Motion to Approve
That the Regulations laid before the House on 16 November be approved.
Relevant documents: 35th Report from the Secondary Legislation Scrutiny Committee and 33rd Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument)
My Lords, this instrument prevents enforcement agents—bailiffs—from entering residential premises in England to execute a writ or warrant of possession until 11 January, except in the most serious circumstances. The purpose of this measure is to protect public health by preventing people from being evicted from their homes by enforcement agents at a time when the risk of virus transmission is high and when local authorities and NHS services are typically under additional strain over the Christmas period.
The instrument builds on the Government’s previous guidance on enforcement activity during the national lockdown in England, introduced by the national health protection regulations, and the intention for the “winter pause” on evictions that was announced by the Government on 10 September. It also prevents enforcement agents from entering residential properties in order to take control of goods during the national lockdown, which ended on 2 December. This instrument applies to enforcement action in England.
The Government have taken unprecedented action to ensure that renters were protected from eviction at the height of the coronavirus pandemic, including providing significant financial support and agreeing with the courts to use powers in relation to court procedure to stay possession proceedings for a total of six months, until 20 September. However, that stay could only be temporary; the civil justice system and the rules that underpin it must be accessible, fair and efficient for tenants and landlords alike.
Ahead of the end of the stay on possession cases in the courts, the Government put in place a number of measures to carefully manage the resumption of cases so that the courts were not overwhelmed and could make decisions so that the most vulnerable could get the help and support that they need and, in particular, so that tenants could have access to legal advice and support.
The Government also worked with the judiciary and others to put in place new court arrangements that seek to ensure appropriate support to all parties. Those court arrangements are in place and working well, and I pay tribute to the working group convened by the Master of the Rolls, chaired by Mr Justice Knowles, for the key role that it played in these matters.
In addition, the Government took legislative action. The Housing Minister laid a statutory instrument on 28 August to amend Schedule 29 to the Coronavirus Act 2020 to require landlords to provide tenants with six months’ notice in all but the most serious cases. This approach ensures that tenants will remain safe and have additional time to find new accommodation while empowering landlords to take action where necessary—for example, if a tenant’s antisocial behaviour is severely impacting their neighbours’ quality of life.
We have also taken some targeted action in respect of the enforcement of evictions to protect public health during the extraordinary circumstances of the coronavirus pandemic. In September, guidance was issued to bailiffs to request that the enforcement of possession orders did not proceed in areas where local lockdown regulations restricted gatherings in residential properties. This was in order to prevent tenants being forced out of their homes at an unsettling time in areas where the public health risks could be greater.
In September, the Government also announced that we would take steps to prevent eviction action from taking place over the Christmas period, ensuring that vulnerable tenants are not forced from their homes at a time when public and local authorities may be dealing with unusual levels of increased demand on services during this time. Bailiffs were issued with guidance that they should not enforce writs or warrants of possession other than in the most serious of circumstances between 11 December and 11 January during the winter pause.
At the beginning of November, following the introduction of the Health Protection (Coronavirus, Restrictions) (England) (No. 4) Regulations 2020, enforcement agents were asked not to enforce evictions nationally at a time when the risk of transmitting the virus was high and a number of significant restrictions were in force. Because the national restrictions were due to end just before the start of the national winter pause, the Government decided that it was appropriate to build on the guidance not to enforce evictions in England during that time with this legislative measure. We therefore laid the instrument in Parliament on 16 November, to come into effect on 17 November.
The draft instrument is consistent with the policy that the Government have adopted in this area since the start of the pandemic. It aims to strike a balance between prioritising public health and supporting the most vulnerable while ensuring that landlords can access and exercise their right to justice in the most serious cases. For that reason, the instrument contains some limited exemptions to the ban on the enforcement of evictions. These exemptions relate to circumstances where the Government feel the health risk is lower or the competing interests of preventing harm to third parties or taking action against serious behaviour are sufficient to outweigh the public health risks of enforcing an eviction.
The instrument provides for the following exemptions to the restrictions on enforcing evictions: first, where the claim is against trespassers who are persons unknown; secondly, where the order for possession was made wholly or partly on the grounds of antisocial behaviour or nuisance, false statements, domestic abuse in social tenancies or substantial rent arrears equivalent to nine months’ rent that predate 23 March 2020; or, thirdly, where the order for possession was made wholly or partly on the grounds of the death of the tenant, and the enforcement agent attending the property is satisfied that the property is unoccupied.
The Government believe that it is important that there is a clear, uniform and transparent process for establishing whether an exemption to the ban on evictions applies. For that reason, the instrument contains a requirement for the court to be satisfied that an exemption applies on a case-by-case basis.
The measure will be in force until 11 January. New rules require that all bailiffs must give 14 days’ notice of an eviction. This means that in most cases evictions will not resume anywhere in England until 25 January at the earliest. We continue to keep the position under review regarding the enforcement of evictions in local tiers following the expiry of these national restrictions over the midwinter period.
The statutory instrument also set out a nationwide prohibition on enforcement agents taking control of goods inside residential properties while the national restrictions were in place. This measure did not prevent enforcement agents from taking other steps to enforce debts and fines under the taking control of goods procedure, including making contact by remote means such as telephone; visiting but not entering properties; taking control of goods located outside homes or on the highway; and enforcement at business premises. The Government believe that such steps may be safely undertaken in line with the Government’s published Covid-secure guidance for enforcement agents using the taking control of goods procedure. The Government’s view is, therefore, that this policy strikes a proportionate balance between protecting against the risk of virus transmission and allowing the continuation of the administration of justice.
I know that there has been significant interest from noble Lords about the effect of removing tenants’ protection from eviction, which was provided by the stay on possession proceedings between 27 March and 20 September this year. Concern has also been expressed by noble Lords about the impact of that stay on the rights of landlords who are dealing with difficult situations in which there is no reasonable alternative to possession proceedings. These restrictions on bailiff enforcement build on protections introduced earlier this year, including the introduction of six-month notice periods, which mean that renters now served notice can stay in their homes until June 2021, with time to find alternative support or accommodation.
Courts remained open during the national restrictions in November. The court rules and procedures introduced in September will ensure protections for tenants and landlords. For example, landlords are required to send the court information about the impact that the pandemic has had on their tenant. The Government have published comprehensive new guidance for landlords and tenants to explain all these new arrangements and how they impact on court possessions. Our approach strikes the right balance between prioritising public health and supporting the most vulnerable renters, while ensuring that landlords can access and exercise their right to justice. Landlords can action possession claims through the courts, but evictions will not be enforced apart from in the most serious cases.
The Ministry of Justice is grateful for the consideration of this instrument by the Joint Committee on Statutory Instruments. In its 33rd report, the committee reported this instrument to both Houses for elucidation and defective drafting. The committee asked for further information about how the exemptions to the eviction bans should be applied and has confirmed that our explanation was helpful. We accept the committee’s findings that the department should have relied on Section 16 of the Interpretation Act 1978 rather than inserting a provision at Section 16(1) and (2) of the instrument that does no more or less than the same thing.
This instrument provides protection to tenants from eviction, ensuring that vulnerable tenants are not forced from their homes at a time when public and local authorities may be dealing with an unusual level of increased demand on services. I beg to move.
My Lords, I refer to my entry in the register of interests. I thank my noble friend for her clear explanation and for all that the Government have done during Covid, particularly at the MHCLG, in inspiring and supporting magnificent voluntary effort during lockdown 1 and giving help to many small businesses. It was Small Business Saturday that reminded us that we can help by buying Christmas gifts from such businesses. However, there is a problem for landlords which this measure highlights. Few landlords are property tycoons. Most are small businesses or individuals letting out a property that they do not need for a while or have bought as part of saving for a pension.
I have spoken to the NRLA, which explained that the provisions mean that landlords cannot repossess properties even where tenants are up to almost 18 months behind with their rents. They actually reward those who were behindhand before the pandemic and have continued not to pay, knowing that landlords cannot remove them. Landlords are being required to subsidise such unsatisfactory tenants—an extraordinary move by a Conservative Government.
On timing, I note that we are debating this measure almost three weeks after it took effect. It runs out on 11 January and in my opinion should not be extended. Court and other processes should start to return to normal—with my thanks to the Government for the advances on vaccines, which have lifted everyone’s spirits this month.
On cost benefit, this is yet another Covid SI using the emergency excuse not to do an estimate of the impact on business. This exemption for measures lasting less than 12 months is frankly a scandal. We know from the impact assessment on the fire safety order that there are millions of tenanted dwellings. Therefore, even the process of informing landlords of these new rules and understanding them will cost millions. Add rent arrears, which cost landlords between £328 million and £437 million between March and September, according to work done for the NRLA. Then estimate the time needed to keep chasing tenants; you can see that we are talking about material sums, even if not all are caused by this measure.
Some tenants are in trouble, but many benefit from furlough and the increase in universal credit. In contrast, landlords are largely unable to access help from the various Covid schemes because they own property assets. It is an irony that the small business impact in the Explanatory Memorandum looks only at the enforcement agents, who can be furloughed, not at small landlords, arguably a backbone of many communities. Many of them are helping tenants get through Covid by reducing or delaying rent.
Does the Minister agree with my assessment? If, contrary to my advice, she is tempted to renew this SI, could she undertake a thorough impact assessment to inform her decision and then publish it? We promised in our manifesto to build at least a million more homes of all tenures over this Parliament. We are putting that at risk with measures of this kind.
I really liked that contribution from the noble Baroness, and I was grateful to hear the careful way in which the Government are approaching this issue. I must declare two things. First—it is in the register—I run RORA, the Ride Out Recession Alliance, which brings businesses, local authorities, tenant associations and landlords together to try to weather our way through what could be a massive increase in homelessness. Instead of me working with 7,000 to 9,000 people a year, I might end up working with 200,000; I assure you that I do not want that. I am trying to avoid it by building an alliance of interests that sometimes clash, but must have a meeting place. Secondly, I was one of the worst tenants you ever saw. As soon as I got my first tenancy, I did all sorts of terrible things like not paying the rent and having loads of people over for parties. I hope that the landlords who used to know me know that, now that I am grown up, I am not defending the kind of bad behaviour of my 20s and teens.
Let us try and separate those people who have fallen into Covid poverty. The Prime Minister said in the early stages that he would not allow people to fall into long-term homelessness through evictions because of Covid-19. We must ensure that this Government—whatever complexion they are, whatever they say—prevent people falling into Covid-related eviction.
We need to put our thinking cap on and realise that anyone evicted falls into a situation where the cost can double, treble and even quadruple for the taxpayer. Therefore, I am looking to get absolute value for money for the taxpayer. The best value for money is for us to keep the tenant or mortgagee in the home. We must recognise at the same time that people are landlords; if we did not have any landlords, we would have lots more homelessness. If we did not have social landlords, who were also hit by Covid-19, we would have much more homelessness. If we did not have banks offering mortgages, we would have more homelessness. This must be a convergence of energies; it has to be clear. We must stand by our commitment not to allow one person to fall into Covid-related eviction and homelessness.
My Lords, I draw the attention of the House to my interests as set out in the register. It is a great pleasure to follow the noble Lord, Lord Bird, who has great experience and knowledge in this area, as is clear. I thank my noble friend Lady Scott for setting out the regulations with such lucidity. As we celebrate the great news of the first vaccinations today—it really is great news—we still have some time to navigate difficulties. I understand the need for these regulations over the midwinter period. Eviction is a dreadful thing and in midwinter it is worse, with the added difficulties of accessing services when pressures are severe. NHS pressures are considerable at this time and I see the need to avoid placing additional pressures on our health service and local authorities.
Additionally, these regulations prevent the use of the “taking control of goods” procedure while the health protection regulations are in force. This validates an instruction given out by the Lord Chancellor in England. As my noble friend has set out, there are some limited, sensible exceptions to the prohibition of evictions: trespassers, where there is domestic abuse and so on. I certainly support that as well.
Therefore, I support these regulations, but I want to voice a general concern, in terms similar to my noble friend Lady Neville-Rolfe. The regulations do not do anything to reduce or abate long-term debts from accruing; in many ways, they just postpone the problem and potentially add to mental health pressures on poor tenants who see these debts continuing to mount up.
Many landlords have incurred substantial losses during the pandemic. Most landlords have a single property —they are not property tycoons—and are often not able to access support packages that the Government have put together, so they are severely disadvantaged, too. Some landlords have seen their income—for some, it is their pension—fall or be wiped out altogether. That is not sustainable in the long term.
I believe that a financial package to help renters based on hardship loans may be needed in the future and I would welcome the Minister saying something on this. Also, what happens after 11 January—or 25 January, allowing for that 14-day notice period? Economic pressures are not suddenly going to end on 11 January and neither, I regret, is winter, unless I am missing something. What are the Government’s plans? Other than those considerations, I support these regulations.
My Lords, I declare my position as vice-chair of the Local Government Association. I begin by agreeing with the noble Baroness, Lady Neville-Rolfe, regarding Small Business Saturday and the importance of doing whatever we can to support small independent businesses. In her speech, she referred to unsatisfactory tenants who are not paying the rent, but some of those people will be one and the same. Many small business owners and self-employed people have, in Covid-related circumstances, found themselves in situations where they are unable to pay the rent through no fault of their own. As the Minister set out in her introduction, what we are talking about here is a “winter pause”.
Of course, it is welcome that people will not be thrown out on to the streets until, effectively, 25 January, but, eventually, many of these people who face eviction now are still going to be facing eviction in January. Based on the campaigning group Shelter’s figures, there were already 442,000 adults in rent arrears in July—double the figure from last year. Many of those people will eventually have to go to their local council seeking emergency accommodation. In 2019-20, local authorities spent £1.2 billion on temporary housing for homeless people.
Looking beyond 25 January, my question to the Minister is: what will the Government do to ensure both that people are not evicted and, for those who are inevitably evicted, that local authorities can afford to pay for their accommodation? We should think about where that money is going because, last year, 87% of it went to private landlords. This is taking public money and pumping it into private hands.
The Huffington Post today notes that a company is advertising that home owners can get
“‘exceptional returns’ by turning their properties into HMOs (houses of multiple occupation) and hostels.”
“The company made £1.8m in profit in 2018-2019 on revenue of £22m.”
Huge windfall sums are being made by private landlords through a housing policy based on privatisation, with right to buy and the idea that we will rely on private builders to supply our housing stock. Will the Government look to ensure that we have genuinely affordable public housing for people to live in securely, free from fear of eviction permanently?
My Lords, I refer the House to my relevant registered interests as a vice-president of the Local Government Association, chair of the Heart of Medway housing association and a non-executive director at MHS Homes. Furthermore, my wife, the noble Baroness, Lady Kennedy of Cradley, is director of Generation Rent, which is the voice of private tenants.
I support the regulations as far as they go, but they are not the solution to the problem. They merely delay, rather than prevent, evictions of tenants. Landlords can serve an eviction notice and the courts remain open, but no possession orders can be enforced until 25 January, as the noble Baroness, Lady Scott of Bybrook, said. However, that still leaves people in the terrifying situation of being made homeless in the new year, possibly with no job or with the risk of losing their job.
The Government have it in their power to support both landlords and tenants while at the same time avoiding the disaster of homelessness for people in what we all know will be the worse economic conditions in the new year. They can also avoid the huge cost to the country of people being made homeless. I have carefully read the briefing note from the National Residential Landlords Association and I agree with it on the need to increase local housing allowance to cover the average rent in any given area, not just the bottom 30% of average rents. There are literally hundreds of constituencies where the local housing allowance does not cover the average rent paid in that constituency. That is a huge problem and there are no winners, neither landlords nor tenants—everyone a loser. For me, this seems an obvious thing that the Government need to do.
I also agree with the call to boost the discretionary housing payment available to local authorities, along with suspending the shared accommodation rate for 12 months, enabling those under 35 to claim benefits for living alone. However, I am not convinced that interest-free loans to cover rent are the solution. I can see the advantage for landlords, but whatever solution we come up with must benefit both landlords and tenants to get us through this crisis. Tenants being saddled with more debt does not seem to me to be the way forward. The solution must be a combination of the measures that I have outlined, which have large support across the housing sector. Could the noble Baroness, Lady Scott of Bybrook, tell the House what protections will be made available to tenants living under tier 2 and tier 3 restrictions from 11 January, when the regulations expire?
The Government have the power to make considerable progress to deal with the issue properly and for the long term. What happens after 11 January? What happens if there is a third wave of Covid-19, which is a risk, as we have heard from the medical profession? After the festive season, when people are meeting people indoors, which they have not done for many months, there is a real risk of another wave. What happens then? I fear that we will be back on this issue again in the new year with additional measures. I just wish that we had had had those long-term measures put in place so that we would not have to come back repeatedly every few months. That is to the benefit of nobody, so I look forward to the noble Baroness’s response.
My Lords, I support these regulations as far as they go. Clearly, they are necessary. However, that does not mean that there will not be many children who are spending this Christmas in the knowledge that next year they will face homelessness. Too many people in this country have seen their income drop during the Covid outbreak and this has impacted their ability to pay their rent. Therefore, it is quite right that some protection from eviction for rent arrears has been provided.
I am grateful to the noble Baroness, Lady Neville-Rolfe, for pointing out that, as others have since echoed, most landlords are to some extent dependent on the income that they get from these properties, so they, too, have been suffering. Therefore, it must make sense for the Government not just to delay eviction but to make sure that both sides of this equation are helped and to subsidise adequate rental payment for landlords as far as they can.
Like so much to do with Covid, this issue merely highlights deficiencies which had already been prevalent in our society. Many people previously were employed but living on the brink, with no funds to fall back on in the event of any emergency. We saw that drive people to food banks immediately Covid hit. By the end of June there were 98,300 households in temporary accommodation because they had been unable to pay their rent before Covid struck. That is an appalling indictment of a modern society. We know the sort of conditions many of these people are being forced to live in, with children sharing rooms and trying to live, do exercise and do homework in appalling accommodation.
The noble Baroness, Lady Bennett, pointed out that public money is going into private hands to help provide roofs for these people, and that cannot be sensible. What this demonstrates is the need for more social housing. There is too little of it. In the London borough of Lewisham alone, there are 10,000 households on the council house waiting list, with little hope for many of them of ever reaching the top and finding themselves in a property.
This is a long-term issue that should be dealt with but, in the short term, I do have a question for the noble Baroness: what is going to happen to those people who fit into the exceptions, whether for domestic abuse or anti-social behaviour, when the courts find in favour of the landlord and issue an eviction order? What will happen to those people in January, when the winter is at its coldest? Will they add to the homeless figures?
The noble Baroness just raised a very interesting question.
Talk of eviction makes me feel uneasy. In the 1970s, 50 years ago, I ran, on a voluntary basis, an anti-eviction group in the Rossendale and Darwen and Blackburn areas of Lancashire. Our national campaign was a major contributor to the repeal of the Small Tenements Recovery Act 1838, a law that gave local councils almost unlimited powers to evict tenants. I learned an important lesson in that battle: backlogged arrears are problematic in themselves, and when you roll up arrears in packaged payments by retained tenants, in particular where tenants have a previously unblemished rental record, you more often than not aggravate the tenant-landlord relationship.
The best policy for landlords, if they are confident that the tenant’s difficulties are in the past and they are unsupported by benefits is, where possible, to write off the arrears and maintain a healthy tenancy. Some landlords, when the tenant has not been in receipt of sufficient benefit to cover the full rent, take a mature view and adopt this approach, despite the cost. They know that there is nothing worse than a resentful tenant. However, some landlords, insensitive to the suffering, do not give a damn, and that is why I am worried about rolled-up arrears post 11 January.
We are told that last year one-quarter of all tenancies nationally were in arrears. So there will be a lot more. For many tenants, the pandemic will have been a nightmare, with cases of acute depression, debt, domestic abuse, alcoholism and perhaps even loss of life—we do not know at this stage. So how can we respond? Yes, we can extend the ban in tier 2 and 3 areas. We can pass the promised rent reform Bill, which we have been briefed on by a number of people from outside. But we could also use the tax system to incentivise a landlord’s ability to write off pandemic-induced, rolled-up rent arrears. A system could be introduced similar to that for the self-employed. HMRC could look at the last three-year accounting period and then give partial grant aid, built on a percentage of the previous three years’ taxable profits base. We can be sure that it would lead to some very interesting conversations between tenants and landlords and, in particular, those landlords who are not too honest with the taxman.
I would like to make it clear that neither I nor any member of my family has an interest in rental property anywhere.
Like many noble Lords, I find it is a great relief to see this extension of the regulations. If once the main fear stalking society was of our loved ones catching Covid, for many people I know that is now equalled by a visceral terror of the blight of bailiffs and eviction notices—but still those eviction notices are on the horizon. My worry is that the regulations just kick a bigger problem down the road. Already, 9% of private renters have suffered job losses, and we know that that is just the tip of the looming unemployment iceberg. Meanwhile, 33% have had a fall in income due to reduced hours and furlough, and we know that furlough, for many, is just joblessness delayed. So how will these renters ever be able to pay arrears? And that, therefore, means that we have to ask: what about the people they owe rent to?
As has already been alluded to, the vast majority of landlords are not anything like massive property magnates; 45% are single individuals who have invested their life savings or redundancy money in just one property. For some, it is their main income. Others are future-proofing their life to supplement meagre pensions. At this stage, they are suffering 20% rental losses, and they know that many rents will not be paid in full, if at all. As the noble Baroness, Lady Neville-Rolfe, reminded us, they are unable to access business support packages because they own a property asset—so now they face a debt crisis, and many are worried about defaulting on mortgages and their future homes.
As for solutions, I—like many noble Lords, I am sure—have been lobbied by special interest groups. They want financial support to pay off Covid-related debt arrears or interest-free Government-guaranteed hardship loans paid directly to landlords. Certainly, that would help both parties. I rather like the look of the proposals in the Reset the Debt report from a variety of churches. However, the real solution is to put a stop to this impending and growing tragedy of increasing homelessness by having a different approach to living with and managing Covid that avoids closing down society. When the Government recently ordered a lockdown based on what is now known to be false data, they guaranteed that more people would be homeless.
The reward for complying with the lockdown was that many millions more were placed in tiers 2 and 3, and that had a devastating impact on the hospitality sector. It is estimated that 30% to 40% of people made homeless this year are—guess what?—former hospitality workers. Many hospitality workers’ homes are linked to their jobs in hotels and pubs, so now they are forced on to the street. Many others who work in hospitality have precarious living arrangements that are not protected by the evictions ban. In other words, it is the Government’s choice of disproportionate and overly risk-averse policies in relation to Covid that have created a long-term debt crisis and looming evictions. No doubt, it is absolutely unintended, but I urge the noble Baroness that the next time her colleagues mention lockdowns or tiers, she reminds them the costs are growing homelessness, evictions in the long term and many more people on the streets and in fear not of Covid but of homelessness.
My Lords, in summing up, will the Minister comment on the question of tied accommodation? Where someone has lost their employment and is then required to vacate a property, there will be a time lag because, by definition, it will not be possible, if you have made someone redundant, to employ somebody new to live in said accommodation. Therefore, there is an incentive to take one’s time in the eviction or disposal of the tenant. It seems to me that that time lag is fairly obvious. What data do the Government have on this, and what plans do they have around tied accommodation?
There is a second group that, in my experience, always gets left out when it comes to legislation on housing rights: those who live in mobile homes that are not mobile. I refer to park homes. With a park home, what people do, in my experience, is purchase, usually relatively cheaply, a so-called mobile home, but rent the space it is on and pay a significant premium for other services—these usually being lighting, which may or may not be where it is meant to be, a tarmac surface in and out of the park-home area, and sometimes heating and other such utilities. An eviction there is an eviction from the space that a person rents, but of course most of these mobile homes are not mobile. They may have been sitting there for 40 years, with the concrete encased into the land, having developed over time. Therefore, the concept that you can dig it up and move it is often used to force people out or to put their rent up—that has been my experience. Coercion based on a lack of housing rights forces the rent up, precisely because people have a capital asset—albeit one that does not really compare to housing as an asset—that they can never capitalise because they are stuck to that particular location.
It seems to me that that there will be an increase in that Covid-related problem. I suspect, from my reading, that this legislation does not apply. What plans do the Government have in that kind of situation to ensure that the same Covid-problem rights will be there for those in mobile homes and those in immobile mobile homes, otherwise known as park homes?
My Lords, I thank the noble Baroness, Lady Scott, for her explanation, and the Housing Minister, the noble Lord, Lord Greenhalgh, for his letter dated 2 December in response to my question to him on 12 November as to why bailiffs are being asked, rather than compelled, not to evict someone from a property. I am pleased that the Government have had a change of heart and introduced this statutory instrument. I also agree with the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Kennedy, that we continue to see a frustratingly piecemeal approach to the issue of the private rented sector, which pleases neither tenants nor landlords.
If, as the Joseph Rowntree Foundation says, 42% of private renters have savings of less than £500, and if 41% have seen a drop in income since March and used their savings already, it is inevitable that many of the 8 million renters in this country will be in significant arrears. Add to that the shortfall of an average of about £100 a month—even with the support of local housing allowance, which is tagged to the bottom 30% of rents—and noble Lords will understand that there are now 1.9 million households in the private rented sector relying on benefits of some kind, including 1.82 million children, as mentioned by the noble Baroness, Lady Wheatcroft. They cannot all rent at the bottom 30%; it is not mathematically possible to have that proportion of low-cost rentals. We are driving more tenants into debt, and that debt is being passed on to the landlords who can least afford it. It also means that many tenants are having to choose between food, rent, heat or unscrupulous lenders this winter.
It is particularly striking that the purpose of instrument No. 1290, as set out in paragraph 2.2 of the Explanatory Memorandum, is to
“prevent people being evicted at a time when accessing services may be more difficult and when pressure on public services is most acute.”
If, as is predicted by many scientists, there is an increase in infections after the more relaxed rules over Christmas, and if that spike is in the days following the Christmas period, will the Minister undertake to ensure that the purpose is maintained beyond 11 January? If the R rate rises, or if people are still designated as living in tiers 2 or 3, will she ensure that this requirement remains in place, because it is for obvious health reasons? I ask particularly what will happen in the scenario where the R rate is above 1? Will bailiffs be allowed to serve warrants of eviction?
On that point, will the Minister clarify the wording, because I think there is a danger here? She said that this can be used for “domestic abuse in tenancies”, but the Explanatory Memorandum says
“domestic abuse in social tenancies”.
My understanding is that this law applies only to social tenancies, and then only when the survivor of abuse is not likely to reclaim the property. This is terribly important. I am worried that Ministers have, on several occasions, misused this term and implied that it is about domestic abuse across the PRS: it is not. To offer that level of hope is very misleading.
While I appreciate that the notice period means there will be no evictions until 25 January, I think the Minister would probably accept that it was the lack of acceptance of the high probability, as predicted by scientific advisers, of a second lockdown that delayed such things as the extension of the furlough scheme. Of course, that led to a lot of people losing their jobs and to the poverty issues described so well by the noble Lord, Lord Bird. Given that these regulations do not prevent eviction notices being served currently, and do not prevent court proceedings, will the Minister undertake to re-examine the issue of allowing judges to have discretion to prevent an eviction if rent arrears are due to the Covid pandemic, in order to try, as much as possible, to keep people in their homes?
In addition to stopping bailiffs over the Christmas period, will the Government urgently look into an increase in the local housing allowance to cover the median local rent? Will they also consider scrapping the benefit cap, which was never designed for a period of a pandemic and is another constraint in an all-too-expensive private rented sector? The number of families affected by the benefit cap rose by a staggering 93% between February and May. Many families have been exempt, but that exemption will disappear at around Christmas.
Will the Minister consider the recommendation from Generation Rent to introduce grant funding for renters already in arrears? They cannot afford to pay back those arrears as a result of the first wave of the pandemic, and some were in arrears before that, as described by the noble Baroness, Lady Wheatcroft. A coronavirus home retention scheme would, in the long run, serve both tenants and landlords.
Finally, the Government’s manifesto promise to scrap Section 21 no-fault evictions is long overdue and would be a strong signal of support for renters who, even now, today, are being served mandatory eviction notices with no explanation or rationale. Frankly, they deserve better.
My Lords, I thank the noble Baroness, Lady Scott, for her explanation of this statutory instrument, which reintroduces the evictions ban for the second lockdown, preventing most evictions until 11 January next year.
Two immediate questions arise. Can the Minister explain why this is being debated only now, many weeks since the implementation of this ban and at the end of the recent lockdown? The second question is that the Government have said they hope and expect that we may get back to some normality in the spring of next year, so why is this eviction ban ending on 11 January? Surely a longer ban would tie in with the expected return to normality.
I have received briefings, no doubt the same as those received by many other noble Lords, from the National Organisation of Residents Associations, Generation Rent and others. They all make the same references. There is clearly a sense of urgency and exasperation in the current situation. Landlords, the vast majority of whom are private individuals and not corporations, as we have heard, feel that they are being asked by the Government to subsidise tenants. On the other hand, tenants feel that the Government are kicking the can down the road while their vulnerability to eviction increases. Between February and August 2020, the number of households renting from a private landlord that were claiming universal credit or housing benefit increased by more than half a million, representing an increase of 36%, and taking the number of PRS households claiming to 1.9 million. However, an estimated half a million of that 1.9 million do not receive enough benefit to cover their rent, so we are in an extremely precarious situation.
As we have heard from other noble Lords, including the noble Baronesses, Lady Grender and Lady Wheatcroft, and my noble friend Lord Kennedy, the various lobbying groups to which I have referred have proposed a number of solutions. It is true that they all would require greater financial commitment by the Government, but what they really require is a long-term interventionist approach to what is a present-day crisis. I understand that the statutory instrument we are debating is just one element in a long-term approach, but I would be grateful if the Minister could say something about how she is working with other departments to get a more fully co-ordinated response.
We have heard about some of the proposals which have been put forward. The first was an increase in the local housing allowance to cover average rent, not just the bottom 30% of average rents. Another point was that there should be government grants or loans. I agree with the point made by my noble friend Lord Kennedy that grants are preferable to loans, but either way it would be a form of support for working renters who have seen a large drop in income. Suspending shared accommodation rates for 12 months would enable people aged under 35 to claim benefits if they are living alone. Other changes have also been proposed.
These are clearly hugely urgent and complex matters and we need a co-ordinated approach. While the Ministry of Justice is leading on this instrument today, the issues sit primarily in the Ministry of Housing, Communities and Local Government as well as in other government departments, in particular the DWP, which deals with universal credit and housing benefit. I would appreciate it if the Minister can say how a co-ordinated, long-term approach is being worked on to deal with these systemic issues.
My Lords, I shall give a big thank you for a very balanced debate on this subject, which is a difficult one. The pandemic is serious and impacts all members of our society—not just tenants but landlords, as has been said. I shall not get through all of the questions, but I will go through the debate and send answers in writing to those I do not respond to.
I want to start with a couple of points, before I forget. First, the noble Lord, Lord Mann, talked about mobile homes. I had quite a lot of experience of mobile homes in my other life. I would quite like to look into where we are on that issue and write him with an answer. Secondly, the noble Baroness, Lady Grender, asked me about tenancies. It is about social tenancies and domestic abuse, not all tenancies. I wanted to make those points clear first of all.
Some themes definitely emerged in the debate. Of course we need support for tenants. The noble Lord, Lord Kennedy, talked about that, as did the noble Lord, Lord Bird, and the noble Baroness, Lady Wheatcroft. I absolutely agree that when children are involved, it is even more critical that we look after them. The Government have provided an unprecedented package of financial support which is available to tenants and will remain in place over the whole winter period. Nearly £1 billion of additional support will be available to private renters claiming universal credit or housing benefit in 2021, which will benefit over 1 million households. That will include households in work, so not just those who are out of work. This year, claimants will gain an average of an additional £600 in increased housing support, and that measure has been well received.
The other issue is that we cannot forget the furlough scheme, which has now been extended until March, or the Self-employment Income Support Scheme, which has also been extended. We have provided £180 million in discretionary housing payments so that local authorities can help renters with their housing costs. This also emphasises the importance of local authorities in giving much-needed support and help during difficult times for tenants, not only those in social housing but those in private rented accommodation.
Tackling homelessness has been another priority for the Government. We remain committed to that work because the homeless are some of the most vulnerable in our society. In this year alone, we are spending over £700 million to tackle homelessness and rough sleeping, and the spending review has just committed a further £750 million for next year. We are continuing the project of “Everyone In”, which supports rough sleepers. The noble Baroness, Lady Bennett of Manor Castle, asked what we are doing about homelessness support for those facing eviction. The Homelessness Reduction Act, which came into force in 2018, was the most ambitious reform to tackle homelessness. It is interesting to note that over 270,000 households have had homelessness successfully prevented or relieved by securing accommodation for more than six months. We are looking at the whole issue, from before people receive eviction notices right through to if they do, unfortunately, become homeless.
I was pleased to hear—this was the second part of it—that this is about landlords as well as tenants because it is important that we take a balanced view. We have been supporting landlords as well with buy-to-let mortgages while the mortgage holiday will be extended, with applications open until 31 January 2021. We are very grateful to our landlords for their forbearance during this unprecedented time and we continue to strongly encourage tenants to pay their rent, or at least to have an early conversation with their landlord if they have difficulty in doing so. Often, things can be dealt with during that early stage.
The noble Lord, Lord Kennedy, and the noble Baroness, Lady Fox, rightly asked what will happen if tiers 2 and 3 are extended past January. We know that there are concerns about the period from January and perhaps through to Easter, when the vaccine will start to take control of the pandemic. We will continue to keep this policy under constant review because it is important to do so. If any changes need to be made, the Government will consider them. However, we have to remember that occupiers now must be given 14 days’ notice of an eviction before the bailiffs can come in. Also, on any new possession, the landlord will have to give six months’ notice to any tenant if they require them to leave the property.
We talked a lot about poverty. The Government have put £500 million into a hardship fund to help further reduce the council tax bills of some of the most vulnerable households, those we are talking about. That fund can help them by up to £150 a year.
I thank the noble Lord, Lord Campbell-Savours, for some of his ideas and we will look into them. However, the best way in which to help landlords is to help tenants pay. That is why programmes such as the furlough scheme are so important because if families still retain an income, tenants can pay and landlords are secure. In addition, mortgage payment holidays of up to six months are available and can help landlords.
The noble Baroness, Lady Bennett of Manor Castle, was absolutely right about having more housing. We have committed at least £44 billion over five years to build more homes in this country.
Lastly, my noble friend Lady Neville-Rolfe mentioned impact assessments. This measure is only temporary, lasting less than 12 months, as part of our Covid emergency response. Therefore, requirements for a formal impact assessment do not apply.
I am sure that I have not answered a number of other questions, but time has taken over.