The Government is today announcing its intention to abolish Section 21, so-called ‘no fault’ repossessions in the private rented sector.
Section 8 evictions are also set to be reformed in England and Wales with a consultation launching on the Government’s plans.
Under the Government’s plans, landlords would have to provide a “concrete, evidenced reason already specified in law” in order to end tenancies.
Prime minister Theresa May says the move will protect responsible tenants with the “long-term certainty and the peace of mind they deserve”, while Shelter welcomed the move. Chief executive Polly Neate said the Government would leave a legacy it could be proud of.
Section 21’s Scottish equivalent has already been binned north of the border.
ARLA chief executive David Cox said this morning: “Today’s news could be devastating for the private rented sector and landlords operating within it.
“The effects of the tenant fees ban have not yet been felt, and now the Government is introducing more new legislation which could deter landlords from operating in the market.
“Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has no choice but to take action and evict tenants from a property.
“Until we have greater clarity on the changes planned for Section 8, today’s news will only increase pressure on the sector and discourage new landlords from investing in buy-to-let properties.
“This comes at a time when demand is dramatically outpacing supply and rent costs are rising.”
He said that ARLA Propertymark will be engaging with the Government to ensure ministers fully understand the consequences of any changes, and all changes are based on evidence, so landlords have the ability to regain their properties if needed.
The National Landlords Association slammed the move, with chief executive Richard Lambert saying it will make ‘fixed term’ meaningless, and creates a new system of indefinite tenancies by the back door.
The Residential Landlords Association has also warned against abolition of the right to regain possession of a property for landlords in England and Wales, without them having to give a reason.
David Smith, policy director for the RLA, said: “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.
“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.”
Here – in a video courtesy of Property Tribes – is how one industry figure, Paul Shamplina, reacts:
Comments (48)
– 3% Stamp Duty on BTL Homes
– Section 24 Finance Act
– The inability to serve Section 21 Notices
– Longer Term (3 years) tenancies muted (as per Scotland)
We are back to the days of the 1977 Rent Act which resulted in a mass exodus of landlords and the private sector shrinking to the lowest levels on record.
I’m selling all of my portfolio. I know lots of large scale landlords who are doing the same. The trickle will soon turn into a flood.
The government has sold off the better quality social housing under the Right to Buy scheme and the private sector landlords filled the void. When the sector shrinks, there will be nowhere for these displaced tenants to be housed.
The next decade will witness one of the worst homeless crisis we’ve ever seen. I’d like to say it’s a case of unintended consequences by those tenant groups who lobbied for this, but the consequences are obvious to anyone with an ounce of common sense.
Correct removing Section 21 will create an indefinite protected secure tenancy and along with the:
Tenant Fees Act 2019
“if you seek to increase the rent by way of a section 13 notice the tenant may apply to the First-tier Tribunal for determination of the reasonable rent.”
a Fair Rent Act in all but name.
Worse than 1977 due to the addition of:
Section 24 Finance Act
Loss of 10% fair wear and tear allowance
Tenant Fee Ban
HMO Licencing
Selective Licencing
3% Stamp Duty on BTL property
etc etc
It is obvious that the PRS will now shrink due to each or all of these factors being weighed up by Landlords and some (many?) selling up.
Good or bad is in the mix depending on each interested groups take on all permutations of these effects.
WATCH THIS SPACE as there are going to be a few interesting years ahead, as there are going to be some very serious consequences as a result of all these multiple different factors taking their full effect.
What is the NLA doing?
With Section 21 being used as a backstop to overcome the ineffectiveness of the Section 8 process, we are now calling on the government to take a look at the housing sector as a whole. In a country where the model of tenancy was always intended to operate in a sector where Section 21 exists, it is unrealistic of the government to make impulsive changes to singular items of legislation without expecting chaos throughout the sector.
We will be meeting with government officials to provide our comprehensive research around the use of Section 21 and the ineffectiveness of Section 8, as well as our plethora of member feedback and case studies. We will now look to pressuring the government to re-balance the system so that Section 8 and the court process works for landlords and tenants alike.
We expect the proposals to be consulted on in May and will be asking every landlord to join us in telling the Government why Section 21 is a necessary part of a private landlord’s toolkit. We will contact NLA members shortly to advise what direct action they can take to try to stop this policy being implemented.
Hopefully, they will get people to represent the industry on TV, with better media skills than the two on BBC news this morning
Generation rent made them look like they had forgotten to do their research
This one causes a lot of conflicting thoughts in my head. I fully understand why Section 21 is there and its usefulness within our industry but it has been used in non fault ways in the past and in one case in such a way that I am honestly disgusted at the LL.
I’ve dealt with 3 Sec 21s this year so far. First was standard. LL needed the property back to sell. That’s no problem, I can accept that, totally justifiable reason.
Second was a couple who had been in the property for about 4 years. LL was an elderly lady. Tenants were a professional couple, quiet, never missed rent ever. She gets diagnosed with cancer and passes away. The properties she had went over to her Son who then immediately issues a Section 21. This was so he could partition out the living room into more bedrooms and rent it as a student property instead as he would make more money this way. The couple in there even agreed to increase their rent by 30% than deal with the hassle of moving, but was declined, simply because he could get slightly more money.
Then finally, the most recent one. Another professional couple. Likewise no problems, no issues with rent, house in impeccable condition. The husband informs the landlord that his wife is pregnant with their first child and he wanted to let him know in case it needed to the noted on the Agreement. Oh it changed alright, by getting a Section 21 issued to them. this LL kicked out a couple because the wife was going to have a child. That’s it, the only reason. So now the T’s had to go through the stress and expense of finding a new place to live while the wife is several months pregnant. No matter what neotiations we tried, the LL just didn’t want a child in there to “mess up his house”.
I assume that people here will say, its the LL’s house, he can do what he likes with it, but treating other human beings in such a way is disgusting. This is what should be stopped.
I completely agree that LL#3 was out of order. It is his house, true, but how would he feel if he were the Tenant, kicked out because they were expecting? Or his sister? Daughter?
I agree that a Tenant should have a reason to be asked to leave, I don’t think anyone would argue that. But as mentioned above, not all reasons fit exactly in to the S8 list. If a Tenant always pays late, but is never in arrears, is the Judge definitely going to award possession back? Not guaranteed! If a Tenant is in 2 months arrears, and pays a weeks rent, they then have no grounds to go to court. S21 has it’s problems, but until a fair and definitive way for a Landlord to get the property is found, both S8 and S21 do the job as well as they can.
A Tenant should never be asked to leave for reporting a repair (unless the Landlord can’t afford to get it fixed, or it cannot be fixed with a tenant in place and he cannot afford alternative accomodation whilst it’s done), but the legal owner of a property should be able to regain possession as and when they need it. Even if they are inconsiderate people that cockroaches look down on…
I’ve been trying to think of any solution I can to this problem. I had a thought, probably not popular with LL’s but it may work.
I wonder what would happen if there was a policy in place that if once a Section 21 is issued, the Tenant is no longer responsible for paying the rent? They effectively have the couple of months of rent as a buffer to assist with finding their new place.
I expect a lot of scoffing from this thought from the initial outset, but here are my thoughts on it.
For Landlords evicting for non payment of rent and using Sec 21 as an easier route to eviction, they lose nothing they wouldnt already have done so, nothing has changed. It may give revenge eviction landlords at least a moments pause if they might get hit financially. The Tenants would have less stress in moving as there is not such a massive drain of their funds in having to move.
Its by no means perfect, but I think better than either what we have now, or the possibility of losing Sec 21 all together.
Possibly the last month, as they can then use that towards the deposit on the new place, which is possibly the biggest issue I would imagine most Tenants face. I know I would struggle to come up with that amount of money in a couple of months!
I can see the logic in that, however for an accidental Landlord, or one that has a mortgage to pay, they won’t be able to do that and at the end of the day, renting is fluid by nature,the use of the property is never guaranteed past the end of a fixed term. For those Tenants that pay on time, keep the proeprty in good condition and are generally good people, a Landlord will hang on to one of those even if it rips his arms from his sockets! So I can’t see a Landlord being happy at essentially having to pay to get rid of a not-great Tenant. Bad ones would be done through S8, obviously where possible.
Not an entirely bad idea, but it would need tweaking before weeing how it would work in the real world.
I currently have a nightmare tenant and visiting relative, in a block of flats. Everyone in the block is petrified of the tenant, relatives and gang that hover around the building. Most have been happy for years and never caused anyone a problem but few are now looking to move out, the landlord is one of the best. The police are fed up with turning up and unable to do anything as it always falls on border line etc. The simple solution is Section 21, insufficient grounds for any other course of action as the tenant is really crafty and knows how far to the line he can go, which we know he passes over, but proving it in court is another matter.
I appear to have managed to get myself roped into doing an interview on my regional BBC radio channel regarding this…
On your own or is there somebody in opposition with you?
I have absolutely no idea! I bumped into a team interviewing some political candidates, and I asked the candidates some questions about this and other changes, and they asked me to be on the show later… Apparently the political party thought I was a plant by the BBC team as they got put on the spot slightly… They aren’t fielding an MP for general elections at the moment though, just local elections so they were a bit blindsided as they didn’t seem to know what I was talking about!
I’m not entirely sure what I’m actually going to say though. Giving Tenants more security is obviously a good thing, but the Landlord still has the right to get the property back. They need to sort out the existing system problems with S8 before they start attacking something else in the sector. And letting everything settle with regards to the Fee Ban, S24 and Brexit would also be a good idea. I get that once you have made a change, keeping the momentum is good, but have thye never heard the phrase ‘punch-drunk’? Landlords and the PRS can only take so many hits before we go down and don’t get bak up again. And if we fall, there isn’t enough social housing to cover the housing needs, let alone find work for those of us without a job!
Hi CountryLass,
If I may be so bold, I highly doubt the listeners will be remotely interested in the PRS/Sec. 8s (most won’t know what a Sec. 8 is!)/ your (my and many readers’) job security /Landlord financial security. I think you may need to simplify the approach somewhat if your views are to be taken as anything other than an industry operator trying to justify your existence.
IMHO I suspect that if you’re to make any impact as a speaker/interviewee, the message is kept simple and relevant to the audience, if you want to make a small (albeit we’re battling a tidal wave of negative propaganda) impact on any listener…
If it were me, I would take the ‘angle’ of Govt. intervention creating actual/tangible disadvantage to Tenants- IMO it would be wise to focus on the group that the Govt./lobbyists focus on…I.e. Tenants (we all know it isn’t about Tenants, but that’s the ‘game’!)… Ill-conceived legislation of the likes we’ve seen over the past several years is fundamentally detrimental to Tenants…increased rents, less housing stock, less choice and less flexibility.
Its a difficult one, and something we must be wary about. An interesting point I keep seeing is about the landlords selling off, there being less stock, rents going up. This may well be true, but its going to take some tact to get it right.
If rent does go up, why is it going up? We all know the answer, its because we can. Right now the rents are what they are and LL are happy to accept what they are currently being paid. So what if the rents go up by say 10-20%. What is the extra expense that LL are facing that would cause the rent to increase? In all honesty there isn’t. it would be raising rents on the supply and demand principle.
And if the rents go up quickly and honest hard working tenants are priced out of their homes by those horrible Landlords (you know this is what the BBC will say) then you can be certain that even more legislation will come out to stop this. I would see Rent controls being implemented extremely quickly.
This is a difficult time and we need to be careful in what we say and how we say it.
In the cases of new Tenancies it may not be the Landlord raising the price, but Tenants bidding higher to get the proeprty. I’ve had that happen before, although in one case the Landlord didn’t take the highest rent, he went for one lower because he liked their application better.
But then you will get Landlords saying that the market price has risen because of it, and they want to increase their rents slightly to keep in line with the market, as this is a business for them, which it is their right to do. I always try to be as fair to both sides as I can; I always try to put myself in the Tenants position as to how I would react. In some minor maintenance cases I do wonder why the Tenant can’t just go out and spend the few £ to fix a problem themselves as it is what I would do!
Landlords in London tried this in the run up to they Olympics I believe, and quite a few kicked out good Tenants to try and take advantage of a few weeks of higher rents. I was not upset when I heard it had backfired for many!
And that was basically what I said to the policital party earlier, I mentioned the Fee Ban, the S24 tax relief going and now this. I pointed out that the cost of referencing is now on my (the Agents) shoulders, which means it will be passed to the Landlord who will then increase rents. They agreed that a cap would have made much more sense; I told them that pretty much everyone I had spoken to agrred with that statement.
Thank you for your advice, I will try and bear it in mind!
Most of the Section 21 we issue is at the request of the tenants. They have found themselves in a situation, maybe due to a relationship breakdown, that they need to approach their local council, but can’t be seen to be making themselves homeless.
Given that these tenancies will now be ASSURED TENANCIES , if lenders can be persuaded to formally allow landlords to grant an ASSURED TENANCY, it will be good news for Letting Agents as the deposit does not need to be protected, and the Tenant Fees ban will not apply.
Good news too for local councils. Since people will be “intentionally homeless” when they are evicted, the Council does not have a duty to rehouse.
Next business venture ? Making human sized cardboard boxes (from recycled cardboard of course) to sell to homeless people sleeping in our parks
Dave Absalom
You may find that they are already writing up new tenancy agreement law to cover the bolt holes.
The end is nigh.
There will be a mass exodus of amature landlords, who make up the majority of PRS.
If they think there is a housing shortage now …….. wait till Sec 21 is confirmed date and watch the numbers sell up and those that stay and get burnt by tenants will soon after.
Its a stupid move! – But lets face it, how many section 21 notices do we actually serve? More often than not its the tenant that decides to leave NOT the landlord.
The bigger worry is the stealthy way they are starting to regulate the industry. Yes there are positives as i think the day of tenant find only with the landlord managing it will be gone meaning more business but as you have seen with CMP in just 12 months the cost jumping almost 200% – Its a licence to print money and creating an industry within the industry.
The only way lettings agents will be able to survive is to take more from a landlord, which will mean rent are pushed higher which over a 12 – 18 month period will mean tenants paying more than they already do.
I cant help but feel the government have stuck a deal with the pressure group shelter. In that shealter will not call out the government for housing as long as the government continue to put the boot into agents and landlords. This is rather worrying as shelter do not have a clue how housing works other than they feel it should be “Secure and safe”.
Can you imagine having voted for chaos under Ed Milliband rather than austerity and civil war under Cameron and May, who then need to turn to populist measures to win any votes?
Do away with section 21 and leave landlords with the predicament of how do I get my house back.
I’m sure some less professional landlords will come up with their own unpleasant methods, which will be far more upsetting/damaging for tenant’s than a notice to quit which gives them time to find somewhere else.
I’m not condoning it, but I also live in the real world and know that when certain people are told they can’t do something, they’ll do it differently, but do it they will.
So now we have a future where agents can’t afford to help tenants due to tenant fee bans. or landlords are simply not using them.
Landlords can’t afford to repair properties due to tax changes.
Landlords who must keep paying a mortgage on a property they want to sell due to no mortgage relief, but can’t because they can’t serve notice.
Tenants who think they can behave anyway they like, knowing that the landlord has no redress.
In trying to tame the wild west they ransacked its borders, now everywhere is wild!
The idiots haven’t thought of two crucial points:
1. Tenants will now be forced to get CCJs where there is an eviction situation whereas landlords using S21 could previously help them get away without one. I’ve done this myself many times. Not any more!
2. When I let property in future, tenants will now have to jump through so many hoops it’ll be only the finest applicants that succeed. No DSS for me! Well done Shelter!!
Just more populist legislation to win generation rent votes at a time when they are completely desperate for any votes
simply put, with INCREASING Difficulty. ( time and expense, with no guarantees and a higher percentage of cases dismissed ) The Govt, has got so much wrong it proves lack of understanding, Sec 21 isn’t used against Responsible tenants, what business would turn good customers away, duhhh Its a Govt win-win. More votes, snatch them before Labour get the chance so Conservatives can remain in power ( which they won’t because of Brexit ) and Local Govt won’t have to foot so much of the Emergency – Temporary Housing because landlords won’t be able to evict them in the first place. Landlords need to be really really careful about Housing at the lower end of the spectrum and either insist on Guarantor from the Local Authority, or Not grant tenancies, which will back around to bite L.A’s
“what business would turn good customers away”
They are out there, trust me! Usually the wealthy, always get my own way individuals.
1. Landlords do not usually want to evict good tenants who pay their rent on time and in full and look after the property.
2. Government is suggesting they are being evicted after complaining about property standards. Rather than bring in this measure which will make even more good landlords leave the market completely, government should provide ENOUGH ENFORCEMENT STAFF to enforce the laws we already have. Bad landlords ALWAYS thrive when there is no-one to chase them
3. Most s 21 evictions are in reality for rent arrears, but because tenants are persuaded by Shelter and CAB to invent non existent repairs issues on the day of the hearing, the case drags on and on.
4. Prohinition ( of which this is a type) always leads to “BAD GUYS” thriving. Under Prohibition in America, drinking establishments thrived underground, under rationing during the war, spivs thrived, and with cannabis not being legal, dealers thrive. When good landlords have been driven out of the market bad landlords will still be there to provide their disgusting hovels at top dollar rents. GOVERNMENT – GO AFTER THE BAD GUYS – THE LAWS ARE THERE
Dave Absalom
The “bad guys” landlords are a very small minority as confirmed by the small level of complaints and prosecutions but hyped as the norm by the far left. This nothing more than the looney left and unelected civil servants vendetta towards PRS and STATE CONTROL in the hope to guarantee social housing they should have been providing.
This move will help to raise standards in PRS.
Many landlords in Scotland, where the “no fault” ground was abolished some 16 months ago, threw their hands up in horror and predicted gloom. The reality is, for responsible landlords who manage to professional standards, little has changed in practice. Tenants move on at a time of their choosing, just as they’ve always done. The ban does mean that landlords need to be diligent in selecting tenants, but that is surely just sensible.
One of the key effects of the ban is that landlords can no longer just “change tenant” on a whim. There are 18 grounds for ending a tenancy, not all mandatory, and these allow termination where there is a genuine need to do so, but dislike of the tenant isn’t one of them. Neither is that the tenant is asserting his entitlement to require statutory repairs to be carried out, a situation which hitherto could induce some landlords to seek a more compliant tenant.
Be bold, southern cousins, like the tenant fee ban, the binning is Section 21 will be good for the sector.
Do landlords change tenants ‘on a whim?’. With tenant find fees in the ‘£00’s – that’s an expensive way of indulging yourself
We’ve never issued a Section 21 except for poor tenant behaviour, rent arrears or change in landlord circumstance. Never done one for a whim
So we can only take 5 weeks rent as a deposit. A tenant would need to be 8 weeks in arrears before a Section 8 can be issued and seeing that through could take at least another 2 months – so potentially 4 months rent arrears – let alone the legal costs.
If you remove the Section 21 notice – could we then go back to the old Assured tenancy agreement? We can charge tenant fees on that can’t we? (genuine question – I’m not entirely sure)
Only applies to an AST
The trouble with the current Section 8 (you can bet they will soon meddle with that) at the hearing, their must be two months rent outstanding and it didn’t take long for Shelter to advise tenants not to say anything until they arrive at court with £1 or whatever figure they need to bring it back under £two months by £1 or claim withheld for repairs the landlord has not done. Gets kicked out and you are back to 6 plus months to get into court, and so it gets repeated, repeated, repeated.
Section 21 was the safest and less stressful for all concerned (including the neighbours) but has been hyped up as “NO Fault Clause”. No landlord gets rid of a good tenant …. no smoke without fire as they say. The behaviour of the tenant is really the route cause for the use of Section 21.
If we want to be a professional service provider managing the nations housing stock in bulk on behalf of private investors and their tenants, greater security of tenure comes as part of the parcel. Social housing landlords do not use s21 notices, they have to evidence that there has been a breach in the tenancy terms. A better solution would be minimum term tenancies for say 3 to 5 years. The demographics of the PRS are shifting – 30 and 40 somethings with families who are never going to own their own home until their “baby boomer” generation mum and dad pass away and there is an inheritance to fund a deposit. As an industry we actually “manage” a derisory % of the total PRS stock – we (agents) would be better off with fewer DIY landlords, even a smaller PRS in absolute terms, but more of it under our control and management.
Depressing time to be a landlord. Done correctly this is a sensible thing though. I was appalled at the statistic that nearly half of tenants that request maintenance get evicted within six months. If you’re a a career landlord, it’s in your interests to have no voids, and it’s in your interests to maintain a good property for capital gains. They need to get it right so accidental landlords (former owner occupiers) can return or sell when viable, and that investments can be sold on (expect a scheme for tenants to be able to buy) when needed. I imagine a portfolio should be moved to trust/company ownership so it can formally be run as a business. Need to nail down fast track evictions for arrears and damages, or a government backed insurance policy.
The problem is statistics are manipulated by everyone nowadays and are of little use.
Correct they churn any statistics to match the agenda
that 50% stat must be wrong, or they mistakely turned up at the last Labour conference to conduct the survey
Abacus Abbott did the figures 50% of all the people that she bumped into last week said sorry so that means that 90% didn’t and 120% walked around her and 33% didn’t care and 40% didn’t answer 50 + 90 + 120 +33 + 40 = 100 in Abbott land!
Shelter now writing the conservative manifesto. Strongest message yet to NOT INVESTED IN THE PRIVATE RENTED SECTOR. Invest your money somewhere where you can control it.
i guess the June announcement will be rent control proposals; after all new changes every couple of months!
there appears to be no difference between the tories and labour….
we need another choice in politics, otherwise the lettings industry apart from the big players is doomed.
Just more proof that government has completely lost the plot!
The trouble is that government ministers live in a bubble fed crap advice by campaigners, they have nothing to fear though as, when many lose their positions as MPs they will just fall into roles as directors or fall back on their gold plated pensions paid for by our taxes!
Wait for the tough response from ARLA and other representatives of our industry…. no wait, those directors will either fall into roles as directors elsewhere or fall back on gold plated pensions paid for by our subscriptions!
With a parliament that doesn’t understand the word brexit they don’t stand a chance of understanding more complex words like short hold.
What a bizarre thing to do. All those business fearing that a Labour government would be bad for landlords, looks like the Tory party has beaten them to it. I’m not a lettings expert, so question….if you remove section 21, how does the landlord get their property back?
Court. Guaranteed to be slow
simply put, with INCREASING Difficulty. ( time and expense, with no guarantees and a higher percentage of cases dismissed )