There has been a sharp rise in the number of Section 21 notices issued, which gives a landlord an automatic right of possession without having to give any grounds once the fixed term has expired.
Paul Shamplina, founder of Landlord Action, says that the scrapping of Section 21, as part of the Renters Reform Bill, will come as little surprise to landlords, many of whom have already started making plans to sell in anticipation.
He explained that April was Landlord Action’s busiest month in 23 years, with a 91% year-on-year increase in the number of step two Section 21 notices being served.
Shamplina commented: “I have no doubt that as the date for the end of Section 21 nears, more landlords will start to panic, which will lead to more good tenants having to leave their homes.
“The government has made reference to digitising more of the process for those evictions which do end up in court, by way of speeding up the process. Whilst this is positive, greater reform of the court system will be required if landlords are to have confidence to remain in the market.”
A third of landlords say that the scrapping of Section 21 is of major concern to them, a recent poll found.
According to Mortgages for Business, which carried out the research, 33% of landlords were worried by the reform of Section 21 as part of the Renters Reform Bill.
Under government plans, landlords are set to lose the right to evict tenants at short notice without giving a good reason for doing so. Until now landlords have been able to use Section 21 of the 1988 Housing Act to evict renters after the end of a fixed term tenancy, with two months’ notice.
Government plans will effectively create open-ended tenancies whereby landlords will have to give a reason for eviction — such as rent arrears or antisocial behaviour — as well as include evidence of the tenant’s shortcomings.
“Fears surrounding the scrapping of Section 21 are a driving force behind landlords not remortgaging and selling-up instead” said Gavin Richardson, the managing director of Mortgages for Business.
Emily Williams, residential researcher at Savills, warned that the real challenge is probably going to be at the lower end of the market.
“What it’s really going to do is make landlords much more careful about who they rent to and really do their due diligence on their tenants,” she said. “It’s probably going to make it tougher for people who are either on universal credit or have to use local housing allowance to secure a private tenancy.”
Renters’ Reform Bill finally introduced to parliament – industry reaction
This will end in disaster. Tenants need homes and good tenants deserve security of tenure too. But why should a private property owner who has invested in a property be denied the opportunity to get their property back when they want it?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Is anyone else like me fed up of hearing from ill informed politicians and journalists that S21 lead to eviction after 2 months when in reality this is just the start of what is a long and costly process for landlords who wouldn’t instigate it without good reason.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
https://www.hillingdon.gov.uk/article/11046/Housing-fraudster-evicted-following-lengthy-legal-battle
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
2 decades in social housing, tens of thousands in legal fess… and who foots the bill? The tax payer.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Landlords are worried and worried landlords would want out.
The bit of information they are failing to disclose is councils want section 21 notices served and tenants made homeless before they would house tenents.
This would mean councils will not house as the reason for the Section 21 will not hold in court as the landlord generally doesnt have a real reason to evict and in most cases is following the procedure set by the council to serve the Section 21 notice etc. So landlords dealing with social housing tenants could be stuck with tenants.
It would be good to know how many Section 21 notices were served on social housing tenants as they use S21 to move from property to property.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I wonder if a reason will be there such as “is not a good Tenant”. At the moment, consistent late payment of rent is a discretionary reason on S8, I would want to see it being a mandatory one in the new system.
I’d like there to be a PITA reason as well, but I can’t see that happening as people would then say it’s a revenge eviction… Its not. You are just FAR too much effort to deal with. I had one tenant ring me 2-3 times a day for about 3 days to see when the contractor was coming out to look at her broken drawer. In the end I went round myself just to say “yes, it’s broken” and hopefully shut her up for a bit! It also turned out that the contractor had been trying to call her, but as she didn’t recognise his number she didn’t pick up… Now if it had been a serious issues, fair enough, but one drawer? That she could get into but it was difficult to open and close? She also called me one day screaming about a leak and the ceiling coming down and needing the fire service and an ambulance… Fortunately her daughter was there and took the phone, pointing out that yes, there was a small leak just appearing from the bathroom upstairs, but that the ceiling hadn’t come down and we did not need to send the emergency services.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Oh what a surprise.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I would always try to avoid S21 anyway if I were to serve notice, as the Courts allow Defendants so many opportunities to submit “evidence” that the process can take literally years. Use Section 8 and the various Grounds provided, it’s much more certain.
This Bill IMO is going to bounced around for 12 months + and then shelved as the focus will be on Elections. It just gives Gove an opportunity to get some further air time for a while and deflect the MSM away from the real issues in Government, “look over there not over here”, and the MSM take the bait every time.
I do find it strange how Savills state it will “make landlords much more careful about who they rent to and really do their due diligence”. What on earth do Landlords do now!!!, or is it just me that ensures each applicant can afford their rent comfortably and have stable employment?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
One change slipped into the Bill is that currently section 21 notices cannot be served if the tenancy deposit has not been properly protected with an authorised scheme and the prescribed information given unless and until the deposit is returned to the tenant. That rule does not apply to Section 8 notices. Now it is proposed that except in cases of antisocial behaviour: “ the court may make an order for possession … only if the tenancy deposit is being held in accordance with an authorised scheme.”
The tenant must also have been given the Prescribed Information in the required form. So even if the ground for eviction is rent arrears, damage to the property or that the landlord wants the property back to live in himself, he may fail if the deposit paperwork is not in order. It will be possible to give the correct Prescribed information late which may prompt the defaulting tenant to seek a Rent Repayment Order on the basis that the PI had not been properly served in time.
When landlords eventually get to court tenants will be able to ambush them with a technical defence because, for example, the wrong clause number was referred to in the Prescribed Information or there was some other minor error. The safest course will be to return the deposit to the defaulting tenant which is really to add insult to injury. “You owe me £10,000. Have £1000 back!” It will be a bold landlord who seeks an eviction using section 8 without professional help. So much for Mr Gove’s statement about being able to evict more quickly tenants who are “persistently and deliberately evading their responsibility to pay their rent”.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
If I have any properties left I’ll be seeking 2 property owning guarantors prior to commencement of tenancy as the time to recover said property could be years You never know the first one could have popped it or sold up during the tenancy and possession proceedings!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Speaking to a lot of my Landlords they are concerned about the ability to raise the rent and what will happen if the tenant refuses or cant afford it ? Would this make the tenant “not good” or will the landlord have to lose money if the mortgage goes up ?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I am by no means an expert on the subject or a business man as I have one property with a good tenant that I am trying to sell with a ROI of about 8%.
The only person who has approached with serious interest wants to pay under the asking price and kick the tenant out to get more money regardless of the type of person they are moving in and the difficulties they are creating for the person they are displacing.
I think balance is imoortant and it seems like while getting rid of S21s can be seen as a bad thing, it is for that very reason they are doing it.
The streamlining of the eviction process for bad tenants will offset this in my view.
Confident consumers boost markets at the end of the day.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register