Baroness Taylor of Stevenage:

Moved by Baroness Taylor of Stevenage

49: Clause 11, page 18, line 35, leave out from beginning to end of line 28 on page 19Member’s explanatory statementThis removes provision inserted into the Housing Act 1988 making it an implied term of an assured tenancy (other than a tenancy of social housing) that a tenant will comply with conditions relating to pet insurance where the landlord has consented to the tenant keeping a pet and given written notice of the condition.

My Lords, I thank noble Lords for their rigorous, detailed and good-natured engagement on the matter of pet damage insurance. In particular, the extensive knowledge of the insurance industry of the noble Earl, Lord Kinnoull, has been of great assistance in ensuring that we get this policy right.

Following much debate in Committee and further discussions with sector stakeholders, including the Association of British Insurers and the British Insurance Brokers’ Association, we have reflected on our position and I will now speak to government Amendments 49, 54, 55, 57 and 73. I have listened carefully and recognised that, while the insurance market adapts to public policy, there is a risk that relevant insurance will not come on to the market sufficiently following implementation of the Bill. To avoid a situation in which landlords could essentially veto a tenant’s reasonable request to keep a pet, we are withdrawing the pet insurance provisions from the Bill. Tenants will still be able to request to have a pet in their home, but landlords will no longer be able to require insurance to cover property damage caused by a pet. Although our view was that a new market will develop for insurance products, following further engagement with the sector we now accept that this may not happen at the scale necessary. We are committed to supporting responsible pet ownership in the private rented sector and we do not want to leave tenants in a position where they are unable to comply with impractical conditions that a landlord may place on the tenant as part of their pet consent.

Noble Lords will rightly want to know what this means for landlords with concerns about potential property damage. I reassure the House that we are also now satisfied that landlords will be suitably protected from damage caused by pets, particularly after noble Lords shared evidence in Committee—for example, the University of Huddersfield report showing that three-quarters of pet-owning tenancies result in no claim against the deposit. As such, I am content that the existing five-week deposit for typical tenancies will cover any increased damages caused by pet ownership. We will, however, continue to monitor this closely after the implementation of the Bill. If tenants with pets are regularly causing more damage than deposits can cover, we have existing delegated powers to allow higher deposits for tenancies with pets under the Tenant Fees Act 2019. I hope the House recognises that we have listened and responded to the debate with pragmatism. Private renters should be treated fairly if they have reasonable requests for pets, and our legislative framework should support that. I am grateful to all colleagues who have helped us to get to the best position possible, and I beg to move government Amendment 49.

My Lords, before putting Amendment 49, I must advise the House that, if it is agreed to, I will not be able to call Amendments 50 to 53 due to pre-emption.

My Lords, I first wish to thank the noble Baroness, Lady Taylor of Stevenage, and the Government for adding Amendment 49 to this Bill with regard to pet insurance. I know that the Minister and the Bill team, as well as the noble Earl, Lord Kinnoull, have spent a lot of time on this matter, and the Minister listened and considered the noble Earl’s expert views and spoke to the insurance market before bringing this welcome change to the Bill.

I have submitted Amendment 53A. I originally supported Amendment 51 in the noble Earl’s name, with regards to the pet damage deposit, but it no longer worked within the Bill. As mentioned previously, I welcome the changes in this Bill regarding pets. The Government have acknowledged that pets can potentially cause damage or wear and tear to the property, so there was a need for a pet insurance product to cover potential costs, but that is now not part of the Bill.

The amendment seeks to provide an alternative protection to landlords and tenants from the possible additional costs that may be incurred by keeping a pet, to maintain the condition of a property. The additional three weeks’ rent as a deposit would provide an amount towards those costs. Some would say that the first five weeks would cover all forms of wear and tear; that amount is set aside for human wear and tear and damage.

Pets create different types of damage, which is why so many landlords do not allow pets into their rented properties. I note the Minister’s comments on the University of Huddersfield’s report, but a significant proportion cause damage. Pets are not humans and have their own minds, so we do not have as much control over them as we would like. The most significant area of the house that takes a battering will be the carpets and flooring. Human beings spend most of their time walking on these, where dogs and cats sleep, live, play, scratch and do other things, increasing their wear and tear.

Cleaning of the carpets professionally is a condition of most tenancies today where pets are allowed in a property. If that is not done by a tenant, it is what the additional deposit would cover. The noble Lord, Lord Trees, has kindly supported this amendment; his knowledge of pet fleas is vastly greater than mine, and he has spoken before in Committee on this matter. My own personal experience of dogs is that they tend to find a spot in the home that is safe for them and spend time lying and sleeping there, which tends to increase the wear and tear in that place. This results in them leaving their hairs and dirt, despite regular cleaning.

To continue on the carpet theme, animals have accidents at times, just the same as human beings do, and they need cleaning up. It is possible that a tenant with a sick or badly trained pet will find that it has urinated or left faeces on the carpet. If this happens regularly, the carpet will need replacing, which will cost either the landlord or the tenant, and that is what a deposit is for. Certain dogs and cats also enjoy the space of a garden to play in and at times can leave it in a worse state than when the tenant moved in—another cost to be covered by the landlord for replacing plants and doing lawn repairs. As more homes take pets due to the changes in this Bill, more homes will need deep cleaning. Many prospective tenants will have allergies to pets; therefore, deep cleaning is required to try to remove such residues from pets as possible, so that future tenants do not react to the legacy of pets when they move in.

In her summing up in Committee, the noble Baroness the Minister mentioned the affordability of an additional deposit and that five weeks’ deposit would cover the additional cost of these pets being in a house as well as human wear and tear. For many tenants, that would be the case. Tenants who look after properties get their deposits returned, and that would be the case if an eight-week deposit was paid, as a tenant would ensure that their pet was well behaved and cleaned up after them, undertaking necessary additional cleaning, and they would get their deposit back. Unfortunately, not all tenants are the same; they do not all keep their homes clean and well maintained as good tenants do. If these tenants who had a pet had the same outlook on life, it would mean that further damage cleaning and repairs would need to be done at the end of the tenancy. Therefore, the five weeks’ deposit would be used to reinstate the property to a good standard, and the additional deposit would be used to cover any pet damage.

The additional deposit for a pet would be a challenge for someone on a low income. Currently, in Scotland landlords can ask for a deposit of up to two months, which appears to be working and not causing major issues. When you take on a pet, you need to be aware that there will be additional costs to you personally or to your family budgets. For example, there are food costs, flea and worming treatment, cat litter and poo bags, as well as equipment such as rabbit hutches and bird cages and unexpected veterinary Bills. Therefore, tenants should understand that they may need to pay an extra deposit when renting a house.

The benefit of the deposit in this amendment is that, if they respect the property and maintain it, the deposit is returned to them at the end, whereas the initial proposal for pet insurance was money never to be returned, regardless of whether a claim was made or not. I know this amendment will add a burden to tenants, but it also provides a small amount of protection to landlords, who are now having to accept pets when in many circumstances they currently do not. For some landlords, the right to have a pet is making them reconsider whether to continue to let in the private rented sector or choose to do short-term holiday lets or Airbnbs, where they can charge for pets, or even sell the property. This amendment only helps to support landlords to remain in the private rented sector.

The Bill certainly provides some well-needed protection to the tenant, but it also needs to strike a balance for landlords. I believe these extra three weeks’ worth of deposit provide some protection. It may be a struggle for tenants to find. I thank the Minister for her comments regarding her proposals, but I am not sure they quite meet what this deposit would do. I look forward to hearing the Minister’s response, as this is an important matter for landlords and pet-owning tenants and would improve the Bill.

My Lords, I shall speak also to Amendment 53A. Getting the balance right between landlords and tenants is something that was stressed by a number of speakers on the previous group of amendments, including the Minister. The Bill really amounts to a presumption that tenants can keep pets, on the one hand, and protection for landlords, on the other hand, in the shape of a deposit and insurance. Insurance is going to fall away because it was not available and would have entailed a high cost. Even if such insurance had been available, the loss ratio would not have represented good value for tenants. Good tenants would have lost all their money, whereas, as the noble Lord, Lord de Clifford, has pointed out, you can get your deposit back with interest at the end. I feel that a deposit is a very good way to go, and that is why I tabled Amendment 51. I was disappointed that the appearance of Amendment 49 was going to kill Amendment 51 by way of pre-emption. That is why Amendment 53A is a very good idea.

Pets damage buildings. We heard a lot about this in Committee, and the noble Lord, Lord Trees, may say something to remind us of all the unseen things that pets bring into the home. I am afraid that I feel that the survey by the academics at the University of Huddersfield is a rogue thing; it does not accord with my experience at all—and the Blair Charitable Trust is a reasonably sized landlord all round. Pets do damage things, but a deposit is a very fair way of adjusting the balance between the two people.

In Scotland, that deposit is set at two months. Here, if the correct level of deposit is five weeks and we add the risk of a pet on top of that, which was going to be taken out by the insurance as originally proposed in the Bill, it seems to me not to be a good balance that there should be no increase in the level of deposit protection. In the original Amendment 51, I had set the additional protection at three weeks because I considered eight weeks very similar to two months and I felt that having some symmetry between Scotland and England on this point was a good idea. I also felt, through experience, that Scotland, with two months of deposit, was okay, and that the balance between tenants and landlords was okay where pets were concerned. I feel that Amendment 53A has a tremendous amount of merit.

One of the points made to me is that Amendment 53A would add a lot of expense to tenants in the amount of deposit they would have to put up. I was just totting up how much our own two dogs cost to look after in a year, and it is a lot. Even though they probably eat better than some dogs, the dog food, inevitable visits to the vets—we do not buy insurance but it would amount to roughly the same as insurance is a pooling scheme—and all the various other things one has to do, such as finding someone to look after them if you go away on holiday, cost many hundreds of pounds a year. There is also the initial cost. I am talking about dogs, but it would be same for other pets. The website Pets4Homes has 1,625 dogs on it today, which cost between £400 and £3,000. Many people who have pets are engaging in something that is reasonably costly anyway, so asking them to provide another three weeks of security is perfectly fair and proportionate—especially if, having looked after the property well, they get back not only the interest on it but the money itself at the end. I am very pro Amendment 53A.

My Lords, I too will speak to Amendment 53A, but first I thank the Minister and her team for their Amendment 49 and the consequential amendments, which will improve this Bill substantially. I thank her for the helpful letter about assistance dogs, which is a matter I raised in Committee and at Second Reading.

I support Amendment 53A. As many have said, it is extremely important that landlords are willing to accept tenants with pets—an objective with which all noble Lords would concur. This amendment would further that objective, and I think it is quite significant.

The costs incurred occasionally—it is only very occasionally but it happens—can be substantial. It goes way beyond a gnawed chair leg or a bit of wallpaper off the wall. As has been alluded to, if one has deposition of potential allergens in a property or a flea infestation, a real deep clean can cost hundreds if not almost thousands of pounds. Those costs inevitably fall on the landlord at the minute and are a considerable potential disincentive.

We have heard the figures from Huddersfield. Another figure is that 75% of landlords did not have a problem with pets. That means that 25% of landlords accepting pets have had some degree of problem. I note that 40% of landlords do not accept pets at all.

The deposit suggested in the amendment is proportionate and extremely important to assure landlords that, if there were to be negative results from a pet, they would get acceptable recompense. As the noble Earl, Lord Kinnoull, has pointed out, the deposit costs nothing if there has been no problem. It is returned fully, with interest, to the tenant. As he also pointed out, keeping a pet, particularly a dog—we are probably mainly concerned with what dogs can do—is a major financial responsibility and should not be undertaken by people who could not afford to put up a deposit of the size suggested. I support this amendment.

My Lords, I support Amendment 53A in the name of the noble Lord, Lord de Clifford, spoken to so ably by the noble Earl, Lord Kinnoull.

While there is considerable improvement in the present five-week deposit limit, there will still be a good number of cases where the damage by pets is more than the cost of the remedial work that needs to be done. For the first time ever, I have just refused a tenancy on the ground that the pets would be inappropriate. The proposed tenants wanted to have three Newfoundland dogs in a two-bedroom property. In Committee, the Minister said that the Bill already permits landlords to refuse their consent on reasonable grounds which are best judged on a case-by-case basis. Would my refusal to have three Newfoundland dogs in a small two-bedroom cottage be reasonable? I doubt that even an eight-week deposit would cover the potential damage, and the present five-week deposit would be nowhere near adequate.

I urge the Minister to please accept this modest amendment, which would add an additional three weeks. The present five weeks would, in my experience, cover only about 50% of cases where damage has been done by pets. It would be unreasonable to ask landlords to take on yet more liability on top of those already existing and the ever-increasing burden imposed by government.

I remind the Minister that the Majority of landlords are private individuals with just one or two properties. They are already finding it difficult enough to manage their properties, which is why they are a fast-disappearing breed. Driving them to extinction will only accelerate the demise of the rented sector, to the disadvantage of landlords and those seeking a property to rent.

My Lords, I am glad that the noble Lord, Lord de Clifford, brought forward Amendment 53A, because it is enabling us to have this very interesting debate. We are talking about the cost of pets, but actually you could transpose the words “children” or “elderly incontinent”, because those two groups equally have very difficult problems. They can damage carpets—if anyone has had children in a house, they will know that they can inflict an awful lot more damage than pets. Unfortunately, the elderly and the disabled can often be equally as damaging.

The noble Lord, Lord Trees, mentioned that pets have fleas, which is very true. However, if you let your property to people who travel a lot, there is the risk that they might bring bedbugs back, which are much harder and more costly to get rid of than fleas.

Although I understand the reason for the noble Lord’s amendment, we do not support it. We think the Government have struck the right balance with their Amendment 49, which we will support.

My Lords, I support Amendment 53A. However, I ask the noble Lord, Lord de Clifford, to deal with one point when he replies. There appears to be no requirement in the amendment that the landlord must be acting reasonably in demanding a deposit. It is easy to understand and entirely reasonable that the landlord may require a deposit if the tenant wishes to keep dogs, but it would not be reasonable to demand a deposit if the tenant wishes to keep a goldfish. It is easy to understand the idea that there is no harm done because the deposit will be returned at the end of the tenancy, but the requirement of the deposit may well inhibit the tenant from being able to have the goldfish and the companionship that it gives.

My Lords, once again I declare my interest, in that I am a landlord.

I support Amendment 53A most strongly, but I wonder if I might dwell on the point made by the noble Baroness, Lady Miller. Looking around this Chamber, I see that most of us travel a lot as part of our duties in this House if we live outside of London. I am sure my wife would be the first to complain if I brought bedbugs back to our family home.

Drawing on my experience as both a landlord and a managing agent, I know the cost of the Bill will be that the additional costs of damage, wear and tear, fluff, cleanliness, pest control and all those other little things—as enumerated most ably by the noble Lord, Lord de Clifford—will, particularly in blocks of flats, be borne by those tenants who do not keep pets. I do not think that is right. Quite simply, keeping a pet is an add-on to a tenancy and the additional cost should be borne by those who bring the pets with them.

There are lots of examples of where things can go wrong and I will give an example, from my own lived experience, of a tenant who declared that he did not own any pets at all. In due course, he brought his two large dogs to the property, where he left them while he went to work. By and by, it became clear that my house was being used as a kennel. Not only were the neighbours disturbed by the barking all day and all night but, by the time the tenant had stopped paying rent and I had taken proceedings, £15,000-worth of damage had been caused. When he finally left, I discovered the most foul-smelling and revolting scene: one bedroom had been used as a doggy lavatory for weeks. It would have been even worse had the proposals to stop repossession action been extended from eight to 13 weeks.

This was a gross case, in every respect, although I was lucky to get an insurance claim because the sum of money was so large. But that is not what we are talking about generally in this Bill. We are not concerned about granny who may be infirm, as the noble Baroness, Lady Miller, implied, chewing the table leg or eating the carpet. We are thinking of the middling bit, where it is above and beyond the three weeks. I agree with my noble friend Lord Howard that the additional three weeks is not enough, but I accept that we have to fight the battles we can win. If that is as good as we can get, it is a proportionate compromise that I am prepared to accept.

Several noble Lords mentioned—and I agree—that if the pet does not cause any damage, the tenant gets the deposit back in full, with interest. I place on the record that in the statutory deposit protection schemes, interest is not normally paid. The deposit goes in and the costs of interest are retained by the deposit scheme, presumably to defray their costs of operating the system and its administration. I would not want those watching this outside the Chamber to think that we are now going to introduce the requirement to pay interest if the landlord does not accept that.

I listened carefully to what the Minister said about the Government’s ability to increase the deposit through the Tenant Fees Act 2019, but I think we should accept here and now—and Amendment 53 implies this—that there are additional costs and risks to keeping pets, and it is obvious that we should not necessarily wait. Let us have those provisions within the Tenant Fees Act 2019 introduced immediately, but proportionately, so the goldfish is not charged at the same rate as the Newfie—that would not be sensible—particularly in cases where there is furnished accommodation. Then we can have a good compromise that everybody can live with.

Finally, I do not want to repeat this at length, but I believe that if we can come to that arrangement, having that deposit benefits the tenant because at least they get it back, whereas in the case of buying an insurance policy—not that these policies exist, as the noble Earl, Lord Kinnoull, said—that would be an absolute cost because they would pay whether there was damage or not. I strongly support Amendment 53 and if the noble Earl is minded to test the opinion of the House, I will follow him through the Lobby.

My Lords, the issue of pet-related damage is understandably a source of concern for landlords. This group of amendments raises important questions about how we balance—that word balance again—the increased rights granted to tenants to keep pets with the responsibilities and protections that landlords need.

It is simply not reasonable to argue that the existing tenancy deposit, which is designed to cover damage under current arrangements, is also sufficient to cover the additional risks introduced by granting tenants a new right to keep pets.

The Government have already accepted that pets pose a greater risk by including pet insurance measures in the Bill. That was a clear recognition that pets are likely to cause additional damage. However, as we consider these provisions, it is crucial to reflect on the experience already gained in Scotland, where tenants’ rights legislation has evolved to allow pets in rented properties, while seeking to balance landlord protections. In Scotland, the introduction of pet-friendly tenancy provisions and related insurance requirements has offered valuable lessons. While these measures have expanded tenant freedoms and encouraged pet ownership, they have also revealed challenges, particularly in ensuring that landlords are adequately protected against damage and in making sure that any additional costs or deposits are fair and transparent.

Either pets cause additional damage or they do not. If the Government now claim that they do not, they must provide clear and compelling evidence to justify overturning their original assessment. Without such evidence, it logically and fairly follows that the landlord should be permitted to take a separate pet damage deposit.

We believe it is inevitable that some damage will result from pets. That is why we support Amendment 53A, which would introduce the option of a dedicated pet damage deposit. This would provide landlords with an essential route to recoup costs, while also protecting tenants from unfair charges by clearly defining that this is a separate and transparent element of a tenancy agreement and that, as we have already heard, if no damage is done, they get this charge back.

We recognise that some landlords may choose to welcome pets without requiring additional deposits—or, in the future, insurance—and they should be free to do so. But where landlords require further protections, there must be a fair and transparent mechanism for tenants to provide it at the outset of the tenancy.

Finally, the experience in Scotland reminds us that implementing pet-friendly rental policies is a delicate balance that must be tailored to the practical realities that landlords and tenants face. As the Bill moves forward, it is essential that it draws on such lessons to achieve frameworks that work fairly across the whole United Kingdom.

If the noble Lord, Lord de Clifford, is minded to test the opinion of the House on Amendment 53A, we will support him.

My Lords, I thank all noble Lords for their contributions to this debate. I know it is a hugely emotive and important issue for so many people, and we have had a good debate on it today. I thank the noble Lord, Lord de Clifford, for introducing his Amendment, and the noble Earl, Lord Kinnoull, the noble Lords, Lord Trees, Lord Howard, Lord Pannick and Lord Fuller, and the noble Baronesses, Lady Miller and Lady Scott.

I turn now to the amendments in the names of the noble Earl, Lord Kinnoull, and the noble Lord, Lord de Clifford. As we have discussed, Amendment 50 is not required as our government amendments remove the insurance requirements altogether. I understand fully the intention of Amendments 51 and 53A, with the aim to ensure that landlords are protected from potential damages caused by pets. However, we are content that existing deposits, which are capped at five weeks’ rent for typical tenancies where the annual rent is less than £50,000, or six weeks’ rent for tenancies over £50,000 per annum, are enough to cover typical pet damages.

The noble Lord, Lord Pannick, illustrated very clearly some of the complexities of this issue. Allowing a further three weeks’ deposit would cost the average tenant in England over £900. This is unaffordable for many tenants, who will have worked very hard to save for their deposit for their property, and greatly exceeds the average deposit deduction for pet damage of £300 reported in the study we have already spoken about. That study found that 76% of landlords reported that they did not encounter any damage caused by dogs or cats in their rental properties. Where there was damage, it was an average of £300 per property, compared with £775 for non-pet-related damage.

The report also shows that renters with pets tend to stay longer in their properties than those without pets, indicating financial and social advantages for landlords in fostering those longer and more stable tenancies. In the very rare cases where the deposit does not cover the cost of damage caused by a pet, a landlord can of course take the tenant to the small claims court by bringing a money claim to recoup any outstanding funds.

In relation to the issues mentioned about Scotland, housing is of course a devolved matter in Scotland, and it is for the Scottish Government to set deposit limits for private rented properties. I note that the right to request a pet does not yet exist in Scotland. In England, we believe that the five weeks’ deposit will be sufficient to cover damages. We also have concerns that in some cases it will be impossible to distinguish between damage caused by pets and that caused by tenants themselves. This could leave pet owners with more exposure to large, unreasonable deposit deductions compared with other renters. As I said, we have an existing power under the Tenant Fees Act, which we could use to allow landlords to require a larger deposit where they have consented to the tenant having a pet. We want to closely monitor how the pet provisions work in practice following implementation, and will consider using the power in the Tenant Fees Act if we see that the cost of pet damage is frequently exceeding the value of deposits.

A similar amendment to Amendment 52 was discussed in Committee. I explained that I do not believe that this is the right approach, as it may actively serve to discourage insurers from offering insurance products, rather than encourage them. However, as noble Lords are aware, the Government’s position on insurance has now changed. The Government are firm in the view that tenants are not second-class citizens and deserve to be able to keep pets when this is reasonable.

My Lords, the Minister just said that the situation has changed. I have listened very carefully to the debate. The Government thought it was necessary to have insurance; they now say it is not necessary. Therefore, the Government have already admitted that there needs to be something additional to protect the landlord in the case of somebody having a pet. Frankly, the argument does not stand up to say that that is not so. I hope that the Minister will accept that she really has to go back and say that if there is no insurance, there has to be a greater degree of protection for the landlord.

I hear what the noble Lord says, and I have listened to other noble Lords, but the evidence in the study that I cited is that three-quarters of landlords of those tenants who have pets do not report any damage. Where there is damage, the cost is around £300, which is perfectly within the scope of the normal deposit. We are content that landlords would be suitably protected against the cost of pet damage through existing tenancy deposits.

Finally, I turn to Amendment 53. As I stated in Committee, “premium” is already commonly understood to include any insurance premium tax, so this amendment is not strictly required, in our view. However, following the Government’s amendments, which remove the ability of landlords to require tenants to obtain insurance to cover the risk of property damage caused by a pet, the noble Lord will, I am sure, recognise that this amendment is no longer required. I therefore request that these amendments not be pressed.

Amendment 49 agreed.

My Lords, as previously advised, Amendment 49 having been agreed to, I cannot call Amendments 50 to 53 due to pre-emption.