New calls emerge to scrap Section 21 notices to help families out of ‘rent trap’

An insurer has called for Section 21 evictions to be abolished, warning they are contributing to a lack of security for the increasing numbers of families living in rental accommodation.

A report by Royal London states that renting is no longer a transitional tenure and due to people renting for longer, half of all babies in Britain are now born into a rental property.

The research warns that long-term renting is “self-perpetuating” for families as the high cost of rents means they can’t save as much for a deposit to buy their own home, while lenders are often strict when it comes to considering childcare costs in a mortgage application.

Additionally, Royal London warns, the tax clampdown on the buy-to-let sector means more landlords are selling, putting families at risk of eviction.

The report sets out several ways that parents can be helped out of the “rent trap,” including reviewing the use of Section 21 notices.

It said: “The effect of Section 21 of the 1988 Housing Act which allows for ‘no-fault’ evictions and which reduced tenant security. This has recently been abolished in Scotland, and the Westminster government should review the evidence on the impact that this has had.”

Royal London also calls for more family sized homes to be built, an assessment of the impact of current policy towards buy to let landlords on the tenants who currently rent from them and whether there is a case for incentivising larger institutional landlords, such as pension funds, through the planning system, to build, own and manage affordable long-term rental accommodation.

Becky O’Connor, personal finance specialist at Royal London, said: “Renting is no longer something carefree young people do for a few years while they save up a deposit to buy and settle down.

“Renting is an increasingly long-term tenure and it’s increasingly impossible to escape from.

“For people in their late twenties and thirties, half of whom are starting families in insecure accommodation, not having a home of their own is fraught with practical and emotional issues.

“The main risk is eviction, which hangs threateningly in the background of normal family life.”

Commenting on the report, David Smith, policy director for the Residential Landlords Association (RLA), said: “Tenants are on average living in their private rented properties for more than four years.

“However, the RLA recognises that the growing number of families living in the sector is increasing calls for greater security for tenants.

“The Government has argued that financial incentives could be quicker to implement than legislation to encourage the development of long-term tenancies. We agree.

“These should be matched by establishing a dedicated housing court to ensure that landlords and tenants can get swift access to justice when something goes wrong in a longer tenancy agreement. This would provide the confidence needed to provide them.”

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20 Comments

  1. jackoTLG

    Yes look to Scotland, where today there is another story in EYE saying how rents are rising four times faster there. All the tinkering in the PRS that government are doing and will no doubt continue to do to pander to tenant lobby groups will only end in higher rents and if section 21 removed and rent controls introduced, poorer standards. No fault evictions are very very rare, we only issue section 21 if tenant rent issues or landlord wants to sell. If a landlord wants to sell that’s their right, it’s their property and their money.

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  2. Will2

    OK so Royal London should now be boycotted by the whole of the property industry. I will no longer use this company when my policies are up for renewal.  Why do they feel it is acceptable to significantly affect an investment I made to buy a property on the basis I could get possession when I wished to liquidate that investment.  I made a long term investment on the basis of letting on a SHORTHOLD basis. Yes SHORTHOLD means SHORTHOLD ( a bit like brexit means Brexit unless you are a politician!!!!!).  Who the hell do these clowns think they are?  stooges for the Government no doubt! Or may be just plain old SELF INTEREST and no professionalism. Families should take Assured Tenancies if they wish long term security.  So why doesn’t Royal London Build property as an investment fund and give Assured Tenancies to people rather than tell the rest of us, what we should do once we have invested on the basis of Assured SHORTHOLD tenancies. Why not put your money where your mouth is Royal London? It seems the ROGUE & crooked politicians have incited, tricked or manipluated the public into investing in a residential market whereby investments could be liquidated when the investor wishes and then moves to goal posts to prevent the sale of investment properties on the same basis upon which they were purchased. This is as scummy as the Cypriot Government/EU that raided the Cypriot population’s bank accounts.

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    1. kittygirl06

      Yes I agree

       

      All BTL landlords should avoid Royal London..

      They are encouraging the removal of BTL  with suggesting Section21 is a no fault eviction which in 90% of cases is no such thing.

      Brief mention of Section24 which is driving landlords out of this market.  Then suggesting BTR with incentives surprise surprise.

      Landlords dont give your business to a company which indirectly is seeking to distroy the sector

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  3. JMK

    “Royal London also calls for more family sized homes to be built, an assessment of the impact of current policy towards buy to let landlords on the tenants who currently rent from them and whether there is a case for incentivising larger institutional landlords, such as pension funds, through the planning system, to build, own and manage affordable long-term rental accommodation.”
     
    Pension funds such as Royal London then?  Another L&G!
     
    If you go to Royal London’s pension home page you will find the sentence  “A company you can trust to be there in your moments of truth – and to keep your best interests at heart!  Some years ago my home buildings insurance was with RL and I had to make a claim for subsidence.  They were plain incompetent and tried their best to swindle me.  Had I not dug my heels in I would have been significantly stung for many thousands of pounds as they tried numerous times to fob me off.  They certainly didn’t have my best interests at heart then and they clearly don’t now.  I wouldn’t trust them one inch.  

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    1. Interested Party

      I suspect they want the smaller landlords out of the market too, so they can build and rent themselves…

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      1. Eyereaderturnedposter12

        Precisely the point…It is institutional investors/Insurance firms/Financiers (such as the firm stated in the article) who ARE the B-T-R investors…

        Interestingly enough…most are also (directly or indirectly) political party donors…

        …and these chaps do like ‘hedging their bets’…”left, right….whatever. Someone’s going to win the election, and when they do we’ll remind them of all the lovely £’s we gave them !”

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    2. Will2

      JMK had a similar situation with AVIVA and indeed been involved where they under direction of 2 national firms of so called loss adjusters have been back about 5 times doing further tosh up repairs where the job was never carried out to a suitable standard!  I will not insure or recommend clients to insure with AVIVA and now Royal London are on my Blacklist.

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  4. Deltic2130

    This is an outrage. WTF is a private company doing laying into landlords like this? Why is it relevant to an insurance company/pension fund whether a landlord can gain possession of their property?? ‘We want further ‘incentives’ to build and hold long-term rental property’ said a massive and extremely rich pension fund ‘preferably whilst ******** over the little guy in order to benefit us further!’ They can FRO. Greedy hypocrites. At least they say they think the govt should review the effect of the attacks on landlords but it’s something of an afterthought that clearly won’t be acted on.

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  5. Woodentop

    Well done Royal London you have just accelerated more landlords to think about leaving the market. When will these people look before they jump in with their big feet on the consequences of their liberal left wing ideas. So Royal London no longer believe in investment, in a free market. If any government wants to abolish Sec 21 then they will have to come up with guarantees to protect the landlords investment from rogue tenants and criminalise their behaviour …. not going to happen, the prisons are already overflowing and they don’t have family wings. Government is more than happy to “use” landlords for free, the landlords suffering the £m’s lost every year.

     

    A balanced view would be to see how much £m’s is being lost by landlords, without making things worse?

     

    The Private Rental Sector is exactly what it says, it is not a nationalised industry …. but looking more and more like it.

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  6. AGent

    Why do Royal London care?
     
    A. If we stop investing in property on an individual basis, we’re more likely to throw our money into pensions and investment products through RL (and others).
     
    B. BTL Landlords leaving the sector will pave the way for Corporate Investors to lobby Government for more Build To Rent incentives.

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  7. Tcos

    I just don’t understand the thinking here. How does this help in anyway? There is no reason for a landlord to issue a section 21 unless a tenant is not paying their rent or the landlord wants to sell. Have they bothered to ask all of the tenants being issued a section 21 one why they are being issued? I bet if they dug a little deeper and put a little bit more effort into their research they would find that in those circumstances there are some very legitimate reasons as to why the section 21 is served. So you have people who cannot afford to buy but need somewhere to live so the best plan you can come up with is tighten up the rental sector even more and push landlords away thus reducing the stock and increasing the rents. Slow clap…..

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    1. Woodentop

      The “no fault” claim is hyped up by the looney left and is often because the tenant has been at fault. Never come across a landlord who has kicked out a good tenant, if they remain in the market.

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  8. Punchy123

    There is no thinking. Just another organisation with an opinion that makes them news worthy.

    .

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    1. The_Maluka

      You hit the nail on the head, pity the landlords’ thumb was in the way. Just a minor casualty on the road to government assisted corporate control.

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  9. letstalk

    When did we all become responsible for other peoples life choices? Or did I miss something?

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    1. Woodentop

      When they buried their head in the sand with idelology of consumer protection (often is legitamate), like tied-in contracts, no get out of jail clauses …. oops isn’t that what government and looney left tenant groups steering to with PRS housing and forcing on landlords. 

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  10. IWONDER36

    “Additionally, Royal London warns, the tax clampdown on the buy-to-let sector means more landlords are selling, putting families at risk of eviction”.

    So Royal London, are you stating that a landlord who is struggling to meet his/her financial obligations because of the tax clampdown and other austerity measures haphazardly forced through should then fall into mortgage arrears just to avoid ending a tenancy?

    I think insurance companies should not be allowed to rip off young drivers, or elderly holiday makers, that life insurance should be for life and not just the part which carries little risk.

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  11. kathytaylor

    If Section 21 is abolished then there will just be an increase in Section 8 notices because, as everyone has pretty much pointed out, Landlords rarely serve notice on good tenants!

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    1. Will2

      Except some landlords will need to sell if they are screwed much more by the clowns that call themselves a Government. This will either mean they can’t get possession to sell or there will be s significant loss in value of their investment.  Look at the 1977 Rent act and sales prices of property with protected tenancies. Potential lOss of about 30-40%.? People should not underestimate the financial impact. History tells the story.

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  12. PossessionFriendUK39

    Lots of Landlords not going to be using Royal London,  I won’t forget their  treachery to their customers.  !

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