Clause 3 - Changes to grounds for possession

Renters (Reform) Bill – in a Public Bill Committee am ar 21 Tachwedd 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Amendment proposed (this day): 138, in clause 3, page 3, line 3, at end insert—

“(5C) (a) Where the court makes an order for possession on Grounds 1 or 1A in Schedule 2 to this Act (whether with or without other grounds), the order shall include a provision requiring the landlord to file evidence at court and to serve the same on the tenant, any other defendant, and the local housing authority for the district where the dwelling is located no later than sixteen weeks from the date of the order.

(b) The evidence referred to in paragraph (a) must—

(i) give details of the state of occupation of the dwelling-house since the date of the order,

(ii) give details of the progress of any sale of the dwelling-house, and

(iii) be verified by a statement of truth signed by the landlord.”—(Matthew Pennycook.)

This amendment would require a landlord to evidence the progress toward occupation or sale of a property obtained under grounds of possession 1 or 1A no later than 16 weeks after the date of the order and to verify this by a statement of truth.

Question again proposed, That the amendment be made.

Photo of James Gray James Gray Chair, Environmental Audit Sub-Committee on Polar Research, Chair, Environmental Audit Sub-Committee on Polar Research

I remind the Committee that with this we are discussing the following:

Amendment 139, in clause 3, page 3, line 4, at end insert—

“(2A) After section 7 of the 1988 Act insert—

(1) The court shall not make an order for possession on Grounds 1 or 1A in Schedule 2 to this Act unless the landlord has complied with the relevant provisions of subsections (2) to (4).

(2) Where the landlord relies on Grounds 1 or 1A, the claim must be supported by evidence which is verified by a statement of truth signed by the landlord.

(3) Where the landlord relies on Ground 1 and the dwelling-house is required by a member of the landlord’s family as defined in paragraphs 2(b) to (d) of that Ground, the claim must also be supported by evidence which is verified by a statement of truth signed by that family member.

(4) Where the landlord relies on Ground 1A, the evidence referred to in subsection (2) must include a letter of engagement from a solicitor or estate agent concerning the sale of the dwelling-house.’”

This amendment would require a landlord seeking possession of a property on the Grounds of occupation or selling to evidence and verify in advance via a statement of truth.

Amendment 143, in schedule 1, page 65, line 10, leave out “6 months” and insert “2 years”.

Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.

Amendment 192, in schedule 1, page 65, line 10, after “6 months” insert

“or 6 months have elapsed since rent was last increased”.

This amendment would prohibit evictions under Ground 1 within 6 months of each rent increase giving periodic protection at each rent renewal.

Amendment 203, in schedule 1, page 65, line 29, at end insert new unnumbered paragraph—

“Where this ground is used no rent will be due in the final two months of the tenancy.”

This amendment would ensure when a no-fault eviction on Ground 1 is used tenants would not pay rent for the final two months of the tenancy.

Government amendments 2 and 3.

Amendment 144, in schedule 1, page 66, line 6, leave out “6 months” and insert “2 years”.

Amendments 143 and 144 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.

Amendment 193, in schedule 1, page 66, line 6, after “6 months” insert

“or 6 months have elapsed since rent was last increased”.

This amendment would prohibit evictions under Ground 1A within 6 months of each rent increase giving periodic protection at each rent renewal.

Government amendments 4 and 5.

Amendment 194, in schedule 1, page 66, line 23, at end insert—

“(e) the landlord has offered to sell the property to the current tenant at the same value at which the landlord intends to list the property for public sale and the tenant has informed the landlord within four weeks of receiving the offer from the landlord that the tenant does not intend to buy the property at this value.”

This amendment would require landlords wishing to issue a notice for possession on the basis of Ground 1A to offer the current tenants the right to buy the property at the intended listing value before it goes onto the market.

Amendment 204, in schedule 1, page 66, line 24, at end insert new unnumbered paragraph—

“Where this ground is used no rent will be due in the final two months of the tenancy.”

This amendment would ensure when a no-fault eviction on Ground 1A is used tenants would not pay rent for the final two months of the tenancy.

The hon. Member for Brighton, Kemptown was on his feet, but I think he had nearly completed his remarks, and he is not here, so I call the Minister to reply.

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

I thank hon. Members for their contributions so far, and for the amendments. As we discussed, we all agree that the removal of section 21 will give tenants more security in their home. Tenants will know that landlords can evict them only when they have a legitimate reason to do so. It is also vital that the new grounds give landlords the confidence to continue renting out their properties, rather than leaving them empty, if they might wish to sell or move in.

If a landlord goes to court to seek possession, a judge will determine whether the ground has been met, based on the evidence provided. We do not think it is necessary to prescribe in legislation what the evidence is, because a judge will always be best placed to determine, based on what is in front of them, whether the landlord intends to occupy or sell the property.

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

The question is why it would not be useful for a judge to base that professional, informed decision on criteria that are in front of them.

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

We feel that it is best to give the courts the power to make the decision themselves, rather than prescribing that in legislation. Of course, following Royal Assent, we will publish secondary legislation and guidance. I hope that that gives the hon. Member the assurance that he is looking for.

We will issue guidance to help landlords understand what type of evidence they may choose to provide. It would not be appropriate to be too prescriptive about that in legislation; that might inadvertently suggest that other evidence may not be sufficient. The decision is best determined by a judge on a case-by-case basis. I therefore ask that the hon. Member for Greenwich and Woolwich withdraw his amendment.

With regards to amendments 143, 144, 192 and 193, we thought long and hard while developing these reforms about getting the right balance between tenant security and landlords’ ability to move into or sell their homes. We believe that having a six-month period at the start of the tenancy during which landlords cannot use the grounds provides the right balance. A longer period risks landlords not making their properties available for rent and reduces the supply of much-needed homes. Landlords also need the flexibility that periodic tenancies allow, and our proposals strike the right balance.

On amendment 194, although we encourage landlords to consider selling to or with sitting tenants, landlords must have the ultimate decision over who they wish to sell their property to. Giving a tenant first refusal could prevent the landlord selling if, for example, they already had a buyer in mind. It could also cause delays in the public sale process and therefore financial hardship to the landlord.

On amendments 203 and 204, the Government do not believe in penalising landlords by mandating that tenants be entitled to a rent-free period at the end of their tenancy. Landlords looking to move into or sell their property may themselves be in financial difficulty, and amendments 203 and 204 could exacerbate that. By disincentivising landlords’ investment in the sector, the amendments would introduce uncertainty and ultimately be detrimental to tenants. On that basis, I ask that the hon. Member for Brighton, Kemptown, not move the amendments.

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

I want to ask about a two-month no-rent period. The Government must recognise that there is a huge cost to tenants who have to move out through no fault of their own. Does the Minister not think that there should be some alleviation of that cost? For example, if a tenant finds another property during the two-month notice period, they should not be bound to pay two months’ rent. They have been forced to leave through no fault of their own, and should not have to pay double rent; that would be totally unfair. Does the Minister have views on that?

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

I accept the hon. Gentleman’s argument and understand the sincerity with which he makes it. We are trying to strike a balance throughout this Bill between tenants’ rights and landlords’ rights. A landlord may choose to evict someone on the grounds that they wish to sell their property, for example, and then be unable to sell their property; if we were to follow the hon. Gentleman’s logic, that landlord would be without rent for two months during the notice period, and three months during the refusal-to-let-again period before being able to put their property back on the market, given that they had been unable to sell their property. I do not think it is fair that if landlords were to pursue that course of action, they could be five months’ rent out of pocket.

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

May I press the Minister on that point? If a tenant leaves within the two-month notice period, does the Minister really think that they should be bound to pay those two months’ rent, even though they have been kicked out and have found another property, and relinquished the property to the landlord sooner than the landlord asked them to? Surely they should not be liable for that amount of money.

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

Again, I understand the hon. Gentleman’s point. We are trying to strike the right balance in these reforms. That is all I can say on that.

Government amendments 2 to 5 deliver technical changes that will ensure that grounds for possession work as intended, allowing the selling ground to apply to both freeholders and leaseholders who wish to sell their interest in their property. The changes to possession ground 1A are slight, and ensure that the selling ground for private landlords applies to all circumstances where it would be reasonable to consider the landlord to be selling their property, and ensuring that their valid desire to manage their property as they see fit is not unintentionally thwarted. These small changes will ensure that the selling ground works as intended.

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

We are disappointed with the Minister’s response, for the following reasons.

We will, no doubt, hear ad nauseam about the Government’s intention and the obvious need, with which we all agree, to get the balance right between the interests of landlords and tenants. We do not think the Government have got that balance quite right in this and many other areas of the Bill.

It is, of course, reasonable that landlords who legitimately want to use grounds 1 and 1A either to take back a property for themselves or a family member, or to sell it, should be able to. We take no issue with the mandatory grounds. However, the Minister has failed to address Labour Members’ arguments about the clear risk of those mandatory grounds being abused in several ways. We know that they are being abused in Scotland, where they have already been introduced—that is the proof point here—and there are several other layers of protection in Scotland that this Bill does not provide.

The Government know that there is a risk of these grounds being abused; they would not otherwise have the three-month no-let period. We have clearly identified the loopholes that exist as a result of there being no evidential requirement, unlike in Scotland. Evidence suggests that the Scottish provisions are still open to abuse, but Scotland at least has the Private Housing (Tenancies) (Scotland) Act 2016, which requires the landlord to provide specific evidence. That is not the case here. The Minister makes the point that it is for judges to make a determination, but grounds 1 and 1A are mandatory grounds. The judge literally just has to determine whether the landlord has proved that ground 1 or 1A applies. The judge does not assess the merits of the case, as they would if these were discretionary grounds. Judges do not have the freedom to say that they do not think the landlord is legitimately taking back the property. As we have argued, at the end of four months of the protected period, any landlord can, under these grounds, serve notice or evict on the pretence that they will use the property for themselves or sell it, but they can then not sell it; nothing prevents that.

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

On the hon. Gentleman’s point about providing evidence to a court, a judge would have to determine whether the intention to sell the property is valid.

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

I will happily give way to the Minister again if he can say how the judge would prove an intent to sell or occupy the property without evidential requirements. The judge does not have to ask the landlord for any evidence that they will use those grounds.

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

It is our position that the types of evidence that can be used do not need to be in the Bill, but as I have already set out, they will be in guidance.

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

That is some progress. If we have a commitment from the Minister that we will get detailed guidance that landlords need to submit—

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

That is welcome, but I think the concern is still there, because what does the guidance say? We do not know. What proof does it ask for? We have a clear set of evidential requirements in amendment 138.

We feel strongly about the point of protected periods. In amending ground 1, the Government have removed the requirement for prior notice of the use of the ground. If a landlord wants to take back a property for their own use, they must tell the tenant when the tenancy agreement is made that they may wish to engage the provision for prior notice. There is no prior notice under the amended ground 1. Any tenant could find themselves evicted with six months’ notice, and they would have no clue when they agreed the tenancy with the landlord that they could face that scenario. We very much support the legitimate use of these grounds, but it is essential to strengthen the Bill and the guidance that may come forward to prevent and deter abuse.

For that reason, we will press amendments 138, 139 and 143 to a vote. We also support amendment 194, in the name of my hon. Friend the Member for Brighton, Kemptown. It is completely reasonable for landlords to have to offer the sitting tenant first refusal on purchase of a property. To be frank, I do not really understand what the Minister says about the alternative scenario of a landlord having a buyer in mind who is not the tenant. That does not sound like a particularly fair ground. The tenant is in the property; they should have first refusal at the market price that the landlord asks for. If they cannot meet that price, the landlord can sell to any other buyers.

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

My hon. Friend will note that such provisions exist in other areas, where the first right of refusal is given. Surely if this legislation is passed, the landlord will always first have the tenant in mind when looking for a buyer. The scenarios suggested by the Minister would not occur, because the landlord would go to the tenant before other buyers.

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

That is a reasonable point. Landlords will adapt to the system. They will have it in mind that they must automatically make an offer to the sitting tenant. If they determine that the market price is more than the tenant can afford, they can go to the second buyer that they have in mind. We are not quibbling about them selling at market rate, obviously, but it is important to help renters on to the home ownership ladder if possible.

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

I understand the hon. Member’s point, but consider a landlord who wanted to sell a property to a family member. That is perfectly legitimate. They might want to sell to their child. If there was a duty on the landlord to offer the tenant first refusal, surely they could not do what they wanted with their property. [Interruption.]

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

My colleagues behind me are making the case for me. In that scenario, I respectfully say that the landlord could legitimately exercise ground 1 and, within six months, take the property back for that family member. They could then sell it freely. However, evicting a tenant to do so is, we think, questionable, because it is reasonable to give the tenant first refusal. If I have understood the Minister’s point correctly, if I am a landlord and I want to sell to my son, I can take back the property under mandatory ground 1. My son could live in it, and I could then sell it to him at any point. I do not see why a sitting tenant would need to be evicted for that to happen.

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

Under the hon. Gentleman’s argument, the landlord would have to charge rent to the family member. Say the landlord wanted to sell to a close friend; they would not be covered by ground 1. There is a difference on a point of principle between the two sides here. We think that landlords should be able to sell their property to whomever they want. The Opposition seem to take a different view.

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

We do take a different view, because, as I have said, it is reasonable that landlords should offer first refusal to tenants. I do not know how many landlords out there are desperately planning to sell to a close friend and would not be able to. That scenario might arise, but in the majority of cases, landlords will sell a property on the open market, and they could give tenants first refusal, at the price that they seek. As I said, we support amendment 194, and will press our amendments in this group to a vote.

Question put, That the amendment be made.

Rhif adran 1 Renters (Reform) Bill — Clause 3 - Changes to grounds for possession

Ie: 6 MPs

Na: 8 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.

Amendment proposed: 139, in clause 3, page 3, line 4, at end insert—

“(2A) After section 7 of the 1988 Act insert—

‘7A Evidential requirements for Grounds 1 and 1A

(1) The court shall not make an order for possession on Grounds 1 or 1A in Schedule 2 to this Act unless the landlord has complied with the relevant provisions of subsections (2) to (4).

(2) Where the landlord relies on Grounds 1 or 1A, the claim must be supported by evidence which is verified by a statement of truth signed by the landlord.

(3) Where the landlord relies on Ground 1 and the dwelling-house is required by a member of the landlord’s family as defined in paragraphs 2(b) to (d) of that Ground, the claim must also be supported by evidence which is verified by a statement of truth signed by that family member.

(4) Where the landlord relies on Ground 1A, the evidence referred to in subsection (2) must include a letter of engagement from a solicitor or estate agent concerning the sale of the dwelling-house.’”—(Matthew Pennycook.)

This amendment would require a landlord seeking possession of a property on the Grounds of occupation or selling to evidence and verify in advance via a statement of truth.

Question put, That the amendment be made.

Rhif adran 2 Renters (Reform) Bill — Clause 3 - Changes to grounds for possession

Ie: 6 MPs

Na: 8 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.

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

I beg to move amendment 136, in clause 3, page 3, leave out lines 21 and 22 and insert—

“1, 1A, 1B, 2, 2ZA, 2ZB, 6, 6A four months beginning with the date of service of the notice

5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”

This amendment would ensure that the minimum notice period for a number of ‘no fault’ grounds for possession would be four months rather than two.

Clause 3 amends the grounds for possession in schedule 2 to the Housing Act 1988 in relation to not only the courts making orders for possession, but notice periods, to which amendment 136 relates. Each existing, revised or new possession ground, with the exception of grounds 7A and 14, has a corresponding minimum notice period after which either a tenant must vacate the property or the landlord is permitted to start court proceedings to regain possession. Each of these minimum notice periods is set out in clause 3(3). I will read them all out for the record, Mr Gray, because it is important that we know precisely which grounds we are talking about.

As the Bill stands, there is a minimum notice period of two months before the landlord can begin court proceedings under grounds 1, 1A—which we have just discussed—1B, 2, 2ZA, 2ZB, 5, 5A, 5B, 5C, 5D, 6, 6A, 7 and 9. There is a four-week notice period for grounds 5E, 5F, 5G, 8, 8A, 10, 11 and 18, and a two-week notice period for grounds 4, 7B, 12, 13, 14ZA, 14A, 15 and 17.

Amendment 136 amends the provisions in question by creating a new minimum notice period of four months that would apply to a number of existing, revised or new possession grounds that can still fairly be categorised as de facto no-fault grounds because they could be used to evict even model tenants who scrupulously adhere to the terms and conditions of their tenancy agreements. The grounds for possession that we believe should have their minimum notice periods increased from two to four months are the new mandatory grounds for possession 1 and 1A for occupation of a property by the landlord or their family and for its sale; ground 1B for sale of a property by a registered provider of social housing; ground 2 for sale by mortgage; grounds 2ZA and 2ZB for when a superior lease ends or when a superior landlord becomes the direct landlord; ground 6 for redevelopment; and ground 6A for when compliance with enforcement action is required. Grounds 5, 5A, 5B, 5C, 5D, 7 and 9 would retain a minimum notice period of two months, as provided for by subsection (3).

While there are legitimate, genuinely held differences of opinion between the Opposition and the Government about how Ministers propose to implement the ending of section 21 evictions, there is broad consensus in the House on the removal of section 21 by means of the Bill. It is obvious why such a consensus exists. As we have discussed, landlords can evict tenants with as little as two months’ notice at any point after their fixed-term tenancy has come to an end, without giving a reason for doing so, or even having such a reason.

As we discussed this morning in discussion on clause 1 stand part, significant numbers of tenants are evicted each year through a section 21 notice. Worryingly, the numbers appear to be rising; the Government’s own figures make it clear that between July and September of this year alone, accelerated procedures numbers for England increased across all actions, with claims up 38%, orders up 32%, warrants up 31% and repossessions up by 29%. No-fault, no-reason evictions are hugely disruptive for tenants; they harm the health, wellbeing and life chances of many, particularly the growing number of young people growing up in the private rented sector. They are also the leading cause of homelessness in England.

Abolishing section 21 is, then, long overdue, and when it is finally enacted it will give private renters much-needed security in their homes and enable and embolden them to assert and enforce their rights more vigorously. However, the abolition of section 21 will not entirely remove the threat of short-notice frequent evictions, which put tenants at risk of homelessness, and the Bill proposes to retain a number of de facto no-fault grounds for possession with, as I explained earlier, minimum notice periods of just two months.

Some would argue, as the Minister may, that two months is more than enough time to find a new private rented property, but we think that such an assumption is highly questionable. There is a wealth of evidence to suggest that a significant proportion of the approximately 11 million private renters in England struggle to do so, particularly in hot rental markets where demand is extremely high, as pointed out in the evidence given by James Prestwich from the Chartered Institute of Housing. For example, research carried out by Shelter suggests that for 34% of renters it took longer than two months to find and agree a new tenancy the last time they moved. Worryingly, that increased to 40% of renters with children and 46% of black renters. That highlights the additional challenges faced by particular tenant cohorts.

Our amendments do not press for a blanket four-month minimum notice period in relation to all grounds for possession. That would be excessive and limit the ability of landlords to quickly regain possession of their properties in legitimate circumstances. For example, if a tenant is found guilty of breaching one of the terms of their tenancy agreement, it is right that, albeit on a discretionary and not mandatory ground, the landlord can recover the property in two weeks. We would not want to extend notice periods in a uniform way in that respect, which would undermine ground 12 or any number of others.

However, we do feel strongly that when it comes to the de facto no-fault grounds that the Bill provides for, the notice period should be increased to better protect tenants against the risk of homelessness, particularly families and those who, for a variety of reasons, will struggle to secure a new home within two months. As Ben Twomey, the chief executive of Generation Rent, put it in our evidence sessions:

“We think there should be better protections” in this part of the Bill. He continued:

“It should go to four months instead, to give the renter time to make the savings, look around and find somewhere to live.”––[Official Report, Renters (Reform) Public Bill Committee, 14 November 2023; c. 38, Q38.]

The Government maintain that, as we have just discussed, the Bill strikes the right balance between the interests of landlords and tenants. Indeed, the Minister made the point in the previous debate, and this morning, warning us that to seek to upset that delicate balance would be to invite ruin. We do not believe that the Bill as it is currently drafted strikes the right balance between the interests of landlords and tenants. The proposed notice periods are a prime example of where we believe the playing field is still tilted towards the landlord interest, in a way that would cause real problems for tenants. To ensure that the playing field between landlords and tenants is truly levelled, the latter require greater protection when it comes to the notice period for the de facto no-fault possession grounds that are to remain in force as a result of the Bill. I look forward to hearing the Minister’s response.

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

I rise to support the amendment —no surprise there. We have a crisis not only in our private rented sector, but with the burdens that local authorities are having placed on them, with people coming to them at short notice because they are losing their homes. Many Members will know that two months is just not long enough for many local authorities to assist the constituent or, in this case, tenant to find a home in time. They are put into emergency accommodation at great cost to the council and the public purse. As a result of section 21s and the short period people have to find homes, last year 24,000 households were threatened with homelessness and had to resort to their local council. That is a huge number, and our local councils are suffering. The emergency accommodation spending of Hastings Borough Council, just down the road from me, has gone from £500,000 to £5 million this year. How can a council find that amount of money in three years? Almost exclusively, the cause is the ending of private tenancies.

We all think that private tenancies will need to end sometimes. No one thinks they should not when there are legitimate reasons. The Conservative party manifesto said that the Government would end no-fault evictions. It did not say that they would end just section 21s: it said they would end no-fault evictions. Clearly, that has not happened. We all agree that there are some reasons why a no-fault eviction might be needed, but serving those no-fault evictions with the same terms and time limit as section 21 evictions seems to breach the spirit, if not the letter, of not only the governing party’s manifesto but the point that we are meant to be rebalancing and giving time for tenants to find properties.

We could choose any number and say it was suitable, but let us think about the cycle through which people find houses. It will often take a number of weeks just to look for a house. Then someone will have to raise the money to pay for a deposit in advance, which might require one or two pay cheques. The Minister has already dismissed my amendment on rent-free periods, so people will have to raise that amount from the money they are earning at the time, and that may take a number of months. For a lot of private renters, 60% of their salary goes toward rent, so the idea of having to raise a month’s rent in advance in two months is almost impossible.

There is then the need to ensure that contracts are signed and references are done. To go through all that process in two months, someone would effectively need to have found a property on day one of getting the order. Four months is a much more reasonable period for someone to be able to do all that, when there is no fault of their own. It is incumbent on the Minister to at least consider that idea, and if not, to ask what additional protections and support will be given to tenants and local authorities to aid that transition, which is currently not aided.

All that is without me even touching on children and the fact that they will need to move schools. Four months would also mean that a child can make a move between schools within term-time and half-term periods. That allows a parent to say to their child, if they are having to move, “At half-term you will be starting at a new school.” These are important things for raising families, and the cycles are not unrealistic.

Of course, there will always be need for quicker evictions. There will be fault evictions. There will be pre-notice evictions. My Front-Bench team is not proposing to change any of them; I think that that is a reasonable balance for everyone. I urge the Minister to accept the amendment.

Photo of Karen Buck Karen Buck Llafur, Westminster North

I, too, urge the Minister to accept the amendment. It is common knowledge that London is at the sharp end of the pressures in this respect, and the need for a more flexible approach is pressing.

The Government are missing a recognition that the private rented sector, and moves within it, are not as they were, as we touched on earlier. The profile of renters is now completely different compared with the situation a decade or two ago, so the needs of households need to be accommodated in the management of the sector. There are more families in the sector and, as my hon. Friend the Member for Brighton, Kemptown said, we need to ensure that families with children are given sufficient lead-in time to move their children between schools. For families with two or three children, that can involve finding a way of moving children in primary school and secondary school and between nurseries. These are major logistical tasks.

A large cohort of people who are now in the private rented sector have disabilities. Some people have had to undertake adaptations to their properties, or need adaptations, and that is also true of a proportion of older people. The Government are thinking of young footloose renters who are able to up sticks and move within a couple of weeks.

Section 21 evictions—we argued earlier that this will also be the case with the loopholes in the grounds under the new provisions—are the single largest driver of homelessness. That is acutely true in London, but it is increasingly true in other cities and in some rural areas. One in every 50 Londoners, and one in every 23 children in London schools, are homeless as a consequence of the end of a private tenancy.

The Government also completely fail to understand that the private tenancies that are available to people are not 100% of all private rentals. We heard from Julie Rugg in the evidence session last week, and her excellent study of private rental confirms that we are talking about not a single private rented market but many. The properties available to those on lower incomes, and particularly those who need Government housing support to access them, are a very small proportion of the total available. Shopping around and being able to move within eight weeks is fine if 100% of the properties are available, but they are not.

We hope the Chancellor will make some concessions tomorrow on the critical issue of financial support to low-income renters, but as things stand, in higher-cost areas fewer than one in 20 properties are available to those renters. It is simply unrealistic to expect people on low incomes with access to only a limited proportion of the total rental market, those with higher needs, those who need a particular type of property, and those who need to manage a move to accommodate their caring or childcare responsibilities, to move within eight weeks.

My hon. Friend the Member for Brighton, Kemptown briefly touched on the cost. People need the time and capacity to marshal the resources to fund a move. In many cases, these people are frequent movers, and it is estimated that in the private rented sector the move alone costs an average household £1,500. That is simply not money that people on lower incomes have lying around.

I urge the Minister to bear in mind that we are not talking about an idealised tenancy—a fantasy tenant in a fantasy private rented sector: we are talking about real, complex lives, which will be damaged if they are not afforded proper protection, and there will be consequences for very hard-pressed local authorities. That is one of the big drivers that is tipping some of our local councils into severe crisis. The Minister can do something about that and ensure that the process is more realistic, better managed and in everybody’s interest. I urge him to reconsider.

Photo of James Gray James Gray Chair, Environmental Audit Sub-Committee on Polar Research, Chair, Environmental Audit Sub-Committee on Polar Research

Order. It is also an extremely bad idea to argue with the Chair. You did not make yourself known to me, I did not see you, and saying you did puts you in bad odour, so just don’t do it.

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

Thank you, Mr Gray. I rise to support the amendment, which is a pragmatic response to the current housing market conditions, which are particularly acute in London and the south-east, for those who are vulnerable and do not have buying power, such as young professionals. My hon. Friend the shadow Minister highlighted a rather startling figure from Shelter: 40% of renters with children wait way beyond the two months currently in the Bill.

Members have also referred to the cost ultimately to the Exchequer, but certainly to local authorities. We have 104,000 people—a record number—living in temporary accommodation, and the cost to local authorities is £1.7 billion. That is another startling figure, and maybe the Chancellor will respond to it tomorrow with changes to the local housing allowance. I think the amendment is pragmatic. It is about focusing on the families and vulnerable tenants most in need in a marketplace that has limited availability. I think local housing allowance covers about 5% nationally—

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

Of course it is far worse in London and, indeed, other cities. I urge the Minister and the Government to do the to do the right thing with this amendment.

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

I thank the hon. Member for Greenwich and Woolwich for tabling amendment 136, which seeks to lengthen the notice period that landlords must give for some grounds of possession. The notice period in the Bill balances the needs of both tenants and landlords. We have not reached our decisions without a lot of thought and careful consideration over many years and in collaboration with the sector.

It is important to give tenants sufficient time to find a new home. However, notice periods must also balance that aim with ensuring that landlords can manage their assets. For example, they may need to sell or move into the property, which might also be their long-term family home. Landlords must also be able to comply with enforcement measures or contractual requirements, such as superior leases, in a timely manner. Setting a longer notice period would undermine landlords’ confidence in dealing with such reasonable scenarios. We encourage landlords to work flexibly with their tenants and notify them of their intentions as far in advance as possible, but we also recognise that that is not always possible.

As Members have indicated, we think our approach strikes the right balance, so I ask the shadow Minister to withdraw the amendment.

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

I will not withdraw the amendment; I am going to press it to a vote because, again, I do not think the Government have got the balance right. I do not think that two months’ notice is sufficient for a whole cohort of tenants, and I think my hon. Friend the Member for Weaver Vale is absolutely right. There is a basic issue of fairness here in terms of the profile of the private rented sector, as it now is. We can all look at the minimum notice period in the explanatory notes and think that it seems very reasonable: “Two months. Who could not make two months?” But we all look at that as highly paid professionals who could move in that period of time. Older people, disabled renters, or renters with a family simply cannot do that.

I put the Shelter figure to the Minister again. He may question the figure, but it seems like it comes from a very detailed study. What are the Government saying to the 34% of renters who could not move within that two-month period when they last moved? The Government are effectively saying to those renters, “You’re at risk of homelessness,” and we do not think that is fair. On the de facto no-fault grounds—which, just to be very clear, are mandatory; we are not talking about every ground—the Government should think again.

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

The hon. Member refers to fairness, but the situation is not fair for the landlord either. A landlord who wants to move into their property for whatever reason—we do not know the reasons, but it could be a reasonable ground—or sell it would have to wait an additional two months. We are talking about two months’ notice to provide grounds for possession, so in reality it could be much longer than that because it could be two months plus whatever court proceedings come afterwards.

The hon. Member is saying that we should extend the period to four months. On the basis that a typical court hearing would take 22 weeks, as we have heard elsewhere, we are talking about a period of nine months between when a landlord might want to move into their property and when they can actually do so. I do not think that that is fair either. As I say, we believe that we are striking the right balance.

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

I say two things to the Minister. First, the minimum notice periods are from the date of service of the notice. I take the point about court reform, but this is at the point of service of the notice, not the point of the possession award; they are the minimum periods that apply. Secondly, what is his answer to the 34%? There is evidence out there from organisations with expertise in this area. What the Minister is saying is that the Government are content to see a third of tenants given a minimum notice period in which they cannot possibly reasonably find a new property.

There is a fairness point and also a cost point, which the Government should, from their own perspective, be more concerned about. The cost of those renters not being able to find properties will be borne by local authorities. As Parliamentary Under-Secretary of State for Levelling Up—I think I have his title correct—the Minister will know what is happening with Liverpool City Council. Its spend on temporary accommodation increased by 7,660% by the end of the fiscal year compared to 2019. Several London councils, including my own, are in financial difficulty because of temporary accommodation costs. This is not sustainable. If the Government are going to allow this broad swathe of new mandatory de facto grounds to be in place with a two-month notice period, that situation will persist.

The last thing I would say goes to a point made by my hon. Friend the Member for Brighton, Kemptown earlier. Lots of tenants served with these notices are going to find somewhere and move out before the date. We are talking about the hard cases where people cannot move out. I think the Government have a tin ear on this—they have a mindset issue when it comes to grappling with what the PRS looks like now. By refusing the amendment, the Government are effectively saying, “That’s their problem.” We think the Government should think again, so we intend to press the amendment to a vote.

Question put, That the amendment be made.

Rhif adran 3 Renters (Reform) Bill — Clause 3 - Changes to grounds for possession

Ie: 6 MPs

Na: 9 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

The Committee divided: Ayes 6, Noes 9.

Question accordingly negatived.

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

I beg to move amendment 1, in clause 3, page 3, line 21, after “2ZB,” insert “4A,”.

This amendment adds the new Ground 4A inserted by Amendment 9 to the table that the Bill inserts into section 8 of the 1988 Act, with the effect that a notice under that section relying on that ground must specify a date no sooner than 2 months after the date of service of the notice.

Photo of James Gray James Gray Chair, Environmental Audit Sub-Committee on Polar Research, Chair, Environmental Audit Sub-Committee on Polar Research

With this it will be convenient to discuss the following:

Government amendment 9.

Amendment (a) to Government amendment 9, line 16, at end insert—

“(e) the property was exclusively advertised through a specified educational institution, their agents or providers as outlined in Schedule 1 of the 1988 Act.”

This amendment would only allow Ground 4A to be used as a ground for possession when the property was exclusively advertised through an educational institution, rather than in relation to a HMO property which is not exclusively provided to students.

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

Government amendments 1 and 9 introduce a new ground for possession to ensure that the annual cycle of student lettings can continue in the new tenancy system. We have spoken to many, including landlords and universities, who are concerned about the potential impact of our reforms on the student market. I thank all those who have engaged with us on this important issue. The amendments address the concerns in a balanced and proportionate way.

As many of us will have experienced, the student housing market works on an annual, cyclical basis. Students typically move in and out of properties over the summer, in line with the academic year. Without the backstop of section 21, we understand that landlords would no longer be able to guarantee that properties would be empty for new groups of students. That would have knock-on implications for students, who could not sign up for properties in advance and know that they had somewhere to live for the start of the academic year. The introduction of this ground will mean that the annual churn of “typical” student lettings is maintained. Landlords letting to full-time students can ensure a property is vacant at the end of the academic year and ready for a new group of student tenants over the summer months.

I would like to reassure Members that we have designed the ground carefully. Our approach will protect this crucial part of the market while balancing the needs of both landlords and students. The ground can be used by landlords in England when a house in multiple occupation is occupied by full-time students at the start of a tenancy and the property is needed for a new group of students for the next academic year. That means that the ground is unlikely to capture students who have children or other caring responsibilities, or who are studying part-time alongside their main job.

The amendment tabled by the hon. Member for Brighton, Kemptown is therefore not necessary. It would narrow the scope of the ground significantly. Most properties are advertised on Zoopla or Rightmove rather than through a university, so the amendment would not provide the carve-out that the student market needs. Landlords will be required to give tenants at least two months’ notice in line with the other “landlord circumstance” or “no fault” grounds. I hope the hon. Member will withdraw his amendment to clause 9.

Photo of Lloyd Russell-Moyle Lloyd Russell-Moyle Labour/Co-operative, Brighton, Kemptown 2:45, 21 Tachwedd 2023

I am sceptical about the need for a special student carve-out. The National Union of Students is sceptical as well, but it did acknowledge that if worded correctly it could provide some relief to support a special dedicated market.

I think the Government’s amendment is too broad: it attacks the market that students might be bidding in rather than specifying student markets. There are three markets for the students to bid in. One is purpose-built student accommodation, which already has an exemption and a ground in the Bill—no problem. The second is the student-only houses in multiple occupation market, which is usually advertised via universities or organisations such as Unipol, and focuses only on students. Then there are the HMOs available for young professionals and young people.

Most of the HMOs on the seafront in my constituency are not occupied by students; they are occupied by young professionals looking to eventually get a house to themselves, but they are sharing. There might be people who share accommodation for cost-saving purposes. The measure gives an exemption to that market if the landlord lets to students only. It sucks away a market that is already overstretched—the HMO market—and pushes it into the student market. Already there is pressure because the student market pays more than the general HMO market. The measure will exacerbate that and make things far worse. I am deeply worried about that unintended consequence.

We could stop that unintended consequence. If a property is only for the student market, of course we recognise that, but it should be advertised only via student letting agencies—at the university or via a registered provider. That is largely done, anyway. Universities often pair up with local letting agents and assign letting agents that are trusted providers. My amendment allows that, but it treats the exemption much more like the purpose-built student accommodation exemption. In the long run, universities should have a duty to provide housing—purpose-built or HMO—via the university for all students who want it. That would relieve a lot of the tensions that we get in communities where people are fighting over HMOs—young professionals versus students.

There are measures via article 4 directives under the planning regulations, but they are blunt tools. What we really need is a duty given to universities to ensure that any student who so wishes can be provided with accommodation. That would be a long-term solution. It would solve the madness in Manchester this year—students having to live in Liverpool because not enough accommodation is provided for them in Manchester. But that will not be solved by the Government’s amendment. In my view, it could be made worse.

Providing that all student accommodation needed to be advertised via the university would also allow the university to have a better appraisal of what accommodation was available for their students. It would allow the university to liaise with landlords. When there are problems in communities with student houses—I do not want to be unfair to students, but they are sometimes known to enjoy a party here or there—the universities would be involved in that process, rather than students just being out in the wild, as it were. Good universities already do that. Most universities already have that process.

My other fear is that the measure will make it harder for students who actively choose to live in mixed households, because landlords will not want mixed households. Students who at the moment want to enter the general HMO market and live in a mixed household will now be discouraged. The landlord will say, “No, even though I am advertising this on the general market, I would quite like to rent to an exclusive student household.” The measure also underestimates the flexibility of the student experience: students will drop out, want to stay or want to go into work.

Finally, the danger of the Government amendment, without my amendment, is that it will embed the very problem with the student market. Anyone whose children have gone to university or who has recently been to university themselves will know that, by January, students already have to decide what accommodation they will have next year. Preserving that function of the market is not a positive thing. Students have not developed deep friendships—they only arrived in October—and often have not actually worked out what course they want to do. If they are on a course that has vocational or work placement elements, they do not know where those placements will be. It is impossible for those students to properly plan. Young people who come through clearing are often scrabbling around; by that point, purpose-built accommodation is already taken, and private rented properties are already snatched up.

We could push back the point at which a landlord would know whether that property was vacant. If the students want to stay, there is no problem: the landlord is still going to get the rent, and for the landlord there is no argument there. But if the landlord knew only a few months beforehand—perhaps a two-month or four-month notice period—then students would be deciding in July or August about what accommodation they would be living in. That would give students who had gone through clearing or were going into work placements much better options in the private rented sector.

I worry that, without my amendment, we are locking in many of the problems of the student market. I would struggle to withdraw my amendment, because I think it improves the Minister’s amendment: it does what he is trying to do, but without the unintended consequences.

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

I thank the Minister for his explanation, but it lacked detail; I am still not particularly clear on the Government’s rationale for drafting and tabling the amendment as it stands. I will come to the reasons why, but I want first to thank my hon. Friend the Member for Brighton, Kemptown for raising an important issue in relation to student lettings. I fully agree that we need to do much more to improve the student lettings market and drive up professionalism in it.

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

I should have declared at the beginning that I am a trustee at the University of Bradford Union of Students, which has a board member place on Unipol, the student lettings agency.

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

The Committee will have noted that. I have no doubt that lettings services run by universities and student unions have an important and effective part to play in driving up professionalism and improving the functioning of the market.

As we have heard, Government amendments 1 and 9 make provision for new possession ground 4A, which would allow a student HMO to be recovered by a landlord for further occupation by students. On the Opposition Front Bench, we take a slightly different view from my hon. Friend the Member for Brighton, Kemptown: we welcome the fact that the Government have recognised that the student market is distinct in particular ways from the rest of the private rented sector and that its protection requires a bespoke approach of some kind. We appreciate the arguments advanced by some landlords operating in the sector about the fact that much of the student market—not all of it; I will come to that—is cyclical and that landlords need a means of guaranteeing possession each year for a new set of tenants. However, we are equally cognisant of the concerns put forward by bodies and organisations representing students and their interests about the potential implications of treating student renters differently from other private tenants—the precedent that might set and the problems that might arise as a result of specific exemptions for certain types of purpose-built dwelling.

In determining whether the Government have struck the right balance as it relates to this measure, we need to grapple with the fact—my hon. Friend the Member for Brighton, Kemptown referred to this—that defining what constitutes a student dwelling is deeply challenging, given the diversity of individuals engaged in higher education and how varied their educational circumstances can be. There is also the fact that some private dwellings will be shared between students and people in employment, whether because the people working have chosen to remain in the area following completion of study or because it made sense for the student in question to move in with an individual of working age who was already at work when they signed their tenancy agreement.

Paragraph (a) of the proposed new ground 4A makes clear that it may be used for houses in multiple occupation and where each tenant is a student at the beginning of the tenancy. Is the implication of the paragraph that, to make use of the ground, a landlord would have to verify at the point the tenancy was signed that every individual who would occupy the property was in fact a student? If a landlord let a house, for example, to two students and one person working full-time, would they not be able to make use of new ground 4A? If it is the case that landlords cannot use new ground 4A to gain possession of a household of, say, part-time students sharing with full-time workers, can the Minister explain whether the Government have undertaken any assessment of the impact of the new possession ground on the availability of rental housing, particularly in towns and cities with large student populations where, as my hon. Friend said, the supply of student housing is already under enormous pressure? I know that, too, from my own constituency.

A further complication is added into the mix by sub-paragraph (a)(ii), which provides for use of the ground where

“the landlord reasonably believed that the tenant would become a full-time student during the tenancy”.

That strikes us as an incredibly low evidential threshold to have to meet. Can the Minister explain how on earth landlords will be expected to prove that such a belief is legitimate? Who will they need to satisfy, if anyone, that there are reasonable grounds to assume that a non-student tenant will become a student during the lifetime of the tenancy?

We are genuinely concerned that Government amendment 9 as drafted could be abused by unscrupulous landlords following the enactment of chapter 1 of part 1 of the Bill. Relying on paragraph (a)(ii), one could easily imagine landlords evicting groups of, say, young working tenants sharing a property using the justification that they believed they intended to become full-time students before the tenancy agreement expired. We would venture that the courts themselves will struggle to ascertain whether a landlord has proved the new ground by relying on sub-paragraph (ii) and that most evictions under 4A, like other mandatory possession grounds, will probably not even arrive before a judge—the tenants will simply leave, the threat having been made. We would welcome further clarification from the Minister about why sub-paragraph (ii) has been included in the proposed new clause and would like some robust assurances that it cannot be abused to facilitate section 21 no-fault evictions by the back door.

Another complication arising from the wording of the new clause concerns paragraph (c) on lines 11 and 12 of the amendment paper. That states that new ground 4A can be used to gain possession only between 1 June and 30 September in any year. However, as hon. Members with student populations in their constituencies will know, a large number of UK universities now also accommodate a winter intake in January. They do so not only for postgraduate students; it is now also the main secondary intake for some undergraduate courses. Given that the proposed new possession ground is available for use only during June and September, we are concerned it could have the unintended consequence of impacting detrimentally on the availability of other properties for students to let at other times of the year, given that under the proposed new ground there is an inherent incentive for landlords to let only on the primary summer-to-summer cycle.

If it is the Government’s intention to ensure that there is a cyclical availability of student accommodation, we suspect that they may need to think again about how it is achieved for students whose academic year starts and finishes at times other than those specified in the amendment. Moreover, even for those students who finish their courses in the summer, there is a wide degree of variation between undergraduates, who will usually finish earlier; postgraduates, who may be working on research projects until a much later date; or undergraduates undertaking placements.

For example, a landlord could give two months’ notice under new ground 4A, as currently drafted, on 1 April for a student to leave their accommodation on 1 June. For postgraduate students—medical students would be a good example—who may still be working hard into July or even August, we fear that the fact that landlords are likely to seek to evict them before their course completes using the new possession ground, simply because it can be utilised only in a narrow, three-month window, will result in unacceptable strain, when individuals are already under pressure from their placements or studies.

We agree with the Government that the student market requires a tailored approach to ensure that its particular features and dynamics are catered for. However, while in no way doubting the scale of the challenge—we think it is a challenge to come up with an amendment that does the job the Government are seeking to do—we are not convinced that they have got this quite right. In the absence of any convincing assurances that would allay the various concerns I have outlined, we are inclined to encourage the Minister and his officials to go away and think carefully about whether the amendment might be improved to guard against any unintended consequences that might arise from it.

Photo of Jacob Young Jacob Young Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 3:00, 21 Tachwedd 2023

Let me address some of the hon. Gentleman’s questions straightaway. On whether a landlord will have to check that the tenants are students, they must do that at the beginning of the tenancy. They can be fined if they try to use these grounds without having notified the students that they are in student accommodation and that the grounds are therefore included.

The hon. Gentleman asked if everyone in a property must be a student. That is the case; if the property is mixed occupancy, the ground will not apply. On his point about reasonable belief, that is specifically in relation to first-year students who have not yet become a student. A landlord can reasonably believe that a student taking out a tenancy is to become one, but until they are a student they are not technically one just yet.

The ground is designed to cover the majority of the market. Were we to make the ground available all year round, it would give much less security and open it up to much greater abuse.

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

That is why it is better to swap in my amendment on this point. Rather than working with the universities on the particular cycle they might have in their local area, we are trying to legislate for term times here in Westminster, but it does not work. Will the Minister go away, maybe when the Bill goes to the other place, and rethink how we can have a clause that requires landlords to work with a university to ensure that letting is in line with the relevant local term times and not our attempts to legislate for these things here? I get what the Minister is trying to say.

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

I completely take the hon. Gentleman’s point. Obviously, on the back of the conversations we have had today, we will consider these measures further. The ground has been carefully designed in consultation with stakeholders—landlords, universities and so on—to facilitate the annual cycle of short-term student tenancies. That is why we specifically created that gap in the change in the academic year.

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

If I have understood the Minister correctly, he has made a commitment to go away and think further about this. As it stands, is there anything in the Bill that would protect students whose courses are not on that summer-to-summer cycle from being evicted through the use of the new mandatory ground? We do not think there is, which is why we think the Government need to think again. Is anything forthcoming or in the Bill that is designed to protect against the problem I spoke about—postgrads or others who go beyond the summer cycle? It may be a minority of students, but it is still a significant minority.

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

I undertake to write to the hon. Gentleman with the assurances he seeks. We have designed the ground carefully with landlords, because we have listened to their concerns, particularly about the student market. None of us in Committee today would want to end up in a situation where, on Royal Assent, we were not able to facilitate student accommodation.

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

I want to probe the Minister a little more on the point that the landlord “reasonably believed” someone could be a student. Some time ago I was a councillor in Fallowfield, which had large areas of student accommodation. Some of those were mixed tenancies, but people would have made an assumption—would have reasonably believed—that all the people who lived there were students. Is that covered? Is the clause tight enough?

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

As I said, everyone in a property would have to be a student. It would be an obligation on the landlord to ensure that they are students or that he or she reasonably believes that they are students. We will follow the Bill with statutory instruments plus guidance; we can make it clear in the guidance what we expect. For those reasons, I ask the hon. Member for Brighton, Kemptown not to press his amendment.

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

It is about evidencing that. It would be in the guidance, but what kind of evidence would the landlord need to provide?

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

I am not in a position to outline that today. I have made it clear that, in terms of a landlord reasonably expecting someone to become a student, that would hinge on them starting term in the very near future. I think that that is clear, but we will set that out further in guidance. For those reasons and others, I ask the hon. Member for Brighton, Kemptown not to press his amendment.

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

The Minister has given a good rationale for his amendment. Paragraph (d) requires the landlord, in the next letting cycle, to be letting out to exclusively students or those he believes to be students. How will we assess whether the property has been let out to students exclusively? That is the only point of the clause. Will the property portal be an opportunity to record information about whether the house is a student let, so that we can be clear when the tenancy is signed and when the next tenancy is released that it is a reserved student property?

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

It is likely that a new contract would have to be signed with the new tenants, who would be students, for this to be used. It would be unusual for a judge to think that, “I thought all of these people were suddenly going to become students,” would be a reasonable argument to use this ground. I do not think the hon. Gentleman’s points have merit, and I ask him not to press his amendment to a vote.

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

I am not inclined to press my amendment, because the Minister has given assurances that he will go away and rethink the clause. I am still not happy about the clause, and we will see what we do on the substantive issue, but there are problems with paragraph (d). The provisions do not work with the universities; they set things in Westminster, rather than saying that the property should be protected because it has been let via an approved university letting agent or the university itself. That seems like a solution the Minister could grab. It would solve his term dates problem, his “Is it going to be let to students?” problem and his “Is it being let to students?” problem. In fact, every single question we have would be solved by my amendment. The Minister has said, and I will take it in good faith, that he will go away, look at this and see how things could be amended, and I will push him on Third Reading on what ideas he has come up with.

Amendment 1 agreed to.

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

I beg to move amendment 137, in clause 3, page 3, line 32, at end insert—

“(4) The Secretary of State must lay before Parliament a review of the changes to grounds for possession made under this Act within two years of the date of Royal Assent.”

This amendment would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.

Photo of James Gray James Gray Chair, Environmental Audit Sub-Committee on Polar Research, Chair, Environmental Audit Sub-Committee on Polar Research

With this it will be convenient to discuss new clause 54—Review of changes to grounds for possession—

“(1) The Secretary of State must, within two years of the date of Royal Assent to this Act, conduct and lay before Parliament a review of the grounds for possession in Schedule 2 of the Housing Act 1988, as amended by this Act.

(2) The review must include—

(a) an assessment of the effectiveness of the new or amended grounds for possession set out in Schedule 1 of this Act in securing evictions from properties;

(b) an assessment of the impact on the security of tenure of tenants as a result of the use of the new or amended grounds for possession set out in Schedule 1 of this Act;

(c) a report on the use of enforcement action in relation to the new or amended grounds for possession set out in Schedule 1 of this Act;

(d) an assessment of the effectiveness of the grounds for possession listed in Schedule 2 of the Housing Act 1988 in securing evictions from properties that remain unamended by Schedule 1 of this Act.

(3) The review under subsection (1) must make such recommendations as, in the opinion of the Secretary of State, are necessary in the light of the findings of the review.”

This new clause would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.

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

Clause 3, as we have discussed, amends the grounds for possession in schedule 2 to the Housing Act 1988. Once section 21 has finally been removed from that Act through the provisions in clause 2 and the commencement dates in clause 67, the only means by which a landlord will be able to regain possession of a property by evicting a tenant will be by securing a court judgment under the revised section 8 grounds set out in schedule 2 to the 1988 Act, whether they be mandatory or discretionary. We have already debated concerns relating to several of those grounds, and we will debate more in due course when we get to schedule 1. However, we believe it is important to also take a view on the proposed replacement possession regime as a whole, given that it is the most comprehensive reform of the grounds in that regime in the 35 years since the 1988 Act came into force.

Labour recognises, and has repeatedly said since the White Paper was published, that following the abolition of section 21 no-fault evictions, landlords will need recourse to robust and effective grounds for possession in circumstances where there are valid reasons for taking a property back, such as flagrant antisocial or criminal behaviour. However, we have also made it clear that the Bill must ensure that such grounds cannot be abused to unfairly evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland in the wake of the major private renting reforms introduced there in 2017.

The revised set of section 8 possession grounds must reflect the fact that evictions, which are inherently disruptive and often incredibly damaging to tenants’ lives, should be only ever a measure of last resort where no alternative course of action exists. The grounds must be proportionate, secure against abuse from landlords seeking to carry out unfair or retaliatory evictions, and designed effectively so that properties are recovered only when a tenant is genuinely at fault, and they must not cause tenants undue hardship.

Amendment 137 and new clause 54 would require the Government to publish a review of the impact of the amended grounds for possession regime within two years of the Act coming into force. With that requirement, whether individual grounds for possession are further amended, as we hope, or the Government resist our efforts and the grounds remain as drafted, we will at least be able to judge the efficacy and impact of the new arrangements both for landlords seeking to recover their properties when a tenant is genuinely at fault and for tenants who are not at fault but who may suffer as a result of flaws in the regime. We think the amendment is entirely reasonable, and I am interested to hear how the Minister will, no doubt, resist it.

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

I rise to support the amendment. The Minister has already indicated that there is work still to do and that he will go away and see how this will work in practice. Clearly, some of these issues will come out when the Bill receives Royal Assent.

These are sensible measures with which nobody—landlords or tenants—could really disagree. We can no longer have a set of grounds that have been stuck in time for 30 years, and Bills that only add things on from time to time, without stepping back and looking at the changes that have occurred, whether those relate to students—the Minister is pushing for the measures on students to be included in the Bill, rather than in regulations—or any of the other clauses. Consider antisocial behaviour in particular, and the concern that many campaign groups have expressed around potential domestic violence falling foul of the new “likely” or “able to” provisions.

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

The Minister may disagree. That is fine: he will get his way, and we will pass his wording, but there should then be an assurance that, in a few years’ time, there will be a review of the legislation. If the Minister is right, we will applaud him—well, we cannot applaud in the House of Commons, but we will metaphorically cheer him in the House and say that he did such a fantastic job with his civil servants and the Department that the legislation is watertight. Alternatively, we will say that there are some small loopholes that need changing or that the world has changed. I do not think that that is unreasonable.

Personally, I think these sorts of provisions should be in almost all Bills we pass, but they are particularly important in this Bill, because of the dynamic nature of the market and the wholescale reforms we are making. Nobody knows what effects this will have on the courts. Nobody knows quite what effects it will have on tenants. Opposition Members are all talking about unintended consequences, which is why our proposals are so important.

Photo of Helen Morgan Helen Morgan Liberal Democrat Spokesperson (Levelling up, Housing and Communities), Liberal Democrat Spokesperson (Local Government) 3:15, 21 Tachwedd 2023

I should have referred this morning to my entry in the Register of Members’ Financial Interests. I apologise for that oversight and refer Members to it now.

I rise to support the amendment and the new clause. We have had a lot of discussion, in good faith, about the unintended consequences for the private rented sector and the impact on tenants, but much of this has been guesswork. It would be extremely sensible to have a requirement to look at this a couple of years down the line and to ask, “Have we driven landlords from the market unintentionally? Have we put tenants in an insecure position unintentionally?” It would be remiss of any Government to fail to assess the impact of their legislation.

Photo of Karen Buck Karen Buck Llafur, Westminster North

I really do hope that the Minister will concede on this point. One of the striking themes that emerged in the evidence sessions was just how little we know about what is happening in the private rented sector. It is to the shame of the Government, and probably even the previous Government, that this massive transformation in the life of the country and throughout the housing stock, which is affecting millions of people, has happened without us having accurate data to assess the impact. We are struggling to catch up in so many respects.

We will no doubt be talking more about the changing grounds for possession in the context of antisocial behaviour and rent arrears but as has been reinforced—we just need to keep saying this—the people in the private rented sector who we have the most concern about are those whose equivalents were not in the private rented sector 20 or 25 years ago. Their patterns of need, the patterns of demand they place on the sector and the risks they have to face are also quite different.

Families with children, families experiencing domestic violence and those with all kinds of vulnerabilities, including serious mental health problems, addictions or learning disabilities, would for the most part not have been in this situation before, but they are now having to be accommodated. It is not only that they are in the private rented sector in a way that they were not before, and are at risk, but that they are disproportionately impacted by harsh decisions that cause them to lose their homes. They face a higher risk and are worst affected.

I do not know whether all Members have experience of this, but any Member of Parliament with a larger private rented sector will be experiencing the consequences and will have traumatised families coming to them with problems who will perhaps be facing eviction and be in distress. That is often for completely trivial reasons or because of circumstances that arise simply out of misunderstandings or the failure of the bureaucratic and social security systems to catch up.

It is the most basic and sensible thing to do to ensure that there is a proper data review and that we make up for the fact that we have spent several decades now trying to understand a system about which we have too little information. The Minister has a chance to put that right.

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

I thank the hon. Member for Greenwich and Woolwich and other hon. Members who have spoken on amendment 137 and new clause 54. We all agree that it is vital that the Government keep such an important set of policies under review. We must ensure that the grounds for possession are providing adequate security to tenants and functioning effectively for landlords, too.

We are committed to robustly monitoring and evaluating the private rented sector reform programme. Our impact assessment for the Bill, which has been published online, sets out our plans for evaluation. That builds on the Department’s existing long-term housing sector monitoring work, and we will conduct our process, impact, and value for money evaluation in line with the Department’s recently published evaluation strategy. Setting an arbitrary deadline in law for that work might detract from the quality of evaluation and prevent us conducting as robust an assessment as possible. I therefore ask the hon. Member to withdraw his amendment 137.

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

Why could this not be added to the current evaluation plans? Surely good law is about assessment of the planning, implementation and then review. Given the nature of the current marketplace and how it can shape things, particularly for those who are out of sight or are vulnerable in the current population, surely that two-year review would be good law.

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

I appreciate the hon. Gentleman’s point, but it is not usual for us to include such a review on the face of the Bill.

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

I thank the Minister for his response, but it is a little disappointing, and I want briefly to say why.

The point that my hon. Friend the Member for Westminster North made is absolutely right. Unlike in other sectors, we really have no idea of the composition of the private rented sector. That is one reason why the portal is so important: it is such a potential game changer that we can start to get that information, but we do not have it at the moment, so we do not know what the impact of these reforms will be, nor do we know the impact of the changes to the grounds for possession.

I want to bring it home to the Committee that the changes to the grounds for possession are not small. We have new grounds that could potentially work in ways that the Government do not intend; we also have significantly amended grounds. We really need a more formalised review than the Department’s ongoing review process that the Minister has set out.

I urge the Minister to think about that point. If the two years set out in amendment 137 is the wrong deadline or, as he sees it, an arbitrary deadline, we would welcome the Government coming forward with some more formalised means of reviewing the impact not only on tenants, who might find themselves at the sharp end of abuse on some of the grounds, but on landlords, for whom the new grounds simply may not work in the way the Government want. I will not press the amendment to a vote, but I encourage the Government to think about whether we can have something beyond the usual departmental processes. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3, as amended, ordered to stand part of the Bill.