Lords clash over need for transition period as Renters’ Rights Bill passes committee stage

The Renters’ Rights Bill has passed the committee stage and will now head to Report stage.

During the final debate, peers clashed over whether landlords need a transition period before the bill takes effect and the risks of landlords leaving the market.

Renters’ Rights Bill risks driving landlords out of the market

Baroness Scott of Bybrook warned the House of Lords that the Renters’ Rights Bill risks driving landlords out of the market and fails to deliver on its promises.

She told the debate: “We all agree that tenants deserve safe, secure and decent homes at a fair price, but to deliver that we need a functioning rental market with enough good-quality homes to meet growing demand.

“We need more homes in the right places. This bill, regrettably, puts that in danger. Rather than boosting supply, it risks driving landlords out of the market, shrinking the number of available homes and pushing rents even higher. If we get this wrong, renters will pay the price. Balance is essential. At present, we believe this Bill does not strike that balance.”

Under the Renters’ Rights Bill, the abolition of Section 21 will take effect immediately once the Bill is passed, along with other new regulations.

However, Baroness Scott warns that landlords need more time to adjust.

She said: “We simply cannot expect landlords to react and comply with significant new requirements on day one. Indeed, the evidence bears this out. In a recent survey conducted by Paragon, 57% of landlords said they had heard of the legislation but did not fully understand its implications, and a further 39% said they knew little about it.

“Those statistics point clearly to a knowledge gap in the market, one that we must not ignore. Therefore, we believe that a clear transition period is necessary.

“A phased approach would allow landlords, tenants and letting agents time to understand and adapt to the new legal framework. Commencing the Act immediately upon passage does not provide sufficient time to do this.”

There will be no dither or delay the abolition of Section will happen as soon as possible

Lord Bird, founder of the Big Issue, tabled an amendment to abolish Section 21 once the Renters’ Rights Bill becomes law, a move the government has agreed to and plans to implement as soon as possible.

Baroness Taylor of Stevenage, the housing minister, backed Lord Bird and explained how the Bill will work in practice, saying more details will be shared during the report stage.

She explained: “We agree with Lord Bird that measures in this Bill are urgently needed, which is why we moved swiftly to introduce it early in our first legislative programme for government. To end the scourge of Section 21 evictions as quickly as possible, we will introduce the new tenancy for the private rented sector in one stage.

“On that date, the new tenancy system will apply to all private tenancies. Existing tenancies will convert to the new system, and any new tenancies signed on or after that date will be governed by the new rules. There will be no dither or delay, and the abolition of Section 21, fixed-term contracts, and other vital measures in the Bill will happen as quickly as possible.”

Baroness Stevenage adds: “However, we must do this in a responsible manner, as noble Lords have mentioned.

We are therefore also committed to making sure that implementation takes place smoothly. As such, it is essential that wider work around the Bill is allowed to conclude before implementation takes place. That includes the production of guidance, updating court forms and making secondary legislation.

“For example, the information that landlords are required to give tenants in the written statement of terms will be set out in secondary legislation. Work is already under way on these matters. We need to get it right. We will appoint the date of implementation via secondary legislation, which is typical when commencing complex primary legislation. This will allow us to give the sector certainty about when the system will come into force.”

The role of the tenant has been to make sure that landlord gets richer and richer

In a heated exchange between the founder of the Big Issue, Lord Bird, and Labour’s Lord Hacking, Lord Bird claimed tenants have spent years making landlords richer.

Lord Bird claimed: “If you look at what has happened to the property market over the last 40 or 50 years, the role of the tenant has been to make sure that the landlord gets richer and richer, because we know the way the property market has been going.

“It has been going in a direction where people can buy a house in one decade, my ex-wife did so, and sell it later in the decade for maybe two or three times as much. The landlord would often have done not much more than rent the property out and keep it going.”

His comments were quickly challenged by Labour peer Lord Hacking, who responded: “That is not true.”

Lord Bird, however, stood by his position, saying: “I am telling the noble Lord that, from my experience, it is. From my experience, what has happened is that tenants have made a very large section of the population who are small landlords much wealthier.”

However, Lord Bird overlooked the fact that the median gross income for landlords is around £25,000 before expenses, with 41% earning less than £20,000, showing that many landlords don’t make the kind of profits he suggests.

You can watch Lord Bird’s comments below

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