Renters' Rights Bill has Second Reading in Lords

Student tenancies, lets with pets and court capacity were all under the microscope this week as the Renters’ Rights Bill had its Second Reading in the House of Lords.

The NRLA issued a hard-hitting briefing to peers ahead of the debate, outlining major concerns including issues with access to the private rented sector for those on the financial margins, as well as concerns about the student sector and the courts.

Lord Northbrook, Baroness Thornhill, and Lord Jamieson all drew on insights included in the document to highlight the impact of the Bill on landlords and the wider rental sector.

So what are the major sticking points for peers?

Will the courts cope?

Several peers raised serious concerns about the ability of the courts to handle increased possession cases caused by the loss of section 21, with section 8 cases already taking more than seven months to make their way through the system.

There were also concerns that moves to make the process for rent challenges easier would see a flood of appeals, with the First-tier Tribunal already taking up to 10 weeks to process rent disputes.

Peers stressed that court readiness is critical to the success of the Bill - a key argument of the NRLA, not least as Housing Minister Matthew Pennycook is on record as saying the system is already “on its knees”. 

A glimmer of hope for student landlords?

In line with NRLA's calls, peers also raised major concerns on the impact of the Bill on the student market.

Lord Willetts highlighted the mismatch between the Bill’s proposals for maximum rent payments of a month at a time, despite students receiving their loan payments on a term-by-term basis, with Baroness Warwick questioning the the decision to prevent landlords of one-or-two bedroomed student rentals having access to the new 4a possession ground.

The was echoed by Lord Shipley, who also called for the extension of the ground, warning that without it there is a real risk of landlords exiting the student market altogether.

In what could provide a glimmer of hope for student landlords, peers were in agreement that student housing needs clearer exemptions to work, although government minister Baroness Taylor reiterated the government's commitment not to extend the ground beyond HMOs.

Lets with pets

The right for tenants to keep pets is always a hotly debated issue, with the major concern in the Lords being the lack of pet damage insurance policies in the UK – an issue raised by Baroness Fookes and Earl Kinnoull.

While reassuring peers that landlords will be able to require pet liability insurance, the Government acknowledged that more insurance products may need to emerge to support the change.

The local authority challenge

With councils already managing on limited resources, a number of peers asked for more detail about how local authorities will enforce new rules on property standards.

Baroness Janke and Lord Davies of Brixton both flagged the need for extra cash to fund enforcement, with Baroness Taylor saying enforcement would be funded by increased civil penalties paid by non-compliant landlords.

Changes to rent in advance rules: A barrier to vulnerable tenants?

Restrictions on requesting rent in advance were also debated, with peers warning that this could make landlords more risk-averse when it comes to tenant selection, an issue also flagged by the NRLA.

Baroness Scott and Lord Carter argued that these rules could harm tenants with poor credit histories, foreign students, and self-employed renters, as landlords could avoid renting to them altogether to help mitigate risk.

Lord Willetts also stressed lower-income students, who already struggle to find guarantors, could be disproportionately affected, with Lord Northbrook warning that restricting rent in advance could also deter highly skilled foreign workers - impacting the Government’s aim to attract international talent.

Arrears

Additionally, peers raised concerns over the plans to allow rent arrears to accumulate for three months before enforcement action can be taken - and the potential impact of that on landlords; with Lord Carter suggesting this could push good landlords out of the maket altogether.

He proposed allowing an ombudsman to determine whether landlords are issuing notices for legitimate reasons, which he said would reduce abuse of the system while protecting landlords from financial hardship.

What happens next?

With Second Reading complete the Bill now moves to the Committee stage, where the concerns raised will be examined in greater detail.

No date has been set, but, as there must be at least 14 days between Second Reading and Committee stage - and with recess scheduled from14-24 February - we anticipate it will begin no earlier than the week commencing 25 February.

In the meantime the NRLA will continue to engage with peers and Government officials to advocate for landlords’ and lobby for the practical amendments needed to make the Bill fair and workable for landlords and tenants.

The NRLA has also updated its comprehensive list of Frequently Asked Questions (FAQs) to help keep you informed as the Bill moved through Parliament. Click here to find out more.

More information

• To find out more about out campaign on student tenancies click here.
• For more on the NRLA's approach to the Bill and our campaigns work read a blog by our policy director Chris Norris here.
• You can keep up to date with all the developments of the Renters Rights Bill, by accessing our exclusive member Hub here.   
• Extra dates have been added for our new Renters’ Rights course, after training sessions sold out in record time. For more information and to book click here.  
• Be sure to follow us on social media and sign up for our newsletters for all the latest news and updates on the Bill and its progress