A third of landlords say that the scrapping of Section 21 is of major concern to them, according to a new poll.
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.
In future all tenancies will be assured tenancies that will continue indefinitely unless ended by one of the new Section 8 grounds for possession. These include: if the landlord wants to sell the property (or move into it) or if there has been a breach of the tenancy by the tenant.
But Richardson believes that landlords have less to fear from reform of Section 21 than they realised.
“Section 21 notices have been abused for years. They have been used as a vehicle for ‘revenge evictions’, for instance, where renters who have complained about their property are evicted in retaliation.” he said.
“I don’t think the reforms will prove to be that bad. First, tenants didn’t have to do anything wrong to justify a Section 21 notice — they could have been paying the rent on time and taking good care of the property. Sensible landlords rarely turf out good tenants who pay their rent as they want them to stick around. So this reform will disproportionately hit bad landlords abusing Section 21, rather than the reputable end of the market.
“Second, tenancies can still be ended if there has been a breach of the tenancy by the tenant. Furthermore, the government has said it will introduce a new ombudsman to settle disputes between tenants and landlords without the need to go to court — and speed up court processes where possession cases require them. The government has also promised to digitise the courts’ agenda ahead of these reforms to ensure a swift resolution to these cases.
“Third, owners will be able to end a tenancy if they plan to move back in or sell it — that was the real danger of this reform, anything that inadvertently risked landlords’ ability to realise the value of their housing assets through disposal.”
“The loss of full tax relief on mortgage interest payments for individual landlords, the stamp duty surcharge on additional property property purchases, and the need to ensure properties meet energy efficiency rules expected to apply from 2025 are all far more significant for landlords.
“You’d never guess that from the government rhetoric though. For instance, I don’t think for a moment that Section 21 exacerbated homelessness as one Tory communities secretary claimed. The politicians are irresponsibly trying to curry favour with tenants: the country will suffer as the private rented sector — with its efficient use of property stock — dries up. The government needs to stop trying to gain cheap brownie points by taking a pop at the private rented sector and needlessly spooking landlords. It is the reason the government has lost the confidence of responsible landlords.”
Mortgages for Business’ research found that the chief concern of landlords was higher mortgage rates (a concern of 63% of landlords) followed by Section 21 reform and EPC regulations and tax (both a concern of 32% of landlords).
Richardson added: “Of the big concerns raised by the business people working in this entrepreneurial sector, government is responsible for all of them — from Kwasi Kwarteng’s catastrophic mini-budget smashing up rates to new EPC legislation and the changes to the way the Private Rented sector is taxed. It’s hard to see how this is the work of the party of business. The government is making it harder to start and grow a business in the private rented sector. The UK is not a place where property entrepreneurs know they can build on their ideas and find success. Landlords’ potential is being restrained.”
This is what happens when Government interferes with an industry they know nothing about.
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I wonder what this cross section of opinion was based on, number’s wise…33% of 10000, or 33% of 10?
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Good grief- group think! Good landlords do not evict good tenants, Good landlords use the contractual agreement to end a tenancy and change the people occupying their property. Bad landlords do as they please.
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The basic fact is S21 worked for landlords and was a strong part of the 1988 Housing Act that gave investors faith to invest in the property market given the previous abomination of the Rent Act 1977 that killed stone dead the private rented sector from the earlier PRS. The current proposals are the blueprint of the previous devastation of housing reincarnated. The fact is that S21 gave certainty that possession could be obtained with realively little doubt of rogue judgements by some of the judiciary. Had the court system been more efficient and sensible more actions under s8 would have been used but unacceptable delays encouraged s21. Landlords with good tenants wanted to keep them not evict. Bad tenants were at risk of eviction, they type of tenants that Shelter & Generation rant appear to support. By directing of all matters under S8 will significantly delay decisions, significantly increase costs and ambulance chasing lawyers involvement. As we always see this will be the thin edge of the wedge and further OWNERS RIGHTS will be removed as time goes on. This will be encouraged by those who fell the PRS is an alternative social housing system where councils sell and spend their council housing stock. Those leaving have every right to fear staying in a market where investments will turn bad. Today we hear more “last minute” politicing how anti social behaviour will be addressed but at whose cost THE LANDLORD’s. A raised cost as things always cost more under S8 with hearings and suspect vampire lawyers on no win no fees commissions. This again will be designed to show the Landlord’s as the bad boys i.e. if he does not want to pay the excessive costs (due to the legal system & s8) of dealing with anti-social behaviour he will be the villian of the peace. Scum politics in my humble opinion. What do others think?
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100% Agree.
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Perhaps all those agents who used to issue renewals, charging the tenant several hundred pounds sometimes and threatening that if they didn’t pay and sign a new tenancy, that they would be served a section 21, should take some of the responsibility for this.
Section 21’s have been abused by the industry and now we are V surprised they are being done away with?
Just hope section 8’s are sorted out!
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In my opinion as an agent of 30+ years and a landlord myself, the problem of Section 21 is small fry compared to the uncertainty and the impractical targets surrounding changes to EPC.
This government’s obsession with net zero and making private landlords pay for it is wrong and unless they u turn very quickly I can see a lot of landlords serving notices or heading to the courts to get properties back!
Would anyone spend £10,000 making a car roadworthy and more efficient then let someone else drive it around giving the owner zero benefit, No? Then why expect landlords to do the same to their properties, either leave things alone (they work) or make grants available to tenants who, at the end of the day, pay the bills and leave landlords out of it?
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