Section 21 ban risks hurting tenants

7:00 AM, 15th April 2019, About 6 years ago 23

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PRS warns of “serious dangers” to the supply of rental housing for vulnerable tenants as a result of government plans to axe Section 21.

The Government is proposing a consultation on the abolition of Section 21, so called ‘no fault’, repossessions in the private rented sector in favour of improving the court system to ensure landlords can more speedily repossess properties through them in legitimate cases.

David Smith, Policy Director for the Residential Landlords Association said:

“Whilst the RLA recognises the pressure being placed on Government for change, there are serious dangers of getting such reforms wrong.

“With the demand for private rented homes continuing to increase, we need the majority of good landlords to have confidence to invest in new homes. This means ensuring they can swiftly repossess properties for legitimate reasons such as rent arrears, tenant anti-social behaviour or wanting to sell them. This needs to happen before any moves are made to end Section 21.

“For all the talk of greater security for tenants, that will be nothing if the homes to rent are not there in the first place. We call on the government to act with caution.”

Government data shows that on average tenants live in their rental properties for over four years and that in 90 per cent of cases tenancies are ended by the tenant rather than the landlord.

The Residential Landlords Association is warning that at a time when the demand for rental homes is outstripping supply, especially among vulnerable tenants, the Government risks exacerbating the problem if it does not ensure that landlords have complete confidence that they can repossess properties swiftly for legitimate reasons. These include tenant rent arrears, tenants committing anti-social behaviour and landlords wanting to sell their properties.

With the Government’s own data showing that it takes over five months from a private landlord applying to the courts for a property to be repossessed to it actually happening, the RLA argues that it is vital that a reformed and improved court system is able to bed in and the grounds to repossess properties are properly improved before making changes to Section 21. This would follow the lead set in Scotland.

Research by Manchester Metropolitan University for the RLA has found that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices there is a clear reason. Half of the notices are used where tenants have rent arrears, are committing anti-social behaviour or damage to the property. Other common reasons include the landlord needing to take back possession of a property for sale or refurbishment. The report’s authors argue that this “raises questions” about whether the use of Section 21 notices can properly be described as ‘no fault’ evictions, as some have called them.

The RLA will shortly be consulting the landlord community to establish what measures would be needed to ensure they have confidence in the system before efforts are made to end Section 21 repossessions.

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Frederick Morrow-Ahmed

12:41 PM, 17th April 2019, About 6 years ago

Reply to the comment left by Gary Nock at 15/04/2019 - 10:57
Oh, let's not quote cnn's propaganda lies about Venezuela! Venezuela may have its socialist fault but it's being crippled from outside. Let's stay on topic about the problems being created at home by this supposedly Tory government, no doubt run by the same handlers crippling Venezuela.

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dismayed landlord

15:03 PM, 17th April 2019, About 6 years ago

re desert fox comments, - I too thought intentionally homeless meant no council house but having evicted a mother and 3 kids for non rent payment (including not passing on to me the h/b) she was re housed by the council. It makes sense if you think about. Its the councils cheapest option than to putting 3 under 7 year old kids into care, and the mothers know this. Also worthy of thought if the judge I had is anything to go by they are actually suggesting section 21 to both stop me pursuing the rent arrears and to still enable the council to rehouse the family. To which a slight bit of blatant manipulation of the facts by a judge is allowable. No doubt if I tried falsifying the facts to suit or omitting some facts deliberately then I would be in contempt or even be imprisoned for perjury. He ho all good fun. Served to Notices today before the ability to use section 21 disappears. Another 11 to go. Should be fun. I'll become that landlord that the media says I am. Heartless and money grabbing with no concern for my tenants. Tell me I am a villain long and loud enough and I'll believe it.

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Appalled Landlord

18:31 PM, 26th April 2019, About 6 years ago

Scathing article in the Telegraph by Professor Bourne. Below are a few excepts, nothing we didn’t know, but it’s good to see them in a newspaper rather than just on landlord websites:

“Under plans open for consultation, the Tories would abolish Section 21 notices. It’s sadly unsurprising that Tories would not take a principled stance in favour of individual property rights and free contract….. The less charitable interpretation is that, unwilling to address broader housing market supply dysfunctions, they want to set up a landlord bogeyman to send a political signal to tenants.

The Conservatives risk creating severe problems in the private rented sector. One feature of post-1989 housing policy, including the birth of fixed-term “assured short-hold tenancies”, has been entry into the market of huge numbers of individual landlords owning a small number of properties.

Under the Government’s plan, they could get stuck with a difficult tenant, or locked out from accessing their own property.

The results of this policy are therefore obvious to anyone who understands basic economics. First, landlords will be far less likely to rent to tenants they consider high-risk. The incentive to engage in serious vetting, demanding extensive guarantees from tenants, will skyrocket.

Second, fewer landlords will remain in the sector and new, potential landlords will be less likely to consider it an attractive investment. All this reduced supply will, of course, raise rents further.

We might expect this sort of dumb policy from Labour. But the Conservatives, who facilitated the modern rental market by reversing anti-landlord regulations that eviscerated supply to a rump through the Fifites to Eighties, should understand the need for good microeconomic policy.”

Ryan Bourne holds the R Evan Scharf chair for the public understanding of economics at the Cato Institute

https://www-telegraph-co-uk.cdn.ampproject.org/v/s/www.telegraph.co.uk/business/2019/04/26/no-fault-evictions-ban-epitomises-paucity-tory-economic-thinking/amp/?amp_js_v=0.1#referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fwww.telegraph.co.uk%2Fbusiness%2F2019%2F04%2F26%2Fno-fault-evictions-ban-epitomises-paucity-tory-economic-thinking%2F

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