fault eviction for a sale, they are potentially getting a big windfall through that anyway. The two months out of pocket can be balanced against the fact that otherwise it would be two months in which the tenant is likely to find themselves as one of the record number of homeless people we have at the moment. It is an important balance to strike, and that is one of the ways in which you could do it.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Levelling Up, Housing, Communities and Local Government)

Does the amendment to ground 14, the ground for possession for antisocial behaviour, strike the right balance? Or is this potentially another backroom approach to no-fault evictionsQ ?

Ben Twomey:

Thank you, shadow Minister. On the point about being “capable of causing” a nuisance, the previous language in the Housing Act 1988 was “likely to cause” a nuisance. It would be difficult for me to prove that you are “likely to cause” a nuisance, but it would be a lot easier to say you are “capable of causing” a nuisance—as it would be for me, you or anybody else here. I think that change in language is potentially dangerous, particularly when you think about antisocial behaviour being relatively difficult to define.

I know that others in these sessions have expressed serious concerns about domestic abuse victims, how domestic abuse could be mischaracterised as antisocial behaviour, and how that may be a reason for eviction. Obviously I do not need to emphasise how difficult that would be—having the punishment of homelessness potentially layered on to a domestic abuse situation, where that is happening. It is important that we differentiate between criminal justice matters and housing matters.

However, the need to deal with antisocial behaviour, when it causes a real a nightmare for neighbours and other tenants, is important, but the local authority has a duty to prevent homelessness as well. They enact that duty with two months’ lead-in time. You cannot do that if the ground says that a tenant could be out of their home in two weeks. Within those two weeks, the possession proceedings can begin immediately as well. The approach does seem reckless. Are we just talking about moving a problem, which is currently in a home, on to the streets rather than addressing the fundamental issues? Is it going to catch within it some serious victims of domestic violence?

Sue James:

I would agree with all of that, but I add that I have dealt with many antisocial behaviour cases in my time as a solicitor and they are complicated. They are not quite so straightforward, and there is often a mental health issue or a vulnerability at the heart of them. I think we absolutely need to keep the original language rather than change it. And I agree with Ben on the importance of the domestic abuse issues; there are going to be women facing eviction and having to experience that as well.

Photo of Nickie Aiken Nickie Aiken Ceidwadwyr, Cities of London and Westminster

What are your views on the property portal that is being proposedQ ?

Sue James:

We think it is a great idea.

Sue James:

But it needs more.

Ben Twomey:

I would add that it lacks detail at the moment, and we are very keen to see that detail. I mentioned that we are particularly interested in eviction notices and the outcomes of evictions being logged there; otherwise, there is not really much improvement in the way you monitor and enforce against abuse of some of the new no-fault grounds. So eviction notices are really important. Getting the rents charged on there will be really important, and we should think about energy performance certificates going on to the portal so that they can be enforced. When I talk about enforcement, I think it is really important that local authorities are empowered and have the necessary resources to enforce against bad practice—the kind of practice that can lead to people being unsafe in their homes.

It is also about having a place for tenants to access this information, as they have a vested interest in what happens afterwards. The only way to give them a vested interest is to have an incentive, and we think that is through rent repayment orders. We would encourage the portal to be made accessible to tenants. For example, where they can see that no-let periods have been abused, there should be a rent repayment order. If the landlord is not compliant with the portal, there should be a rent repayment order. Also, if the landlord is not compliant with minimum energy efficiency standards, we think that there should be a repayment—you would equalise it in that way. At the moment, where licensing schemes exist, for example, and the local authority pursues landlords for a fine, often that money does not actually get back to the person who has lost out—the tenant. It is important that rent repayment orders go directly to the tenant wherever possible.

Sue James:

I totally agree, and I would like to pick up on the issue around the basic requirements of gas safety and stuff. At the moment, that is a huge protection in section 21; a landlord cannot get a possession order unless they have all those protections, and that does not appear in the Bill. We absolutely need to have them included, and the portal could be a place to put them. We would then have transparency; a tenant knows when they are looking in the portal that this is a good landlord and that they have complied with everything. I think that is so fundamental to changing the nature of the private-rented sector.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

Q As we have you here and you have unique access to residents and organisations that represent residents, I wonder whether I could push you on some areas that are not covered in the Bill. Some of them were flagged in the White Paper and some were not, but they are a problem for renters every day—at least on the basis of my postbag—and we might deal with them in the Bill. I am thinking of things like guarantors, advanced rent and bidding wars, which we are hearing a lot about at the moment, particularly in the part of London that I represent. Could you speak about some of the potential solutions that we might look to work into the Bill?

Ben Twomey:

The question of guarantors is really important. Usually, there would be a guarantor if you are not earning a certain amount to cover the rent—usually, you should have an income that is two and a half times the rent and, if not, you require a guarantor. For younger people, for people on low incomes, that can be quite difficult, so they would need a guarantor.

We have been working with the National Youth Advocacy Service to look at the barriers facing care leavers when they access private rented homes. This has been a major barrier for care leavers. At the moment, 60% of local authorities do not offer people the ability to be a guarantor for care leavers. Local authorities are the corporate parent for care leavers, so they are basically taking on parenting duties. We think that is a big problem. The 40% that offer the guarantor scheme in principle vary in the way that they do so. We think that it is for the Government to step in and say, “If, as a state, you are going to take on parental responsibility, you should be a guarantor to make sure that young people who are care-experienced are not being locked out of rented accommodation, compared with their peers.” That would be a major step forward.

To touch on bidding wars, we have found in our research at Generation Rent that there are seven times more bidding wars than there were just five years ago. We have gone up from 3% of tenants experiencing this to 21%, from our research. I experienced it when I moved down to London relatively recently. I was asked how much more I would want to give and how much longer I would want to stay in the property as a fixed-term tenancy. It is very, very common now. We think that the issue needs to be addressed. There is nothing in the Bill at the moment, but there should be some consideration given to this. When a landlord offers a price for rent, they are almost, by definition, offering a rent that they are comfortable with. Just because of the changes in market forces—that is a change not to their costs, but to the number of people queuing round the block for them—it should not be that they can then increase the rent as they please and encourage others to enter into these kinds of bidding wars, which basically pit tenant against tenant. The only one who is benefiting from this is the landlord.

Sue James:

To pick up on that point, this is not in the Bill, but the position of the Renters’ Reform Coalition is that, at the moment, unless you restrict the amount that landlords can put up rents, you potentially have an economic eviction, and we would suggest that you restrict that to the lowest of either inflation or wage growth.

To touch on what is in the Bill, section 14 of the 1988 Act allows the tenant to apply for the tribunal to have a look at the rent. Originally, it was restricted to whatever the landlord was requesting, but in the Bill it is now the market rent. That would potentially have a chilling effect on tenants who want to challenge the rent that has been set. As an adviser, I might say, “It is limited to what your landlord has suggested,” but at the moment, with the way Bill is, that could be the market rent if the landlord has asked for less than that. Does that person then challenge it? That could have a chilling effect. When thinking about rents and, as Ben said, bidding wars, that absolutely needs to change, because it is really difficult. There are queues of people for every tenancy and the protection needs to be there, so thoughts around that would be really welcome.

Photo of Yvonne Fovargue Yvonne Fovargue Llafur, Makerfield

I call Helen Morgan. This will have to be the last question, I am afraid.

Photo of Helen Morgan Helen Morgan Liberal Democrat Spokesperson (Levelling up, Housing and Communities), Liberal Democrat Spokesperson (Local Government)

Briefly, you mentioned the possibility of the attractiveness of longer-term tenancies without the six-month break point at which you can be evicted. Will you expand on that?Q

Ben Twomey:

It is really important, if you are thinking about a private rented sector that is attractive to tenants, rather than something that we feel trapped in. It needs to be something that recognises that there are 11 million private renters across England, and that, for many of us, we are here to stay in the private rented sector. It is no longer just a quick in and out—a temporary thing—while we save enough money to buy our own home. The protection is important, knowing that you can be in your home for a certain period of time—unless, of course, you do something seriously wrong, in which case there are protections in the grounds for landlords to act on that. At the moment, there is only a six-month protected period in which you are safe from a no-fault eviction, within the Bill’s wording. As I said, that does not really change the situation we are currently in, so it is not actually ambitious towards a fairer private rented sector.

We believe that the period should be two years. That would mean the landlord—if they are taking housing seriously and recognising that homes are the foundation of our lives—would be comfortable knowing that they can hold off selling the property and moving a family member in for two years. If they need to do some of those things afterwards—which would be a great shame, because the tenants are probably enjoying the property—they can still do that after that period. Six months feels far too short; it treats it like temporary accommodation—

Photo of Yvonne Fovargue Yvonne Fovargue Llafur, Makerfield

Order. I am afraid that brings us to the end of the time allotted to the Committee to ask questions. I thank the witnesses, on behalf of the Committee.