Lord de Clifford:

Moved by Lord de Clifford

At end insert “, and do propose Amendment 11B in lieu—

11B: Clause 11, page 19, line 28, at end insert— “16D Pet damage deposit (1) It is an implied term of every assured tenancy to which section 16A applies that if, at the time of consenting to the tenant keeping a pet, the landlord informs the tenant in writing that the payment of an additional pet damage deposit by the tenant is a condition of the consent, then the tenant must comply with that condition. (2) The additional pet damage deposit under subsection (1)— (a) can be used to make good pet damage, (b) must be of equivalent value to a minimum of one weeks of rent and a maximum of three weeks of rent, depending on the nature of the pet, at the landlord's discretion acting reasonably, (c) cannot be subject to the limits for deposits in tenancy agreements, and (d) is subject to the rules governing deposits in tenancy agreements, for purposes of monies handled.””

My Lords, first, I thank the Minister for her opening remarks. Your Lordships should please note my interest in the register that I work for and am a shareholder in a veterinary business that cares for many pets. I also have the privilege of being a dog owner for many years.

My updated Amendment seeks to provide protection and reassurance to landlords and give tenants much more opportunity to find a rentable property that allows pets. The Government quite rightly included in the Bill the right of tenants to request landlords to allow pets, as currently there is a limited number of properties available.

At the commencement of the Bill, the Government wished to support landlords with a change with regards to the financial risk that pets may cause damage to a property during a tenancy. This proposed solution was an insurance policy which provided a level of cover. The proposal was supported by many housing and pet charities. Due to the risk profile of this type of cover, the insurance market could not provide the appropriate policies. As a result, the Government withdrew the proposal from the Bill. That risk still exists. The tenant’s five-week deposit covers the risk that tenants may cause damage to a property. Housing a pet is an additional risk and therefore asking for an extra amount of deposit is surely not unreasonable.

One of the Government’s objections to the amendment, as already stated by the Minister, was the increase in the deposit, and I acknowledge that this is an issue that exists for some. We have considered this in updating and reducing the number of weeks’ deposit required to a minimum of one week and in an obligation on landlords to be reasonable when asking for the amount of deposit considered and the nature of the pet or number of pets.

The Government said that the five-week deposit will cover the damage of pets. They used figures from the University of Huddersfield survey provided to the Battersea Dogs & Cats Home, which say 76% of landlords have no issue with pets. That leaves 24% of landlords with issues; that is not a small number and the summary does not define what those pet issues are. The report did quote that the average cost of pet-related damage was about £300 per tenancy. I believe the average weekly rent is about £300, as mentioned in the passage of the Bill, so one weeks’ rent would cover the damage.

It may be that if a pet damages a property, a good tenant will repair it. Sadly, not all tenants are the same, just like we have a range of good and bad landlords. If a tenant has a pet that causes some damage and it is not repaired, is it not likely that, if there are other damages, they will not be repaired? That is what the five-week deposit will cover, and an additional pet deposit could cover the pet damage.

There is good evidence that tenants with pets tend to stay longer, and many take care of their properties to a high standard. One conclusion would be that these tenants stay in certain properties for longer due to the lack of supply of alternative rental properties—which, happily, the Bill wishes to address—but we need to support landlords with this change. By supporting this amendment, we will be supporting landlords and making the process of more landlords accepting pets without objection a far greater reality, as they will have the protection of an additional deposit. It will, I hope, also encourage existing landlords to stay in the private rental sector market and potentially encourage new landlords to choose long-term tenancies over short-term holiday and Airbnb lets, so maintaining supply of rental properties.

A table in the University of Huddersfield report asks landlords whether different policies or incentives would encourage them to consider pet owners as tenants in the future. Some 53% asked said that having a tenant with insurance cover for pet damage would help. Sadly, this is not available. Some 51% said that allowing landlords to charge for a deep clean would help; this would be covered by a pet deposit. Some 43% said that allowing landlords to be allowed to hold a pet deposit would help them, and this is what this amendment does.

Pets provide so much to us human beings in companionship and health benefits and provide friendship and support at difficult times. When owning a pet, we have a responsibility to maintain their welfare and health. This is both a time commitment and a financial commitment for the owners. If someone is a potential tenant with a pet, an additional deposit for a property should be thought of as part of that financial commitment.

I hope my revised amendment will find some support with your Lordships today, and that we can find a balance between landlords and tenants to increase the supply of pet-friendly accommodation. I beg to move.

My Lords, I welcome Amendments 39B and 39C in particular—on my behalf and on behalf of our most able leader on this Bill team, my noble friend Lady Thornhill. We are absolutely delighted that military housing is going to be held to the same legal standard as the private rentals in the Bill. Putting this on a statutory footing fulfils the wishes of this Government and the campaigning work by some of my colleagues, particularly in the Commons: MPs Gideon Amos and Helen Morgan, to name but two. I thank Adam Bull in our Whips’ Office, who has been working very hard on this over the recess.

I thank the Minister, the noble Baroness, Lady Taylor of Stevenage, for her time and patience in discussing this issue and us getting to this very happy mutual agreement. I also thank Minister Pennycook for the time he spared, and the noble Lord, Lord Coaker, who has spent time on this. The noble Lord, Lord Best, and the noble and gallant Lord, Lord Stirrup, have provided wisdom, backing and advice, and I am grateful to them both as well.

At the heart of this issue are those in the military who give the ultimate sacrifice and the families who live with them and stand by them. Let us hope, as a result of this change, that the appalling conditions they have endured so far will change and will be a thing of the past. We are enormously grateful for this change and are looking forward to seeing it introduced.

With regard to the Motion in the name of the noble Lord, Lord de Clifford, we have consistently not supported this. We recognise the eloquence of his arguments in this area, but we continue to argue that this will place undue financial pressure on tenants and could be exploited by rogue landlords to impose excessive deposit charges. We believe that tenants, owner-occupiers and social tenants should be viewed on a much more equal footing. This speaks to some of the speeches that both I and my noble friend Lady Thornhill have made. Therefore, we feel we cannot support it, but we are absolutely delighted with the government Amendment, and we look forward to its implementation.

My Lords, as we have heard, Amendment 11B in the name of the noble Lord, Lord de Clifford, seeks to allow landlords to request a pet deposit equivalent to up to three weeks of rent. Like many of the charities involved in the animal welfare sector that have campaigned tirelessly on this issue, I am disappointed that we are having to return to this subject after it was clearly rejected in the other place, having been the subject of intense discussion. Charities including Battersea, Cats Protection and the Dogs Trust strongly support the Government’s position, and so do I. The reason for that is clear. Such an obligation would defeat the very purpose of the pet provisions in this carefully balanced Bill, which are designed to make pet ownership easier for tenants and remove the iniquity that owning a pet is the preserve of the increasingly small number of people who can afford to own their own home. I declare my own interests as the owner of a cat.

Let us be clear: as I said in Committee, for tenants seeking to have a single pet in rented accommodation, there is likely to be only very minimal, if any, damage. The standard security deposit is more than sufficient to cover any damage beyond standard wear and tear, as a survey conducted in 2021 by YouGov on behalf of the Dogs Trust and Cats Protection concluded. In rare circumstances, where damage caused by a pet may exceed the value of the existing security deposit, measures already exist for landlords to seek additional compensation from the tenant. As such, charging an additional pet deposit is unnecessarily and wholly disproportionate.

This costly proposal would put the wonderful aspiration of pet ownership beyond the reach of many. Allowing landlords to require a pet deposit equivalent of up to three weeks’ rent could see tenants forced to find up to an additional £1,500 for a one-bedroom flat in high-rent areas such as London—a figure which is unaffordable for many. It would also introduce an unfair geographical disparity, with those living in cities, where rents are higher, being far worse off compared with those living in rural areas.

Another problem with the addition of a pet deposit is the potential lack of transparency regarding what a landlord decides should constitute pet damage and what constitutes the type of damage that would otherwise be funded by the standard security deposit. Many landlords, I fear, would see this as an extra fund to provide an option to withhold more money simply for standard wear and tear.

The pet provisions in the Bill have been thoroughly and energetically debated, both inside and outside this House. It is clear from all those discussions that the standard security deposit is more than adequate to cover any damage caused by a pet and that this amendment is completely unnecessary. Its only result would be to neuter one of the key planks of this vital legislation, destroying the hopes of so many tenants who dream of having a pet in their home. Today, we should make that dream a reality, so I am afraid that, if the noble Lord presses his Motion, I shall be voting against it.

My Lords, I will speak briefly on two matters: first, the Ministry of Defence accommodation, and then the pet deposit. On the Ministry of Defence housing, we thank the Government for listening and engaging so constructively on this issue. The concerns raised have been recognised, and the Government’s response has been both proportionate and pragmatic. On these Benches, as ever, we strongly support our service personnel and the vital contribution they make to us and our country, and we are happy to support the Government’s Motion.

Turning to pets, I support the noble Lord, Lord de Clifford, on an issue that has filled my inbox and, I know, that of my noble friend Lord Jamieson as well. When the Bill was first introduced, the Government rightly sought to balance the cost of pet-related damage through the requirement of pet insurance. However, as we pointed out repeatedly, and as the noble Earl, Lord Kinnoull, emphasised, no such insurance product actually existed. Once the Government accepted that fact, the requirement was removed, but nothing was put in its place.

The noble Lord’s Amendment would restore that missing balance. It offers a fair and proportionate settlement, ensuring that renters can keep pets in their homes while landlords have reassurance that any pet-related damage can be covered. If there is no damage, the deposit will be returned. Recent research by Propertymark shows that 85.3% of landlords and agents have incurred damage to their properties by pets. Yet more staggeringly, 57% of landlords and agents report being unable to recoup pet-related damage costs.

Allowing an additional deposit of one to three weeks’ rent is therefore a reasonable and balanced step that protects tenants’ rights while recognising the realities faced by landlords, particularly small landlords. Landlords are not always wealthy investors. Many, as we have said many times on this Bill, are ordinary people for whom a second property represents their pension or their life savings. If a property requires major cleaning or repair, those costs can be prohibitive, and in some cases could drive properties out of the rental market altogether. Therefore, if the noble Lord, Lord de Clifford, chooses to test the opinion of the House once again, we on these Benches will support him.

Finally, I thank the Government for their constructive engagement and the assurances given in writing and from the Dispatch Box on the standard of proof. Those commitments provide much-needed clarity and reassurance on how this will be applied in practice, and we are grateful for the Minister’s response.

Taken together, we believe that these measures improve the Bill, and make it fairer, more workable and more balanced for tenants and landlords alike.

My Lords, I thank all noble Lords who have spoken in this debate. I thank again the noble Lord, Lord de Clifford, and the noble Baroness, Lady Grender, for their positive approaches throughout the course of the Bill. I thank the noble Lord, Lord Black, for his support—I will come on to some of the points that he raised in a moment—and the noble Baroness, Lady Scott.

I think the responses to this part of the debate are pragmatic. I am afraid that we cannot accept the Amendment tabled by the noble Lord, Lord de Clifford. He mentioned the Government’s change in position on pet insurance. We had an extensive debate, in both your Lordships’ House and the other place. We drew on the expertise of Peers such as the noble Earl, Lord Kinnoull, and the noble Lords, Lord de Clifford and Lord Trees. The Government consulted further with the Association of British Insurers and the British Insurance Brokers’ Association. Following that engagement, we concluded that we were no longer confident that the insurance and underwriting sector would have sufficient or suitable products available for landlords or tenants to purchase.

In view of that, we did not want to leave tenants in a position where they could not comply with conditions set as part of the pet consent granted by their landlord, as that would mean they would not be able to have a pet, which would defeat the object of having pet provisions in the Bill. I am pleased to say that, as the noble Lord, Lord Black, mentioned, Battersea Dogs & Cats Home has indicated its support for the Government’s approach, including the approach of not accepting this amendment. I received just today a letter of very strong support from Dogs Trust and Cats Protection, and another email from Shelter expressing its support and hope that this amendment would not be accepted, because it did not feel that it was in the interest of tenants or their pets. We used the information from the University of Huddersfield as part of our consideration.

It is important to say that, as I noted in my Opening Speech, we will continue to keep this under review. We have powers to allow for higher deposits for pets, if needed. We are satisfied at the moment that the existing requirement of five weeks’ deposit for typical tenancies is sufficient to cover the risk of any increased damage by pet ownership. I know some landlords are concerned about potential damage that may be caused by pets. Landlords can deduct damage costs from the normal tenancy deposit, as they do now. In rare cases, where the deposit did not cover the cost of the damage, the landlord could take the tenant to the small claims court and bring a money claim to recoup any outstanding amounts, in line with the wider rules in the sector.

We do not want to put tenants in a position where they cannot have a pet because there are no suitable insurance products available or they cannot afford the additional cost of a deposit. We will keep this matter under review, and I hope the noble Lord will consider withdrawing his Motion.

I thank your Lordships for your thoughts and speeches. I am pleased about, and support, the Amendment from the noble Baroness, Lady Grender, being accepted by the Government.

The Minister has not changed her position on my amendment. I understand the comments regarding the deposit scheme. On the remarks made by the noble Lord, Lord Black of Brentwood, I am just as passionate about allowing more people to have pets. With this amendment, I am trying to encourage landlords not to leave the sector due to tenants having pets. I would like more people to have pets, and I realise how important that is, but there is a balance to be struck with trying to reassure landlords, because they do not accept pets at the present time. There are very few properties on the market that allow them.

This amendment is trying to create a balance. I appreciate that some tenants will struggle to find that deposit, but I believe that, by having it in place, more landlords would be willing to accept pets, and there would be less disruption between landlords and tenants when tenants ask to have pets. On that basis, I would like to test the opinion of the House on my Motion.

Ayes 192, Noes 239.

Motion A1 disagreed.

Motion A agreed.

My Lords, before we turn to Motion B, I remind your Lordships that, during a Division in particular, I need a clear sight of the clerk at all times. It is therefore strictly forbidden for any Peer to move between the Table and me so that I cannot see the clerk.