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Category: renters reform bill
The third reading of the amended Renters’ Rights Bill (RRB) has taken place in the House of Commons, bringing the controversial bill a step closer to coming into law.
Housing minister Matthew Pennycook came in strong with a lengthy breakdown of Labour’s goal to fix a “broken” private renting system and the amendments made, following constructive criticism from the previous parliamentary readings.
Key amendments
Pennycook proposed a key amendment to ground 6A. He wants to give courts the power to require landlords to pay compensation to evicted tenants, when the landlord is found to be at fault in their given reasoning for eviction.
The topic of upfront payments to secure a rental property was raised, and Pennycook reiterated the government’s aim to ban ‘bidding war’ strategies employed by some letting agents and landlords.
Among the amendments made to inhibit bidding wars:
Clauses 13 and 14 will protect tenants from “unreasonable requests for rent to be paid early once a tenancy has commenced”. These will restrict landlords from asking tenants for more than one month’s worth of rent in advance.
Even in situations where a tenant voluntarily offers to pay more than one month’s rent in advance, it would be considered unlawful for a landlord to accept this.
Labour minister Helen Hayes expressed outrage at the plight of one of her constituents who emailed her about a tragic situation in which the constituent’s son had taken his life midway through his tenancy in a shared student house. But as a guarantor, the constituent was compelled to continue paying his deceased son’s rent for the duration of the tenancy unless a replacement could be found.
As such, amendments have been made that accounts for various guarantor situations, though they are not as reactionary as the emotionally-driven story above might suggest.
Guarantors related to a deceased tenant will be allowed grace to grieve, but those that are unrelated will not be given the same benefit. Landlords will also be able to reclaim costs owed prior to a tenant’s death.
Landlords will have fewer opportunities to request a guarantor in cases where a tenant has paid significant sums up front, such as a tenancy deposit, an advance rent payment, or they have proof of sufficient income. Across the board, the liability for guarantors will also be changed to a maximum of six months’ rent.
The RRB will affect landlords’ abilities to recover possession of their properties from former students. New possession ground 4A will not be available if the tenant entered into the tenancy more than six months before they actually started living there.
MP responses
There is concern that these changes will discourage landlords from taking risks on many potential tenants due to the lower financial security involved. People that would normally be considered highly eligible tenants may lose out on good housing opportunities as a result.
Many left-leaning MPs were baying for rent controls, but Labour have once again rejected such calls on the basis that they would reduce housing supply and investment opportunities.
Despite many of these amendments having a clear negative impact on landlords, Pennycook denied that the RRB was “anti-landlord”, but “pro-market”. He said:
The reality is that countries with strong regulation on rental standards have seen faster growth than those that do not have it.
Let me clear: this Bill is pro-market, not anti-landlord. It will help create a more stable rental sector in which good landlords can thrive and bad landlords are held to account. This is good for tenants, it is good for responsible landlords and it is good for our economy.
Tory ministers were naturally sceptical of the RRB. The shadow housing secretary Kevin Hollinrake ultimately had the final word as the session was prematurely interrupted:
We agree that tenants need a better deal but this is not the Bill that gives them that better deal.
Where the bill will go next
Despite the interruption, the RRB is formally considered “read” for the third time.
The RRB is now set to go through to the House of Lords. After more of an introductory ceremony in the first reading, the peers will be able to debate the bill in more depth during the second reading. As of this writing, no dates have been set for these readings.
The role of the House of Lords is to review, refine and scrutinise legislation rather than block it outright. At times, they may delay a bill from being processed, but they have limited capacity to do so. They were notably willing to let the Tories’ Renters (Reform) Bill pass through without delay, despite acknowledging its shortcomings, so the same may happen to the new Labour equivalent bill.
