Renters Rights Bill passes Commonsas it prepares to becomelaw Mortgage Finance Gazette

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Parliament overwhelmingly rejected a series of changes to the government’s Renter’s Rights Bill last night, clearing the way for the legislation to become law as soon as this month.  

The House of Commons dismissed almost 80 Lords’ amendments to the wide-ranging Bill, leaving royal assent as the final stage before it passes into law. 

Observers say the Bill will hit the statute books before parliament rises for the major party conferences on September 16th. 

Its reforms include limiting rent increases to once a year, moves to end bidding wars, scrapping fixed-term tenancies, as well as banning Section 21 no-fault possessions.     

Housing and planning minister Matthew Pennycook laid out the government’s objections to the Lords’ amendments last night, which included greater flexibility for landlords who rent to students, reducing the restricted period for property investors to relet a property and on pet insurance for rental properties. 

New housing secretary Steve Reed, who took up his post on Friday after Angela Rayner resigned over her tax affairs, sat beside Pennycook during much of the debate. 

Pennycook said that most of the Lords’ amendments “serve to undermine the core principles of the Bill and for that reason we cannot accept them”. 

He rejected moves to extend greater lease flexibility, known as Ground 4A, all student properties, including one- and two-beds, and not just houses in multiple occupation, “as it dramatically broadens the scope of possession”. 

The minister said: “We believe restricting its use to houses in multiple occupation, or dwelling-houses in houses in multiple occupation, strikes the right balance,” adding that non-typical students, such as older students with families undertaking postgraduate studies will be covered by the new law. 

Pennycook also spoke against a move to reduce the restricted period for property investors to relet a property to six months from 12 months where a sale falls through, known as Ground 1A. 

He said: “We are not prepared to weaken the strong safeguard against abuse provided by the 12-month no-let provision.  

“It is essential to prevent landlords misusing ground 1A and evicting tenants who are not at fault, whether that be because they have made a legitimate complaint or simply because the landlord wants to relet at a higher rate.” 

The minister also rejected Lords proposals that would require local authorities to meet the criminal, rather than the civil, standard of proof when imposing penalties for rental discrimination and rental bidding breaches.   

One of the few concessions made was over the requirement of renters to take out pet insurance. 

Pennycook admitted that Lords’ amendments pointed out that “the insurance industry appears unlikely to provide suitable financial products at the speed and scale”. 

He said this provision would be removed, adding that a typical five-week rent deposit is likely to cover average pet damage, which he said amounted to around £300 against average non-pet damage to a rental of over £700. 

Shadow housing secretary James Cleverly called the Bill “poorly thought through and counterproductive”. 

Cleverly added: “The Bill risks driving private landlords out of the sector, reducing the supply of private rented accommodation and pushing up rents for those in the private rented sector.  

“Limiting the supply of such accommodation means limiting the options for tenants in the private rented sector, and leaving them worse off.” 

Key votes against the Lords’ amendments included:  

  • The Commons voted 404 for and 98 against, to keep the wording “on the balance of probabilities” and not insert “beyond reasonable doubt” as the standard of proof local authorities would require when imposing landlord penalties for rental discrimination and rental bidding breaches, meeting a civil rather than a criminal standard
  • The Commons voted 402 for and 97 against, reducing the restricted period for property investors to relet a property to six months from 12 months where a sale falls through 

Propertymark chief executive Nathan Emerson says: “The Renters’ Rights Bill represents one of the biggest evolutions of housing legislation across England in over thirty years.  

“Implementing such a wide-ranging overhaul of law must prove dynamic by design to help deliver a fair and workable balance between tenants and landlords. 

“Housing fundamentally affects everyone, and there is an immense pressure on this new legislation to deliver tangible results.  

“There is an essential ongoing need for new sustainable housing stock across all regions, and for this to efficiently happen, there must be long-term investment within the private rented sector, especially as population growth continues to move at pace.” 

Together director Scott Clay says: “Ahead of the Renters’ Rights Bill getting its much-anticipated royal assent, discussion of the last few elements are vital – especially as some landlords, particularly those with smaller portfolios, could be at risk of being caught unawares. 

“The potential end of assured shorthold tenancies agreements and clampdown on surging rent pricing – while possibly contentious for individual, private landlords, should hopefully create a more balanced and fair system. 

“The allowance of pets and inclusion of prospective tenants on benefits – provided there are watertight financial agreements and clear and honest communications from all parties should help this too. 

“Indeed, these new measures may be an easier pill to swallow than the removal of Section 21 or ‘no fault’ evictions. 

Clay adds: “This could see unjust cases overlooked or ignored – causing costly and time draining situations for legitimate landlords. For example, landlords can evict tenants to sell their property, but this cannot be re-let for up to a year if the sale falls through. 

“This could mean houses are left empty for months on end, worsening rather than improving our housing crisis. 

“The bill is under immense pressure to positively deliver from both sides – hopes are it properly addresses the concerns of landlords and tenants equally.”