Financial penalties etc

Tenant Fees Bill – in the House of Commons at 4:49 pm on 5th September 2018.

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Amendments made: 44, page 27, line 33, after second “paragraph” insert “4(3A) (period for payment),”.

See the explanatory statement for Amendment 13.

Amendment 45, page 28, line 27, leave out from second “the” to end of line 28 and insert “relevant period.”

See the explanatory statement for Amendment 13.

Amendment 46, page 28, line 28, at end insert—

“(3A) In sub-paragraph (3) “the relevant period” means—

(a) in relation to a financial penalty under section 8, the period of 28 days beginning with the day after that on which the notice is served;

(b) in relation to an amount which is required to be paid under section 10(2), (5) or (8) or 11(1), the period specified in the notice.

(3B) A period specified as mentioned in sub-paragraph (3A)(b) must be a period of at least 7 days but not more than 14 days beginning with the day after that on which the notice is served.”

See the explanatory statement for Amendment 13.

Amendment 47, page 29, line 8, leave out from “period” to end of line 9 and insert

“that is the relevant period in relation to the penalty by virtue of paragraph 4(3A).”

See the explanatory statement for Amendment 13.

Amendment 48, page 29, line 10, after “suspended” insert

“so far as it relates to the penalty which is the subject of the appeal”.—(Rishi Sunak.)

See the explanatory statement for Amendment 13.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

I will now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will table the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.

Sitting suspended.

On resuming—

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means) 5:30 pm, 5th September 2018

I can now inform the House that I have completed the certification of the Bill, as required by the Standing Order. I have confirmed the view expressed in the provisional certificate published with the selection list. Copies of the final certificate will be made available in the Vote Office and on the parliamentary website. Under Standing Order No. 83M a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and on the parliamentary website, and have been made available to Members in the Chamber. Does the Minister intend to move the consent motion?

Photo of Rishi Sunak Rishi Sunak Parliamentary Under-Secretary (Housing, Communities and Local Government)

indicated assent.

The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M(4)).

[Dame Rosie Winterton in the Chair]

Photo of David Linden David Linden SNP Whip 5:31 pm, 5th September 2018

I beg to move, That the Committee do sit in private.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

I regret that I have to inform the hon. Gentleman that I cannot put his motion to the Committee. That is because he is not a member of the Legislative Grand Committee, because he does not represent a qualifying constituency—in this case, a constituency in England. Under Standing Order No. 83W, a Member who is not a member of a Legislative Grand Committee may take part in its deliberations but may not vote, make any motion or move any amendment.

Photo of David Linden David Linden SNP Whip

Further to that point of order, Madam Deputy Speaker. Thank you for your ruling on that. Can you just clarify for me, as you have done, that because I am a Member from a Scottish constituency I am unable to take part in proceedings of this House, and indeed that that is contrary to what the people of Scotland were told in 2014, when they were told they were an equal part of the United Kingdom?

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (Second Deputy Chairman of Ways and Means)

The hon. Gentleman may take in part in the deliberations but, as I have said, he may not vote, make any motion or move any amendment.

As the knife has fallen, there can be no debate. I call the Minister to move the consent motion.

Motion made, and Question put forthwith (Standing Order No. 83M(5)),

That the Committee consents to the Tenant Fees Bill.—(Rishi Sunak).

Question agreed to.

The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).

The Deputy Speaker resumed the Chair; decision reported.

Third Reading

Queen’s consent signified.

Photo of James Brokenshire James Brokenshire The Secretary of State for Housing, Communities and Local Government 5:33 pm, 5th September 2018

I beg to move, That the Bill be now read the Third time.

I thank Members on both sides of the House for their passionate and constructive contributions to the Bill’s passage through the House. We all agree that the Bill’s aim of making renting fairer, more transparent and more affordable for tenants is important. As such, it is a key part of the Government’s housing agenda. More people are renting, and they deserve help now, which is what the Bill is all about. We want to ensure that everyone, regardless of whether they own their home or rent, or whether they are in the social or private sector, has the security and dignity they need to build a better life.

The feedback and evidence we received recognised the challenges that tenants in the private sector face, especially regarding unfair fees and the need to rebalance the relationship between tenants, landlords and agents. Having listened, we introduced amendments on Report to ensure that the Bill better delivers on our commitment to create a system that works for everyone. I thank all those who have engaged with the process, from our initial consultation through to pre-legislative scrutiny and since the Bill’s introduction to the House. That includes members of the Housing, Communities and Local Government Committee, with their invaluable pre-legislative scrutiny of the Bill; those who provided written and oral evidence to the Committee; and the organisations that have engaged so constructively with my officials in drafting guidance for the Bill.

Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee, Chair, Housing, Communities and Local Government Committee

I thank the Secretary of State for his kind words about the Select Committee. Does he think that there is a wider lesson to be learned—that it would be helpful if the Government more generally provided draft legislation for Select Committees to consider, rather than simply coming to the House with proposals that they have already determined without any consideration in Select Committee?

Photo of James Brokenshire James Brokenshire The Secretary of State for Housing, Communities and Local Government

I recognise the important contribution that Select Committees, and Joint Committees of both Houses, make to pre-legislative scrutiny of draft Bills, and we can point to a number of examples. As I am sure the hon. Gentleman will appreciate, at other times the Government need to act quickly. The Bill has been a good example of the balance needed between ensuring consultation and engagement.

I also wish to pay special tribute to the Under-Secretary of State, my hon. Friend Mrs Wheeler, for all her efforts to develop the Bill and ensure its successful introduction. We all send her our heartfelt best wishes.

I also wish to thank the Under-Secretary of State, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), who has been instrumental in leading the Bill through the Commons and has been careful and conscientious in listening to the views of Members on both sides of the House.

We can all agree that the Bill has benefited from everyone’s input and, as a result, will be more effective in delivering on its promise to protect tenants from unfair charges. As we have heard, those charges can impose a significant burden on tenants, who often have little choice but to pay excessive and unjustified fees time and again for each property let or even just to renew an existing agreement. The Bill will put a stop to such unacceptable practices by banning unfair and hidden charges, making it easier for tenants to find a property at a price they are willing to pay and saving renters an estimated £240 million within the first year alone. The Bill will also help to introduce a level playing field for landlords and agents by protecting reputable players in the market from having their reputations tarnished by rogues.

I know that the changes have raised concerns in some parts of the letting market, but agents who offer good value and high quality services to landlords will continue to be in demand and play an important role in the sector. In addition, the Bill introduces a cap on tenancy deposits of six weeks’ rent, and we are not stopping there. We want to ensure improvements to how deposits are protected in the interests of both tenants and landlords, to reduce up-front costs to tenants. That is why we recently established a working group to look at the merits of innovative approaches to tenancy deposits, such as deposit passporting.

I am confidence that the measures in the Bill will help to deliver the fairer, clearer and more affordable private rented sector that we all want to see—for tenants, yes, but also for decent, professional landlords and agents who are providing a vital service. I am happy to commend the Bill to the House.

Photo of Melanie Onn Melanie Onn Shadow Minister (Housing, Communities and Local Government) (Housing) 5:38 pm, 5th September 2018

I thank the Secretary of State for his words and my colleagues who have taken part in the debates and have assisted in Committee. The conversations that we have had have been very helpful, and were certainly heard to some degree by the Minister, and I thank him for that. I am pleased that the Bill is leaving the House in a better state than when it was introduced, after pressure from Labour to improve specific elements of it. But there is still more that the Bill needs to include to stop this being a missed opportunity for 4.7 million tenants in England. Those tenants often end up in the private rented sector not by choice but because of the lack of social housing, especially in high-demand areas.

The Government need to consider further the impact of their policy, which allows default fees to continue to be open to abuse. More than half of tenants do not see their tenancy agreement before putting money down for a tenancy. Much emphasis is still placed on the ability of a tenancy agreement to signify a mutually understood and fair relationship, but that is very often not the reality for tenants. The Bill continues to place reliance on guidance, so much so that the Chair of the Delegated Powers and Regulatory Reform Committee, Lord Blencathra, has said that, since the guidance will play such an important part in the functioning of this Bill, it should be subject to parliamentary scrutiny, but we are yet to see even a hint of a first draft. I hope that the Government reconsider the current provision regarding default fees and bring in regulations to tie down tenants’ rights. If they remain steadfast against that idea, will they at least follow the advice of Lord Blencathra?

Members on both sides of the House have raised continuing issues regarding deposits and enforcement. However, Labour fundamentally supports the Bill because it will tackle many of the unfair fees that tenants face when they rent a property, and will help to build a more professional, transparent and fairer private rented sector across England. I am pleased that years of Labour pressure has finally twisted the Government’s arm on this issue and brought forward a Bill that starts to do genuine good for tenants. But the battle to create a private rented sector that works for the 4.7 million renters in this country is far from complete.

The most recent English housing survey made for hard reading for many of England’s private renters. The rental marker is affecting more and more people from a wider variety of groups. The proportion of families in our rental market is going up, with 20% more families in the private rental sector since 2010. More and more children—not just young adults and students—are growing up in rental accommodation. Although the short-term nature of rental accommodation offers flexibility for some, it can have a devastating effect on others. Families in rental accommodation are nine times more likely to move than those who own a house, incurring repeated deposits and fees. Despite today’s efforts, rental regulation in this country still leaves a lot to be desired, and tenants need far more long-term security when they rent a house.

We had hoped that this Bill would be broadened to make longer tenancies a reality, and to ensure that families do not face yearly moves and get hit with repeat fees and costs. However, despite the Prime Minister’s protests at Prime Minister’s questions today, there were reports last night that suggested that the Government are afraid to take that measure to further help millions of renters around the country.

As this Bill moves to the other place, there remain issues that could be explored further to improve rights and access to rights for renters, and to ensure that suitable deterrents and enforcement are in place to improve the private rental sector in the UK. I trust that genuine issues raised by Members today will be given closer consideration to reflect the hopes of those in the private rented sector.

Photo of Wera Hobhouse Wera Hobhouse Liberal Democrat Spokesperson (Housing, Communities and Local Government) 5:42 pm, 5th September 2018

May I first draw the attention of the House to my entry in the Register of Members’ Financial Interests?

One of the many effects of the housing crisis is the sheer amount of people now forced into the private rented sector. It is for this reason that I am adamant that we must improve conditions for renters. The Liberal Democrats have fought long for renters’ rights, so I welcome and support this Bill. It is vital that we in Westminster ensure that tenants’ fees are abolished because of the transient nature of the private rented sector, particularly for young people. However, the housing crisis has also pushed many families into renting and, as we heard earlier, the leading cause of homelessness is the ending of a private rented sector tenancy.

While rental costs continue to spiral, people are becoming trapped. They cannot afford their rent, but nor can they afford to move because of the myriad administrative fees. We must ensure that the Bill fully ends the practice of tenants’ fees. However, as the Bill is currently drafted, there are still loopholes around default fees. The Secretary of State’s amendments go some way towards closing the gap, and ensuring that letting agents and landlords do not introduce new fees under a different name. However, the text of the Bill is still too ambiguous, leaving what constitutes a reasonable cost to the discretion of landlords or letting agents. We must also provide local authorities with appropriate funding to enforce the ban. If local authorities have no resources to enforce it, landlords and letting agents will just continue with this unreasonable practice.

I urge the Secretary of State to listen to the concerns raised today. Otherwise he will undermine legislation that could really make a difference to people’s lives. There is little merit in introducing legislation with obvious loopholes that allow individuals to continue with a practice that we want to stop. There is also very little merit in introducing legislation that we cannot enforce due to the lack of resources.

We currently have about 5 million households in the private rented sector. Today we are beginning to tackle letting fees, but there must be more wholesale reform of the private rented sector. For example, my Liberal Democrat colleagues and I believe that there must be compulsory registration of landlords, that there must be public access to the Government’s database of rogue landlords, and that those landlords should not be able to obtain a licence for houses in multiple occupation.

This Bill is, in good measure, the result of the hard work put in by my Liberal Democrat colleagues in the other place. I look forward to further improvements as the Bill progresses.

Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee, Chair, Housing, Communities and Local Government Committee 5:45 pm, 5th September 2018

It is good to be here today supporting a Bill that has secured general agreement across the House and is a positive move to help tenants in particular circumstances. I hope that, as the Secretary of State said, the work of the Select Committee has assisted in that process. As I said, I think it would be better if more Bills went through such a process on a regular basis. It is good that the Government have been listening to the Select Committee and have reflected that in their amendments.

However, the Bill raises a number of issues about the need for wider reform in the private rented sector. While we were pleased with the Government’s response to this Bill, we are probably less pleased by their response to our report on the private rented sector in general, where we think they still have a way to go in delivering real change. We will be pushing them on that.

One of the issues across the sphere of issues in the private rented sector is housing courts. That issue applies to this Bill, as I said in the debate on the amendments. If we are to properly deal with the issue of enforcement and a place to go—not merely for tenants but for landlords—to sort out disputes in an easy way that all sides can afford, we need to reform the way in which that can be done through a new system of housing courts. The Select Committee is certainly going to press on that. I hope that the Government will be responsive. They have indicated their desire to do something in that regard, but we have not yet seen what they intend.

The Secretary of State rightly said that the Minister has been particularly assiduous in listening and responding to the Select Committee’s concerns, but the Bill began under the remit of the Under-Secretary of State, Mrs Wheeler. I would like to put it on record that Labour Members recognise that the hon. Lady has been through an incredibly difficult personal time in the past few months. We offer her our best wishes and sympathy and say how good it is to see her back in her place in this House today.

Question put and agreed to.

Bill accordingly read the Third time and passed.