Letting agents and landlords are warning that scrapping Section 21 eviction notices could drive up homelessness.
The Government launched a consultation in July that set out plans to scrap Section 21 notices and improve Section 8 eviction grounds.
ARLA Propertymark and the Residential Landlords Association have been urging members to highlight the side-effects of the proposals before the consultation closes on October 12, and while the policy seems a foregone conclusion, critics warn it could lead to an increase in homelessness.
Eviction company Landlord Action says that half the Section 21 cases it handles are as a result of tenants wanting to be rehoused by the council, which may be harder under a reformed regime.
Paul Shamplina, founder of Landlord Action, said Section 21 is often used as an alternative to Section 8 to evict tenants for rent arrears as the process is faster and doesn’t require a county court judgement (CCJ).
If there is no Section 21 available, Landlord Action warns that tenants will be at greater risk of receiving a CCJ through Section 8 and ending up homeless as local councils will not be obliged to re-house those with rent arrears judgements.
A CCJ will also impact a tenant’s credit rating, making it harder to pass tenant referencing, Landlord Action warns.
Shamplina said: “If those tenants cannot get accommodation in the private rented sector and cannot be re-housed by the council, what will happen to them?”
Agents are also warning that the changes will deter landlords from the sector, which could limit supply and lead to rent rises.
Anton Frost, partner at Carter Jonas, said: “Whilst reforms to the court system surrounding tenancies and evictions is broadly welcomed, the abolition of Section 21 is another legislative move that would only deter landlords and potentially cause some to sell up, only enhancing the imbalance of supply and demand that exists today.
“Should a landlord need to end a tenancy – for reasons such as providing accommodation for a family member or needing to release equity for financial reasons – this would only create more roadblocks and deter them further. This, in turn, does not benefit tenants who would be left with less stock and higher rents.”
Mark Homer, co-founder of Progressive Property, also warned that the changes could lead landlords to favour tenants with the best credit scores.
He said: “It seems clear that the Government has decided that it is a forgone conclusion that landlords wishing to evict tenants will only be able to do so using the less certain Section 8 process in future.
“Such moves are likely to further reduce the amount of private rented properties available and encourage rent rises.
“Landlords are also likely to place an even greater emphasis on only offering properties to tenants who meet the highest credit score and affordability standards.”