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Scrapping S21 could be chance for agents to secure more work - claim

If the government follows through with its plan to scrap Section 21 there could be more work for agents as a result.

That’s the claim from automated rental payment provider PayProp, which says that guidance from agents would become crucial to help landlords regain possession of their properties legally.

In April, the Ministry of Housing, Communities and Local Government announced its intention to abolish Section 21 evictions, a move it said would be “the biggest change to the private rental sector in a generation.”

In its place, the ministry proposes a new system requiring landlords to serve a Section 8 notice providing a “concrete, evidenced reason already specified in law” in order to regain possession of their property.

Many industry insiders consider this may well be a slower and far more cumbersome route of regaining possession, because while S21 allows landlords to regain possession of their property without providing a reason, S8 can only be used when a tenant has fallen into rent arrears, been involved in criminal or anti-social behaviour or broken the terms of their tenancy agreement.

The government has pledged to amend and ‘smooth out’ S8 but many remain sceptical.

"It's no surprise that many landlords would consider their options if S21 was scrapped, as it would mean yet another change in lettings legislation after so many others in recent years" says Neil Cobbold, chief operating officer of PayProp UK.

"If introduced, the changes would represent a huge overhaul in processes for landlords. Therefore, it's important for letting agents to raise awareness of the situation among landlords now, so they have time to prepare."

Cobbold warns that using S8 as it currently stands requires landlords to learn new procedures and documents" he says.

"Evicting tenants can be a legally complex and long-winded process, and if a new system is introduced, letting agencies will need to help landlords to follow the right steps and issue updated documentation. If the evictions process is not followed properly it can cause complications for landlords. It's also important to remember that landlords' investments and tenants' homes are at stake" he says. 

Meanwhile, government figures show that the number of small-scale and accidental landlords is falling, with the proportion of landlords letting one property falling from 78 to 45 per cent between 2010 and 2018.

"This market shift means demand for professional letting agencies will rise - agents should see the potential for increased business and ensure they are prepared to meet landlords' expectations" adds Cobbold.

"They can do this by offering an unrivalled landlord proposition which is fully compliant, transparent and efficient."

You can see the MHCLG’s formal consultation on its proposal too scrap S21 of the Housing Act 1988 and improve S8 here.

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    Consensus in this office is that scrapping S21 will lead to a multitude of BTL landlords selling up prompting a crash in house prices and by inference reducing the amount of work for agents.

    Paul Barrett

    Yep you've got it.
    Mind you isn't S24 having a similar effect!?
    The LA I have known for the past 10 years advises he has been rushed off his feet doing valuations for his LL clients wishing to sell.
    So yes he will get commission for successful sales but no more income stream from these LL selling up their portfolios.
    I don't seem to remember LA putting their hands in their pockets to assist funding the S24 JR!!!
    So I guess LA intransigence will lead to an inevitable decline in your business.
    Shame you didn't support your client base!
    I think perhaps it was forgotten that LL don't grow on trees as you are discovering.
    Along with the TFB many more LL will be choosing to self-manage no longer prepared to pay excessive management fees etc.
    I well remember being charged £500 for a tenant source.
    That was the last time. I have saved thousands of pounds not using LA.
    I'm afraid LA will not be retaining their clients who need to reduce costs to remain profitable.
    Inevitably LA will need to scale up to remain profitable.
    That can only mean one thing.
    Amalgamation just like LSL have done by buying 3 letting books.
    LA need to have far larger letting books to remain viable and will need to work harder to achieve the same income as before the TFB.
    Perhaps this will be no bad thing.
    The days of the one man band LA are over unless he has a very large letting book!

     
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