Private Rental Market

– in the House of Commons at 2:30 pm on 14th January 2022.

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Motion made, and Question proposed, That this House do now adjourn.—(Rebecca Harris.)

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs) 2:40 pm, 14th January 2022

I called for this debate, and was successful thanks to the Speaker’s office, following the recent shocking treatment of a group of residents in my constituency by their landlord, which brought insecurities in the private rented sector into sharp focus. In November last year, I was contacted by several residents living in a block of flats in Hornsey and Wood Green. After their building was sold to a new landlord, they received either section 21 notices to evict them or section 13 notices saying that their rent was set to soar by an eye-watering 30% to 40%.

Those tenants included families who had lived there for decades and they were understandably devastated at the thought of losing their homes. Like me, they could not understand how an increase on that scale could ever be justified or how a landlord could kick out reliable long-standing tenants for no reason in the middle of a pandemic.

I am pleased to say that, following weeks of representations by my office to the new owners, the threat of adverse publicity in our local campaigning newspaper and the help of the charity Shelter and local Hornsey Labour councillors, I learned this week that the new owners had rescinded some of those notices and offered tenants new contracts on more favourable terms. Although that is welcome news for most residents, sadly, for some of them, the landlord’s change of heart two months after the notices were dispatched has come much too late.

This example highlights the huge power imbalance between private landlords and their tenants, which is currently upheld by existing housing legislation. That is why I am urging the Government to end section 21 notices, as they committed in their 2019 general election manifesto. I am asking the Minister to provide an answer today on when the renters’ reform Bill, promised in the Queen’s Speech, will be introduced.

In that block of flats in my constituency, seven households were issued with section 21 notices, which enable private landlords to repossess their properties from assured shorthold tenants without having to establish fault on the part of the tenant. Such measures are sometimes informally referred to as no-fault evictions. Many of those householders have lived in their flats for several years, in some cases decades, and are raising their families there.

One family who were issued with a section 21 notice have been renting their flat since 1991. They raised their daughter there and, now in their 60s, cannot afford a mortgage, because in that period, as the Minister will understand, the average price of a property in a place such as Hornsey and Wood Green has sky-rocketed. After the family challenged their landlord over the notice, they were told that their only other option was to accept a 40% rent increase.

Another resident whose family were issued with a section 21 notice after living in their flat for five years explained that his family had been left in an extremely difficult and precarious situation. To make matters worse, those notices were issued in mid-November, with section 21 notice recipients expected to find a new home and move over the Christmas period in the midst of a global pandemic. When challenged on that, the new managing agent for the block said that there was no good time to serve a section 21 notice. He is right, but there are some very bad times, and that was one of them.

Many other tenants in the blocks were issued with section 13 notices of rent rises of up to 40% with as little as four weeks’ notice. One of those residents explained to me that when she moved into her flat as a single parent, she enjoyed the sense of community in the block, which is home to a number of families. The landlord’s aggressive move to increase her rent by 30% to £2,000 per calendar month for a two-bedroom flat in Hornsey would have made it impossible for her to pay.

The only recourse available to those who receive section 13 notices is to refer them to a tribunal. However, this process can be lengthy, complex, time-consuming and a waste of public funds, particularly for those struggling to access expert advice. Moreover, there is nothing to stop landlords subsequently issuing a section 21 notice if the tribunal decision does not go in their favour. The Mayor of London, Sadiq Khan, who has worked with tenants and landlords to develop a new and fairer tenancy model—the London model—has called on the Government to reform court processes to make it easier for renters to challenge rent increases and eviction notices. He wholeheartedly supports this Adjournment debate.

Particularly given the Tory household budget crisis, it is an injustice that any landlord should be able to behave in this way. When I contacted Shelter for advice, I was told there is nothing to prevent private owners deciding to take possession on a large scale like this, even during a global pandemic and on the eve of Christmas.

Living with that level of uncertainty can be detrimental to the wellbeing of our community. Shelter’s survey of private renters in 2021 found that 39% said their housing problems or worries left them feeling stressed and anxious, and many parents have reported to Shelter that the insecurity of renting makes it harder for their children to settle. Living in homes on short, fixed-term contracts with the threat of eviction or a looming unaffordable rent hike makes planning for the future extremely difficult. Frequent moves are not only expensive but disruptive to employment and children’s education.

Living in constant fear of eviction also makes renters less likely to report disrepair problems, which is an issue I see all too frequently in my constituency, where 17,000 households are privately renting. Shockingly, a quarter of privately rented homes do not meet the decent homes standard, with 14% having a category 1 hazard that poses a very significant safety concern.

Although there are some actions the local authority can take to ensure landlords address the most serious disrepair, Citizens Advice found that private renters who make a formal complaint to their local authority have a 46% chance of being served with an eviction notice within six months, which is a severe deterrent to reporting disrepair to the local authority.

Eleven million people, including 1 million children, are now living in rented accommodation. In the past this was just a short-term option before one purchased a home or before one was able to get on a housing list. Now, with 11 million people living in privately rented accommodation in the UK, this has become an urgent issue. The number is expected to grow in the coming years, with 40% of London’s households expected to be living in the private rented sector by 2025. This is no way for the city’s inhabitants to live.

The last piece of comprehensive legislation affecting the private rented sector was introduced in 1988, when the number was far lower. With a growing number of people affected across the country, the Government need to act urgently. First, when will the renters’ reform Bill be brought to the House? Secondly, when will the Government live up to their promise to build more genuinely affordable homes? By that I mean homes with rent at the level of council rents so that people can afford to save while renting and can get on to the housing ladder if they wish to do so later.

Everyone has the right to a safe and secure home. It is shameful that, three years after promising to end no-fault evictions, renters such as my constituents in Hornsey and Wood Green are still living with the fear of being made homeless by their landlord due to this Government’s failure to act. I urge the Minister to address these concerns, which are shared by so many in my constituency, across London and across the UK—11 million people are affected in the UK.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 2:48 pm, 14th January 2022

I begin by congratulating Catherine West on securing this important debate on insecurity in the private rental market. In a country as great as ours, it should be a basic human right that people, regardless of whether they are home owners, leaseholders or tenants, feel safe and secure in their own home.

The hon. Lady touched on a number of issues that I am sure are familiar not just to me and my constituents but to Members and constituents across the country. As she rightly pointed out, the private rented sector is the second largest housing tenure in the country—11 million people are housed in that way. In fact, 19% of people in the country live in the private rented sector. It is also housing the most diverse range of people these days. People living in the private rented sector are often older now and families rather than single people.

Although it is the sector that continues to play a central role in providing housing across the country, it is the housing market that has undoubtedly left thousands of tenants feeling insecure and unprotected. However, this does not need to be the case and it should not be the case. We, the Government, want to shift the odds in favour of renters and deliver a better deal for them.

People across the country should be able to expect that, when they are signing up to a rental agreement, they will be protected from wrongdoing. There is still much to do for us to reach that point, but the action that we are taking will improve the lives of people right across the country.

As I stand here today, unfortunately, and as the hon. Lady rightly pointed out, millions of responsible tenants are living in homes in the knowledge that they could be uprooted at a moment’s notice and with minimal justification. That is not peace of mind; that is simply wrong. To give people the confidence they need to be able to plan for the future, we are stepping up with the biggest change in legislation for the private rented sector for a generation by abolishing no-fault evictions—section 21s as they are more formally known. This is the centrepiece of our plans to raise standards across the whole of the private rented sector and reflects our determination to drive out rogue and unscrupulous landlords. Our reforms will deliver a fairer, more effective rental market and, later this year, we will publish the White Paper that sets out the blueprint for the whole sector. I appreciate completely that the hon. Lady is very keen for us to progress, but it is important, given this once-in-a-generation change, that we make sure that we have consulted widely with people from across the sector to ensure that we get it right.

In the meantime, the hon. Lady can be assured that we are not resting on our laurels. We are engaging with the widest possible range of voices, including stakeholders and organisations from across the sector. As much as we sometimes like to pretend, politicians do not always have the answers. Hearing and listening to these views would not only ensure that the White Paper and future legislation actually address the challenges that exist, but help to create a system that works for everyone.

As part of a range of actions to address the urgent and pressing needs of the generational pandemic that has arrived on our shores, we acted to keep renters safe in their homes. We banned bailiff evictions, extended notice periods, and provided unprecedented financial support to people and businesses. These measures worked: fewer households were assessed as homeless; there are fewer rough sleepers today; and fewer possession claims are now being made in the courts. We will make sure that build back better is more than a slogan. As we recover from the pandemic, it is right that we do everything we can to improve the security of tenants in the private rented sector and learn the precious lessons from the interventions that we adopted to make sure that we deliver greater protection for tenants and empower them to hold their landlord to account.

The hon. Lady is right to raise the issue of no-fault evictions. Currently, landlords can evict tenants with as little as two months’ notice once their fixed-term contract has come to an end without even needing to give a reason. The practical implication of this unjust situation is that the tenant can find themselves living with the worry that they may be evicted at the click of a finger. Other tenants continue to endure poor standards for fear that they will asked to leave if they complain about the problems in their home, as the hon. Lady pointed out. That is why the Government are committed to abolishing section 21 of the Housing Act 1988. No longer will tenants find that their landlord is evicting them on a whim with no reason given as to why they have to relocate their lives or disrupt their children’s education. In the future, landlords will always have to provide a specific reason for ending a tenancy, such as breach of contract or waiting to sell the property. It will also help to end revenge evictions where landlords may evict tenants who rightly complain about poor standards, as raised by the hon. Lady. It will protect tenants from having to make frequent and short-notice moves, and will enable them to put down roots and plan for the future.

In 2019, we consulted the public on our proposed reforms to the tenancy framework and how we should take it forward. About 20,000 people gave us their views, and we are listening. While we continue to drive forward work on sector reform, we also recognise that affordability concerns can cause insecurity for renters, and we are committed to tackling that.

It is unfortunate to hear of issues that constituents have raised about rent hikes. Under the existing legislative framework, private sector landlords can increase the rent in two main ways. First, during the fixed-term period any rental increases are set out in the tenancy agreement, allowing landlords and tenants to agree arrangements that suit their circumstances. Secondly, once the fixed-term has ended—and if the agreement transitions to a statutory periodic tenancy—a landlord is able to adjust the rent once a year under section 13 of the Housing Act 1988. The landlord must serve a notice to the tenant informing them of the proposed change. If the tenant does not agree with the landlord’s intention, they can refer the matter to the property chamber of the first-tier tribunal for independent adjudication. The tribunal will consider the application and decide what the maximum rent of that property should be if let on the open market, considering, obviously, the conditions of the local housing market. Tenants may also have a rent review clause in their contract.

We are clear about the fact that it is for landlords and tenants to agree the amount of rent that should be charged at the outset of a tenancy, but the Government are keen to avoid any unintended negative consequences related to abolishing section 21. As part of that, we are determined that there should not be any mechanism for landlords to force a tenant to leave a property by including clauses in tenancy agreements which hike up the rent by excessive or unreasonable amounts just before the agreements are due to expire.

While three quarters of private renters found it easy to afford their rent, we understand that affordability may be an issue for some, and that they may require additional support. For tenants who are unable to afford their rental payments, a range of support is available through the welfare system, alongside the unprecedented financial package helping renters to afford their housing costs during the pandemic. That has meant that, even given associated pressures of covid-19, the vast majority of renters—93%—are up to date with their rent. That shows that the comprehensive package of support provided by the Government is preventing widespread rent arrears as a result of covid-19.

I hope we can all recognise that the Government are steadfast in their commitment to building a private rented sector that works for everyone: a sector that introduces a better deal for renters, and improves the lives of people across the country. Ours is a Government who are pursuing reforms that will ensure that good landlords can flourish and continue to provide the homes that the country needs, but it is also a Government who are protecting tenants from sharp practice and removing criminal landlords from the sector, and are building back better from the pandemic. We are committed to rebalancing the relationship between tenants and landlords to deliver a fairer, more secure and more desirable private rented sector. While that will not happen overnight, it will happen. We get it: we understand the challenges that exist in the sector, and we are open to dealing with them. That is why it is so important that we continue to drive through our reforms to ensure that we deliver on our aims.

We are aware that we need the support of the entire private rented sector if we are to achieve these goals. It is in that spirit that I again thank the hon. Lady for securing this important debate, and assure her that I intend to continue to drive through the Government’s ambitious agenda of reform in the sector.

Question put and agreed to.

House adjourned.