The Renters’ Rights Bill has successfully navigated its report stage in the House of Lords and is now progressing to a third reading before it heads back to the Commons.
The schedule could see the law being passed by MPs before the summer recess on July 22, which makes gaining Royal Assent before then nearly impossible.
During the report stage, peers fiercely debated amendments concerning landlord fines and selective licensing.
There was also an amendment agreed that would see councils having the authority to carry out surprise visits and gain entry to privately rented homes, without giving notice to the landlord first.
Previously, officials would have had to provide 24 hours’ notice to both tenants and property owners before any enforcement action.
While tenants will still receive this advance warning, landlords will now be notified only within a ‘reasonable timeframe’ after the inspection has occurred.
Also, many student landlords will be amazed to hear that the housing minister, Matthew Pennycook, has insisted in a reply to an MP that the Bill will not have a ‘destabilising effect on the rental market’.
Capping landlord fines
In the Lords, Conservative peer Lord Keen of Elie proposed capping the fines that can be imposed on landlords by councils at £7,000, which is a huge reduction from the Bill’s proposed £40,000.
Baroness Scott of Bybrook echoed concerns about excessive penalties, warning they could deter landlords.
She said: “My Lords, fines must be proportionate, yet, as the Bill stands, the threshold for imposing fines on landlords is worryingly low, and the scale of those fines is notably high.
“This combination is troubling. Setting fines at such significant levels, in some cases representing a substantial portion of a landlord’s rental income, or even exceeding it, risks driving honest, well-meaning landlords out of the market, not because of any wilful negligence but out of fear.”
Baroness Scott suggested that large landlord fines should apply only to repeated violations.
Financial penalties are needed
However, Baroness Taylor of Stevenage defended the higher penalties, arguing they are vital for deterrence.
She said: “We have increased the maximum civil penalties to take account of inflation since the £30,000 and £5,000 maximums were introduced for similar housing offences.
“We want to ensure that the deterrent value of civil penalties is maintained.”
She went on to say that the fines are ‘maximum penalty amounts’ and councils must consider a range of factors, including the landlord’s culpability and the harm caused to tenants.
Baroness Taylor also warned that the amendment could undermine the Private Rented Sector (PRS) database, since landlords could avoid penalties for failing to register or knowingly or recklessly providing false information to the database operator.
Selective licensing debate
Liberal Democrat Lord Shipley pushed for extending the life of selective licensing schemes from five to 10 years, arguing longer durations would better support local authorities’ improvement efforts.
He said: “Local authorities introduced these schemes to bring about large-scale improvements, but those are unlikely to be fully achieved within five years.
“This amendment would allow them to advertise longer-term posts for staff and to include training of new staff in these schemes.”
Baroness Scott warned that the schemes burden landlords with costs and administrative tasks, potentially affecting tenants.
Baroness Taylor supported the five-year limit and said: “A maximum duration of five years for schemes achieves the right balance.
“It gives local authorities time to assess the effectiveness of schemes while providing landlords with assurance that they will not be subject to increased regulation for extended periods.” Both of the amendments were withdrawn, and the Bill’s third reading is set for 21 July.
Bill won’t harm the PRS
Meanwhile, the government has rejected claims that the Renters’ Rights Bill will harm the private rented sector.
Responding to Shadow Housing Secretary Kevin Hollinrake’s query about the bill’s impact on the Build-to-Rent (BTR) sector, Housing Minister Matthew Pennycook dismissed concerns about market instability.
He said: “My Department has engaged with a range of organisations, including Build to Rent operators, to understand their interests in the development of the Renters’ Rights Bill.
“We do not expect the bill to have a destabilising effect on the rental market or the Build to Rent sector.
“We will continue to work with good landlords and their representative associations to ensure a smooth transition to the new tenancy system.”
Bill will affect student landlords
Simon Thompson, the managing director of Accommodation for Students, said: “For student landlords, the Renters’ Rights Bill will undoubtedly have an impact, and not all of it will be good.
“Unlike PBSA, private landlords must move to periodic tenancies, and they will have to deal with the Decent Homes Standard, again, unlike PBSA operators.”
He added: “Landlords will have to adapt and prepare for the Bill, but while few amendments were accepted in the Lords, we still don’t know when it will gain Royal Assent and become law.”
