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Repeal of Section 21 Evictions – Landlords Promised “Quicker and Smoother” Repossessions.

May 29, 2019
Repeal of Section 21 Evictions - Landlords Promised “Quicker and Smoother” Repossessions

Should landlords offering properties to rent in Redbridge be concerned over the proposal to repeal Section 21 of the Housing Act 1988 and end so-called, “no fault” evictions? In 2018, independent charitable foundation, Trust For London, reported that Redbridge Borough had the fourth highest eviction rate in the capital with more than 25 per 1,000 renting households – around 1 in every 40 tenancies.

Since the government’s announcement in mid-April, an overwhelming number of landlords have quite rightly expressed their fears over laws that could prevent the future removal of tenants if a property needs to be repossessed for a legitimate reason such as, rent arrears, anti-social behaviour or putting up for sale. According to the Residential Landlords Association (RLA), at a time of continuing demand for private rental properties, there is a real need to encourage “the majority of good landlords to have confidence to invest in new homes”.

 

A criminal offence to evict a tenant without a court order

Much has been made of the rise in “revenge” evictions in response to a tenant asking for a repair to be carried out or making a complaint about living conditions. A landlord would actually be committing a criminal offence to evict a tenant without a court order and there are no grounds for eviction based on “complaining about living conditions or repairs”. Even the serving of a Section 8 eviction notice is only a “notice of intent”, not an actual eviction, which only a court can legally order. The process can take six months and costs over £2,500 for landlords to regain possession. The alternative is to wait until the end of the tenancy contract and use a Section 21 notice without having to give a reason.

Landlords say that the use of Section 21 is rare, but is required for those times when they have no choice but to evict tenants from a property. It’s a view also indicated by government statistics showing that only around 1 in ten (11 per cent) of tenancies are ended by the landlord, of which, nearly two thirds regained their property because it was required by the landlord to live in themselves or to sell on the market.

 

Pressure on landlords to improve conditions for tenants

The proposed measure once more places pressure on landlords to accept the latest legislation aimed at improving conditions for tenants within the private rental sector. However, in September 2018, a government proposal to introduce a minimum three-year tenancy contract was successfully blocked due to concerns that it could deter potential investment in the buy-to-let sector. At the time, it was pointed out that a number of landlords already offer three-year tenancies, where required, with the mutual benefit of providing longer term security for tenants and better financial returns for buy to let investors.

In other words, good landlords are more likely to be in tune with the changing property landscape and increasingly responsive to the needs of a broadening demographic of renters. YouGov have reported that more than one in five, or 5 million UK households, were now in private rented accommodation, which is forecast to hit near to one in four (5.8 million) over the next two years.

Yet landlords often feel that their very real concerns are not being sufficiently addressed. A recent swath of legislation has focused on reforming property and tenancy conditions for renters including, Minimum Energy Levels Regulations (MEES), Houses in Multiple Occupation (HMO), Council Selective Licensing, Homes (Fitness for Human Habitation and Liability of Housing Standards) and the Tenant Fees ban. Landlords have also felt the impact of the 3 per cent surcharge on stamp duty from 2016 and the phasing out of higher-rate tax relief on mortgage interest payments by 2021.

 

Measures would provide landlords with “additional safeguards”

James Brokenshire, Secretary of State for Communities and Local Government announced the proposed repeal of Section 21 with a statement indicating that conditions for landlords would not be compromised. He stated that the private rented sector must remain “a stable and secure market” for landlords to continue investing in and that measures to be introduced would provide landlords with “additional safeguards to successfully manage their properties”.

Brokenshire promised that existing grounds for eviction under Section 8 of the Housing Act 1988 would be “strengthened”, which would allow a landlord to regain their property if they wanted to move in themselves or if it was to be sold. In addition, the communities secretary stated that it was important that landlords had confidence in a legal system that “works for them” in situations when there is no other option but to seek possession of their property through the courts. A further pledge was made concerning the improvement of the court procedure that would make it “quicker and smoother for landlords to regain their properties when they have a legitimate reason to do so”.

Government to listen to landlords, tenants and others

The minister highlighted that removing no-fault evictions was a significant step in the longer process of introducing reforms to improve security for tenants while also “providing landlords with the confidence that they have the tools they need”. In conclusion, it was confirmed that a consultation is to be launched, in which, the government would “collaborate with and listen to landlords, tenants and others in the private rented sector to develop a new deal for renting”. The aim is for the consultation to be completed by the summer.

It is claimed that any new system would see  a rise in a type of no-fault eviction where the landlord falsely claims to be selling the property simply to remove the tenant. For the landlord, of course, there could be a future risk to realising the value of their housing assets through disposal because of a “sitting” tenant.

May 29, 2019