Landlord Crusader: Section 21 abolition – congratulations to Shelter et al

And so, it came to pass – section 21 notices to gain possession of a rented property will be no more and there was only the wailing of landlords that could be heard.

So, I guess, congratulations to Shelter and Generation Rent and all the others on a media campaign that focussed on the vilification of landlords over recent years.

The publishing of the Renters’ Reform Bill this week makes for surprising reading but seeing the abolishing of section 21 still hurts. This is just like the ending of section 24 when all landlords took a massive tax hit.

Sadly, landlords aren’t seen in a good light and the downside of what will happen next hasn’t been discussed.

But it will be.

Investing our money into an asset

Shelter and the complainers haven’t quite understood that as landlords, we are investing our money into an asset that provides a home.

We then spend our money to maintain it and most of us will be paying a mortgage.

We also pay tax and invest time and cash in meeting our legal obligations.

But there seems to be a disconnect of sorts because Shelter and Generation Rent don’t appear to appreciate a basic truth.

It is our money that we have invested. Not yours. Not the taxpayers. Ours.

And we can invest it how we like.

There’s not a law in the land that will prevent landlords from deciding that enough is enough and deciding to sell their property.

The future has been made clear with the Renters’ Reform Bill.

If you think the lack of properties and high rents is bad now, wait until the flow of landlords packing in becomes a flood.

As I say, congratulations to Shelter.

Proposed abolition of section 21 ‘no-fault’ evictions

While the proposed abolition of section 21 ‘no-fault’ evictions will be celebrated by tenants’ rights groups, it could prove to be the death knell for a sector already under huge strain. Here’s why:

• First, the abolition of section 21 undermines the fundamental principle of private property rights – and takes us back to the days pre-Thatcher when landlords struggled to reclaim a property. That’s why the Housing Act 1988 revolutionised the private rented sector. Abolishing section 21 means that landlords no longer can reclaim their property without a clear reason. This change effectively transfers the control over their property from the landlord to the tenant.
• Secondly, the abolition of section 21 is an overreach of the government into the private rental sector. The government’s role should be to regulate the rental market, not to take sides in the relationship between tenants and landlords.
• Thirdly, the abolition of section 21 fails to recognise that there are cases where evicting a tenant without a specific reason is necessary. Sometimes tenants violate rental agreements, such as not paying rent or damaging property. In these cases, section 21 ‘no-fault’ evictions provide a simple solution for landlords to reclaim their property without jumping through hoops. The alternative, of having to prove legal cause for an eviction, can be a long and expensive legal process.
• Finally, the abolition of section 21 is likely to have unintended consequences. One of these is the reduction in investment in the rental market. Landlords will be less inclined to invest in rental properties if they believe that their control over the property is being taken away from them. This drop in investment will reduce the supply of available rental properties, leading to increased rental prices.

In addition, the abolition of section 21 may lead landlords to be more selective in choosing tenants. If landlords can’t easily remove tenants who aren’t paying rent or causing damage, they are more likely to focus on finding more reliable tenants in the first place. This will present challenges for those with poor credit histories, have previous evictions or other issues that may turn landlords off.

So, good luck Mr Gove with the aim of preventing landlords not renting to someone on benefits.

The Renters Reform Bill

Let’s face it, the proposed abolition of section 21 evictions in the Renters’ Reform Bill may sound like a positive change for tenants’ rights, but it has far-reaching negative consequences for property owners and the rental sector.

Instead of abolishing section 21, the government should focus on creating a balanced regulatory framework for the rental market.

A market that is regulated so that tenants have protections and property owners’ rights are respected, but not so heavily regulated that investment in the market decreases and rental prices rise.

Did you hear that Shelter and Generation Rent? You’ve got what you wanted.

But perhaps you didn’t want the huge increase in tenants being made homeless or being priced out of the ever-decreasing private property sector.

As I have said before: Be careful what you wish for because – as the shops say when they have a great deal – when it’s gone, it’s gone!

Until next time,

The Landlord Crusader

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