The Renters’ Rights Bill has now successfully passed its report stage in the House of Lords and is set to move forward to its third reading.
This third reading offers one last chance for discussion and review before the bill heads into what’s known as the ‘ping pong stage’. During this stage, any changes made by the Lords must be sent back to the House of Commons for approval before they can become part of the final legislation.
During the most recent debate at report stage, several amendments were discussed. These included proposals related to introducing financial penalties for landlords and changes linked to selective licensing schemes.
Significant additional responsibilities and costs on landlords
During the debate, Lord Shipley from the Liberal Democrats proposed an amendment to extend the maximum length of selective licensing schemes from five years to ten years.
Lord Shipley argued that a longer duration would help councils achieve more meaningful results. He explained: “Local authorities introduced these schemes to bring about large-scale improvements, but those are unlikely to be fully achieved within five years. This amendment would allow them to advertise longer-term posts for staff and to include training of new staff in these schemes.”
However, concerns were raised from the Conservative benches. Baroness Scott of Bybrook highlighted that while licensing schemes often have benefits, they can also bring unintended consequences. She noted: “We must recognise that licensing regimes, while in many cases beneficial, can place significant additional responsibilities and costs on landlords. These may include fees, compliance with detailed conditions and administrative burdens, all of which can have a knock-on effect for landlords and tenants alike.”
Baroness Taylor of Stevenage, who serves as the Parliamentary Under-Secretary of State for Housing, ultimately rejected the proposed amendment. She defended the current five-year limit, saying it offers a balanced approach. “A maximum duration of five years for schemes achieves the right balance,” she said. “It gives local authorities time to assess the effectiveness of schemes while providing landlords with assurance that they will not be subject to increased regulation for extended periods. Where issues in the private rented sector persist after a scheme has ended, a local authority may introduce a new scheme to take further action, provided that the statutory criteria are still met.”
This exchange reflects the wider debate about how to protect tenants and improve housing standards while ensuring that landlords are not overburdened by regulation.
Risks driving landlords out of the market
During the debate, Lord Keen of Elie from the Conservative benches proposed an amendment aimed at capping the financial penalties that local housing authorities could impose on landlords. His suggestion was to reduce the maximum penalty from £40,000 to £7,000.
Baroness Scott of Bybrook echoed these concerns, arguing that imposing such high fines could have unintended negative consequences for the rental market. She explained: “My Lords, fines must be proportionate, yet, as the Bill stands, the threshold for imposing fines on landlords is worryingly low, and the scale of those fines is notably high. This combination is troubling.”
She went on to warn that these significant penalties might discourage responsible landlords from staying in the sector. “Setting fines at such significant levels, in some cases representing a substantial portion of a landlord’s rental income, or even exceeding it, risks driving honest, well-meaning landlords out of the market, not because of any wilful negligence but out of fear,” she added.
The debate highlights the ongoing challenge in balancing the need for tenant protection and enforcement against bad practices, while ensuring that fair and responsible landlords are not unfairly penalised.
Financial penalties serve as an effective deterrent
Baroness Scott of Bybrook also proposed an amendment that would have limited the use of financial penalties to cases where landlords had committed persistent breaches, rather than one-off offences.
However, Baroness Taylor of Stevenage argued against this change, emphasising the importance of maintaining strong deterrents within the system. She explained that the increase in maximum civil penalties was intended to reflect inflation since the original limits of £30,000 and £5,000 were set for similar housing offences.
“We want to ensure that the deterrent value of civil penalties is maintained,” she said. “As I have stressed before, they are maximum penalty amounts. Local authorities will need to take into account a number of factors, such as the culpability of the landlord and the harm caused to tenants in determining the appropriate level of the civil penalty.”
Baroness Taylor also warned that Baroness Scott’s amendment could undermine the effectiveness of the planned PRS (Private Rented Sector) database, which forms part of the Renters’ Rights Bill. She pointed out that under the proposed change, landlords might avoid penalties for failing to register or for providing false information to the database, unless they repeatedly breached the rules over a long period.
“I appreciate that the noble Baroness is acting in good faith by laying these amendments, but they would have significant negative consequences for the effectiveness of the database,” she said. “For the database to be useful to users, it is important that as many landlords as possible register with the service.”
In the end, both amendments were withdrawn. The Bill will now move to its third reading in the House of Lords, scheduled for Monday 21 July, before entering the next stage of the legislative process.
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