The government says it wants to ban outright Section 21 'no fault' eviction powers in England and Wales.
Instead landlords seeking to evict tenants would have to use Section 8, which can be implemented when a tenant has fallen into rent arrears, has been involved in criminal or antisocial behaviour or has broken terms of the rent agreement, such as damaging the property. The government says it will amend Section 8 to allow it to be used by landlords if they want to sell the property or move back in themselves. Unlike S21, tenants can challenge S8 evictions in many cases.
Trade organisations have reacted with anger to the proposal that these so-called ‘no fault’ repossessions are to be ditched.
David Cox, ARLA Propertymark chief executive told Letting Agent Today: "The effects of the Tenant Fees ban from September 1 have not yet been felt. Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has to use the measures to regain posession of their property. An end to Section 21 could be devastating for existing supply in the private rented sector and on new landlords considering investing in buy to let properties."
And the Residential Landlords Association says such a ban could carry serious dangers.
“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” says David Smith, policy director at the association.
“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 RLA warns 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.
The association says that 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, 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 found that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices there was a clear reason.
Half of the notices were used where tenants have rent arrears, were committing anti-social behaviour or damage to the property.
Other common reasons included the landlord needing to take back possession of a property for sale or refurbishment.
The report’s authors argued that this “raises questions” about whether the use of Section 21 notices could properly be described as ‘no fault’ evictions, as some have called them.
The RLA says it 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.
And another trade body, the National Landlords Association, is also lambasting the government’s proposal to remove Section 21 ‘no fault’ evictions, essentially creating indefinite tenancies.
Richard Lambert, NLA chief executive, says: “Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case.
England’s model of tenancy was always intended to operate in a sector where Section “21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies by the back door.
“The onus is on the government to get this right. It’s entirely dependent on the government’s ability to re-balance the system through Section 8 and court process so that it works for landlords and tenants alike. The government should look to Scotland, where they reformed the court system before thinking about changing how tenancies work. If the Government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.”
Here is how Theresa May and Housing Secretary James Brokenshire have described today's move.