The Renters’ Rights Bill is back in Parliament today. It is having its second reading, which is the first time it is debated by MPs. The Bill offers some long overdue protections from arbitrary eviction, and improving standards in our homes. However, further measures are needed to shield tenants from the cost of renting crisis that is fuelling poverty and homelessness.
Generation Rent briefed all MPs in advance of the debate. This blog outlines our points to them and the changes that we would like to see in the legislation. Watch out for these points in this afternoon’s debate.
We have also analysed the latest homelessness stats and show how effective reform could cut cases of private renter homelessness by half. These reforms must include relocation compensation to give the best chance of keeping evicted renters with a roof over our heads.
No-fault grounds for eviction – What is in the Bill
The Bill will end Section 21 ‘no fault’ evictions, where a landlord can evict a tenant with just two months’ notice and no reason given, as soon as it becomes law. Since the Conservative Government promise to outlaw these evictions in 2019, almost a million renters have received a Section 21 eviction, which is a leading cause of homelessness. Generation Rent has campaigned since 2015 to see the back of it and any attempt to delay ending Section 21 must be resisted.
There will still be lots of grounds for eviction that a landlord can use, including existing grounds such as rent arrears or anti-social behaviour. This Bill will introduce new grounds to replace Section 21, with the most commonly used expected to be when a landlord wants to sell up (Ground 1a) or move themselves or a family member in (Ground 1b). We welcome that the government has listened to Generation Rent and doubled notice periods for no-fault evictions to four months, reducing the pressure on tenants to urgently find a new home. We will also be protected from no-fault evictions for the first year of our tenancy, but this should be increased to two years in order to improve security and stability in new tenancies.
It is positive that these new grounds require the landlord to provide a reason to evict the tenant, as that will outlaw retaliatory evictions that occur too often under the current system when a tenant makes a complaint. Tenants who made a formal complaint to either their local authority or to a redress scheme had a 46% chance of being issued with a section 21 eviction notice within 6 months of doing so.
No-fault eviction compensation – What must be added to the Bill
The government has recognised the harm of no-fault evictions, with Minister Matthew Pennycook outlining how they provide landlords the possibility to “arbitrarily evict … tenants that make complaints about things like damp and mould, rather than fix those problems”, but the current Bill offers no compensation to tenants who will continue to be evicted through no fault of their own under the new grounds.
No-fault eviction compensation should take the form of non-payment of rent for the final two months of the notice period. Generation Rent research has shown that an unwanted move costs a typical tenant household £2216 up-front, and this means the two-month period is proportionate.
Last week, Statutory Homelessness statistics revealed that 13,570 households faced homelessness in 2023-24 because their landlord wished to re-let the property. Under the Renters’ Rights Bill this would not be a valid ground for eviction so there would be a corresponding fall in homelessness cases. However, in the same period, 31,730 households faced homelessness due to their landlord wishing to sell. Although tenants will get more notice to move, it is likely that without further support, this level of homelessness cases will persist.
In the case of eviction for sale, the significant windfall that a landlord would receive for the sale would far outweigh the cost of two months unpaid rent, to compensate the tenant for the upheaval and stress of being removed from their home. Similarly, in the case of eviction for occupation by landlord or family, the landlord is clearly already anticipating no longer requiring rent from the property in the very near future, and so again this should be weighed against the impact of a no-fault eviction on the tenant.
Half of private renters have no savings at all. Every time a tenant is evicted, even with a longer notice period, we find ourselves facing the tightest imaginable window of time to secure a new home on the date that our current tenancy ends. This is in order to avoid paying rent on two tenancies, when many of us are already struggling to afford one rent. Missing this window because of availability or competition can result in homelessness. No-fault eviction compensation solves this longstanding problem by significantly increasing the window in which a tenant can find a new home without risking falling into debt, poverty or homelessness because of two rents. This period of waived rent also gives the tenant time to save for the deposit they will need for a new tenancy.
This proposal has been designed to involve non-payment of rent rather than a requirement for landlords to pay compensation to evicted tenants to ensure that landlords are not required to offer sums to tenants up-front. It also removes the need for a specific new transaction to take place that could be bureaucratic or lead to delays and disputes. This principle already exists in Section 11 of the 1988 Housing Act where tenants evicted for refurbishment are entitled to have their removal costs covered.
The cost of renting crisis – What must be added to the Bill
The Bill in its current form fails to tackle private renters’ primary concern: the unaffordable and soaring cost of renting. Rent inflation (8.4% in the year to August 2024) continues to far outstrip both wage growth (5.1%) and inflation (2.2%).
The Bill proposes outlawing pre-scheduled rent increases being written into contracts and limited rent increases to once a year. While positive, it is clear that this is not enough to address how unaffordable renting has become.
Under these proposals, tenants are still vulnerable to rent-hike evictions, meaning that landlords can increase the rent with the purpose of forcing us out – effectively giving us a Section 21 by the back door. To give us the security we have been promised, the government must limit the amount that rent can be increased within a tenancy to the lowest of either wage growth or inflation.
The Labour Government promised in its election manifesto to “empower [tenants] to challenge unreasonable rent increases”. The Bill’s only way of doing this is through the First Tier Tribunal, which already exists but is widely unknown and difficult to use. When a tenant challenges their rent rise at a Tribunal, the Tribunal measures the proposed new rent against the ‘market rate’, which is what similar tenancies in the area are being advertised for. This drives up prices for renters based on speculative price-setting rather than actual rents being paid in their area. The Bill rightly removes the Tribunal’s ability to award landlords rents that are higher than they originally asked for when challenged, but the measure of ‘market rent’ remains despite its deep flaws and total disconnect from what is real and affordable.
We are pleased that the Bill also includes a ban on rental bidding wars, including landlords soliciting bids and all ‘voluntary’ bidding, meaning that the final rent agreed cannot be more than the advertised price. While banning bidding wars will not solve the cost of renting crisis for tenants, it is welcome protection from some of the worst examples of exploitation, and will mean tenants won’t have their time wasted by greedy letting agents.
There remains no commitment to deposit reform as part of this Bill, and this issue must be addressed going forward. With half of renters reporting having no savings, the ability to pay a substantial deposit at the start of each tenancy is problematic, and driving us into debt.
The government must revive plans for a deposit passporting scheme and consider measures to improve trust in the deposit dispute process, including the release of the non-contested portion of the deposit while a dispute takes place, clear timescales and obligations on landlords to submit to adjudication, and penalties for repeated false claims.
Energy efficiency – What must be added to the Bill
Despite the Labour Government’s election promise to uprate the Minimum Energy Efficiency Standard (MEES) of privately rented homes by 2030, this has not been included in the Bill. A consultation has been promised instead, but we urgently need a legal commitment to the vital changes that would reduce fuel poverty, keep our homes warm and tackle climate change.
The 2030 target could also be made more ambitious by implementing the new MEES earlier for new tenancies, ensuring that improvements take place earlier and that tenants feel the benefit. As private renting is the tenure type with the highest rates of fuel poverty, these changes are urgent and must not be delayed.
Discrimination – What must be added to the Bill
Minority ethnic renters are 36% more likely than white British and Irish renters to have been threatened with an eviction, according to Generation Rent research. Ending Section 21 arbitrary evictions should help to address this injustice, but the new law must be monitored to see which further changes are needed to root out discrimination.
We welcome the Bill’s proposal to outlaw landlords issuing blanket bans of tenants with children or those in receipt of benefits. However, given the high requirements for proving discrimination in these cases, £7,000 as a maximum fine is not enough to act as an adequate disincentive for breaking the law. The maximum fine should therefore be raised. As well as this, tenants should also be entitled to financial compensation and awarded some of the fine paid by the landlord – something that is not only fair for renters, but which will also incentivise tenants to engage with this anti-discrimination legislation. Moreover, in its current form, the Bill requires that a landlords’ intent to discriminate must be proven in court. Regardless of a landlord’s intent, policies and actions which cause discrimination must be the focus of this legislation and so this requirement must be removed.
The ‘Right to Rent’ means that landlords and agents must check the immigration status of adults who will live in the home before a tenancy starts. This continues to fuel discrimination in renting, with landlords required to act, effectively, as immigration officers. Those caught out by the policy face fines of up to £20,000 or a prison sentence of up to five years. As a result, many landlords are often reluctant to rent to any renters born outside of the UK out of fear of making a mistake. In 2017, the Joint Council for the Welfare of Immigrants found that over half of landlord’s surveyed (51%) stated that they were less likely to consider letting to foreign nationals from outside the EU and almost a fifth (18%) were less likely to rent to EU nationals, after Right to Rent checks were put in place. Not only are migrants who do have the right to rent being unfairly targeted, but so too are minority ethnic people born in the UK. Generation Rent research found that white people are 36% more likely to receive a positive response when enquiring about rental homes than Black people. Ending the ‘Right to Rent’ policy would reduce the structural discrimination tenants face when seeking a new home, keeping many safe from insecure housing and homelessness.
Care leavers face barriers to accessing a private tenancy because of the requirement of a guarantor and the need for a deposit, neither of which are always provided by local authorities despite their role as ‘corporate parents’. The Bill should be amended to set out a requirement for local authorities to act as guarantors and provide deposits as and when care leavers seeking to rent a home need them.
Tenants will be able to ask for permission to keep a pet in their homes, which a landlord can only refuse with reasonable grounds. The Bill should set out these grounds clearly and based on evidence of risk or harm. For this law to not disadvantage the most deprived renters with pets, landlords should not be able to demand pet insurance as is currently written into the Bill. The tenancy deposit is already a tenant cost designed to protect the landlord in case of damages.
Safer homes – What is in the Bill
Over a fifth of private renters live in non-decent homes. We welcome the extension of the Decent Homes Standard from social housing to now set minimum standards for privately rented homes.
Awaab’s Law, named after the toddler Awaab Ishak who tragically died following prolonged exposure to mould in the social housing where he lived, is also set to be extended from social housing into private renting. If properly enforced then this could save lives, as the law will mean landlords have a specified time limit to respond to reports of serious hazards.
Cost of moving – our calculations
The deposit on a new home, worth five weeks’ rent (£1531)
Paying rent on two properties while moving (£255)
Time off work to view properties, pack, and move home (£320 for 28 hours at minimum wage)
Cleaning costs (two hours at £30)
Van hire (one day at £60)
Broadband installation (£20)
Total cost: £2216
The rent on a second property and time off work to move home is based on a Survation survey of private renters from 2019, which found that 27.5% of respondents paid rent on two properties at the same time when moving, and spent an average four days searching for a home, packing and moving. Estimates derived from this survey data put the average cost of overlapping rent at £929 (£255 is 27.5% of this figure).
