Contribution
My Lords, I shall speak also to Amendment 265. Both amendments aim to strengthen the very welcome anti-discrimination provisions in the Bill. I am grateful to colleagues who have added their names and to Shelter for its help.
Amendment 170 sets out the circumstances in which a landlord may not require a tenant to provide a guarantor, a practice that has increasingly become a precondition of a tenancy for certain tenants—namely, those in receipt of social security, black renters, women, families and disabled renters—and one that could therefore be used as a way of circumventing the Bill’s anti-discrimination clauses.
The spirit of the amendment is the same as that behind the government amendment in the Commons which will prevent landlords demanding multiple months’ rent up front. To quote Independent Age, which is among the many organisations supporting our amendment,
“this is a sensible measure that safeguards against the risk of solving one problem (excessive rent in advance demands) only for it to be replaced with another (excessive reliance on guarantors)”.
Already, over the last five years, 550,000 private renters were unable to rent a home that they wanted because they did not have a guarantor that met the landlord’s requirements.
I know and respect that the Government do not want to prohibit the use of guarantors altogether, and my noble friend the Minister explained why in her helpful post-Second Reading letter. However, the amendment would not do that. It simply sets out the circumstances in which a landlord could not ask for a guarantor, and those circumstances reflect the National Residential Landlords Association’s guidance on appropriate guarantor use—that is, where a tenant cannot prove that they can afford to pay the rent. However, recent research by Shelter has shown that in practice guarantor requests often do not follow that guidance. Thus, the amendment is not radical but merely serves to ensure that guarantors are used as intended.
The case for ensuring that the use of such requests is limited is a strong one and is very much in line with the aims of the Bill. First, as noted already, it would help to safeguard the Bill’s anti-discrimination measures. Requests for a high-earning or home-owning guarantor are too often used in a discriminatory manner. Renters who receive social security, have a disability or are members of a racialised minority are all significantly more likely to be asked for a guarantor. Similarly, as Independent Age notes,
“requiring a guarantor can be a way for landlords to discriminate against older renters”.
Secondly, and related, the groups most likely to face a guarantor request are also those least likely to be able to meet one. Some 45% of benefit recipients and 43% of families struggle to provide a guarantor, compared with just 24% of those not receiving benefit or without children. The NUS believes that the amendment would make a huge difference to student renters, especially working-class, international, estranged or care-experienced students, who are likely to face difficulties finding a suitable guarantor. Become has highlighted the problems finding a guarantor faced by care-experienced young people more generally; its FoI research found that only around two in five local authorities provide a guarantor scheme for them.
Thirdly, in practice, fewer than 3% of landlords have attempted to pursue a guarantor for unpaid rent in the past two years. Moreover, insurance offers a sensible option for covering that risk.
Fourthly, the argument that the unfettered freedom to request a guarantor provides an essential lifeline for tenants with poor credit and/or problem debts is, Shelter argues, “a disingenuous one”, because there is evidence that landlords already avoid such tenants because of the manner in which tenant referencing is done. Those are not the tenants who are most likely to be able to find a suitable guarantor.
As well as the Renters’ Reform Coalition, of which Shelter is a member, and Independent Age, those calling for limitations on the power to require guarantors include the Mayor of London and Unison. I very much hope that my noble friend the Minister will be willing to discuss what is possible between now and Report and that if she cannot accept this amendment would consider proposing an alternative. Otherwise, I fear that some of the good intended by the Bill’s anti-discrimination measures will be undone in practice.
Amendment 265 would repeal the right to rent provision introduced in the Immigration Act 2014. It requires landlords, including those taking lodgers, and letting agents to check prospective tenants’ immigration status to confirm they have the right to rent in England before granting a tenancy. Letting a property to someone without the right to rent can now be punished with a fine of up to £20,000 or a five-year prison sentence.