Guarantors to stay as peers debate doggy lavatories

Chance would be a fine thing.

One of the most “vigorous” debates centred on Amendment 61, proposed by Baroness Kennedy of Cradley, which sought to restrict the circumstances in which landlords could request guarantors. This is what we might call “the NUS amendment”, the national union having made guarantors the key plank of their campaigning over the Bill.

The statistics presented were pretty bleak. Generation Rent data showed that almost 30 per cent of renters who moved in 2023-24 were asked to provide a guarantor, while a Shelter and YouGov survey revealed that over 100,000 private renters annually are blocked from securing homes due to guarantor requirements they cannot fulfil.

Only 2.9 per cent of landlords actually attempted to claim unpaid rent from guarantors in the past two years, despite an estimated 1.85 million tenants being asked to provide one.

Kennedy argued that guarantors had become “a proxy for discrimination,” noting that black renters were 66 per cent more likely to be asked for a guarantor, whilst disabled renters faced a 20 per cent higher likelihood of such requests. She stressed that her amendment wasn’t about banning guarantors altogether but “restoring proportionality and fairness in their use.”

Lord Fuller mounted a passionate defence of guarantor requirements, particularly for students. Drawing from personal experience, he argued that guarantors make “the unrentable into rentable” for three specific groups – international students, groups of students, and those with impaired reputations or difficult circumstances.

He described how international students, arriving without UK bank accounts or credit histories, often rely on guarantors to secure accommodation before arrival. He also highlighted his own experience as a guarantor for hundreds of families in difficult circumstances, warning that the amendment could prevent councils from acting as guarantors for vulnerable people.

The student dimension then got kicked around in a pretty partisan way. Baroness Grender noted that student groups had expressed support for the amendment, challenging Lord Fuller’s assertion that it would harm student interests. She argued that the current system discriminated against working-class, international, estranged and care-experienced students who struggle to find suitable guarantors because they don’t know anyone in those highest quartiles.

The government’s response, from by Baroness Taylor of Stevenage, acknowledged the concerns but ultimately rejected the amendment. She warned that prohibiting guarantors in broad circumstances could harm those who rely on them to access housing, including “those moving out of home for the first time, the self-employed and those with historic debts.”

She reassured the house that landlords consider multiple factors beyond income when assessing tenancy sustainability, and removing the option of guarantors could disadvantage renters whose circumstances might be perceived as risky.

Later, the government defended a series of highly technical amendments (75-85 and 123-125) to address the unique nature of purpose-built student accommodation. These amendments, explained by Baroness Taylor, aimed to exempt private PBSA from the assured tenancy system whilst ensuring proper protections remained in place.

The complexity was all about a need to align student tenancies with the academic calendar whilst protecting both existing and future student tenants. The government’s solution involves a two-pronged approach – exempting new PBSA tenancies if providers are members of approved housing management codes of practice, while providing modified ground 4A possession rights for existing tenancies.

Baroness Scott of Bybrook welcomed the amendments but sought clarification on several points – asking whether the provision referred specifically to recognised codes like ANUK or Unipol, or included other codes as well. She also questioned how newly established accommodation providers would demonstrate code adherence and when guidance would be updated.

Taylor confirmed that the ANUK and Unipol codes were the focus due to their “clear oversight mechanisms, including regular audits, complaint processes and suspension or exclusion for non-compliance.” She also argued that landlords have to maintain membership and demonstrate adherence to code standards or lose their exemption.

That does mean – given there are three PBSA codes – we’ll soon have four different sets of housing rights for students. Three cover PBSA, and then there’s students in student houses or flats where the landlord intends to “take possession” next June-September, and those in other types of off-street housing. What could possibly go wrong?

Outside of the strictly student debates, one of the evening’s most significant outcomes was the successful passage of Amendment 53A, proposed by Lord de Clifford, which introduced a three-week additional deposit for tenants with pets. This followed the Government’s decision to withdraw pet insurance requirements from the Bill after recognising that the insurance market might not develop sufficiently to support the policy.

The debate discussed the practical challenges of pet ownership in rental properties. Lord de Clifford argued that pets create “different types of damage” from human wear and tear, citing professional carpet cleaning as a common requirement where pets are allowed.

The amendment passed by 206 votes to 198, despite government opposition. Baroness Taylor of Stevenage argued that existing five-week deposits were sufficient, citing a University of Huddersfield study showing that 76 per cent of landlords reported no pet damage.

But peers were unconvinced, with Lord Howard of Rising sharing his recent experience of refusing a tenancy to prospective tenants wanting three Newfoundland dogs in a two-bedroom property. Meanwhile Lord Fuller recounted a £15,000 insurance claim after a tenant used a bedroom as a “doggy lavatory” for weeks. The scenes!

Later Lord Shipley raised the alarm about potential weakening of deposit protection schemes through Amendments 68-71. He argued that landlords should be required to protect deposits before serving possession notices, warning that the current Bill would allow landlords to protect deposits at the last minute, “potentially on the morning of the court hearing.”

Later Baroness Grender moved Amendment 56 on behalf of Lord Tope, requiring landlords to grant permission for disability adaptations following local authority assessments. The statistics were compelling – 37 per cent of households include someone with long-term illness or disability, rising to 59 per cent in social housing, while one-third of disabled people in private rentals live in unsuitable accommodation.

But despite support from Baroness Jones of Moulsecoomb, who noted businesses were “moving ahead” on accessibility while housing lagged behind, the government resisted. Baroness Taylor argued the amendment would create a “confusing two-tier system” (as opposed to the 5 tier system students will face) and promised instead to clarify disability adaptation rights in written tenancy statements and through awareness campaigns.

Two other successful opposition amendments significantly modified landlord obligations when selling properties. Lord Pannick, moving Lord Cromwell’s Amendment 58, successfully reduced from 12 to six months the period landlords must wait before re-letting if a sale falls through. The amendment passed 213-209, with Lord Pannick arguing the original provision was “unjustifiably penal.”

Lord Young of Cookham achieved another victory with Amendment 59, exempting shared ownership leaseholders from re-letting restrictions when sales fall through. His amendment passed 274-154 after he argued the restrictions would leave shared owners “with an empty property” and facing financial catastrophe, particularly those affected by the cladding crisis.

It’s a painfully slow process this – we must now be looking at Royal Assent after the recess and commencement right in the middle of the academic year. Report stage continues on July 15th – the fun and games will go on all year.