Eddie Hughes – 2022 Speech on Private Rental Price Increases
The speech made by Eddie Hughes, the Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities, in the House of Commons on 14 January 2022.
I begin by congratulating the hon. Member for Hornsey and Wood Green (Catherine West) on securing this important debate on insecurity in the private rental market. In a country as great as ours, it should be a basic human right that people, regardless of whether they are home owners, leaseholders or tenants, feel safe and secure in their own home.
The hon. Lady touched on a number of issues that I am sure are familiar not just to me and my constituents but to Members and constituents across the country. As she rightly pointed out, the private rented sector is the second largest housing tenure in the country—11 million people are housed in that way. In fact, 19% of people in the country live in the private rented sector. It is also housing the most diverse range of people these days. People living in the private rented sector are often older now and families rather than single people.
Although it is the sector that continues to play a central role in providing housing across the country, it is the housing market that has undoubtedly left thousands of tenants feeling insecure and unprotected. However, this does not need to be the case and it should not be the case. We, the Government, want to shift the odds in favour of renters and deliver a better deal for them.
People across the country should be able to expect that, when they are signing up to a rental agreement, they will be protected from wrongdoing. There is still much to do for us to reach that point, but the action that we are taking will improve the lives of people right across the country.
As I stand here today, unfortunately, and as the hon. Lady rightly pointed out, millions of responsible tenants are living in homes in the knowledge that they could be uprooted at a moment’s notice and with minimal justification. That is not peace of mind; that is simply wrong. To give people the confidence they need to be able to plan for the future, we are stepping up with the biggest change in legislation for the private rented sector for a generation by abolishing no-fault evictions—section 21s as they are more formally known. This is the centrepiece of our plans to raise standards across the whole of the private rented sector and reflects our determination to drive out rogue and unscrupulous landlords. Our reforms will deliver a fairer, more effective rental market and, later this year, we will publish the White Paper that sets out the blueprint for the whole sector. I appreciate completely that the hon. Lady is very keen for us to progress, but it is important, given this once-in-a-generation change, that we make sure that we have consulted widely with people from across the sector to ensure that we get it right.
In the meantime, the hon. Lady can be assured that we are not resting on our laurels. We are engaging with the widest possible range of voices, including stakeholders and organisations from across the sector. As much as we sometimes like to pretend, politicians do not always have the answers. Hearing and listening to these views would not only ensure that the White Paper and future legislation actually address the challenges that exist, but help to create a system that works for everyone.
As part of a range of actions to address the urgent and pressing needs of the generational pandemic that has arrived on our shores, we acted to keep renters safe in their homes. We banned bailiff evictions, extended notice periods, and provided unprecedented financial support to people and businesses. These measures worked: fewer households were assessed as homeless; there are fewer rough sleepers today; and fewer possession claims are now being made in the courts. We will make sure that build back better is more than a slogan. As we recover from the pandemic, it is right that we do everything we can to improve the security of tenants in the private rented sector and learn the precious lessons from the interventions that we adopted to make sure that we deliver greater protection for tenants and empower them to hold their landlord to account.
The hon. Lady is right to raise the issue of no-fault evictions. Currently, landlords can evict tenants with as little as two months’ notice once their fixed-term contract has come to an end without even needing to give a reason. The practical implication of this unjust situation is that the tenant can find themselves living with the worry that they may be evicted at the click of a finger. Other tenants continue to endure poor standards for fear that they will asked to leave if they complain about the problems in their home, as the hon. Lady pointed out. That is why the Government are committed to abolishing section 21 of the Housing Act 1988. No longer will tenants find that their landlord is evicting them on a whim with no reason given as to why they have to relocate their lives or disrupt their children’s education. In the future, landlords will always have to provide a specific reason for ending a tenancy, such as breach of contract or waiting to sell the property. It will also help to end revenge evictions where landlords may evict tenants who rightly complain about poor standards, as raised by the hon. Lady. It will protect tenants from having to make frequent and short-notice moves, and will enable them to put down roots and plan for the future.
In 2019, we consulted the public on our proposed reforms to the tenancy framework and how we should take it forward. About 20,000 people gave us their views, and we are listening. While we continue to drive forward work on sector reform, we also recognise that affordability concerns can cause insecurity for renters, and we are committed to tackling that.
It is unfortunate to hear of issues that constituents have raised about rent hikes. Under the existing legislative framework, private sector landlords can increase the rent in two main ways. First, during the fixed-term period any rental increases are set out in the tenancy agreement, allowing landlords and tenants to agree arrangements that suit their circumstances. Secondly, once the fixed-term has ended—and if the agreement transitions to a statutory periodic tenancy—a landlord is able to adjust the rent once a year under section 13 of the Housing Act 1988. The landlord must serve a notice to the tenant informing them of the proposed change. If the tenant does not agree with the landlord’s intention, they can refer the matter to the property chamber of the first-tier tribunal for independent adjudication. The tribunal will consider the application and decide what the maximum rent of that property should be if let on the open market, considering, obviously, the conditions of the local housing market. Tenants may also have a rent review clause in their contract.
We are clear about the fact that it is for landlords and tenants to agree the amount of rent that should be charged at the outset of a tenancy, but the Government are keen to avoid any unintended negative consequences related to abolishing section 21. As part of that, we are determined that there should not be any mechanism for landlords to force a tenant to leave a property by including clauses in tenancy agreements which hike up the rent by excessive or unreasonable amounts just before the agreements are due to expire.
While three quarters of private renters found it easy to afford their rent, we understand that affordability may be an issue for some, and that they may require additional support. For tenants who are unable to afford their rental payments, a range of support is available through the welfare system, alongside the unprecedented financial package helping renters to afford their housing costs during the pandemic. That has meant that, even given associated pressures of covid-19, the vast majority of renters—93%—are up to date with their rent. That shows that the comprehensive package of support provided by the Government is preventing widespread rent arrears as a result of covid-19.
I hope we can all recognise that the Government are steadfast in their commitment to building a private rented sector that works for everyone: a sector that introduces a better deal for renters, and improves the lives of people across the country. Ours is a Government who are pursuing reforms that will ensure that good landlords can flourish and continue to provide the homes that the country needs, but it is also a Government who are protecting tenants from sharp practice and removing criminal landlords from the sector, and are building back better from the pandemic. We are committed to rebalancing the relationship between tenants and landlords to deliver a fairer, more secure and more desirable private rented sector. While that will not happen overnight, it will happen. We get it: we understand the challenges that exist in the sector, and we are open to dealing with them. That is why it is so important that we continue to drive through our reforms to ensure that we deliver on our aims.
We are aware that we need the support of the entire private rented sector if we are to achieve these goals. It is in that spirit that I again thank the hon. Lady for securing this important debate, and assure her that I intend to continue to drive through the Government’s ambitious agenda of reform in the sector.
