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TODAY'S OTHER NEWS

Section 21 evictions set to be axed to create ‘indefinite tenancies’

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.

Poll: Should S21 be scrapped?

PLACE YOUR VOTE BELOW

  • Mark Wilson

    The buy to let party is over. No political party will promote it. Exit via the gift shop.

  • Barry X

    I posted this same comment on the other related article today....

    They're both crazy and completely out of touch if they want to simply end s.21 style "no fault" repossession. They also show their extreme ignorance of the history of the Private Rental Sector/Market and the mechanisms that drive it.

    The Housing Act 1988 created the Section 21 right to regain possession of a property without having to show the tenant(s) had "seriously" breached any of the terms of the rental/tenancy agreement. Landlords could use this new right to seek repossession of his/her/its property for any reason whatsoever - another principle that has also been dangerously undermined in recent years - if it's your property surely you should have the right to regain it on reasonable notice without having to explain why. This is a fundamental BUSINESS principle - we are in business, we are not managing stock for "social housing" - that's someone else's job not ours.

    BEFORE the introduction of s.21 EVERY tenant in every rental property was in effect a "sitting tenant" (or "statutory tenant") protected by law and potentially not only there for life but able to transfer the tenancy to near relatives etc. They also had other rights for example to apply for rent tribunals if you dared to try and put the rent up to a viable commercial level - wouldn't it be a terrible social injustice if a landlord was actually able to charge a fair rent and make a reasonable return on their investments, work and efforts?!

    Anyone who goes to property auctions will see that properties occupied by "statutory tenants" are cannot be sold with "vacant possession" . As a result such properties are virtually un-mortgageable (except perhaps via specialist portfolio finance) and are typically worth about 1/3 of their "open market value with full vacant possession".

    THAT is the sort of thing we've already being covertly returning to with the incremental undermining of the s.21 in recent years - as I've commented before. It's abolition will - I believe get us there in a single step (unless some alternative safety mechanism is implemented to properly and fairly replace it).

    As I've been saying for years..... if only I was able to sell up and go I would have left this messed-up country like a shot. Sadly, for many personal reasons, I wasn't able to - but anyone who can should perhaps consider it before things get even worse!

    Good luck - you're gonna' need it!

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    Totally agree with your comments that the Government appears to see landlords as an extension of the Social rental sector.

     
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    Crazy crazy. As landlords we have to wait two months on rent arrears then pay for court costs which also means another two months at least no
    More rent. But our mortgage company if we didn’t pay would be on us, out a black mark on our credit for something that is outside of our control. The government eithe need to tell banks to give us grace for these months until
    It is rented or change the process so we can gain possession of non payment immediately. This government has an issue with housing crisis and is contanstly putting landlords in the firing line as scapegoats. Government need to sort out the root issue which is them not private landlords

    Also if a private landlord wants their property back which is owned by them then they should be able to get it back it is their property Legally!

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    They're going to consult? That's a joke.

    jeremy clarke

    As with other consultations, fee ban, longer tenancies, they are just ticking a box which they then just ignore!

     
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    So homelessness will increase significantly as even the council won’t touch them as we now have to supply a reason then the council says tough you made yourself homeless because you were evicted because.....

  • jeremy clarke

    The headline was banning S21, the issue is not so much to do with S21 more to do with S8.
    Very few landlords use the S21 for a no fault eviction process, most use S21 for other reasons such as rent arrears breach of tenancy because the S8 process is not fit for purpose. S8 is rife with pitfalls, loopholes and opportunities for the tenants that know the system (& "charities") to exploit. Delays cost landlords money and there is often no recourse on the offending tenants so landlords take a view that at least S21 gives them certainty; they write off any tenant debts just to get the property back.
    S21 & S8 do not need 'tinkering with', they need a total review! A landlord must be able to get the property back either when the landlord wants it (sale, move in, for relative etc) but also when tenant defaults. Any new S8 grounds must be able to be actioned quickly to prevent huge losses to the landlord, say within 14 days for rent arrears?(After June 1st, landlords become the cheapest way for tenants to borrow money, a tenant with a rent of say £1,000 pcm can only be charged interest on the debt at 3% above base rate after 14 days - effectively 10p a day! Where else can you borrow money at those rates?)
    In addition, when the tenants owe the landlord money for rent, repairs etc. the tenant must immediately, without any further court action receive a County Court Judgement for the debt; if the tenant owes rent they must not be given Carte Blanc to go and do it again to another landlord. A central register which can be accessed by landlords and agents which shows all offending tenants must be produced.
    In my opinion, if a tenant discovers that he/she/they are going to get a CCJ, it will focus their minds and moderate their behaviour.
    So, this means radical changes to the court system with accessible court time for landlords and penalties on the system if it cannot perform; if the courts had to say, pay the landlords' rent and costs for any delayed time then landlords might not mind waiting. At the moment the biggest issue with landlords taking tenants to court via S8 is the uncertainty and the time delay - RESOLVE THAT FIRST BEFORE EVEN TALKING ABOUT BANNING S21!

  • Paul Barrett

    Stop talking so much commonsense.............you know Govt WON'T take a blind bit of notice of you.
    They want idiots like this David Alexander to trot out their rubbish!

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