Baroness Scott of Bybrook (Con)

My Lords, I will speak to Amendments 92, 93, 95, 102 and 105 in my name, which relate to rent controls and caps. I apologise if I repeat quite a bit that other noble Lords have been debating, but I think this is an important issue and I would like to give my own explanation of my amendments in this group. Amendment 92 in my name addresses an issue of critical concern both to landlords and to the overall functioning of the rental market. The current provision limits the ability of tribunals to increase rent, allowing only for reductions. Let us pause for a moment to consider what such a provision creates. In practice, what incentive does it give to tenants? In essence, this provision incentivises a clear motivation for tenants to appeal all rent increases, as we heard earlier, regardless of whether the increases are reasonable, aligned with market value or necessary. Why? Because they know that the worst outcome for them will be that their rent is either frozen or reduced. I have tried over the course of our debates on this Bill to understand the Government’s position on many of its provisions. On this provision, I find myself asking who exactly came up with this. Who thought it was fair or reasonable to restrict the ability of tribunals to increase rents while leaving only the option for reductions? Under this existing framework, tribunals can never increase rents, regardless of the circumstances. Not only does this create a totally imbalanced system within the rental market: more pressingly, how will the tribunals cope? How can we expect the tribunals to fairly adjudicate cases when the scope of their decision-making is so narrowly constrained? On the issue of tribunal capacity, I once again ask the Minister to assure the House that tribunals will have the necessary resources and capacity to manage the inevitable increase in the number of cases under this new system. If the Minister does not have the figures on this available today, can she commit to writing to me with the details in full? It is essential that we understand how the Government intend to support the tribunals, given the increasing workload and the very real risk of backlogs that this Bill may introduce. I do not believe that it is sufficient simply to introduce this provision without a clear plan for ensuring that tribunals can operate efficiently and without significant delays. I must ask: is this what we really want? Are we truly creating a fair system if landlords are unable to maintain rents that reflect the realities of the market? At what point do we risk undermining the rental market altogether? If landlords begin to feel that any rent increase, no matter how justified, will result in a tribunal-imposed reduction or freeze, will they not simply choose to exit the market—and what will this do to the rental supply? To put it plainly, this provision will lead to fewer rental properties, fewer long-term stable tenancies and, ultimately, higher rents for tenants. We cannot ignore the wider consequences of this approach. Amendment 92 seeks to correct this imbalance by giving tribunals the discretion to make a neutral decision based on the facts before them. It would allow the tribunal to increase rents if justified, just as it could reduce rents when necessary. In doing this, we would be creating a balanced system that reflects the realities of the housing market and treats both landlords and tenants fairly. Amendment 93 addresses another fundamental issue: the ability of tribunals to backdate rent reductions. How can it be fair to require landlords to repay rent that they agreed to in good faith at the start of the tenancy? If a rent increase has been agreed to, how can we justify forcing landlords to pay back significant sums retrospectively? The provision does not just destabilise the relationship between the landlord and the tenant; it undermines the entire principle of contractual fairness. If landlords face the risk of backdating payments, why would they agree to any rent increases at all? And what happens to trust between landlords and tenants when rents can be altered retrospectively? The solution is simple. Amendment 93 would ensure that rent reductions cannot be backdated, promoting stability and fairness. Amendment 95 ties directly into this. It addresses the delay of rent increases by tribunals. How can we justify automatic delays to rent increases when those increases are fair, reasonable and in line with market conditions? This provision creates an incentive for tenants to appeal rent increases simply to delay them. Of course tenants would do this—if they know that they can delay rent increases for months or even longer, regardless of whether the increase is justified, why would they not do that? The reality is that the current system encourages tenants to use the tribunal process as a delaying tactic, even when there is no real case against the rent increase. What does this do to landlords, who rely on these rent increases to cover rising costs, maintain their properties and meet their financial obligations? What happens to them when the tribunal can, at any time, delay a rent increase without a justifiable reason? I therefore ask the Minister how the Government expect landlords to respond to this. Can she explain why we are encouraging tenants to delay rent increases when the increases are reasonable and necessary? Does she not see that this provision disincentivises landlords from entering or remaining in the rental market at all? If we allow this to continue, the only winners will be tenants who exploit the system. Landlords will be left with fewer options and fewer incentives to maintain or improve their properties. At what point do we risk irreparable damage to the rental market? Amendment 95 seeks to correct this imbalance by ensuring that rent increases are delayed only where there is clear evidence of undue hardship for the tenant. This would prevent tenants delaying rent increases simply for convenience and would provide landlords with the certainty they need to operate within a fair system. Why is the Renters’ Rights Bill so intent on restricting rent increases, when in many cases increases are entirely justified by market conditions? The provision that rents can only be decreased creates an artificial cap that disregards the economic reality of the rental market. Moreover, by limiting rents to reductions, we are effectively disincentivising landlords from maintaining or improving their properties. Is the Minister aware of the potential long-term consequences of this? Amendment 102 seeks to address this by replacing the requirement for rents to be decreased with a possibility for rents to be adjusted according to the circumstances. This would create a more flexible and fair approach, one that allows the tribunal to consider the economic reality of the rental market without imposing artificial restrictions.