Labour’s ‘No Fault’ Eviction Ban Won’t Work
In yesterday's speech to Labour conference, Angela Rayner announced plans to ban ‘no fault’ evictions — but without rent controls, landlords will still be allowed to hike rents to force out tenants.
Deputy Prime Minister Angela Rayner announced a ban on 'no fault' evictions. (Photo by Ian Forsyth/Getty Images)
Yesterday, Angela Rayner gave her first speech to the Labour Party conference as Deputy Prime Minister, with legislation to ban ‘no-fault’ evictions being touted as a central commitment. Ending no-fault evictions could not come sooner. Repossessions through no-fault evictions are currently at a six-year high, and half a decade has passed since this policy reform was first proposed under the Conservative government. However, despite the positive news, the Labour’s bill is riddled with problems and shortcomings.
Despite promising to ‘overhaul’ the sector and ‘rebalance the relationship between tenants and landlords’, a huge amount is left to be desired. The bill represents a halfway house between the previous government’s Renters’ Reform Bill, particularly in its watered-down form, and the ‘Renters Charter’ plans adopted by Labour in 2022. The latter of which attempted to outflank the Tories by offering more ambitious reforms for renters and came closer to the demands of the major housing charities and renters’ unions. Compared to Labour’s previous manifesto in 2019, the legislation falls even shorter still.
2022 plans to end ‘automatic eviction’ for arrears have been significantly diluted; proposals to update and improve the Decent Homes Standard have disappeared (though the current standard will be introduced to private renting); and a proposal to look at making tenant’s deposits ‘portable’ has also been abandoned. Nor has a full ban on landlords having a ‘no pets’ policy been included. Instead, like under the previous government’s proposals, the bill will give tenants a right to request a pet and not be unreasonably refused.
It is not just that the bill falls short of plans from when Labour were in opposition. Bigger problems lie elsewhere. While no-fault evictions have long been the key mechanism for forcing out tenants who’ve done nothing wrong, rent hikes remain a huge barrier to housing security. This is not just a question about affordability — which is a critical question — but about ensuring real security of tenure.
Without meaningful rent regulation, people can still be forced out of their homes easily and arbitrarily if landlords choose to hike rents above what tenants can afford. While the bill does promise legal changes around rent rises, these fall short. Landlords will have to give more notice of rent increases and will be expected not to raise the rent beyond the ‘market rate’. However, unlike the caps on rent rises in many European countries, tenants would have to take their landlord to tribunal to block an above-market rate increase. This is an improvement on the status quo, but it places the onus on tenants and an under-resourced system to bargain with landlords and keep rents in check.
This still leaves plenty of scope for landlords to use rent increases as a mechanism to evict a tenant arbitrarily. Without caps on rent rises, tenants will be left with inadequate security. This view is recognised across the tenant’s unions, the housing NGOs, other countries, and the previous three Labour manifestos — under both Corbyn and Miliband.
Control Rents, Secure Housing
The majority of countries in Europe have some form of rent control, with the UK (with the crucial exception of Scotland) one of just two nations in Northwest Europe lacking controls on rent levels or rises. Nor is rent control historically unusual in the UK. As recently as 1988, England and Wales had rent controls, before being scrapped by the Thatcher government.
While rent controls have a reputation for being destructive in orthodox economics, a fuller picture of the research literature reveals much more nuance. For example, a literature review from the Journal of Housing Economics concludes that rent control is ‘very effective’ at its primary goal of increasing affordability but can have negative knock-on effects. This can include inflating the rents of exempted properties — a problem which would only arise if some properties were excluded from controls in the first place — and reductions in housing construction, with the review noting that additional policy choices can address these side effects.
I would add that comprehensive rent controls and substantial levels of public or social housebuilding can dissolve that problem (a better framework and set of incentives for effective, affordable housing development could also do similar). It’s worth reflecting on the fact that the significant majority of the cities which score highest for quality of life have rent controls. If caps are so destructive, why are they often associated with more livable cities?
Beyond the affordability debate, which is of considerable importance, it’s clear that caps on rent rises are the obvious route to protecting people from no-fault evictions through the backdoor. While Labour’s proposals for stronger rights to appeal a proposed rent increase could help, this remains a murkier and significantly weaker option.
It’s not the only threat to security for renters the bill doesn’t succeed in tackling. The bill will also allow landlords to evict tenants to sell the property or to move the landlord or family members in, provided they give four months’ notice (up from two months) and not in the first year of a tenancy. While an improvement on the previous government’s bill, this would allow landlords to kick people out at their own discretion — and at relatively short notice.
A bolder — and far better — alternative would be for the bill to scrap ‘mandatory grounds for possession’, placing discretion over evictions into the hands of the courts, and offering tenants an additional line of defence against homelessness. The courts and the legal system will not fix the housing crisis, but doing more to check the power of private landlords to decide whether or not someone has a home still represents a step toward housing justice. This option has been pushed by the Society of Labour Lawyers, and a softer iteration by the trade union Unison, involving overhauling and replacing the current mandatory grounds system. Labour’s proposals, as they currently stand, fall far short of providing tenants the security they need.
While the Renters’ Reform Bill could have grasped an opportunity for far-reaching reform, it’s worth keeping sight of one harsher reality. More rights for renters is simply a way of ameliorating, rather than resolving, the housing emergency. Piecemeal reforms may help advance the cause of tenants, but this is not the same as systemic change. As long as the places we live serve as real estate assets to be invested in and to deliver returns for owners, renters will face a housing system in crisis.