My Lords, I thank those Peers who have already taken an interest in this Bill and those who have worked to improve the private rented sector over many years. The Renters (Reform) Bill brings forward the most significant changes to the sector in 30 years.
For England’s 11 million tenants, representing some 4.6 million private rented sector households, the Bill provides the robust protections needed to increase security and standards, helping people to put down roots in their communities, keep jobs and build careers in their local areas. We are also supporting England’s 2 million landlords and recognising the importance of privately rented homes to our economy. The Bill will give good landlords the confidence to let their properties, equipping them with the tools needed to charge a fair rent and reclaim their properties when they need to, while driving out rogue and bad actors who undercut the majority. The Government have worked closely with those across the sector and across political parties to ensure that our measures strike the right balance. I will now move to the specific content of the Bill and outline the ways in which, when taken together, this package of reforms will support responsible landlords and tenants alike.
The measure that noble Lords will be most familiar with is the abolition of Section 21 evictions. We know that the threat of a Section 21 eviction can make tenants feel very insecure in their homes, with good reason. Unexpected evictions can cause real financial difficulty and interrupt employment and schooling for parents and children. By removing Section 21, we are helping tenants to feel settled and to challenge poor practices if their landlord is not meeting their basic responsibilities. We recognise that the vast majority of landlords provide an excellent service. In the absence of Section 21, it is important that they have the confidence that they can get their properties back. That is why, alongside abolishing Section 21, we will strengthen Section 8 possession grounds.
Landlords will be able to get their properties back if their circumstances change—for example, when they are selling or moving into their property. We are also protecting landlords and expediting their ability to evict those who disrupt neighbourhoods through the evils of anti-social behaviour, as well as introducing new grounds for persistent rent arrears. To protect tenants where there are more complex circumstances, such as a breach of tenancy conditions, the grounds will remain discretionary so that judges can consider whether it is reasonable to evict them.
After listening to concerns from the sector, we have also made changes to protect the functioning of the student market by introducing a new ground for possession to ensure that student landlords can continue to offer tenancies which align with the academic year.
To further protect people from homelessness, as well as abolishing Section 21, we will make sure that tenants still have certainty that a homelessness prevention duty will be owed when a valid Section 8 possession notice is served. This means that vulnerable households will continue to receive support while the threat of homelessness remains.
The strengthened grounds are fair, comprehensive and efficient. It is reasonable for landlords to regain their property when they need to, but they should rightly give tenants a specific reason for ending a tenancy rather than securing possession simply to avoid the responsibilities of being a good landlord.
We are also simplifying the tenancy system by abolishing fixed-term tenancies and moving to a system of periodic tenancies. Fixed terms lock in both tenants and landlords, even when their circumstances change, on a property of poor quality. Much has been said and written about fixed terms, and not always accurately. It is important to acknowledge that under a fixed term, tenants cannot end the tenancy and landlords cannot evict them using Section 21. However, at the end of a fixed-term contract, a tenancy does not automatically end, and to regain possession a landlord still needs to issue a notice and apply to the court if the tenant does not leave. In the new system, after the minimum six-month initial period at the start of a new tenancy, either party will be able to end the tenancy when they need to.
The Government are also exploring potential exemptions to the minimum six-month initial period where it is absolutely necessary for the tenant to end the tenancy early. This could include, for example, where a tenant has died, instances of domestic abuse or where a landlord has not remedied a serious health hazard such as severe damp or mould. We remain committed to abolishing Section 21 as quickly as possible. However, we should be clear that delivering a smooth transition to the new system is essential so that tenants understand their rights and landlords have the confidence to remain and invest in this important sector. That is why we have committed to ensuring that county courts are ready to deal with our tenancy reforms so that landlords and tenants can benefit from a modern, efficient possession system. To ensure the courts are ready, we will work with the Lord Chancellor to assess the readiness of the county courts ahead of abolishing Section 21 for existing tenancies.
To help illustrate this, it may be helpful for me to explain what needs to happen to prepare for the new tenancy system. Following Royal Assent, a raft of secondary legislation is needed to switch on the Section 21 ban, alongside important consequential amendments to other legislation. Guidance is being developed so that the sector is fully prepared for the new system. Court rules and systems need updating to reflect these new rules, and we have already committed to aligning changes to the tenancy system with improvements in the courts. We are working closely with the Ministry of Justice and His Majesty’s Courts & Tribunals Service to digitise the county court possession system, and we are investing some £11 million this year to design this new digital system. Other target areas for improvement include the prioritisation of certain serious cases such as anti-social behaviour and improving bailiff enforcement by enhancing recruitment and retention practices. We will also provide early legal advice and better signposting for tenants.
Although we know that a majority of landlords provide an excellent service for their tenants, the Government are committed to providing tenants with free and easy access to redress where their complaint has not been dealt with as it should be by their landlord. That is why the Bill allows for a new private rented sector landlord ombudsman. The ombudsman will have strong powers to support tenants, including being able to compel unscrupulous landlords to take or cease action and issue an apology or an explanation, and to award compensation where needed. For the vast majority of landlords who provide a quality service, the ombudsman will have the power to protect them by dismissing vexatious, malicious or unfounded complaints. It also means that fewer cases will need to be dealt with in the courts, further reducing burdens on the judicial system.
In the other place, we set out that the Government’s preferred provider for this service is the existing Housing Ombudsman, which already provides redress for the social rented sector. Although no final decision has been made, the Housing Ombudsman is uniquely placed to deliver a single streamlined service for both social and private tenants.
Home should be where we feel comfortable and safe but, for some tenants, the rooms and homes they live in, the stairs they climb and the air they breathe can be a clear and present danger. To improve quality and drive up standards, we are introducing a decent homes standard in the private rented sector for the first time. This will ensure that all tenants have access to the safe and decent homes they deserve. It will also support the Government’s aim to reduce the number of non-decent homes by 50% by 2030. We know that the vast majority of landlords already provide decent housing and a good service for their tenants. The decent homes standard will help good landlords by simplifying and clarifying requirements, while providing local councils with effective and proportionate enforcement powers to deal with the minority—I stress that it is a minority—who do not meet their obligations. It is imperative that we get the new standard right, ensuring that it is proportionate and fair. We are working closely with the sector to co-design it and make sure the balance is right between landlords and tenants. We will set out our proposals in due course.
The Bill will also introduce a new property portal, which will set out landlords’ responsibilities clearly in one place and support tenants to make more informed choices. It will also support local authorities by providing them with the information and tools they need to support enforcement and drive out the bad actors from the private rented sector. To ensure the new property portal works with existing requirements, we will review how it interacts with selective and HMO licensing. This includes how we can reduce administrative burdens and make the system more effective for landlords, tenants and local authorities.
Blanket bans on letting to families with children or people who receive benefits have no place in a fair and modern housing market. People are much more than their benefit status, and no two families are identical. Everyone in the private rented sector is entitled to access a safe and decent home, and landlords should consider prospective tenants on their individual basis. That is why the Bill will also ensure that no family is unjustly discriminated against when looking for a place to live. We are making it illegal for landlords and agents to have blanket bans on renting to people who receive benefits or to families with children. The Bill will address overt discriminatory practices, such as “No DSS” adverts, and indirect practices designed to intentionally prevent someone entering a tenancy. Working with the devolved Administrations, we intend to extend these measures to Wales and Scotland, further protecting vulnerable tenants from discrimination.
Everyone has the right to make the house they rent into a home and, for many, pets are part of that, which is why we are making sure that private landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home. We will give tenants the right to challenge unreasonable refusals. We know that some landlords are concerned about potential damage caused by pets, so landlords will be allowed to require insurance covering pet damage. This will provide landlords with reassurance that any damage caused by a pet can be taken care of, with the responsibility for damage caused by a pet falling explicitly to the tenant.
All the changes I have set out today must be underpinned by a robust, proportionate and effective enforcement framework. That is why we are extending councils’ powers to collect and retain revenue for future enforcement work from financial penalties against landlords who flout the rules. Local authorities will be able to issues fines of up to £30,000 in the most serious cases, with the alternative of a criminal prosecution. We are also introducing enhanced investigatory powers that will make it easier for local councils to obtain financial information from bad landlords when seeking to build a case against them for suspected abuse.
We understand that supporting local authorities to deliver these functions is critical. That is why we will ensure that additional burdens created by the new system are fully funded and that local councils are able to keep the revenue they receive from civil penalties ring-fenced for further enforcement activity.
I hope we can bring to scrutiny of this Bill a shared perspective that, when it works best, the private rental sector can deliver both a stable home and a healthy
return for investors. The Bill seeks to support these aims by providing a comprehensive, balanced package of measures that will meet the needs of the sector for the 21st century. The Bill will give tenants the protections and security they need to feel truly at home in their communities, and give landlords the confidence that, if they do the right thing, they can be rewarded for providing those very homes. I beg to move.
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