Legal expert warns against scrapping Section 21 evictions, which ‘will have repercussions’

Boris Johnson’s government has once again pledged to reform renters’ rights by scrapping no-fault evictions in England.

Proposals designed to overturn Section 21 of the 1988 Housing Act, which permits landlords to evict tenants without reason and with two months’ notice, were initially proposed by Theresa May back in April 2019.

The Conservative manifesto pledged “private landlords will no longer be able to evict tenants from their homes at short notice and without a good reason”.

The long-awaited protections for tenants against so-called “no fault” evictions appeared in the Queen’s Speech, and now a white paper has been published by the government.

The government has naturally presented its decision to end so-called ‘no fault’ section 21 evictions – that allow landlords to terminate tenancies without giving any reason – as a positive thing for landlords. It points out that more than a fifth of private renters who moved in 2019 and 2020 did not end their tenancy by choice, including 8% who were asked to leave by their landlord.

However, Ian Narbeth, a consultant solicitor in the real estate team at city law firm DMH Stallard, is warning tenants who are cheering the proposed abolition of evictions using section 21 of the Housing Act, to “be careful what they wish for”.

He commented: “Until the introduction of assured shorthold tenancies, the residential rental market was stultified.

“Owners, fearful that they might never recover their property will be reluctant to let. If landlords serve s8 notices for rent arrears instead of the quicker s21, tenants will have county court judgments registered against them, wrecking their credit referencing and meaning that when they apply to the council for a home they will be considered to be ‘intentionally homeless’.

“Behind most so-called ‘no fault’ evictions is a solid reason such as non-payment of rent or anti-social behaviour. Forcing landlords to air the tenants’ dirty linen in court will have repercussions.

“Families who let out their home while working abroad will be concerned that they may not get it back when they return without going through the uncertain court procedure. Being delayed by several months in recovering their home may mean staying in expensive B and Bs or taking on an expensive 12-month lease.

“Private landlords, having already faced seven years of anti-landlord legislation, may take their properties off the market, exacerbating the shortage of housing and pushing up rents.”

 

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9 Comments

  1. frostieclaret87

    Totally agree. The political posturing by a so-called Conservative government as it seeks to bow to the pressure group called Shelter does not do anything to help tenants at all. It is an ill considered and ignorant policy. Where are the voices of our professional bodies when you need them??

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  2. KByfield04

    In this regard, our professional bodies have actually done a lot to petition and educate the government about these planned reforms. Propertymark, RICS, NRLA as well as action groups such as TLIC and the Zoopla Lettings Advisory Board have all worked hard to engage with DLUHC and central government. It is worth noting this is just a white paper and is subject to a consultation period- with legislation expected early next year.

    Articles like this, reacting like this is a new revelation and hyping the ‘dangers’ do nothing to help the situation. The removal of S21 (as the article highlights) was announced in 2019 so we have had 3 years to prepare and educate ourselves around this.

    If you look to Scotland, who brought in a similar structure of no S21 & periodic tenancies, there was a lot of fear but data shows that tenancy terms have changed very little since the law changed.

    Indeed, whilst S21 notices are referred to as ‘no fault’ evictions- they are often used for the reasons of re-occupancy, selling or an easier way to remove a tenant that’s in breach. These will all be protected conditions, with S8 meant to be strengthened. As such, these conditions will not change- they just won’t be secured via a S21 anymore.

    In reference to a family returning to a rented home- a S21 gives no extra security as a tenant may not vacate and court proceedings are then required anyway- how is that different to the new framework proposed?

    There have been countless consultations over the past 3 years- the engagement by individuals has been appalling- so has that of landlords themselves. A recent survey saw just 50k landlords take part (after being cajoled for more to after poor engagement) from a pool of roughly 2m landlords.

    Housing is a political football- if you want a party to listen to your argument you need to convince them that a substantial voting segment back that thought process. As such, 500k landlords engaging in such a survey would have got the politicians listening- and that would still have only been 1 in 4.

    Guess what- as agents and solicitors supplying this sector- if we panic and hype these changes and state that this will mean landlords will flee in their droves- guess what will happen. We need to calm down, educate ourselves and our client base and focus on the positives and how the market will evolve rather than scaring the crap out of them.

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    1. A W

      just…stop, please.

      Housing is NOT a political football, it is a basic right (ownership however is not, but that’s a different conversation). Treating it as such merely results in idiotic decisions…such as this “renters reform bill”.

      Saying that we cannot critique the idiocy “for fear people may leave the sector” is extremely poor advice.

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      1. KByfield04

        Housing is a basic human right- my point is that our political parties treat it as a political football. Why else would we have a constantly changing strategy and the ever-revolving door of housing ministers? We must question and fight our perspective on new policies, but we must first understand that we won’t get it all the way we want it & raising the hype and scaremongering with unfounded statements or those based around worst-case scenarios help no one.

        Periodic tenancies, in theory, COULD mean a tenant will move every 2 months- but will they? No. This could also lead to short lets in expensive markets taking periodic to secure a shorter, cheaper stay- but would you go through rigorous tenant referencing for a holiday let? What’s more, any quality referencing company should flag concerns over those not linked to the local area.

        We can look at every piece of legislation proposed (and, again, this is important to remember- these are merely proposals) and ponder a worst-case scenario- but that’s not the real world.

        The reality is. rents are higher than ever. These proposals, and the scaremongering around them, will lead to landlords exiting- lowering supplying, driving rents even higher for those still in the market. As such, those that ride the 2wave stand to be the greatest beneficiaries and the tenants so many of these policies were designed to aid & protect will find a reduction of supply and climbing costs.

        I’d argue that it will be tenants that will fare the worst from these new proposals (should they be implemented in their entirety and current structure) and the blame will lie largely at the feet of the likes of Generation Rent & Acorn for their constant scare-mongering, demonising of landlords & agents alike……not that they will ever admit it.

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        1. A W

          I agree and disagree with you.

          While rent is higher than ever, but you’re looking at this in terms of numbers and not percentages. How much does it now take to get a property compliant as opposed to what it used to be? Even the best of properties will need to have a plethora or certificates and licences meaning that this all comes out of the landlords costs (offsetting the gain in rent). Couple that with reduction of tax relief means that in real terms, landlord aren’t earning much more (if at all).

          However saying that we cannot discuss the idiocy of proposed reforms on a platforms (PIE) that is specifically designed for that very purpose is nonsense. It’s not as if we’re all going to go to our landlords and say SELL SELL SELL, because of us do lettings and management and that would adversely affect our businesses.

          The government, shelter and the like have little to no understanding of how PRS works and this is the result. Landlords lose out and tenants lose out.

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  3. AcornsRNuts

    Will someone please get it through Ministers’ thick heads that LANDLORDS DO NOT EVICT,  Evictions are carried out by High Court Bailiffs after landlords have gone through expensive County and High Court processes.

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    1. A W

      You’d have thought someone would have pointed this out to them at some stage… but who knows with the current government.

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  4. Ian Narbeth

    @KByfield04 If we had a speedy legal system and rapid enforcement so that landlords were not faced with delays of many months and over a year in some cases to recover possession, this issue would be less fraught.  Politicians get het up about motorists being overcharged 5p a litre but a landlord losing £10,000 is expected to just suck it up.  Landlords won’t be holding their breath waiting for effective rights to deal with defaulting tenants. Abolishing s21 is ill-thought out. Landlords who stay in the market will increase their rents but that is not good for tenants whom this policy is supposed to help. As for scaring the crap out of landlords, don’t shoot the messenger.

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    1. KByfield04

      However, the proposals talk about strengthening S8 claims, making it easier & faster to evict tenants in arrears, regular arrears and who display ASB. There is also talk of a system to remove the burden from the courts, in theory, expediting matters in this regard. We must find balance in looking at the proposals, we can’t just talk worst-case scenarios about the bits we don’t like and ignore the proposals that look to address these other elements. By doing so, that is scare-mongering and helps no one.

      Many of this has been implemented in Scotland already- an interesting point is that introduction of periodic tenancies has resulted in almost no change at all to a tenant’s average stay. Again, let’s use context of other UK markets but also other international rental markets to see what impact similar legislation has had. Rent controls (although thankfully not part of these proposals) is a great example where multiple cases of this globally have been [proven to drive up rent costs creating a strong argument against the implementation for the very people & organisations driving for it.

      If using a quality reference provider, Landlords can usually secure a substantial rent warranty product for a £200-300 negating this risk with some policies now offering unlimited rental cover (although 6 months rent cover is probably the market norm) and legal expense cover to secure vacant possession. A £15-25 per month cost to indemnify against the greatest risks sound good value to me. Again, it’s all about context.

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